May 20, 2020 | Jason Baumgartner
This blog post is based on a webinar of the same name. Watch a replay of the webinar here.
Due to car wash site closures, unemployment and just the sheer uncertainty of the pandemic, nearly every car wash operator has suffered a dip in their hard-earned unlimited membership counts.
While this is obviously cause for concern, it also presents an opportunity. By applying certain strategies, you can not only recoup your previous membership counts but earn market share by attracting new retail customers and plan members.
Understand the Present
First, it’s important to understand your current situation. On average, we are anticipating that washes will experience a 25% churn over two months, or roughly double what their normal churn rate was.
The impact on your specific business, though, may look different depending on several factors, including when and to what extent your state shut down. Another factor is how you reacted early on. Washes that heavily discounted or waived members’ monthly recharges proactively tended to experience less membership churn than businesses that chose not to make a decision and then were shut down completely or blindsided by mass cancellations.
Look at your numbers and figure out what you need to rebound. Watch for a leveling out or an uptick in sales. That’s when you’ll want to step on the gas and start your recovery plan, taking advantage of the opportunities that await you on the other side of this pandemic.
We believe that the car wash industry is positioned to emerge from the pandemic strong. With the express car wash model, customers stay in their cars and can have limited, if not zero, interaction with staff members or a pay station. We are in the business of clean, and that’s a pretty good business to be in right now.
This puts us in a great position to bounce back quickly, especially when compared to industries such as event venues and movie theaters. Who knows how long it will be before states allow (and people feel comfortable with) those types of gatherings? And with movies and concerts streaming at more affordable prices, people may continue to enjoy these entertainment options from the comfort of their own homes.
With all the uncertainty and volatility the pandemic created, your tendency may be to play it safe as things calm down. You may look to cut costs and hold back on marketing to make up for the shortfall. However, we believe a more aggressive strategy will be more successful. Try putting your marketing efforts and dollars behind these strategies.
Recapturing Your Own Terminated Members
A big key to this is what you did BEFORE the pandemic. Understandably, car wash operators are often more focused on running their businesses than marketing them. They often sacrifice data collection for operational speed. However, it’s important that you collect good contact info (email and phone number) when you sign members up. This allows you to stay in touch with them if they do churn out. If you don’t already have a process for collecting this information, make sure you put one in place.
When someone cancels their plan, you should automatically follow-up with an email or text message expressing your disappointment in seeing them go. Then after a period of time, say 90 days, you can send a "we miss you” offer, such as their first month free if they rejoin the plan. Which leads us to our next opportunity.
When a customer signs up for a package, particularly the base-level, they rarely ever upgrade to a higher plan over the course of their membership. You now have the opportunity to not only recapture them but to do so at a higher price point.
When you follow up with former members, offer them an incentive to try out one of your higher packages. If you can get former members to rejoin at a higher price point, you can make up for some of the losses you experienced in the thick of the pandemic. Even increasing ticket averages just by 5% can have a huge impact on your bottom line as you can see here:
Capture New Customers
People’s “ant trials” have changed. They are not going to the office or taking the kids to school. Instead, they are going to the grocery store or picking up take out. This is bringing new people past your wash every day, potentially even former members of your competitors’ unlimited plans who may now be willing to dry a different wash.
Now’s the time to be disruptive and capture their attention. Here’s are some strategies:
- Disrupt frequency blindness – When you drive by the same businesses day after day, you stop noticing them. This is known as frequency blindness. You can disrupt that by using signage, flags, banners, etc., near the road to draw drivers’ eyes. Change it up every couple of weeks because they will eventually become blind to the signs as well. People are looking for things to do, so reminding them that you are there makes them realize a car wash is a safe activity they can still do.
- Be community-minded. At Suds™, we often look at the sentiment of social media posts and other online activity when cultivating marketing messages. Recently, the sentiment filters we use have indicated a strong community-minded feeling. People want to support local businesses. Lean into that and be associated with something more than just car washing. Some examples are giving free car washes to people who present receipts from local restaurants and washing the vehicles of first responders for free.
- Social Media Activity. Now is when you can really build a community online. Don’t be overly promotional. Instead, offer value-added content and, again, show support for your local area. For example, some washes post pictures of cool things happening in the community, or they help promote another local business. That can form a nice foundation for you when people are ready to come back to the wash.
Perfect Your Processes
Take advantage of this time to shore up your marketing strategy from the inside out. At Suds, we spend a ton of time upfront on the internal factors (branding, pricing, process) before even considering external efforts, such the messaging and delivery methods. As you shift into coronavirus recovery, though, you may have to focus on both at the same time. Just be sure not to overlook the internal processes.
Specifically, if you are noticing abnormally high churn rates (especially after things start to get back to “normal”) or your unlimited plan signups become stagnant, that can be a sign that you need to adjust your internal branding or pricing.
We use design psychology and behavioral economic theorem to influence what customers do. Our goal is to keep customers in what is called System 1 of the brain where they tend to be more intuitive, emotional and prone to making quick decisions, which leads to spending more money. You don’t want them to encounter any “cognitive strain” because that can throw them into System 2 where they are more logical, discerning and cost-conscious. Cognitive strain is caused when your pricing, menus, pay station screens, etc., are too confusing or require too much thought to make a decision. You want to keep everything simple so they are naturally led to the action you want them to take.
Come Out Strong
This is undoubtedly a scary time to own a business, but we believe our industry will emerge strong. We hope this advice helps you recapture business lost during the pandemic and much more.