It’s December and the holiday gift-card-giving season is nearly over. I know one operator that sold an entire year of revenue in gift cards in just the last couple of months. I’ve had conversations with other operators bemoaning the need to do a better job promoting gift card sales to enhance loyalty and generate incremental revenue next year.
With all this talk of gift cards, I spent a few minutes looking up some statistics and came across one estimate that gift card sales grew from $19 billion in 1999 to an estimated $160 billion this year. That’s a huge jump in sales and popularity for what was once the go-to gift at company Christmas parties or a stocking stuffer when you just didn’t know what to get someone. It’s a big pot of potential revenue with numerous competitors — so how do you get your unfair share?
Part will be the bonus, or incentive you offer, such as pay $20 to get a card with $25 in value. The bigger challenge and opportunity, however, is cultivating a base of loyal customers who want to gift your service and share it with loved ones — regardless of the discount offered.
Customer loyalty is everything in today’s highly competitive business landscape. Customers are demanding more value and we need to find ways to exceed their expectations to compete with other businesses, not only car washes, for the available gift card business out there.
The question is how to incentivize customers, build loyalty, and drive purchasing behavior at the same time? Here are a few tips on how to maximize revenue selling gift cards at your wash:
Evaluate Your Gift Card Buying Experience
How easy is your gift card program to use? Can customers purchase and replenish cards from your website or pay station? Do you offer rewards promotions like bonus points, dollars added, or other similar perks?
The more relevant and personalized you can make the customer experience the better. Some operators offer perks such as a free exterior wash with a purchase of $50 or more in gift cards. Others provide volume discounts such as buy 10 wash cards and get one for free. However you slice it, the message is a clear demonstration of appreciation to customers for gifting your service.
Think Outside the Holidays
A gift card program should be just that, a year-round program that is continuously promoted. If you think you can just dust off the signs each November and expect people to buy, you will likely find yourself disappointed with the sales. Most washes I know with strong holiday sales actively promote gift cards every day and increase the discount incentives during the holidays. Many — after only a few years — have a line of customers waiting for the holiday promotions, resulting in a huge spike in revenue.
The moral is that you must work all year to expand the awareness and reach of your gift card program. Utilize everything from local media, in-store displays at non-competing businesses, social media networks like Instagram and Facebook, your website, e-mail communications, and other marketing vehicles.
Sponsor fundraisers and other local events that allow you to distribute promotional gift cards for a free basic wash. If the event is a fundraiser, this is an excellent way for others to identify your wash as a de facto “preferred local business.” The expected result will be a win-win for your wash business and the community.
Expand Opportunities to Promote
Some of the most successful gift card programs I know take advantage of the holidays leading up to Christmas to energize sales. Steep discounts on Black Friday, and Cyber Monday if you sell online, are most notable, but any holiday is fair game.
Discounted multi-pack gift cards, along with a brief media advertising campaign can work for any holiday that people buy gifts. Valentine’s, Mother’s, and Father’s Days are obvious, but what about Boss’s Day, Administrative Professional’s Day, or a program for local businesses to gift their employees a wash on Labor Day?
Keep your eyes open for events that are expected to be well attended like local concerts, street fairs, and green markets. Don’t be afraid to test these types of events and rent a table to promote gift cards to your wash —they don’t always work but they certainly have for some.
Get Your Employees Onboard
Your employees are often your first point of contact with your customers. Hopefully they’ve established a rapport with your repeat customers. Make sure employees at all your locations are trained to actively promote gift cards and let customers know about upcoming promotions.
Also consider giving employees an incentive to help boost your gift card sales with monthly contests. The employee selling the most gift cards could be offered a prize like a cash bonus or a gift card to another retail store or restaurant or an extra paid day off.
You may have to experiment with different contests and rewards until you find one that works best, but having your employees onboard will factor importantly in your overall gift card sales plan.
Market at Other Retail Stores
Explore opportunities to get some gift card shelf space at other locations. Auto parts stores and other retailers with complementary products are often receptive if you agree to market their gift cards in return. Some regional grocery chains also have programs that are worth evaluating, though you’ll typically have a setup fee to participate in their network, and they may take a significant chunk from sales.
If you are willing to jump through a bunch of hoops, a partnership with a big box warehouse club may be an effective way to fast-track your gift card sales. Clients of these membership-based clubs are famously loyal to their products and services making them a desirable target for any car wash.
The process is not exactly simple though. Some will require you to submit a substantial amount of paperwork as part of the application process. They may require financial statements, business licenses, income tax records, and payment of an application fee for each location where your cards are sold.
It is likely that you’ll need to establish a relationship with a third-party card processor. They may also require a trial period whereby they evaluate how well your gift cards sell before greenlighting you as a vendor.
Be aware that you may have to follow their terms for discounting your cards. You may also have to adhere to certain standards regarding packaging for retail display, which you will have to budget for. If you think partnering with a big box warehouse club may be financially beneficial and logistically possible, your next step will be to research their process online and connect with the regional and local managers responsible for the programs.
Crafting a gift card program that will grow revenue and increase customer loyalty requires a lot of work and more than a little bit of creativity. Some will be put off by the steep discounts extended to both customers and promotional partners necessary to really grow sales. That said, for every owner I hear argue that it’s not worth it, there’s another exuberant with the results. Those, mind you, are the owners who have trained staff to convert discounted gift-card trial customers into monthly unlimited wash club members producing thousands of dollars in recurring revenue — the type of leverage you can take to the bank.
Good luck and good washing.
Anthony Analetto has over 35 years’ experience in the car wash business and is a partner at SONNY’S The Car Wash Factory. Before coming to SONNY’S, Anthony was the director of operations for a 74-location national car wash chain. Anthony can be reached at (800) 327-8723 x 104 or at AAnaletto@SonnysDirect.com.