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Innovate, Adapt, Invest - Technology to Keep Customers Loyal

By AJ Rassamni

05/01/19

It is a jungle out there! “Every morning in Africa, a gazelle wakes up, it knows it must outrun the fastest lion or it will be killed. Every morning in Africa, a lion wakes up. It knows it must run faster than the slowest gazelle, or it will starve. It doesn’t matter whether you’re the lion or a gazelle — when the sun comes up, you’d better be running.” This is a great quote from Born to Run, Christopher McDougal best-selling book.

Regardless of whether a business owner is the lion or the gazelle, they believe they have to outrun, outperform, and out-innovate their competitors. True, it is a jungle out there, but the fact is the only competitor a business owner has to outrun, outperform, and out-innovate is their own past performances and measurements. 

Setting goals based on competitors’ operations is frustrating and stressful; setting goals based on your own company’s past performance is attainable and stress free.

Depending on the industry, 
a 5 percent increase in the customer retention rate will result in profit increase anywhere between
25 percent to 125 percent.
— YCS Group
THE MYTH

Most people believe that it takes too much time and money to improve online ranking, positive reviews, and first-time customer visits. They also believe that it takes too much effort to increase customer retention, frequency of visits, and ultimately to increase revenue and profit.

The saying, “money does not grow on trees,” is a limiting belief and is largely false. The fact is, with a little research and thinking outside the box, any business has the power to improve revenue by concentrating on creating passive income and by taking advantage of today’s technology to automate many marketing strategies, and to resolve all the above issues. 

Business owners who concentrate on their business and their customers and employees, instead of worrying about the competitors, can produce much better results in a shorter amount of time.

Acquiring a new customer is anywhere from five to 25 times more expensive than retaining your existing clients.
— Harvard Business Review
WHEN THE GAME CHANGES, CHANGE YOUR GAME

An entrepreneur may be the most knowledgeable person in their industry. For example, a chef may have all the passion and talent to prepare the most delicious-tasting dish, prepare it in the most elegant presentation as if it were a piece of art, and deliver the most memorable experience and unmatched service. Yet, it doesn’t mean this chef knows how to market his restaurant and make a profit.

In the early nineties, before the Internet revolution, business owners who loved their profession, mastered its daily operation, and demonstrated passion and care for their customers and staff, had a very profitable business. With today’s technology, the game has changed. Those who refuse to innovate, adapt, and invest in new technology will be forced to close or sell.

No matter what business a person is in, there are only four strategies to grow profit exponentially:
• Increase first-time customers
• Increase frequency of visits
• Increase dollar per transaction
• Master daily operation

Work on Your Business not in Your Business

Many entrepreneurs are too busy working in their business; they wear too many hats during the day to master the daily operation. They lack knowledge and time to work on their business.

Keep on doing what you do the best and invest in technology to do the rest.As technology advances, many aspects of our daily lives become simplified or even automated. This stays true for the introduction of new technology available to small and large businesses. Loyalty programs have been available to big corporations for the last 20 years, e.g., airlines and hotels. The introduction of loyalty programs for small businesses is the newest addition to the modern tools available to business owners at a very affordable investment. These programs vary, but all offer features that automate specific aspects of marketing and consumer interactions.

As many as
84 percent of consumers say they’re more apt to stick with a brand that offers a loyalty program. And 66 percent of customers say the ability to earn rewards actually changes their spending behavior.
— Nielsen
The first benefit of loyalty programs is the most obvious: Loyalty. This encourages existing customers to shop more often. Specifically, 81 percent of customers agree that loyalty programs make them more likely to continue doing business with a brand (maccor.com). This helps maintain a large portion of income as 80 percent of revenue is generated by 20 percent of customers (brpconsulting.com). These studies prove that existing customers are of higher value than newly acquired customers. Many loyalty programs with CRM (customer relationship management) software can also automate marketing strategies to increase the number of first-time clients, the frequency of visits, retention of existing customers, and the dollar amount per transaction.

I have an Addiction and You Can Exploit It

As consumers, we went from being exposed to about 500 ads a day to being bombarded with over 10,000 brand messages a day. So how can businesses break through the noise and keep their clients loyal to them? Standing out in the world of competitors is hard. Earning clients takes more than just offering a good service and experience. Today, consumers are taking control by recording their TV shows (skipping commercials) and blocking ads on their digital devices.

Consumers are in charge (or so they believe). However, over 80 percent of consumers own a smartphone, and they are addicted to their SMS messages.

Because of smartphones, consumers have the power to demand advertising experiences that are actually enjoyable to them. The most widely acceptable promotion to them is via text messages. On average, 90 percent of text messages are opened within two minutes. When businesses reach out to a consumer at the right moment with a targeted offer via text messages, many users — if they need the service, are in the vicinity of the business, and have the time and money — will take advantage of the offer. In many cases, the business will reap the benefits within minutes of sending the text.

However, laws prohibit a business from pushing offers to consumers unless the company was able to get their permission first. That is where loyalty programs can help. Customers opt-in and agree to receive messages in return for the opportunity to earn a free service such as a free car wash. 

Frequently returning customers tend to be 67 percent more profitable and refer others. —Bain
& Company
On the surface it looks like a loyalty program. The customer just has to check-in every time they visit the business in order to receive their free car wash after reaching the set number of visits as a thank you for being a loyal customer. However, the loyalty plan may also be a CRM program that helps increase positive reviews, online ranking, first-time customers, frequency of visits, customer retention, and much more. All the strategies will be automated, giving the business owner freedom to continue enjoying running the daily operation and have more time to enjoy life.

The tablet is placed strategically next to the cashier at full-service car washes. The cashier should be trained to ask each and every customer if they would like to receive a free car wash. All customers have to do is check in. The program could also be used at express washes by adding an adjustable kiosk next to the pay terminal or it could be integrated with the pay terminal screen via API with the approval of the pay terminal software developers. This way, after each customer pays for the wash, a screen will pop up and ask if they would like to receive a free car wash: all they have to do is check in.

Under the loyalty program, when the “free wash” is earned by loyal customers for reaching the desired number of visits, the best wash package should always be given for two reasons:
• If you are promoting this wash package as the best wash and most recommended wash, you want to offer it as a reward for loyal customers to try it, like it, and repurchase it on their next visit.
•  For the customer, the value perception is $40, however the real cost for the business is almost similar to the price of the basic car wash.

A 2 percent increase in customer retention has the same effect as decreasing costs by 10 percent. — Emmet & Mark Murphy This is a prescription for cutting cost.HOW LOYAL ARE YOUR CUSTOMERS?

Today’s technology, research, and insights can help businesses understand consumers’ behavior better than ever before. Nielsen, the global measurement and data analytics company, conducted a research asking consumers one question: “What one attribute would encourage you most to switch brands or service providers? Sixty-one percent of consumers in the United States and Canada said, “better price;” only 20 percent said “better quality.” Nielsen concluded that loyalty programs have the most potential for preventing consumers from changing brand because it creates value, the number one attribute that encourages customers to be loyal to any business.  

UNLIMITED WASH PLANS

However, in the car wash industry the unlimited wash plans are perceived as being of great value, and it is an invaluable attribute to build loyalty and keep customers coming back. The success and popularity of the unlimited wash plan depends on the pricing. It is recommended to have the full-service wash plans priced between 1.5 times to twice the price of the wash. Express wash plans should not exceed three times the price of the express wash.

Because car washes are affected by Mother Nature, promoting unlimited wash plans to existing clients is the best strategy to overcome the weather effect and create a passive income rain or shine. It is a great feeling to wake up every morning richer than the night before.

YOUR BIGGEST EXPENSE

There is a misconception that the biggest expense in any business is employees; mortgage; or the cost of water, power, and chemicals. Yes, those are big expenses. However the biggest expense in any business is when employees are standing around waiting for customers to come in. It is the time when the register is not ringing “cha-ching.”

Every business has downtime, and the goal is to reduce this downtime as much as possible. Offering discounts to nearby company employees or acquiring fleet accounts from local government agencies or corporations with fleet vehicles can help reduce the downtime and generate extra income. Securing the account from the city police department could be very easy by calling the fleet department. The sheriff’s office is part of the county, and you may need to call the purchasing department and fill out a bid to wash all county cars including sheriffs, social services, public works, and many other departments. It looks very good for a business to wash law-enforcement cars because this will deter troublemakers from hanging around in the area and gives peace of mind to customers.

Business owners’ jobs are to work on their business not in their business. Owners should have a set of questions to ask themselves every morning, such as what can we do to increase:
• Employee loyalty
• Productivity
• Customers’ experience
• Frequency of visits
• Dollar per transaction
• First-time customer visits
• Online positive reviews
• Online ranking
• Community involvement
• Fleet accounts
• Unlimited wash passes

And the most important question of all is: what technology can we invest in to help us automate many of our marketing strategies?

AJ Rassamni is the author of two books written specifically for the car washindustry: Increase Business 30% in 30 Days, and Dirty Cars Filthy Rich, He is CEO of both the Great American Car Wash and MyLoyaltyApps. AJ can be reached at info@MyLoyaltyApps.com. Text 559-284-1919.



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