On the Wash Front - April 2010

Free? It’s for Me —
Increasing Your Average Ticket

By Anthony Analetto

In just a few weeks, thousands of car wash operators will convene in Las Vegas for the
International Carwash Association’s Car Care World Expo looking to find answers. In order to do that, however, you first have to define your problems. Over the years, I’ve discovered better results at tradeshows when I prioritize and hunt down the best solution to the single biggest issue facing my business. Coincidentally, most years that I do this, the one solution I’m looking for turns out to relate to the same struggle everyone is talking about at the show.

Speaking with colleagues, I’ve found that most of them seem to think that finding ways to hunker down and reduce variable expenses like labor will be the only thing on people’s minds this year in Las Vegas. Coming in a close second, many operators are certain that overcoming financing woes is going to steal the show. Personally, I’m looking for ways to solve my biggest challenge — how to raise my dollar-per-car average from my existing customers.

Specifically, I’m looking for ideas in two areas. First, I want to find the best practices in menu layout, package design, and price differentials to raise ticket averages. Second, I hope to discuss customer-loyalty-program ideas with managers who have had success using them to keep their patrons coming back. I may be wrong, but seeing as the show is in Las Vegas again, I’m putting my money on those two topics to dominate informal discussion. Let’s take a look.

WASH PACKAGE DESIGN AND PROMOTION

A growing percentage of operators have already reduced labor — always a critical number — at the wash via automation or format change. The one number now on everyone’s mind is the average dollar per car. There’s plenty of debate already going on about the viability of low price points in our industry. For my purposes, I’ll steer clear of the actual dollar amounts and focus on an art form that needs more open discussion. In a nutshell, we’ll be evaluating the optimal price differentials between wash packages, and which services deliver enough value to current customers for them to jump to the next higher package. Basically, how can you elevate your dollar per car average?

My next step, recognizing that car washing is not a commodity, is to discuss the most effective ways to use signage and wording to show customers that the incremental value exceeds the additional price paid. It’s a sensitive subject. Mastering it often becomes a competitive advantage for a business in its market. Now ask yourself, if you consistently produced a higher dollar average per car than a similar wash down the street, would you want to talk about it with your competitor? That’s the beauty of the ICA show. Once a year you have an opportunity to get together with other operators from all over the country.

There’s a firm rule in every business that you must deliver a consistent product and customer experience to be successful. Randomly changing your wash menu to try different pricing and service models will merely alienate your existing customers. With trial and error not being a viable option, my recommendation is: Sharpen your pencils and head out to the tradeshow with the questions you have. Here’s a list of the things I’m bringing to this year’s expo.

Good-Better-Great-Great-Ultimate
I see this pricing model more often these days. At an express exterior it often plays out with a $5-$7-$9-$9-$12 structure. The actual prices would obviously vary by market. I’ve also seen it with only four packages, but the concept remains straightforward. You have a value priced offering to attract customers. You have two packages at an equal price in the middle that offer a distinct extra service such as tire dressing or triple-foam conditioner. Finally, you have a top package that offers the combination of those services plus two extra services such as an underbody wash and a total body protectant. With the pricing scenario above, extra services in each of the middle packages have a $2 value. Buy them together and you have a combined incremental value of $4 — or $11 for the wash. The ultimate package in this case provides an underbody wash bringing the perceived value to $12. That last extra service in the top package, total body protectant in this example, is promoted as a free bonus. My questions are: Where to best put each extra service, and which one of those that are offered on the ultimate package as a free bonus demonstrates the greatest value to push customers to the top? Is it total body protectant, tire shine, triple foam, or something else?

Less is More
It’s not uncommon for a car wash to have up to six progressive wash packages with a la carte services to boot. The trend toward simplified menus means making some careful choices about what you offer. I’m hoping to gain some insight from operators who have been able to use simplification to their advantage. There are operators who’ve been extremely successful over the years by offering only a single exterior wash option. On the in-bay automatic side of the business, it’s very common to see a three package, good-better-best scenario. But what’s new is that these limited menus seem to be gaining popularity at express-exterior and flex-serve sites. I came across an interesting in-bay automatic menu puzzler recently: one promotes $5-$7-$8 services; another runs with $5-$7-$9. I’m curious about whether anyone has tried these, or similar pricing models at a conveyorized wash. Which one has the highest dollar per car average? Are customers more likely to buy the $8 service with a $1 price disparity (resulting in a higher average) than a $9 top package with a $2 disparity? Inquiring minds want to know.

If it’s for Free, it’s for Me
Free vacuums! Buy four get one more! Free with a fill-up! Free incentives are certainly not foreign to the car wash industry. But with more operators taking advantage of the growing effectiveness of direct coupon offers to an increasingly frugal customer to drive traffic, what are the best offers to promote? Are washes seeing better results offering a coupon for a free service such as total body protectant, or a discounted wash package? How effective is it to offer free services or guarantees on the top wash package to make the buying decision easier? Is anyone giving a free 48-hour guarantee only on the top wash to take away the concern of making the extra investment? If you give a free wash after 10, how about making the top wash count double — meaning the customer gets a free wash after five? Coming up with ideas is easy. Executing, testing, and evaluating them is a challenge. At this year’s ICA show, I hope to come back with some tested ideas to leverage the power of the word ‘free’ in raising my dollar per car average.

THE PERFECT VIP

Loyalty programs and their endless combinations of incentives are another hot topic I expect to discuss. The trick is offering the right combination of perks to keep customers engaged and coming back as well as providing the wash with incremental profits. Wash discounts, gift card discounts, and extended clean car guarantees are the norm. How can you really stand out from the competition? New technology has given us the ability to manage monthly subscriptions using radio frequency identification (RFID) tags and point-based loyalty programs tied into direct e-mail and text messaging with clients, but do these products deliver results? This is exciting ground and one of the areas I expect many operators will be exploring this year in Las Vegas.

SUMMARY

Times are tight but the opportunities are huge. If you don’t make it out to Car Care World Expo this year, make sure you plan to attend one of the regional shows and make sure to contact your network of colleagues after the show to see what you missed. For those of you who don’t make it to Las Vegas, but are dying to try various pricing models at your wash, I’ve been playing with a new idea that appears to be working. At a nearby location that offers a Whacky Wednesday promotion, they’ve experimented with offering a completely different menu with specials on that day, using varying combinations of extra services and price disparities to test ideas. It gives them an opportunity to evaluate signage and wash packages designed to increase their average dollar per car without disrupting their regular business. In these difficult times, having the ability to incorporate lessons learned to raise your average ticket without disrupting your business is absolutely priceless.

Good luck and good washing.

Anthony Analetto has over 26 years experience in the car wash business and is the president of SONNY’S The Car Wash Factory’s Equipment Division. 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.

 
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