On the Wash Front - December 2010

I Want My Mustard Curry Sauce! —
Are Cost Cutting Measures Alienating
Your Best Customers?
By Anthony Analetto

I returned from lunch the other day to find a register receipt from a local restaurant taped to my monitor with the note “idea for your next article” in angry red ink. What I quickly learned is how unfortunately simple it is for a business to inadvertently alienate its most loyal customers. Contained in this story are mistakes that I know I’ve made, and expect other car wash operators have too. Proceed with caution. The fact is that not all customers are created equal.

Some of your customers barely know the name of your business. Others will leave you for the first five-cent coupon that comes their way. Then, there are those customers who are truly loyal. Something about the experience at your business appeals so strongly to them that they will go out of their way to frequent your site. They influence other people to use your wash based on their recommendation — and they are the customers whom you may accidentally, and personally, insult, when you make what seems like a trivial change to your service in an attempt to control costs. I encourage every operator to read this story below. It provides constructive insight in understanding how small changes in the consistent experience we provide to our best customers can dramatically affect our bottom line.

The person who left the receipt taped to my monitor was a loyal customer of a local restaurant — the type we all hope to attract. I barely entered his office, holding the receipt he left me, when he snapped “Do you know what’s wrong with that receipt?” Before I could answer, he started in with “Here’s what really annoys me about that restaurant — punitive pricing. Over the years they have penalized me for being one of their best customers. Did you know that for years, I used to eat there every single day? I love their food, especially the mustard curry sauce. Unfortunately they’ve forced me to go from eating there every day, to once a month, to the point where I absolutely refuse to eat there ever again. I’ve seen some car washes doing similar things and it’s going to kill their business.” I had to admit not fully understanding the significance of a lunch receipt for $10.19 and how it related to car washing so I asked him to explain.

“You see for over two years I ate the exact same meal, nearly every day. They would substitute tomatoes for extra cheese for me, had self-serve condiments so I could get my three pumps of mustard curry sauce, and my whole lunch cost $5.60. On top of that, they gave me a punch card to get the 10th meal free. Then, after two years, they started charging me a buck for my cheese — so I was at $6.60. Next, they stopped giving self-serve condiments. Instead, they gave one little cup of curry sauce, and charged me 47 cents each for the other two, making the same lunch $7.54. Then they raised their prices. It wasn’t such a big increase for a regular meal, but the more expensive extra cheese and curry sauce put the meal at $9.90 and I vowed never to return. Today, I found a pile of partial punch cards totaling ten punches and decided to get my free lunch. They refused to combine the cards and charged me $10.19 for lunch —and that’s the receipt you’re holding. Basically, they doubled my price without giving any additional value. So I’ve gone from spending $100 to $0 per month at their restaurant — and all I wanted was my mustard curry sauce!”

WHEN CHANGING QUANTITY, QUALITY, AND PRICE

The tragedy is that when you alienate a loyal customer, you not only lose their business, but potentially the business of all the people they know. What’s worse is that you may not even realize anything is wrong until your business starts to drop off unexpectedly. Let’s take a look at the leading cost-cutting scenarios at a car wash that can disrupt consistency and inadvertently turn your best customers against you.

Staff Procedures
Once you discover your staff hasn’t been following a procedure, common sense dictates that you retrain or reprimand them immediately. Although that seems to make sense, it’s not always the best course of action. Imagine that your staff is supposed to apply tire dressing by hand only on your wash package that retails for $20. Now picture you have a loyal customer who buys your $10 wash package every single week, and gets a detail every couple of months. That represents over a thousand dollars in revenue per year. Either by accident, courtesy, or to get a higher tip, your attendants have been giving him a “free” tire shine on his $10 wash for years. You crack down. And guess what, one of your best customers really doesn’t care about your labor struggles. He doesn’t care what’s included in your $10 wash package; his $10 car wash includes tire dressing — and has for years. There are only two realistic outcomes to the scenario. First, the customer says nothing. Angry, he tells everyone he knows that the quality of your service and staff has deteriorated and recommends trying this “new” wash he has found down the street. The second choice is that the customer does complain. Your freshly retrained staff tells him that tire dressing is only included in the $20 wash package, no exceptions. Having in effect doubled the customers price without giving any additional value, he leaves angrier than if he’d said nothing, taking everyone he can find with him to your nearest competitor.

Free Services
Charging for something you previously gave for free is always dangerous ground. There’s no question that inflation absolutely causes prices to increase over time. Changes in market demand and opportunity will continuously influence your service offering and wash packages. But when you try to charge for, or simply eliminate something you previously did, or gave, for free, make sure you’ve evaluated any potential pushback or negative consequences from your existing customers. When cutting costs, or raising prices, the goal is to end up with more money in your pocket at the end of the month. This doesn’t mean that you should maintain status quo; it does however demand that you evolve your business in such a way that you preserve a consistent customer experience. Basically, measure twice, cut once. If for example you realize you have to implement an extra charge for oversized vehicles, greet customers with large SUVs for the first month and explain the charge. Possibly hand them a flyer explaining the charge, how it will allow you to improve the service you provide them, coupled with a coupon for their next wash.

Production Costs
The temptation is always there to cut costs associated with the actual wash process. A little less chemical, a little longer interval between maintenance or replacement of wearable items, a shortened crew, a fraction of a second less time on blowers, high-pressure pumps, or other equipment that draws a lot of power — the possibilities are endless. Proceed with caution. Plan carefully. There are ways to reduce chemical, water, and electrical consumption without degrading wash quality. Likewise, refining your daily, weekly, and monthly preventive maintenance program can save thousands in unexpected repairs. If your equipment package previously removed bird droppings, bugs, or delivered clean wheels, and now it doesn’t because of your cost saving measures, you’re likely to lose more revenue from your loyal customers leaving than you will ever save in expenses.

Advertising
It’s not uncommon for a business to advertise a coupon so consistently, for such a long period of time, that some of your best customers will expect the discount. The coupon itself mutates into a form of loyalty program. Before eliminating those coupons to save money, invest in effective marketing. First, capture customers’ e-mail addresses, sign them up for text-based promotions, get their mailing address, or register them for a loyalty program. Transition your loyal customers to receiving better discount offers directly, and wait for redemption of other paid coupons to drop before cutting them from your budget. Also, if you previously sponsored local charities, avoid pulling the plug because you’re short on cash. Work with them to find alternate ways to provide support. Last year you might have given free wash coupons for a raffle, this year it may be 50 percent off your top wash.

SUMMARY

Consistency of experience and perceived value are the two pillars that support continued business from your most loyal customers. As you look for ways to cut costs, or increase revenue, evaluate each initiative carefully before implementing it. Make sure you haven’t inadvertently created a scenario that will penalize and alienate your best customers — the bread and butter of your business — who may just want their mustard curry sauce.

Good luck, and good washing.

Anthony Analetto has over 28 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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