License Plate Recognition - Its Use in Increasing Car Wash Profits
By Anthony Analetto
There’s nothing new about needing to know who your customers are. From the old fashioned general store where the owners knew the favorite candy of each child to the modern supermarket that uses a discount card to record every purchase, information spurs sales.
How do you currently track individual customer’s habits? Do they like their cars washed once a week or once a month? You can use the statistics you accumulate to manage your operations, predict the supplies you’ll need and more effectively promote.
You can also identify different categories of customers. Do they come in when you advertise specials? Do they purchase additional products or services? Once you have a handle on the types of clients, you can aim your promotions not only to attract them but to also stimulate word-of-mouth sales.
One way to identify customers is by their license plates. For many years, car washes kept manual records of plate numbers. Unfortunately, it was often difficult to train and retain staff who could consistently do the job, and many operators gave up on the idea.
UNLIMITED PLAN TECHNOLOGY EVOLUTION
Original plans to ensure a predictable cash flow were less high-tech. Employees scanned customers’ cards. The cards were easy to use but sharing them led to the theft of services. Car washes needed a better solution.
Radio frequency identification (RFID) tags made a big splash in the car wash industry. Businesses use RFIDs in ways similar to barcodes as unique identifiers, but scanners can read them at a distance. These tags gave operators a method to manage promotions such as memberships, loyalty programs, and clubs. They provided customers with a break on pricing and encouraged more frequent visits.
Once car wash employees installed tags on visitors’ vehicles, the facility could identify them through a database entry. This process would allow customers to drive straight in for service.
Because the staff stuck the tags to the car windows, theft was less of a problem than with cards, but there were other complications. The RFIDs were expensive. Customers bought them at a pay station. An attendant had to be present at each purchase to complete the sale and paperwork. That labor-intensive procedure increased costs and was not a winning combination.
LICENSE PLATE RECOGNITION
The new wave hitting car washes is license plate recognition (LPR), a form of automatic number-plate recognition (ANPR). LPR eliminates the need for the tags that are not only extra work but can also be damaged or defaced. This technology uses specially engineered optical character recognition software to read license plate numbers.
ANPR is used around the world by law enforcement to check whether a vehicle is registered and catch traffic offenders, reducing the need for an on-the-ground police presence.
LPR systems can vary to accommodate the width of a lane. Multiple scanners can also be installed to cover two or more lanes. Like RFIDs, LPR systems can integrate with your POS.
A customer’s license plate number serves as a permanent identifier. The POS keeps track of how many times a car enters. You can store a customer’s purchases as records associated with their license plate.
Many car wash owners are looking at LPR technology not only to track customers but to supercharge monthly unlimited plans. If customers are not members, no attendant is necessary at a pay station. Consumers can buy a single wash or a full membership and sign for it digitally. You already have evidence of their identities.
LPR speeds cars through, cuts labor costs, and gathers more data. Every vehicle gets scanned. When an automobile rolls over a loop detector on the ground, it automatically activates a camera, which takes an image of the license plate. If customers are members, the gates in their lanes open automatically.
For even greater convenience in the e-commerce age, customers can also make their purchase online and redeem it at a pay station. They can even manage their plans. Your clients can pull out their smartphones over their lunch breaks and get their cars washed on their way home from work or school.
From entrance to exit, with LPR, the customer experience is seamless, encouraging frequent return visits and positive reviews on the Internet and to friends and family.
BARGAINS AND UPGRADES
If your records tell you a customer initially bought a basic wash, you can offer to upgrade them to your top package on a second visit. The purchaser will appreciate a bargain, and you’ll make a bigger sale. You can adapt endless marketing options to the behavior of your customers, offering discounts as necessary to keep them coming back.
KNOWLEDGE IS POWER
What you can measure, you can manage. For each consumer, you can determine what and how much they bought, when, and how often. You can count how many unique clients you have, not just the number of cars washed. That will tell you just how much new business you’ve gained and give you a heads up if you’re losing a particular type of sale.
You will also have reliable data on your returning customers. You can measure the rates at which they repeat their purchases.
Loyalty rewards bring customers back. I saw a recent study that estimated that 77 percent of customers participate in retail loyalty programs. If a client visits four or more times per year, or at any frequency that fits your business model, you can offer them special promotions that will have them driving up to your lanes even more often.
If you’ve been estimating your potential revenues with metrics like a dollar per car, you can have the capacity to make more precise calculations. You can understand the profit you make on every customer and where you see income growth. You can also identify any offers that don’t result in increased sales and modify your promotional strategies.
THE NEXT STEPS
Once you’ve used LPR to establish your database, you can develop even more customer specific marketing. If you operate more than one car wash, LPR will enable you to identify location-specific trends. What is your customer churn in a particular neighborhood? What factors can contribute to increasing the average spending per client?
Can you negotiate cross-promotions with other businesses in the neighborhood? How about measuring the impact of your social media campaigns?
Understanding not only the total number of cars washed, but how many are new, and changes in frequency not only helps measure your marketing but can quickly identify challenges and opportunities across your locations. Has a local shopping center gone out of business, leading to lower wash frequency per car? Is a road upgrade temporarily changing traffic and bringing new customers?
As you gather more data and dig deeper, new challenges and opportunities will present themselves, and you’ll have the tools you need to make informed decisions. Whether you have one car wash or a whole portfolio, access to a higher quality of information can bring positive changes to your bottom line.
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.