Past Issue

Price or Brand? Fantastic Winning Marketing Strategies!

By Robert Roman

07/01/18

Articles on marketing usually have an attention-grabbing title followed by dozens of helpful tips and tricks to boost business by attracting new customers and keeping existing customers loyal.

This isn’t one of those articles.

Instead of providing tips to make customers more comfortable and visit more often by remodeling the lobby (e.g., TV, WiFi, massage chairs), pundits today recommend offering free towels and window cleaner in the self-serve vacuum area.

If a car wash operator wants to take the back office work out of running a monthly unlimited membership program, there are now companies (vendors) that will do everything for a fee.

Likewise, it’s now possible for customers to activate self-service and in-bay automatic washes with smartphone apps and more. Push buttons and dials are giving way to capacitive touch screens that make interactions faster and easier.

Similarly, reader boards and POS/pump toppers are giving way to digital menus and videos that demonstrate attributes and benefits of products rather than services.

In the wash bay, flashing LEDs, lava and glow foam, and vivid colors help convey that customers get what they paid for. Today, if the lights are dim, they don’t come in.

Reaching customers is also different with social media and text messages obscuring traditional forms of communication such as newspapers, e-mail, and direct mail.

Modern architecture, tower components, and LEDs have replaced the need for billboard space that is increasingly difficult to find and expensive to lease.

For busy Millennials and bustling young families, the ability to complete multiple transactions at one location can be a huge benefit if the location happens to be a convenience store or shopping center.

However, at a freestanding express wash, convenience of location, process speed, and value (i.e., low price, free vacuums) has basically sidelined the development of additional profit centers at new washes.

For example, most modern car washes don’t offer assisted services such as express detailing, detail shop, vending machines, or express oil changes. There is no lobby or waiting area, and many sites don’t offer restrooms.

I could go on but it’s clear that many of the old marketing tips and tricks to give a car wash business a boost are no longer desirable or needed.

Quite frankly, one could argue that in the near future car wash operators may not be directly involved with marketing their business much at all.

One aspect of this is competition, another is technology. For example, as express captures more and more of the total available market, the supply side of the car wash industry will become more one dimensional.

Even now the number of operators employing cost leadership marketing strategies is on the rise.  Cost leadership is where a company has the most competitively priced product on the market, meaning it is the cheapest.

Small companies in many other industries often find it difficult if not impossible to compete with the larger players on cost leadership because of scale economies.

The same applies to the car wash industry. For example, a firm that buys 10 car wash machines a year gets a much better price than someone who buys one machine every 10 years. This notion extends to chemical, parts and supplies, and service.

Today, technology makes it possible to monitor virtually every aspect of a car wash operation remotely using apps and mobile devices. For example, I know owners who go off site for days or weeks and everything runs like a top — mostly.

Moreover, digital car wash networks are bound to grow based on the strength of the subscription economy. A digital car wash network is a business concept to improve wash frequency by integrating software and vehicle recognition technology into existing wash systems.

Consumers simply download a customer application to a mobile device and pay a fixed monthly fee for unlimited use. The customer app functions allow users to search for the closest store in the network, get directions, check services/prices, make purchases, and even check waiting times. Today, some digital car wash networks are marketing monthly unlimited for as low as $9.95.

Arguably, this price level would serve as a market-clearing price for the proverbial $3 car wash with free vacuums as well as the $100 a year membership-only model.

Consequently, if price promotion eventually takes the pricing power out of car washing, we might believe that competitive advantage would come down to brand, employees, and community involvement.

For example, like Big Steve’s $3 car wash shown earlier, Triple Play Car Wash (shown above) is also located in Massachusetts, but the lowest price at Triple Play is $12 for a basic exterior wash.

Reportedly, Big Steve’s went from a lowly 20,000 cars a year to 120,000 or so after renovating the tunnel, adding some self-serve vacuums, and setting the base price to $3.

Whereas Triple Play had to select a location, build from scratch and add store fixtures, support equipment, back-office organization, point-of-sale systems, lighting and energy management, and parking facilities. Moreover, everything had to be in place before opening and ringing up the first sale.

So, what is a fantastic winning strategy?

Is it the blood, sweat, and tears that result in the creation of a prodigious brand or is it simply enough to build cheap and charge $3?

Regardless of approach, there is no substitute for selling good products that people want, providing excellent customer service, and then merchandising these attributes attractively.

 

Bob Roman is president of RJR Enterprises – Consulting Services (www.carwashplan.com). You can reach Bob via e-mail at bob@carwashplan.com.



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