Jul 7, 2015 | Customer Loyalty Research

Solving the The Car Wash Industry's 5 Biggest Challenges

David Kipke by  David Kipke

From the extreme competitiveness of the market, to the lack of time owners have to devote to marketing –  We pick apart the top 5 challenges the car wash industry faces, and how you can overcome them.

car-wash-industry

Step, for a second, into the shoes of a car wash business operator. You wake up every day knowing that you work in one of the most fragmented industries in the world - Where the 50 largest companies own less than 20% of the market, and each customer is fought for tooth-and-nail. Your business is dictated by weather forecasters who already show “wet bias.” Even on sunny days, it seems the location of your business is your only hope for attracting customers.

Car wash operators out there know that once you manage to convince a driver to come to your wash, the fun has only just begun. A team of minimum wage employees serve as the single point of interaction with your customers, who rightfully expect excellent service because they could so easily take their business elsewhere.

So, how does a car wash operator even begin to use marketing to significantly boost revenue?

Easy – by tackling the five biggest challenges affecting the car wash business better than anyone else. Let’s nail down these problems that plague today’s car wash operators and unpack how to address each.

Challenge 1: Increasing revenue is nearly impossible, especially in the insanely competitive car wash business

In any highly competitive market, it becomes increasingly difficult to find additional revenue opportunities. However, if you look closely enough you can certainly scrub out a few:

  1. Upsell. You have so many upselling opportunities that provide genuinely meaningful services to your customers that they will want to purchase again and again, such as a wheel detail or vacuum service. Have you ever considered offering rewards for purchasing a lobby item?

  2. Optimize your offerings and marketing for your different customers. Fleet customers can be huge profit centers when handled correctly, but what are you currently doing to seek them out? If one of your customers is paying to have 500 cars washed in a month, you would surely want to offer them a customer experience that is tailored to their needs. Targeting big fish customers and making them know that they’re important is a mutually beneficial dynamic.

  3. Adopt an effective, sustainable rewards program. You should be tracking every single marketing dollar that you spend down to its return on investment (ROI). If you’re going to throw money into any marketing machine, you should know how to count what it spits out. Find a rewards program that allows you to actually engage and understand your customers.

Challenge 2: The car wash business is one of the most cyclical on earth.

Other than agriculture, I challenge you to find an industry so dependent on various cyclical factors such as the weather, day of the week, and time of year. The typical car wash operator spends Monday, Tuesday, and Wednesday bracing for the following four days--nearly every single week. With 32% of traffic coming in the Winter and just 18% in the Fall, we can also reasonably predict cyclical business in the short and long term.

Let’s dig into this consumer thought process for a second. Is it worth it for them to go early in the week when it’s inconvenient or before bad weather when they might get bad value on their wash? Short answer – no.

So, all you need to do then is impact this decision making process with an incentive to tip the scales in your favor. Drive loyal customers to other times during the week to maximize weekly revenue. Do you have the means to currently reach out to your customers on that level?

Challenge 3: Ensuring exemplary customer service in the car wash business is no easy task

Keeping your customers happy is critical. In fact, it’s particularly important for car wash operators as car wash consumers are highly emotional consumers. Yes, 4 of the top 5 reasons that a person chooses to go to a professional car wash are emotional-- makes them feel good, reflects well on them, makes them proud, etc. So, providing customers an experience that leaves them happy and feeling rewarded for their decision is critical.

How do you keep your customers happy? Easy, ask them what makes them happy. Even simpler, just ask them if you made them happy and, if not, what you could have done better. There are now, easy ways to create a closed feedback loop with your customers that allows them to have a genuine two-way interaction with your brand.

A pain that many car wash operators share is how to keep employee performance, and customer satisfaction high, while also keeping costs low. Closed feedback loops are are a proven solution to this age-old conundrum. Replying directly to customers can increase sales by 22%!

Challenge 4: Car wash businesses struggle to engage customers in a meaningful way that will actually demand their attention.

79% of people 18-44 have their smartphones with them 22 hours a day.  A study found that 44% of consumers would like brands to deliver deals and coupons to their mobile devices. You need to be interacting with your customers on their cell phones, but how the heck do you do that?

One option do you text them promotions? Well, have you ever exchanged text messages with a business before? I know I haven’t, and I’m a “millennial.”

A better option – push notification open rates are a soaring 50-80% and compared to the ~25% open rates for industry emails, are emerging as the best channel to reach customers. Imagine the possibilities. A mobile engagement channel enables you to market to your customers in very impactful ways that can, for instance, drive some traffic to traditionally slower times via timed incentives (i.e. “50% off for the next hour”).

Challenge 5: There is no time in the car wash business to do marketing nor is there time to become a marketing expert.

Car Wash operators work in basically three different industries: retail, as relating with customers is one of the most important aspects of their job; service, as they must lead a team of highly interdependent employees; and manufacturing, as they have to manage, and administer the use of heavy machinery.

Competitive marketing is a cut-throat business, and only the experts succeed. Do you really have time to become a marketing expert, and then design and market campaigns constantly?

Instead, outsource your marketing to someone whose only job is to understand your customers and to think about how to bring them into your wash. But, as always, make sure whoever you use allows you to measure every last dollar you spend.

Take action and take the lead

Having solved the car wash industry's biggest challenges, be sure to take action on your analysis. Set some time aside to think how best you can tackle these issues for your business, and what systems will best help you manage them. Ensuring the best customer experience and quality service possible is what will create brand loyalty with your wash, and ultimately help you take the lead.

 

Read the 6 Stats For Customer Loyalty eBook Now

 Want more informtion? Check out more car wash research from our car wash customer loyalty blog series: 

  1. Car wash signs work well — but only when done right 
  2. Six ways to get millennials into your car wash
  3. Top car wash tips to get customers' engines revving
  4. From The Car Wash Show in Nashville: marketing strategies that actually work!
  5. Figuring out how to make car wash advertising customer first

 

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