Power Up With Loyalty ProgramsMaintain a healthy customer base and live a long business life.
Customer loyalty programs are changing the way business is done in the professional carwashing industry. From fast, secure and more convenient cashless transactions to solving the woes of weather patterns, customer loyalty programs have changed the way veteran operators have conducted business, and they are currently a big reason why investors are entering the market or pondering an investment.
In this article, we speak with three experts who share best practices when implementing and using loyalty programs in this industry.
Join the Club
These days, the popularity of loyalty programs is primarily driven through consumer interest. According to a recent study by Accenture, 77 percent of consumers participate in a retail loyalty program. Therefore, by not offering a loyalty program, the research states, your business is not effectively serving the large majority of customers today.
Additionally, John Cassady, CEO of EverWash, explains that we live in a “subscription-based” era where customers are ordering everything from dog food to makeup on a recurring basis. And, in this era of consumer convenience, the emergence of apps is omnipresent.
“Smartphones are replacing laptops, and apps continue to gain a huge share in the marketplace,” asserts Cassady. “If customers can’t purchase or learn about your services through a robust app, your business is going to be left behind.”
While many businesses are currently offering loyalty programs, a vast majority of retailers are either not engaged with this strategy at all or are operating programs at low performance potential. Last year, in an article published on Forbes.com on the topic of customer loyalty, the article’s author, Katherine Black of KPMG LLC, reported that many companies have merely “tinkered with programs that were established years ago when consumer expectations and the competition were much different. They also don’t have an accurate way of measuring how their loyalty programs are even performing.”
Shifting customer buying habits and evolving technology are two important reasons why loyalty clubs require attention and research in order to properly maintain successful programs and attract a loyal base of members.
Many owners and operators who minimize the importance and power of loyalty programs are usually convinced that investments in loyalty programs can be both expensive as well as time-consuming. And, according to the experts, these cautious industry professionals are exactly correct.
In order to do loyalty programs properly, investments in technology and customer acquisition marketing must be made; then, once implemented, usage and feedback must be monitored on a continual basis.
In the end, the effort is worth it, as it costs approximately five times more to attract a new customer than it does to retain an existing one. Furthermore, some loyalty program platforms in the industry today are taking the load of installing and monitoring feedback off of the owner’s and operator’s hands, streamlining the process and allowing operators to focus on their businesses and serving customers.
Updating software and hardware and improving on-site processes will pay dividends to your business, especially its loyalty program. Mike Jorgensen, sales manager for XpresWash, says, “If it’s a headache to sign up or your loading system isn’t perfect, we have a problem. Customer perception is very important.” Whether customers are trying to sign up online or at the carwash site, he adds, what they see, feel, smell and experience are paramount in your business’ ability to win their loyalty.
“Take some time out to evaluate your site from your customer’s eyes. Walk through the signup process, the cancellation process, changing packages, etc.,” advises Jorgensen.
Loyalty program exercise
If you have a loyalty program in place and it’s not successful, the first question to ask is, did you partner with a reputable provider, and are you using the tools it offers?
Amy Olson of WashCard Systems equates loyalty programs to workout videos. “You can purchase the video, put it in and turn it on, but if you don’t get off the couch and use the tool, no results will come of it,” she proclaims.
Advanced platforms in the market offer many features and options to make loyalty programs easy to understand and use — for operators and customers. Olson says it’s essential to utilize training from vendors and also to start slow, using a few features of the platform at first until the staff fully understands the data, platform functions and member base.
In addition to using the system’s capabilities, Olson notes that operators should promote loyalty membership, including through social media, where customers can learn about your programs and sign up 24/7.
“Marketing through social media is huge in the society we live in today,” Olson adds. “With all the tools available through Facebook, Instagram and Twitter, it’s well worth the time investment to target the right groups of people you want to attract to your business.”
Sometimes, loyalty programs fail or underperform because of a lack of awareness. Just as you can’t assume that all your social media followers are customers, you equally can’t assume that all of your customers are social media followers. As a result, on-site employees must be adequately trained and equipped to sell the programs, and signage must be present.
“Are your customers aware of your programs?” questions Jorgensen. “Clean, vibrant and easy-to-understand signage components will help drive your message, particularly at unattended washes.”
In addition to social media and signage, advanced platforms are also using other forms of electronic customer outreach tactics. “A properly implemented and managed membership program will have the proper communications tools, such as email, text messaging and push notification campaigns — all designed to keep customers connected to your carwash,” notes Cassady, adding that these channels also prompt user feedback, which is vital to the success of your program.
Reps and the value proposition
Successful operators understand the importance of quality team members. For the purpose of promoting and selling loyalty programs, these employees’ value escalates even further. Research has shown that companies with higher employee engagement have twice the customer loyalty (repeat purchases, recommendations to friends, etc.) than companies with average employee engagement levels.
If the program does not have the support of the staff, Jorgensen explains, it will likely not reach its potential. “High-quality equipment married with a team of motivated people that believes in the product can do wonders for a loyalty program,” he says, encouraging owners to provide incentives to employees in order to drive subscriptions. “If employees understand the value to them on a personal level, they are also more apt to succeed. It’s also a great idea to let your employees wash for free periodically. Doing this helps them understand what they are selling and gives them an opportunity to give you feedback on their experience.”
Often, customers will require an education on your program and the importance of using a professional carwash before committing to membership. On-site representatives provide a personal way for customers to connect to your loyalty program and sell its value. These moments are precious, especially since time is of the essence and employees are typically preoccupied with other tasks while the customer is on-site. Also, the level of education needed will vary from customer to customer. Unfortunately, estimates Cassady, many customers need a significant amount of education.
“The average carwash customer will wash his or her car less than one time per month and might only wash four or five times per year, which makes up a larger percentage of the overall customer base than many operators even realize,” explains Cassady. “The education starts at the wash with your greeters, cashier and service attendants. All of these employees must be properly trained on being able to show each customer there’s a more cost effective way to keep your car clean throughout the year — and that’s with membership.”
This education must be followed by a viable value statement, which is often expressed through effective pricing. According to the experts we interviewed for this article, pricing your program requires looking at several considerations, such as:
- What are the local demographics, and what are its buying habits?
- What will the current customer base be willing to pay for the services/incentives you’re offering?
- Does the competition offer a loyalty program(s)? If so, what is the price and benefits?
- What are your costs to operate the program?
- How many locations are tied to the program?
- What were the results and metrics of any previous loyalty program offered at your business?
- What are the membership prices, benefits as well as experiences of other non-carwash retailers in the area regarding customer loyalty programs?
Showing value is a critical component of a successful loyalty program. If the customer does not feel like they’re saving money or getting something out of membership, they simply won’t join, even though long-term savings are possible.
Promoting the value of your loyalty program should be featured on signage and menus, in marketing efforts and when employees are conversing with customers. Also, advanced point-of-sale (POS) systems can help translate the overall value statement of your program as well as process payments and memberships.
“Today, many POS systems are incorporating mobile payment options for payment acceptance,” educates Olson. “This allows the operator to take on unlimited programs, pre-paid programs or pay-as-you-go programs within their wash, whether it is a tunnel, in-bay automatic or self-serve location.”
According to Jorgensen, POS systems are becoming more user-friendly with app-based platforms as well as more secure. “It will be very interesting to see in five years where the PCI-compliant world leads us. Both customer cardholder and personal data are obviously extremely important to keep safe and secured, but many operators still overlook the importance of their customer data. I would encourage anybody reading this who has older POS equipment to evaluate their processing hardware\software soon,” he advises.
Since technology, security and customer perception of value change, Olson notes that operators should always stay mindful of software updates, benefits, pricing and member levels. “When you have a continuous input of data, you have the tools available to figure out how to manage, change and maintain your loyalty programs,” she adds. “A good rule of thumb to start with is looking at your programs every 90 days. Spend the time to examine the data, see what results you’re getting and, if needed, figure out where you can make tweaks.”
Still, once you’ve found that sweet spot in pricing, it’s important to resist the urge to increase prices. “If it’s not broke, don’t fix it. People will start to cancel if they don’t see value,” warns Cassady.
The power of referrals
As mentioned, a successful loyalty program requires continuous monitoring and selling of membership. While having a few members is a good starting point, there is strength in numbers beyond profitability. More members equals more feedback as well as more people who will promote your program.
Although relatively new to this space, Cassady has over 25 years of experience growing membership in the gym and fitness industry. “In the gym industry,” he educates, “the average gym has about 6,000 members. The average carwash that does membership has about 300 members.” But, Cassady continues, there is potential to significantly grow carwash membership when operators combine the best practices of gym owners with the right mobile commerce innovations, leading to higher wash volume and much higher revenue.
Once you’ve attracted a large membership base, you will surely notice that usage varies across members. Members on both extremes of the spectrum — heavy and light users — present unique challenges to operators, which is another reason some operators stall to implement these programs. Simply put, light users will eventually stop using the service, then cancel their memberships and possibly never come back. Heavy users, or what some in the industry call “abusers,” will look to take advantage and even break the rules by sharing membership.
Advanced loyalty program providers work with operators and these members, such as by reminding light users of benefits and providing incentives through digital communications and limiting washing to once a day for heavy users.
However, Cassady believes heavy users should be cherished, not feared. “In the carwash industry, they’re called abusers; in the gym industry, they’re called gym rats. We love our gym rats,” he professes. “They’ll never go to another gym, and they’re going to refer a lot of friends and families — they’re our best customers. That same dynamic exists in the carwash industry.”
While operators should maintain a healthy focus on both sides of the usage spectrum, focusing on the average and the power of referrals is of utmost importance when managing your program. According to Cassady, while the average one-off customer might visit the carwash four times a year, the average monthly member uses it three times a month, or 36 times a year.
The word-of-mouth advertising these loyal members will do is priceless. This is one area where the experts see the biggest potential in growing membership in the industry today. “In the gym industry, 50 to 70 percent of all new members come from referrals. In the carwash industry, maybe one percent is coming from referrals.” Leading vendors in this industry are working to grow this percentage by making the referral process easier and more appealing for current members, such as through incentives and discounts for referring a friend or family member.
Today’s members can make referrals through apps and many other ways. According to Olson, “Whether you are using loaded loyalty cards, promo codes or paper recommendation cards, having your loyal members talk to their friends about your business is one of the best marketing tools available.”
Word-of-mouth advertising is also possible through online reviews. “One of the first things people do when searching for any kind of service is look to Google. If you don’t have great reviews or any presence on Google, your business could be suffering because of it,” continues Olson.
Multiple site, maximum value
In addition to getting a great price, many customers also place significant value on convenience. As more multi-site owners and operators expand in the industry, offering loyalty programs and membership across several locations offers a multitude of benefits.
The experts we interviewed all agree that multi-site operators will find it easy, practical and effective when coordinating all locations under one membership program. Additionally, operators should consider teaming up with other carwashes in the area or state — even neighboring states — to coordinate a united loyalty campaign and program.
The benefits for operators, adds Olson, include the ease of operation, management and reporting as well as overall customer satisfaction. For customers, she notes, the benefits are even greater. Customers have access to a wider array of services, technologies, locations, hours of operation and wash formats — just to name a few advantages — when embership can be accessed at a variety of sites.
Improvements continue to be made in this area of our industry. Customer and vehicle recognition from an app-based QR code is just a continuation of this evolution. Whether it’s through your services, access to multiple sites, offering advanced technology or any of the best practices noted here, riding the wave of loyalty is far more preferable to being drowned by competition that is doing it better.