Unlimited Monthly Wash Club

[TEEBOX]

So I'm considering not bucking the trend and going with a membership wash. However, I do not have the $$$ now to invest in paid gates.

My layout: 120 foot Conveyor, 2 sets of wraparounds, top brush, mitter curtain, low rocker brush, 1 set of high pressure pivot blasters, underbody flush, triple foam and RainX Arch.

I hand apply the tire shine with my manned towel dryers. I also have 8 producers for drying as well as a flash dryer.

I have paid vacuums that have suffered in revenue every since 1 guy bought 2 washes around me and offers free vac.

My best year we did 80K in washes. Avg. Ticket $7, Wash Packages start at $5 for Express, 7, 9, and 12 with Rain X.

Any suggestions with those that have handhelds that you would recommend and what steps should I take to insure it is a smooth transition?

I'm trying to be proactive rather than reactive at this point.

Thanks in advance.

 

[Washmee]

Sent you a PM.

 

[robert roman]

If base is $5.00 and average is only $7.00, what is unlimited $14.95?

If so, how are you going to pay for all that labor when unlimited drops average revenue from $7.00 to $5.50?

Just saying.

 

[Jerry]

At 500 members you will not need to increase labor at all.
500 members produce an extra 1500 washes a month. That’s only 50 more cars washed a day. That’s only 5 more cars an hour. If your current staff can’t handle roughly 5 more cars an hour, something is wrong.

500 members at $15/month will produce an extra $90,000 so if in fact he needs to hire 1 additional employee, he’ll have plenty of money to do that.

 

[benny2]

This is where I can’t make sense of the math on Unlimited. Let’s say he washes 80k cars a year 80k x $7 = 560k. If he washes 80k x $5.50 =$440k + $90k from Unlimited = $530k, and all variable costs increase. Seems like the POS people are the largest beneficiaries. They get steady revenue from you purchasing RFID tags, I guess the car wash itself actually ends up on a monthly plan.

 

[BBE]

This is where I can’t make sense of the math on Unlimited. Let’s say he washes 80k cars a year 80k x $7 = 560k. If he washes 80k x $5.50 =$440k + $90k from Unlimited = $530k, and all variable costs increase. Seems like the POS people are the largest beneficiaries. They get steady revenue from you purchasing RFID tags, I guess the car wash itself actually ends up on a monthly plan.

Your math is flawed. $7 ticket avg across the 80k non monthly customers would not change. Redo the math

 

[Jerry]

just to expand on what BBE said, your math is definitely flawed. You are completely forgetting that volume will increase with a monthly club. An 80k wash can easily expect to add 20k more washes in year 1.. Only 500 total members will add ~18,000 washes to your volume.

Also, don’t worry about average ticket per car. It’s really a useless number. Worry about adding more revenue to your wash. Unlimited doesn’t take away from your ‘regular’ paying customers. It maximizes the amount they spend with you each year. If his average price is $7, and the average customer washes 4 times a year, each of his customers are worth ~$30. Once they join the club they pay $180/yr. each club member is now worth roughly $150 more to you. An 80k volume wash can easily double their revenues in less than 3 years by just adding unlimited clubs.

Rfid tags cost $1-2 each. Who wouldn’t happily buy 3000 tags if it meant $540,000 more in revenue?

 

[robert roman]

500 members at $14.95 would increase net operating income by about $50,000 minus the implementation cost (transponders, training, etc.). Then use this to buy $150,000 in pay stations and software. Also need responsive website, phone app, promotion, etc.

Then get rid of the greeter, the two side dryers, install tire shiner, offer free vacuums, and you might be able to become as profitable as express exterior.

 

[JustaGuy]

To further expand on what BBE and Jerry said, with good promoting and marketing you should be able to sign up more than 500 members.

Also, many of these members would want more than just the lowest price plan - if the plans are differentiated like your packages most likely are, and are priced accordingly, you might expect roughly half to sign up on the lowest price, perhaps 40% at the mid tier, and 10% at the top tier.

If those plans price out at $14.95, 19.95 and 24.95, and you are able to sign up 800 members, the numbers change dramatically:

400 @ 14.95 per month is $70K+ / year
320 @ 19.95 per month is $76K+ / year
80 @ 24.95 per month is 23K+ /year

That gives a total of over $170K / year, or over $14K / month, from plan members alone. If each of those members averaged washing 4x per year before becoming members, at your $7 average ticket you've converted $22K of annual revenue into $170K.

 

[robert roman]

So, what happens to unlimited when along comes a spider, like in Chicago, Detroit, and lots of other places, with $3/4/6/9 and free vacuums?

 

[Jerry]

What happens to a car wash without unlimited when along comes a spider, like in Chicago, Detroit and lots of other places with $3/4/6/9 and free vacuums?

I’d much rather have a mature membership club with some form of guaranteed revenue and loyal customers that come from unlimited clubs to combat a competitor then not have it.

 

[robert roman]

What about along comes a spider with members-only carwash. $100 annual fee and you can wash all you want, whenever you want.

 

[benny2]

Thanks guys for the correction on the numbers it makes sense in my head now.

 

[JustaGuy]

So, what happens to unlimited when along comes a spider, like in Chicago, Detroit, and lots of other places, with $3/4/6/9 and free vacuums?

What about along comes a spider with members-only carwash. $100 annual fee and you can wash all you want, whenever you want.

What happens when any aspect of the business climate changes? You adapt. That might mean adjusting your price point, ensuring you are differentiated from the El Cheapo washes well enough to maintain your current price point and market position, adopting a similar model, and so on. In the mean time, make hay while the sun shines. It is a proven model for the industry, why not make it work for you?

 

[robert roman]

I really don't disagree. Unlimited is de facto standard. Point I was trying to make is how difficult it will become to be different when washes are more similar than different. I seen some markets where the only major difference between stores is business name and color scheme.

 

[Jerry]

Robert - the point you just made in post #15 was well explained without any contrarian or condescending overtones. If you took that approach more often, you could be so much more of an asset as you seem to have a wealth of knowledge. Maybe you could even hit the thanks button once or twice for the constructive criticism, or just change your user name to Robert Trump and call it a day.

 

[robert roman]

Robert - the point you just made in post #15 was well explained without any contrarian or condescending overtones. If you took that approach more often, you could be so much more of an asset as you seem to have a wealth of knowledge. Maybe you could even hit the thanks button once or twice for the constructive criticism, or just change your user name to Robert Trump and call it a day.

That's great, LOL

 

[madamelcee]

With the increase in rideshare programs and TNC vehicles (my full service car wash is located in a particularly high area where TNC drivers reside), do you think unlimited is still worth it? Not only do they wash on average every 2-3 days, but the lanes are clogged deterring many other paying customers. Yes, even with separate higher rates for commercial vehicles, many just remove their trade dress stickers and I can suspect but hard to prove...
I'm contemplating offering an unlimited & limited monthly program to accommodate the clientele in this area, the higher priced commercial rate will just be the unlimited plan and the current regular personal vehicle unlimited plan will be a limited 8x/month plan.
Anyone else with unlimited membership car washes in large metro areas see this issue?

 

[robert roman]

Subscription economy is going to wreck a lot of carwash businesses.

Not only are most areas going to see an increase in the development of high-volume express exterior there is going to be increase in infill development (i.e. mini tunnels).

There is also going to be growth in digital carwash networks (i.e. Superoperator, Everwash, Mywashpass, etc.). Digital network is a way for operators to have a 3rd party administer to their brand’s monthly membership program with mobile app.

As more networks are created and more brands join networks, the result will be a more uniform distribution of customers in a single market where services may be purchased.

This may have profound effect as the industry converges on express because the business model teaches people to buy price. For example, Everwash’s website banner is – Unlimited Car Washes starting at $9.95

Think you have an issue with TNC vehicles. Wait till someone in your market offers $9.95.

It’s like drug addiction. Operators are hooked on getting money at the beginning of each month and most customers are hooked on fast and cheap. Neither will want to give it up.

Carwash is well on its way to become a commodity.

 

[Jerry]

The percentage of ride share drivers vs regular unlimited customers is very very small, so yes unlimited is well worth it. Ride share drivers will not wash every 2-3 days. That data is incorrect. They will wash more, but not 11-15 times a month.

Not sure how you plan on policing a ride share customer vs a regular unlimited customer. Having multiple unlimited/limited plans is a recipe for disaster and frustration on your end. "Is she a professional driver? Is he part time or full time Uber?"

remember, the more someone washes a month, the less likely they are to cancel their membership. Every wash owner seems to want to limit the amount of times a person can wash, but wants as much money as possible. Seems pretty unfair to the customer.

The average unlimited customer(pro driver or not) will wash between 2.5-3.5 times a month. The less they wash, the more they cancel. You should be really happy getting paid for 12 months at x price, no matter how many times a person washes bc the average customer doesnt spend 12x at you wash now. If they did spend that much, you wouldnt need membership.