Unlimited Pass - Why are they offered?

[Mr. Clean]

We're into it now three years. It has increased traffic, car count and the bottom line. A lot of my customers would be subscribed elsewhere had we not made the choice to go this route.

No regrets, but I do get perturbed by jacked up pickups with aggressive tires that lay mud everywhere, come in daily and never tip. Does anyone charge more for trucks & SUVs?

MC

 

[slash007]

I've offered Everwash at my IBA's for over a year now. I had plenty of room to grow since I never have lines, but a combination of demographics and an inability to sell memberships properly has hampered the offering. You really need numbers so that the few people that wash every other day don't' kill you.

 

[washnshine]

Something I still don't understand is the free vacs. The vacs, vac-islands and maintenance on these things costs money. Why give them away? Plus they're money-makers even with the hassles involved in keeping them clean and running. Just my opinion.

It’s like the all you can eat buffets that have desserts and drinks included too. They are part of the reason they get the volume of monthly membership customers paying the monthly fee. The attraction of the vacs helps to push them to that high volume of monthly members. And in the express tunnel world, the vacs are usually a central motor system with 10-20 booms. Very different from running that many individual vacs.

 

[OurTown]

Does anyone have data on what percentage of EE customers use the free vacs and is there a difference in retail customers usage vs member usage?

 

[traveler17]

I've offered Everwash at my IBA's for over a year now. I had plenty of room to grow since I never have lines, but a combination of demographics and an inability to sell memberships properly has hampered the offering. You really need numbers so that the few people that wash every other day don't' kill you.

Hey slash I’m in the same boat. I’m in a rural area and have been back and forth trying to offer everwash. Leaning towards not going that route. If you don’t mind me asking how many members after a year? The guy at everwash told me if I sell hard I should be able to get 250 to 300 members.

 

[slash007]

Hey slash I’m in the same boat. I’m in a rural area and have been back and forth trying to offer everwash. Leaning towards not going that route. If you don’t mind me asking how many members after a year? The guy at everwash told me if I sell hard I should be able to get 250 to 300 members.

I'm only at 40 members now with a use rate of around 4.9. That number was lower, but has gone up in the winter. I would have many more members, but my churn rate is high as people cancel way more than I expected and I've also had to cancel several members due to abuse. I'm sure I could have at least 100 members by now if I was able to devote more time to selling memberships, but my issue is that demographics suck, and about 40% of my customers for the IBA pay in cash. Cash customers won't sign up and most can't, so that takes away many potential sales. Another issue is it's hard to have someone there dedicated to selling when you get so few cars in per our and 40% of them can't sign up to start with. I believe in memberships if the location is right and you can sell them, but it's not for everyone. Everwash has been great to work with at least.

 

[traveler17]

I'm only at 40 members now with a use rate of around 4.9. That number was lower, but has gone up in the winter. I would have many more members, but my churn rate is high as people cancel way more than I expected and I've also had to cancel several members due to abuse. I'm sure I could have at least 100 members by now if I was able to devote more time to selling memberships, but my issue is that demographics suck, and about 40% of my customers for the IBA pay in cash. Cash customers won't sign up and most can't, so that takes away many potential sales. Another issue is it's hard to have someone there dedicated to selling when you get so few cars in per our and 40% of them can't sign up to start with. I believe in memberships if the location is right and you can sell them, but it's not for everyone. Everwash has been great to work with at least.

Sounds like we have the same customers. I feel like if I spend my busiest days up there I’d have the same numbers. Thanks for your input, it was a big help!!

 

[BubblesIllinois]

I see a lot of flawed logic in some of the answers. Many responses seem to assume a loyal consistent customer base only, and that those washes will take advantage of a monthly membership. I see it differently (as others do also). People who pay by the wash aren't loyal, they likely go to two or three washes. The membership makes them loyal. The frugal person (as I am) may determine that they don't see value in a $12 wash, but if they can get the same wash each week for $7.50, they see value. Then there are the people who think they will go more than they actually do; and then there are the people who forget they even subscribed. I think it is a brilliant approach, but of course there will be abusers.

 

[JLanman]

For what it is worth, here is a snip from an article we wrote a while back about memberships at self serve car washes. Don't take offense to the simple math. The point is that the right level of memberships helps offset the fixed cost of the business. I've heard it said the the most expensive wash to operate is an empty wash..... And don't forget the HUGE advantage the self serve wash has - 24/7 service....

"The typical worry goes like this. I sell washes for $10 each and if a member washes twice a week that is 8 times per month. Now if I sell that membership for $29 I've sold the washes for $3.63 each. I can't afford to do that. I will be losing money! I've calculated my costs and it costs me $3.95 per for every car I wash. I have to get more than that or I will lose money.

There are several things to consider with this seemingly logical calculation. What membership businesses including that shiny new tunnel down the street know is that the value of a customer increases by 200% - 400% when you convert that customer to a member. This translates into increased revenue for your primarily fixed cost business and that translates into more profit. Let's take a simple car wash industry example. There are lots of places to wash a car in most towns. Your customers are likely washing a couple of times a month during part of the year and they are skipping long periods of time in other parts of the year and stopping at other facilities from time to time to wash their car as well.

This person may end up averaging 1.25 washes per month when you factor in their full year habits. At $10 per wash that's $150 of annual revenue for a solid customer. If you can convert that customer to a $29 membership you're now earning $348 per year from this same customer. Let's also look at the cost equation. In our example the owner who calculated $3.95 for every car he washes has simply divided their total cost of doing business by the number of cars he washed last year.

The challenge with this calculation is that most of his costs are fixed costs. Fixed costs are the things that aren't going to change whether you wash 1 car or 100 cars on a given day. Either way you have your original capital investment in land, building and equipment. The property tax bill is fixed. Loan payment costs are fixed. Much of the labor cost is fixed. The phone bill and internet bills are fixed. Even some of the water, sewer, and gas bills are fixed to provide freeze protection in the winter etc...

If you calculate only the variable costs (soap, water, equip maint) you are looking at a true variable cost of cents per wash to provide that member a service that they feel is very valuable and are happy to pay a reasonable monthly fee to utilize. This customer will most likely wash their car more frequently but it won't be as drastic as you probably fear and the customer will be a more loyal, more satisfied customer that now feels a strong connection to your business as a member. Surprisingly all of the membership activity at your wash is also likely to draw in additional customers even if they aren't all members. When passers-by see that your wash is always busy they are much more likely to stop in to see what they are missing."

Hope this helps.

Jim