Unlimited Pass - Why are they offered?

[Car_Wash_Guy]

Hard to compete with a tunnel who can wash in one hour what a busy IBA would wash in one day. Just need to provide customers a better wash experience with the way you wash a car. RIO tunnel prices the monthly below the cost of a single wash just to hook customers to join their club......Probably smarter for an IBA not to try to compete with a tunnel with a monthly program, driving your revenue down to $2-$5/wash (above example) is not a good longterm solution.

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What are your thoughts on the below:



https://www.dencartechnology.com/wp-content/uploads/2020/12/Denpay-Experience-Visual-v2.pdf

 

[Roz]

Too many just look at the cost for water, sewer, and Chemcials while ignoring the other associated costs such as depreciation, pit cleaning, repairs, utilities, taxes, and service. The $2/wash number in reality is probably $4-$5/wash when everything is accounted.

 

[BenBranam]

You might think of putting a mini tunnel in that will do more than the Petit system will. If you really want to compete and do the volume.

 

[Carwashclubber]

I opened my IBA with a Petit last month. Runs like a champ, fast and they'll talk ya thru even idiot questions (nice.) Approaching this retiree biz a little differently - 100% membership based. $36 mnthly, 54 members so far. Could be a fools game, we'll see. I'll give it 6mos, then run my #s again. If it's a trainwreck, will share. If a goldmine, we can toast it in Vegas (someday.)

 

[slash007]

I opened my IBA with a Petit last month. Runs like a champ, fast and they'll talk ya thru even idiot questions (nice.) Approaching this retiree biz a little differently - 100% membership based. $36 mnthly, 54 members so far. Could be a fools game, we'll see. I'll give it 6mos, then run my #s again. If it's a trainwreck, will share. If a goldmine, we can toast it in Vegas (someday.)

What pay station you using?

 

[AnalyticWash]

I opened my IBA with a Petit last month. Runs like a champ, fast and they'll talk ya thru even idiot questions (nice.) Approaching this retiree biz a little differently - 100% membership based. $36 mnthly, 54 members so far. Could be a fools game, we'll see. I'll give it 6mos, then run my #s again. If it's a trainwreck, will share. If a goldmine, we can toast it in Vegas (someday.)

What is your goal for membership #'s? Is there only one wash package to choose from for a customer?

 

[Wash4Life]

I opened my IBA with a Petit last month. Runs like a champ, fast and they'll talk ya thru even idiot questions (nice.) Approaching this retiree biz a little differently - 100% membership based. $36 mnthly, 54 members so far. Could be a fools game, we'll see. I'll give it 6mos, then run my #s again. If it's a trainwreck, will share. If a goldmine, we can toast it in Vegas (someday.)

For our car washes, 100% membership-based would be an epic fail. On non-precipitory days, anywhere from 30% to 60% of our customers are not members. That would be a lot of money to turn away and aggravation from people.

 

[Greg Pack]

I opened my IBA with a Petit last month. Runs like a champ, fast and they'll talk ya thru even idiot questions (nice.) Approaching this retiree biz a little differently - 100% membership based. $36 mnthly, 54 members so far. Could be a fools game, we'll see. I'll give it 6mos, then run my #s again. If it's a trainwreck, will share. If a goldmine, we can toast it in Vegas (someday.)

Thanks for sharing. Sometimes pioneers get the gold, sometimes they get an arrow in the back. Keep us posted!

 

[Mr. Clean]

You may or may not make more money, that part will depend more on pricing. Evidently the goal is to make consistent money as mentioned. An example would by gyms. If they thought they could make more money by charging a per-hour or per-visit fee, why do almost all of them do a monthly subscription?

I think the gym membership analogy is bogus. It compares active and passive activities which skews the value proposition. Exercising takes motivation and EFFORT. At the right price point it becomes inconsequential whether it actually gets used often or not at all. Excuses abound. Visiting a car wash is, for all intents and purposes, EFFORTLESS -no sweat- we do all the work, so why not? Motivation: snow removal, salt, rain, pollen, bugs, bird droppings, just to see how many times you can wash in a month......Not to mention convenience, comfort and a clean vehicle.

If the bottom line improves after all true costs are factored in, isn't that a win-win? Customers will always pursue their "win".

 

[Mr. Clean]

I think your missing the competitive advantage of providing 'perceived value'. Not a parallel, but Netflix provides memberships while blockbuster (remember them?) provided daily rentals.

Yesterday's WSJ - Netflix hits 200 million subscribers.

 

[MEP001]

I think the gym membership analogy is bogus.

IDGAF. I wasn't promoting either monthly or pricing, nor trying to give the perfect apples-to-apples analogy. It was just the first thing I thought of where monthly plans are the norm.

 

[ScottV]

This has been an interesting thread. Fortunately, in my immediate area, we don't have any operators that have gone to the Unlimited Plan yet. Hoffman's is 40 miles away in Vestal, and Delta Sonic is 90 miles away in Rochester. We have strong competition with 10 IBA's, 8 SS and an express tunnel in a city of 20k. The express tunnel is the newest addition to the market, but they are not doing well at all. New owners who thought they could operate their tunnel remotely from an IPad.

We've had PDQ's Wash Club membership program online for 15yrs and we offer up to 20% off our pricing depending on what the customer purchases. Over the years we've seen where that "club loyalty" has been a big component of retaining customers. Customers will continue to replenish their accounts throughout the year. We also have businesses that use them for their fleet vehicles. Holiday gift cards from family members are a great way to introduce others to the "club" and they often contact us wanting to replenish their account once they've used up the gift value. There is no time component to the wash club purchases, so they don't have to worry about using them up before they expire.

If a big operator ever decides to enter our small market, I'm sure the landscape will change and we will have to address the unlimited programs. Hopefully, I've cashed out before then. LOL

 

[washnshine]

Hey Scott - where are you? I’m in Buffalo with 12 Delta Sonics, 5 Royals, and Classy Chassy just entered our region. Not to mention all the IBA’s that are too numerous to count, as well as the other single location tunnels. It sounds like you are more in the central part of the state. If your town is small, chances are you won’t get a Delta, but Royal seems to build in smaller markets- they just hit Batavia and are in line for one In Syracuse. Hoffman’s has not made it this far west yet, but it might only be a matter of time. Those Vestal and Binghamton locations are more recent compared to his originals in Albany. Hope all is going well where you are.

 

[ScottV]

Hey Scott - where are you? I’m in Buffalo with 12 Delta Sonics, 5 Royals, and Classy Chassy just entered our region. Not to mention all the IBA’s that are too numerous to count, as well as the other single location tunnels. It sounds like you are more in the central part of the state. If your town is small, chances are you won’t get a Delta, but Royal seems to build in smaller markets- they just hit Batavia and are in line for one In Syracuse. Hope all is going well where you are.

I'm in Corning, along the NY/PA border. The closest Classy Chassis is in Watkins Glen, and Elmira which are both 15miles away.

 

[pgrzes]

MY OPINION< Unlimited memberships programs are awesome! I just cant get the numbers to work in an IBA. IBA's are rarely attended like a tunnel wash. Memberships is all about the numbers. You need to sell to every swingin di*k in your area! If not marketed/sold properly, it wont work! If you only have 4-500 members, you dont have enough equalizers(paying customers that never come in). Tunnels that market and sell properly will have 3000+ members and have capacity for it. IBA doesnt have the capacity. I come up with 800 members minimum to be somewhat effective, and to me even at that its marginal. The added costs to run the members in an IBA are not ideal. You will run the balls out of your machine/'s for little to no additional income. If you want #'s you will wash more cars BUT will you make more $$$. Added electric, water, sewer, chemicals and maintenance cost can overcome any possible income. Again this is my opinion!!

 

[Jerry]

Jan It's more of a math equation than an assumption. No matter if the unlimited user cleans 3.5x or 5x per month as an average wash amount, the washes margins are slowly stripped as people transfer over to subscriptions until the whole business is locked into a "consistent" system that shows margins far less than operating at full price. Trade the business model from a consistent one and work on a better customer experience that the customer will come back on their own. As many other business in other industries operate like this. The more you wash the more soap and equipment wears out, the same wash suppliers supporting the unlimited pass is the same ones selling you the higher volume of equipment and soap. You are under the assumption that the single wash user comes as frequently as the member. This isn't the case. The average single paying cutomer washes less than 4 times per year. If your wash is $10 a visit, each customer is only worth $40 per year to you. Take the average member at $20 per month and the average member is now worth $240 per year. That's a 5-6x increase in revenue per member vs single paying customer. That's how membership actually works. One you understand these averages, then you'll begin to understand why you should be doing membership at your car wash. 1000 members will double your revenues at the average car wash(50,000 cars a year volume). It's simple math. while replacement foam/cloth/maintenance does increase with more volume, it does not increase to a noticeable number to effect any profit when offering membership correctly. If you find a way to actually drive real volume to your car wash, then you prolly don't need membership as much as the operator who is unable to drive volume. If membership is done correctly, you should be profitable every single day of the year(including days that you are closed for weather or maintenance. Even Chik fil a loses money on sunday when they are closed. Car washes with a robust membership program will make money on closed days.

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[AnalyticWash]

You need to sell to every swingin di*k in your area! If not marketed/sold properly, it wont work! If you only have 4-500 members, you dont have enough equalizers(paying customers that never come in). Tunnels that market and sell properly will have 3000+ members and have capacity for it. IBA doesnt have the capacity. I come up with 800 members minimum to be somewhat effective, and to me even at that its marginal.

How did you come up with the 800 member minimum number?

I have seen the numbers for a few IBA sites with memberships that only had about 2-3 hundred members and the customers buying them were the ones that were already coming in 2 times a week...

 

[pgrzes]

Running the numbers over and over, time and again. Membership is all about the numbers. I like the membership model, just dont feel it works so much with IBA sites. Works perfectly when you have capacity to handle 2500 or more members, not so much when its only a few hundred members.

 

[Jerry]

How did you come up with the 800 member minimum number?

I have seen the numbers for a few IBA sites with memberships that only had about 2-3 hundred members and the customers buying them were the ones that were already coming in 2 times a week...

the reason they had only 2-300 members is bc they do a poor job of promoting membership to all their customers. Of course the ones that wash often will immediately see the value in a subscription model of 1 price per month.

membership works, but it isn’t a magic pill. You have to sell it, explain why it’s better for the average customer not just the frequent washers. If you do a poor job of sales and promotion, your membership will fail and you will see little if any benefit to offering membership.

 

[CheetahExpress]

Having just a single unattended IBA, we still occaisionally get requests for a membership program like what is offered with the big tunnel washes. But I believe the key to success with membership programs is the demographic of your area. I believe the idea of the memberships actually making money is the steady income coupled with the estimate that folks might wash their cars once every 2-3 weeks. With our area being rural, with lots of DIRT, GRIME, CALICHE on cars, we have customers who wash their cars once a week or even more. I'd be broke! 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.