Unlimited Plans: The Lifeblood of the Carwash Industry 2021
By Dominick A. Candelore
THE STATS ARE IN; CUSTOMERS WASH THEIR CARS AN AVERAGE OF THREE TIMES A MONTH. IN SOME CASES MORE AND SOME LESS.
The unlimited wash plan has been around the carwash business for going 15 years or so. I remember it well, back in 2007, as point of sale companies were trying to convince us operators that this was the future of the business. We initially struggled to come out of the low wash price and free vacuum era. Many suppliers loved the $3 carwash as it wore out equipment and it sold a lot of chemicals. The question was raised though; did it make the operator any money? Short answer, albeit it controversial, is NO!
I recall when DRB took the initiative and had a program where it funded some local operators a marketing program if they let DRB take the wheel. DRB did an outstanding job of helping the industry transition to what we experience today. I remember going to Akron on one of their carwash tours that took you to their various projects where they took over the pricing models and the on-site signage and more. They effectively created case studies and helped the carwash industry get out of the low price point gutter.
Now the game is all about pricing ratio and the value proposition for the rationale of the unlimited purchase. The secret is to increase your base wash price to get your establishment a good unlimited plan wash price. The stats are in; customers wash their cars an average of three times a month. In some cases more and some less. Other data companies can tell you the average length an unlimited customer stays on for; industry average is around eight months. We at Cheetah Clean experience over 18 months, which is relatively unheard of in the industry. Showing that if you have the right model and treat every customer as if they are your only customer, they will stay.
There are many experts selling the $9.99 unlimited program, which we don’t agree with or adhere to, and this is why: We don’t agree to the idea of selling our unlimited package at an even more discounted rate. With unlimited plans, the name of the game is conversion. How many one-time customers can you convert to a lifetime customer? Part of the success we have is the transparency of our pricing structure. When you pull up and sign up for a $29.99 plan it’s $29.99. Our salespeople are knowledgeable and sell the benefits of our service at the price point we have set. Our wash process is like no other and our customer service is the best in the country. We don’t need to discount an unlimited plan to bait and switch the customer at a later date.
The other side of this is churn rate (the number of customers you lose). When you deep discount your unlimited plans to a price like $9.99 and then the next month it’s $29.99 or $39.99 the sticker shock is tremendous. You can be thorough and explain it, but most customers see the $9.99 and that’s it. So, the next month when the higher price hits not only do you lose a customer, but the perception of dishonesty sits with them. Now not only have you lost them, but they will tell family members and friends how they felt they were treated. I always said a happy customer tells two or three people, but an angry customer tells 10-12. In this business, where numbers and reputation are everything, an incident like this could crush you. That is why full transparency and upfront pricing has always been our policy.
We start our unlimited program at $29.99 for our $15 wash. We are careful not to go over two times the wash price with our strategy. It’s a great for those that wash more than twice a month and the plan pays for itself. Like I said earlier, most customers wash their cars an average of three times a month. With that being said we average around $9-$10 per wash. That’s efficient. It’s really all about how many dollars you take to the house.
We are all in this to make a profit. There’s no sense in us operators abusing our equipment and running through excessive amounts of chemical for a lower gross profit.
Dominick A. Candelore, director of operations, Cheetah Clean Auto Wash, has over a decade in the industry from site manager to owner operator. Experience in full service and high volume express, Dominick spent 10 years as a behavioral specialist with DHS. Married to his best friend for 22 years, he loves karaoke and cooking for his family and friends.
