People — not pricing — will drive the market’s growth.
Based on Rinsed Industry reporting, same-store membership sales growth in the car wash industry is still strong at 11.75%, while same-store retail sales are down 4.54%. While there is some variance, these numbers haven’t changed drastically over the past four quarters. Has the industry reached a new status quo? I believe the answer is no. Growth will come from a place that might be less obvious: people.
So, what does a world-class people strategy actually look like in practice? Look no further than Chick-fil-A. I personally know multiple operators who have said they want to “replicate the Chick-fil-A model” when it comes to managing a busy driveway. There's a good reason for this.
Investing in our people
Chick-fil-A has led the American Customer Satisfaction Index for 11 consecutive years. 50 million Americans have joined the Chick-fil-A loyalty program. Their secret sauce? Smiling people in the driveway with the freedom to walk around, have positive interactions with customers, build brand loyalty and transact anywhere, making higher throughput possible. I’ve heard arguments that staffing a car wash the way Chick-fil-A staffs its restaurants is just not financially viable in the car wash industry. I’m here to tell you why it is.
In industry data sets, sub-5% membership conversion rates are still incredibly common. The average location today still sits at around 7%-10% conversion rate in the driveway. However, top operators can sustain double-digit conversion even at locations that have been open for 3-plus years. What’s the clear differentiator among these top operators? A human in the driveway giving a good membership sales pitch on as many opportunities as possible.
"Coaching is how you create a culture of winning at your organization." —SAM LOGAN
More opportunities to build value
Where the car wash has an even bigger opportunity than any fast-food chain is there are more locations in the car wash to close memberships, enroll retail customers in the loyalty program or offer free washes for other lifetime value (LTV)-building incentives: the vacuum area. I’ve heard mixed reviews from operators on attempts to engage with customers in the vacuum area, but there’s never been a better time for the industry to try to solve the vacuum area puzzle.
When we know the average LTV of a member is $444, versus the average LTV of a repeat retail customer is $104, the math on investing in more ways to sell memberships speaks for itself.
If people are the answer, how do you make sure that those people are saying the right things during every customer interaction? How do you train and retain talent? These are challenges that I’ve observed time and time again in this industry. Coaching systems have been hard to roll out at scale, and even when done well, it has been extremely difficult to know if the coaching is being followed in the driveway.
Having a strong coaching culture, backed by modern tools, helps in more ways than just ensuring the obvious adherence to the pitch. Coaching is how you create motivated employees. Coaching is how you give top performers a defined ramp towards management roles and beyond. Coaching is how you create a culture of winning at your organization. At Rinsed, we’ve already seen some incredible success stories in the industry both with and without Rinsed tools, and it’s clear that a culture of coaching has a big impact.
But even with the best coaching on the planet, will it be enough to move the needle at a location with high membership saturation? The answer is personalization at a scale that has only recently become possible with new LPR, AI and data tools. In the past, every retail customer got the same pitch because it was the highest value interaction that we could have. But now it’s possible to pitch specific customers specific membership packages based on their visit history. It’s possible to know that you’re not likely to convert someone to a membership and instead pitch them on joining the loyalty program. Something as simple as greeting every customer by their first name is now possible, and this will make a meaningful difference in increasing the LTV of every customer who visits the car wash.
A year from now, the top-performing locations in this industry will be the ones where every customer is greeted by name, pitched the right offer for them and coached by a team that knows exactly what is working. The operators who invest in their people and the tools to support them will pull away from the rest of the industry in ways that will be very hard for competitors to close. The only question is whether your team will be one of them.
"Now it's possible to specific customers specific membership packages based on their visit history." —SAM LOGAN