After basing promotions on customer feedback, Wallis Co.'s met its car wash budget for the first time in three years
Wallis Co.'s can finally say it cleans up good in car washes. While the Cuba, Mo.-based convenience chain has always had a strong focus on car washes (since its 1968 inception), it wasn't meeting budget in the sudsy profit center. But then it got smart with promotions, using an online survey to determine what really worked with customers. Now they are not only meeting the budget for the first time in three years, but are surpassing it.
"We exceeded our projected 2010 car wash budget by 5.6 percent in dollar sales, but we exceeded the prior year's dollar sales by 22 percent," Rachel Andreasson, executive vice president of marketing told CSNews.
The turnaround sprung from an online customer survey that Wallis conducted in the fall of 2009 to get a better understanding of customer perception, expectation and motivation when purchasing a car wash.
There were two big takeaways from the survey, according to Andreasson. First, that the quality of the car wash was really important to its customers, and second, that a free giveaway was not as important as a promotional offering.
Prior to the survey, the company's car wash promotions were mostly centered on product giveaways. But after customer feedback revealed a giveaway was not such a great purchase motivator, Wallis eliminated them in 2010 and switched gears.
When gasoline was high last year (around $4 a gallon in its stores' markets), the company also had success offering a 20-cent discount per gallon of gas when purchased with a car wash.
"Our goal is to offer customers a good deal without devaluing our products," Andreasson explained.
In addition to discovering the greater effectiveness of these types of promotions, Wallis also learned a surprising lesson in timing.
"In the past, we ran promotions for a month. The concern was that the long promotions evolved into everyday offers in the eyes of our customers," said Andreasson. "But the success of last year's promotion over a three-month period demonstrates we can run promotions for longer periods of time without a backlash from customers when the promotion is over."
Moving forward, Wallis will continue to evolve its car wash promotions with a little help from its suppliers. "Great River Wash is the local distributor for PDQ Equipment and Ecolab chemicals," Andreasson explained. "Great River helps us to stay in touch with these partners. They give us the latest research and trends. It's great to have unbiased feedback about our programs and a fresh set of eyes to offer constructive criticism before we launch a new promotion."
For instance, pulling ideas from successful promotions launched in different areas of the country, the suppliers suggested Wallis try out different car wash promotions concurrently in different territories to see what would yield the best sales for 2011. Andreasson and the team got right on it and are currently planning out signage and sales leaders that will support those promotions.
Another important element to the future growth and success of car washes at Wallis Co.'s is various employee incentives. One of those incentives rewards associates additional income if they sell 50 Top Washes in a month.
The chain also sets up contests between territories that often don't have to have a gift attached. "It's just inherent competition between the territories that makes it work," Andreasson stated.
To really get that going, Chris Grau, a territory manager at Wallis, is responsible for being the car wash "measure holder." He generates weekly e-mail communication among the stores, enabling each location to see how it stacks up relative to other stores in car washes on a scorecard that he updates. Every store has a dashboard diagram that shows actual sales vs. budgeted sales vs. prior year sales.
Scrubbing the Numbers
In the fall of 2009, Wallis surveyed its On the Run home team members to get a better understanding of car wash customers and how it should steer future promotions. It specifically wanted to uncover which created a better customer incentive â free product giveaways or cents/dollars off. Some stats that resulted from the survey include:
â The median frequency of car wash purchases in a 90-day period is 2; however, 55 percent of the most loyal customers purchase 3-plus car washes in that same timeframe.
â Of those surveyed, 55 percent said the quality of the car wash is more important than the price.
â Cents/dollars off is a greater incentive than giveaways; 55 percent opt for a 20-cent per-gallon-of-gas discount vs. 45 percent who opt for a $2 car-wash discount.
â 32 percent said the giveaway persuades them to buy. A conclusion was drawn that it may further stimulate the car wash purchase and be seen as a value-add, but it doesn't typically drive the purchase.
In April, May and June, a $2 discount off the Top Wash was run in all 32 stores with car washes. The result was a 15 percent increase in unit sales and a 4 percent increase in dollar sales for the promotional period. Looking at Rain-X (Top Wash) units only, there was an 18 percent increase in unit sales over the prior year.
Additionally, the chain started a car wash loyalty program that it intends to build from. Eight stores now have a "Wash Club" whereby customers can purchase car washes without coming inside the store â either online or at the car wash box, according to Andreasson.
So what is it about a car wash program that has kept it a focus at Wallis Co.'s since its inception?
"It's an easy thing to suggestive sell and promote, and it has one of the highest gross profit margins â it can bring in 75 percent," Andreasson said. "We make more on the car washes than we make on the fountain. If we have enough property, we work to put a car wash on it."