Subscriptions and memberships are here to stay. Amazon, for instance, has discounts for repeat purchases. Rideshare and food delivery combine their offers into one very attractive membership. Then there’s streaming, an industry that thrives on the monthly membership model. Not to be left behind, now even fitness and coffee are moving on from one-time purchases to the ongoing relationship model.

The value that is being offered here is not just services or products at a discount. It’s built more on the lines of one of those exclusive club memberships and is more about what members get and non-members don’t.

To be fair, the car wash industry was quick to recognize the value of membership plans. So much so that most operators now offer some kind of membership or subscription plan. What many of them haven’t yet understood is what makes the subscription model actually work, and no, it’s not just about prices.

What car wash memberships are getting right

At their core, car memberships are quite simple. Customers pay a flat monthly (or in some cases annual) fee and wash as often as they want. Some memberships offer the option to get multiple cars washed. This takes away the need to make decisions at the menu board and removes friction at the point of purchase.

This model works because it increases repeat usage and generates predictable revenue. This protects car washes from the unpredictability and fluctuations of drive-up revenue. That’s most likely why there was barely any resistance to this shift, and car washes were quick to adopt it. While most operators were quick to see the advantages, what many of them failed to understand was that this was merely the first step and that they couldn’t depend only on a basic membership model to scale up their business.

Where the car wash membership model falls short

Subscription/membership-based business models succeed as long as they retain their customers. For that to happen, you cannot depend only on usage discounts. Instead, you must create so much value that your customers find it hard to cancel. In the car wash industry, if the only benefit you give them is unlimited washes, the decision to cancel becomes easy. All your customers need to figure out is whether getting their car washed multiple times is worth adding one more recurring utility bill to their monthly budget.

If the answer is no, they’ll cancel because all they have to lose are a few washes and nothing else.

How to make it harder for your customers to cancel

All that car wash operators need to do is take cues from industries that are thriving on the membership model:

  • Amazon Prime is not just about free shipping. Membership gives you access to their video and music streaming platforms, and exclusive/early deals
  • The Uber One membership program gives you more than ride discounts. You get food/grocery delivery perks and priority service.
  • Streaming platforms compete on content you cannot get anywhere else.

Look closely at these cases, and you’ll notice a common thread. The value they offer extends far beyond their core product. Memberships/subscriptions give customers access to a bundle of benefits that you cannot get elsewhere. Now, canceling your subscription becomes harder. They’ll also be giving up all the other benefits that are bundled along with it. That is what will make your customer think hard before they cancel, and that is what will make them want to stick with you.

What this means for car wash operators

By offering benefits that go beyond just washing, car wash operators get an opportunity to build a loyal customer base, one that will drive recurring business. These benefits could include:

  • Roadside assistance or towing coverage
  • Discounts on routine driver needs such as parking, gas, repairs, etc.
  • Free oil changes for membership anniversaries
  • Priority access, fast lanes, convenience features.
  • Other bundled perks that extend beyond the wash

The benefit mix can vary, but what the membership must do is make the customer feel like they are getting bang for their buck, even during months when they don’t wash often. For instance, offering perks that accumulate over time is a good incentive to keep a subscription during winter when they may not wash their vehicles that often. You could automatically send your customer a text or email reminder, e.g., “You’re just 2 months away from your free oil change!”

How this changes retention

When canceling a membership means losing access to several other benefits, the decision to cancel becomes tougher. Your customer now has to consider whether they’re okay with losing all the bundled benefits that came along with unlimited washes. When you offer benefits that make members feel privileged, give them access to member-only discounts or promos, and get them to wait for time-based rewards, you get an engaged customer who’s less likely to cancel.

The question now becomes “What am I giving up when I cancel?” If their answer is just car washes, then churn will continue to be linked with usage. If the answer is a combination of useful benefits, retention will improve. That is the difference between a pricing strategy and a value strategy.

Where the industry is heading

The car wash industry has already recognized the value of memberships, and that is unlikely to change. In fact, the competition to acquire members is likely to heat up. Operators will soon be competing based on how good their membership programs are rather than how cheap they are. People are now used to subscription services that offer them all sorts of extra value, like streaming subscriptions or gym memberships. It’s not too much of a stretch to think that they’ll expect the same from their car wash membership. It’s not going to be about getting a cheap wash or an unlimited number of washes; it’s going to be about getting a whole bunch of perks and benefits that make it worth paying for a membership.

Unlimited washes got the industry to where it is today. Bundled value is what will define where they go from here.