Consider What NetFlix, AT&T, Verizon Wireless and 24 Hour Fitness Have Done To Make Their Monthly Plans So Successful... They've Looked At The Big Picture!

They don’t base monthly pass/plan prices on the costs of individual transactions, but on the overall cost of keeping their customers happy.

Monthly Pass Prices Should Reflect What Carwash Customers Are Really Buying

Based on the theory followed by these market leaders, your monthly pass customers aren’t buying individual carwashes as much as they’re paying you to keep their vehicles clean.

For some customers this may mean visiting your carwash 2-3 times a month, while others may drop by twice as often. Pass prices should reflect what you need to charge to make a reasonable profit on pass customers, not on the price of each wash if it were purchased individually.

Click Here To Read A DRB Systems MarketView On Monthly Pass Pricing Strategies.

Points To Consider When Pricing Monthly Pass Plans

SiteWatch® ARM® makes it easy to sell and control monthly passes at your full-service, flex serve or exterior site. SiteWatch ARM renews passes every month by automatically recharging customer credit cards without requiring any action on the part of your employees or customers.

1. Look At The Average, Not Extremes – Some customers are going to abuse a monthly pass program, while others will under utilize it. However, most customers will be in the middle. A pass plan is more likely to succeed if prices are based on this average.
2. Have A Realistic View Of Customer Behavior – There is no exact correlation between monthly pass plans and pay-as-you-go sales. Customers will visit more often with a monthly pass option. So don’t assume that the pass customer who visits four times a month would have paid for four individual visits if the pass option wasn’t available. Chances are that customer would have made fewer visits without the pass plan.
3. Take A Long Range View – Immediately after customers sign up for a pass plan, they tend to use it more often. This tapers off after the customer has been enrolled in the pass plan. Expect the frequency of the customer’s visits to decline once the “novelty” of the plan wears off.
4. Offer A Real Value – The most successful pass plans are ones that allow a business to make a reasonable profit while still offering a great value to the customer. The “value” of a pass plan isn’t always measured in money. Many customers will pay more in pass charges than they would have on individual washes because they value the speed and convenience of passes.

Video Star! NetFlix Shows The Power Of Monthly Passes

Few companies illustrate the power of automatic monthly billing as much as DVD rental powerhouse Netflix, which grew from 1 million subscribers in 2003 to 10 million in 2008, a year that saw its sales volume increase by 10% despite an overall decline in the DVD market. Meanwhile, Blockbuster, which depended on a pay-as-you-go business model, closed over 900 stores.

Netflix offers some valuable lessons about monthly pass pricing for carwash operators. Between 2006 and 2008, Netflix’s average revenue per customer dropped from $16.34 to $13.75; the result of price promotions. But, at the same time, the number of NetFlix users jumped 40% and operating income increased by 26%, because of the added volume generated by monthly passes.