Success Stories

Karl Murphy Carolina Auto Spa and Express Carwash, Raleigh-Durham, NC

Flex Service carwash

Responding To Market Changes By Converting To Flex Serve And Implementing A Digital Marketing Program Helped These Washes Enjoy Double Digit Growth Despite A Tough Economy

The world has undergone some big changes since DRB Systems customer Karl Murphy, a former software executive, purchased a low-volume full-service carwash in the Raleigh-Durham area of North Carolina in 2003. Facebook and Twitter didn’t even exist back then, the introduction of the iPhone was still four years away and Google was a relatively small privately-held company that was unknown to most Americans. Fast forward a few years, and we find Facebook having 500 million followers; Google growing into a $24 billion corporate giant; and people sending out 50 million Tweets and 2.5 billion text messages every day.

Karl Murphy is the owner of Carolina Express and Carolina Auto Spa in the Raleigh-Durham area of North Carolina.

As this powerful transformation was taking place in the middle of the 21st Century’s first decade, Karl recognized that his business would have to adapt to keep pace with rapidly changing times. So, he gradually phased out the post cards and printed welcome-to-town kits that he had been using to communicate with customers and potential customers and replaced them with a carefully conceived digital/social media marketing program.

While he was doing this, Karl also changed his business model from full service to flex serve to provide customers with two of the most important things they want from retail transactions in the digital age: control and time-savings.

The results have been nothing short of spectacular! Despite the tough economy and poor carwashing weather that characterized 2009, combined volume at Karl’s original Carolina Auto Spa in the suburb of Cary and a second location (Express Car Wash) that he opened in nearby Apex, NC grew by double digits. Karl credits his conversion to flex serve and electronic marketing efforts with generating this healthy growth. "The way people live, communicate and receive information has changed," he said. "It only makes sense for a carwash that wants to reach people to change with them."

Engaging Customers With Digital Newsletters

A key part of Karl’s new marketing plan is the weekly newsletter he emails customers. Almost 8,000 customers receive his digital newsletter; very few ever unsubscribe, in fact most issues generate a healthy volume of “fan mail,” from customers who thank him for the correspondence. According to Karl, each newsletter also generates between $500 and $2,000 in plus business after the cost of the discounts awarded to customers is factored into the equation.

Karl is quick to point out that his digital newsletters have been successful because they do more than offer money-saving deals. Although coupon specials are important, says Karl, it’s also necessary to go beyond discounts and engage customers with personal stories and meaningful information that creates an emotional connection between them and his business.

“Technology didn’t just change how we communicate with customers, it’s also changed what they expect us to say to them when we communicate,” he explained. “Social media is just that social; people want to feel that you care about them and are engaging them, so we go the extra mile to make our newsletters more personal.”

A quick look at some back issues of Karl’s newsletter illustrates what he means. One issue has an article on Earth Day and conservation, another includes a feature on the history of Daylight Savings Time, a third highlights a Super Bowl contest, and fourth has photographs and a story about a skiing vacation taken by Karl and his family.

Using Social Media To Draw New Customers

Producing entertaining digital newsletters with a personal touch has been an effective way for Karl to connect with existing customers, encourage them to return more often and spend more when they do visit. However, since most readers are already familiar with his washes, these piece do very little to attract new customers. To accomplish this, Karl relies on social media advertising.

Although, Karl has an active Facebook page, he finds that this medium is “much more social than selling oriented.” This makes Facebook more effective at image-building than driving traffic to a carwash. Karl has enjoyed much better results advertising with social media group buying services like Groupon and Living Social.

These services email specials to people in a specific market who have opted to receive offers from businesses in their trading area. Customers buy the special offers online directly from the group buying service and print a barcode, which they then take to the local business. Typically, the offers sold by the social media service are half-price specials. The group buying service receives half of what the customer pays and reimburses the local business for the other half. This means the local business receives only 25% of the regular price.

Taking 75% off your regular price may seem like a steep sacrifice, but this is at least partially offset by the fact that there are no production, mailing or advertising costs with group buying services. Plus, as Karl points out, the fact that these offers attract so many brand new customers makes them a good investment. He notes that 60% of the customers that respond to his group buying offers have never been to either of his sites before, while 20% are former customers that have stopped coming to his washes. During one recent promotion, 440 customers came to his washes, generating over $8,000 in sales, despite the fact that it was raining.

Creating A Flex Serve

Not only has Karl developed new ways of communicating with customers, he’s also kept up with an ever-evolving market by changing the way he processes cars. Recognizing that people in the digital age are demanding greater speed and more control of their transactions, he has moved from a traditional full-service carwash to a flex serve model.

Karl began implementing the self-pay concept in 2006 when he opened his second carwash and installed SiteWatch Xpress Pay Terminals from DRB Systems to create an express exterior. In 2009, he converted both sites to flex serves, making it easy for customers to use the wash as an express, or receive a full service wash after they exit the tunnel.

The move to the flex serve concept has paid off for Karl, even though dollars per car at his former full-service site has declined. “Before I went to flex serve, I was averaging $27 a car at that site, now it’s averaging $19.50, but my net has just about doubled, because volume has increased and labor costs have gone down.”

For Karl, the conversion to flex serve and the move to digital marketing are part of the same process. Both have been the result of looking at the real everyday lives of customers, and then adjusting his business model to reflect their experiences and expectations. That’s a sure formula for success in the digital age -- or any era.