The Numbers Guy Looks at the Likelihood of Rejoining a Monthly Pass Program after Involuntarily Getting Kicked Out

SiteWatch® Automatic Recharge Module®

When someone involuntarily gets kicked out of a monthly pass program, how likely are they to rejoin?

If you are a regular reader of the Numbers Guy articles, you’ll know that you’ll lose between 2% and 8% of your monthly pass customers each month. This value can range depending on the season of the year, but it mostly depends on how hard you work at retaining your monthly pass customers.

At one particular user, we found that 60% of customers lost during 2012 were kicked out involuntarily. The following chart shows that this is because their credit card account was “Uncollectible”; meaning, this car wash operator was not able to successfully process the credit card.

The rest (40%) of the customers lost during the year left of their own accord. They were “Terminated” (quit the program in the middle of the month) or “Discontinued” (asked to not renew at the end of their paid month).

For this analysis, we want to focus on the “Uncollectible” customers who were kicked out of their monthly pass because their credit card was rejected. As we’ll see, these people typically want to be in the plan, but are just having a temporary credit card problem. In the following chart, we see the decline responses from the credit card processor.

Some comments on each of the reasons:

  • A generic “Declined” message may indicate that the customer is over their credit limit or may be having another problem with their account.
  • An “Expired” response obviously means that their credit card was rejected because it is past its expiration date.
  • “Invalid Data” is an interesting response because the credit card being charged was previously valid. Therefore, “Invalid Data” typically is indicative of a situation such as a cancelled credit card or some other issue.

When a customer’s account becomes uncollectible, SiteWatch removes them automatically from their monthly pass program. That means that many customers who are kicked out are surprised by this fact when they show up the next time for a car wash. At that moment, they primarily have three options: 1) Turn around and leave, 2) Buy a wash, or 3) Rejoin a monthly pass program.

What our analysis found is that nearly 3 out of 4 (74.8%) of those who involuntarily left the monthly pass program chose option #3 and rejoined when they next visited the site. This means that the majority of the monthly pass customers find value in the monthly pass program and want to remain loyal customers.

The remaining 25.2% of folks who dropped due to credit card problems in 2012 had not yet rejoined as of mid-February of 2013 when this study was performed.

One final note to think about is that even though most customers rejoined, there was a gap of 19.2 days between when they were dropped and when they rejoined. This resulted in average lost revenue of $22.72 per customer based on the average monthly pass plan. By using standard features of the system (retry period, prompting at the cashier or Xpress Pay Terminal® for new credit cards, etc.), SiteWatch works with you to minimize the number of customers lost and their “revenue gap”.

Harold Guthrie, denizen of the digital world, is the DRB Systems numbers guy. A graduate of the University of Akron with a degree in mathematics, Harold toiled for IBM before he came to our company in 1994.

A consummate numbers guy, he has conducted numerous engineering studies on a wide variety of SiteWatch products. When it comes to figuring out the meaning of figures, Harold is clearly our number one choice. He can be reached at 800-336-6338.

Posted in Article