Scaling Car Washes

02: Insiders Car Wash Marketing Tips with Jason Baumgartner of Suds Creative

In today’s episode of Scaling Car Washes, host JT Thomson talks with Jason Baumgartner of Suds Creative. Jason shares some amazing marketing tips and tricks with JT that will help car wash owners better build and scale their businesses. Jason reveals many marketing secrets including how to efficiently collect data about customers, how to enrich the data available to you to create more effective advertising campaigns, how to optimize your website, and what to do with car wash packages to continue to grow your community.

“We’re driving to a landing page to collect contact information; use the contact information as the reason to distribute a coupon. Facebook’s a great place for direct response. The thing that we found is that the combination of direct response and awareness actually lifts both. So, if you if you only have direct response, and it’s only in one channel, it’s not going to be as effective as if you’re in multiple channels, direct response and awareness.”

Listen in for more great tips from Jason Baumgartner!

Interested in the Episode but Can’t Listen Right Now? Check out the full interview below.

Profile Pic - Jason Baumgartner with Suds Creative
Jason Baumgartner with Suds Creative

JT 0:01
Welcome to Scaling Car Washes. I’m your host, JT Thompson. I built my first car wash in 2002, and since then I’ve been involved at every level of the carwash ownership experience. I have built and sold my own car washes and as a Sonny’s distributor, I have helped other investors build and operate their car washes. Along the way. I’ve been a multi unit restaurant owner with 23 units in five states. We’ll talk to experts in the carwash industry and related industries that can share inside information that will help you build scale and ultimately exit your multi unit carwash platform.

Hey, welcome everybody to the Scaling Car Washes podcast episode number two. Today I had a great time interviewing Jason Baumgartner from Suds Creative. Jason and the team over at Suds are just doing some really amazing and interesting things utilizing data and digital marketing strategies in car washing. Today in the interview, you’re going to hear Jason share some different ideas and just simple tips that you can do at home. So hope you enjoy the interview. I had a great time talking to him. So hope you will enjoy listening.

Okay, looks like you shaved your beard.

Jason 1:17
I did, yeah. I got COVID. And I was like, I don’t want to just like harbor COVID. It was getting pretty crazy. I was waiting until a deal closed like kind of like a playoff beard situation, but I just needed to get rid of that! I can’t imagine what kind of stuff is hanging out in my beard!

JT 1:37
Just got caught in there! That’s right. Trapped it in there.

Jason 1:40
Couldn’t think about kissing my newborn or anything like that. So, yeah. I do it every once a while every single time, I’m like, “Is that what my face looks like?”

You know, my chin goes away. But it’s alright.

JT 1:54
I was in Europe for three weeks, and my beard started getting pretty long because I didn’t shave the whole time I was there.

Jason 1:58
Yeah, I noticed when you came back, it was awesome. I’m like, alright.

JT 2:05
Well, great, man. Good talking with you. I’m super excited about having you joined the scaling carwashes podcast. I think this is like a fastball down the middle for you guys. I mean, I think your background is perfect for, you know, this platform. And I think because I’ve talked to a lot of different operators, you know, the whole marketing side is kind of a big unknown to them. You know, this is one of the things when you only own one or two, three units, it’s much different than when you have a platform of 8, 9, 10, 11, 12, 13 units. And some of those are in different markets. So how do you leverage that? How do you get the most out of that marketing dollar? And that’s one of the advantages as people scale their car washes, you know, and scale scale their businesses, that the leverage that they get in their marketing dollars is much, much more efficient, right? So they get a lot more for their dollar. So that’s, you know, some of the things that I think would be fun to just kind of talk to you about, and if you want to maybe just give a little bit of your background. I know you’ve been working in the carwash marketing world for probably what, five or six years now? And it’s probably changed a lot. So once you just take a second and, you know, this is Jason Baumgartner with Suds. He’s out of Boise, Idaho. The guy’s just like a marketing master. I love I’ve worked with him in the past. And thought it would be a lot of fun to to bring them on and have him share some of the things that they’re learning and, you know, give some some nuggets and some free advice out to people. So, Jason, why don’t you give us a little bit of your background.

Jason 3:34
You bet. Thanks, JT. I’m happy to be on here with you. And I just like talking to you. So, you know, call me anytime, even if we’re not recording. But you know, one of the things I thought… I came in, and we started Suds in 2016. So, we’re going on five years of being in the industry, which is not a lot of time. But we’ve seen so much change in this industry since 2016, as you well know!

JT 3:57
Yeah, it’s been a busy five years. I’ll tell you that.

Jason 4:00
Yep. And the more money that got into the industry, and the focus on recurring; that whole shift really brought more sophisticated investors into the industry. And I think what we saw early in 2016, 2017, still 2018, and we still tackle today is that, you know, there wasn’t a lot of emphasis put on marketing. “Well, I put up a sign, and I do well.” And I think one of the things that we had to get people to realize is that it’s not about… you know, you get… It’s about going from good to great. And when when you scale an organization, you know, you start to realize that you leave a lot of money on the table because you’re just doing okay. You’re doing well enough to where you don’t think that anything’s wrong. But as we started to get perspective and Suds starting to grow, we started to see well, you know, 1000 members used to be kind of the… I want to get to 1000 members as quickly as possible, and then all sudden was 2,500. And then we started getting clients that, you know, we would get to 10,000 or 15,000 members at a site. And so you see where the ceiling is, and then, you know, the the people that were okay with, you know, being 1000, 1200, 1400 members, we would say, “Hey, you know, if we were to make some adjustments, or just focus on the sale script, or, you know, these types of things, we can get your capture rate from, you know, 1.5% to 2%, up to 6% to 8%!” You know, you start to do that in succession. And you do that enough to where I think the value of that Suds has is really in the perspective of being able to see what winning looks like, and what mediocrity looks like, and what poor performance looks like, and be able to then be prescriptive about what changes you could make to get to that, you know, to the next phase. And so what it really became for us was a matter of what we found really early on that the more you knew about your consumer, the better decisions that you can make. And in order to do that, you have to collect contact information. And so one of the first things that we did was create a mechanism for us to, offsite and onsite, collect contact information for our clients, so that we can remarket to those people at a very low cost.

JT 6:18
You’re talking about just the growth and where the market is going? And how do you? How do you maximize that, right? So you know, just like you said, you know, what was a big number, just a year or two years ago, is really changing. So I think the expectation… and one thing I want to unpack here is, what is it that people are doing in order to get from 1500 or 2000 members to 3000 or 4000 members? What are you seeing that, you know, if you were just kind of, you know, kind of a quick hit, like what are some easy things that these owners can do to try to get there?

Jason 6:57
Well, first thing, engage with Suds. I mean, that’s first and foremost. No, you know, it’s it’s about understanding that you’re not… it’s not about the transaction, it’s about the relationship. And you know, I think that’s the biggest thing is, is looking at membership growth, not as like a quick hitting promo, but we’re creating conversations and building a relationship, that creates loyalty. So you have to… sometimes you have to infill with the quickening, the promo, the discounting and that type of thing. But you also have to have this really linear type of ongoing relationship building with your customer base that will create that sustaining feature and make sure that you don’t hit some of those plateaus, because a lot of people will — you get to 1000, and you kind of plateau, and then you get to 1500, and you’re there for a long time. And then it’s hard to get to over 2000. And I don’t know how many times we heard, we just can’t get past X number. No matter what we do, it’s always like we just come back… right back down to it! You have to create enough momentum through short term promotion and long term relationship building. And part of that also is just enhancing the customer experience. So you want them to come back to build a relationship; you have to, it’s just like a marriage or anything else. I mean, you have to put some time and effort in. You have to be a good person; you have to have a good site with a good product, and you have to treat your customers well. Or they’re going to leave. And you also have to have a way to build, to communicate, and build a relationship with them. So capturing contact information to me is A Number One because it allows you to build that long term strategy that’s low cost and you know, create some automations and onboarding and loyalty communications. You know, you’re spending money to drive people on site. And what we try to do is encourage people to collect enough information that you can remarket to them. It’s that initial customer acquisition cost is x, but then the ability to communicate with them after that you’re not spending as much money for that creates a really sustainable, low cost way to build those relationships with people.

JT 9:05
That’s a great point, one of the parts I know as an operator we struggled with in terms of how much do you want to bug people in order to get their information versus, you know, how do you do that in a way that, you know, is as unobtrusive as possible. But also, you know, you capture the information because that information that you capture really helps drive long term value to the business. Because you can reach out, you know? And you and I’ve had this conversation before, right? We’re always focused on you know, the front door, but you know, what are the things that we can do to close the back door so we’re not losing them. And that’s a big, you know, that’s a big part of it is just creating a channel to where you can communicate with them and stay relevant and stay kind of on the forefront. I think that’s a big part of just building a brand.

Jason 9:52
Yep, you’re absolutely right. And one of the easy ways to do that. So you know, you [hear] “I don’t want to give you my contact information,” if you’re requesting that when somebody signs up for a membership. We just say, “We need to sign off on the terms and conditions.” And you know, that’s an easy way. And usually that takes care of 90% of any pushback that you get; it makes the contact information relevant. “Why do you need to? Why do you need my phone number? Why do you need my email address?” “Well, we’re going to email you a copy of your terms and conditions, you know, that’s just part of our process.” It makes you look more legit, and it overcomes 90% of those objections. And so, don’t just stop at well, customers don’t want to give us your contact information. Just, you know, make it that it’s part of our wanting to provide you with a good service. And you’ll overcome 90% of that objection.

JT 10:37
Part of it also is just the quality of the interaction, the training that I see. I visit a lot of sites, and so you see sites where you have constant training, and really working with employees and their engagement. And then you have others where there’s very little engagement, and it just seems really kind of awkward, so it’s not something that comes natural, I think. You know, and I think you’ve got a group now that’s really focused on training and customer service and things like that, so I think that that’s one of the pieces that I feel this industry is really kind of lagging on. In the restaurant business, that was a big part… we used to call it table touching, and really kind of making sure that that interaction was as positive as possible, and it takes work, man! It’s like, you know… everybody holds Chick-fil-A up as kind of the gold standard in the quick serve restaurant business, and it doesn’t happen by accident, so I think that’s one of the things that, you know… Anybody who’s scaling their business, if you really want to get to the next level, you got to focus on training.

Jason 11:27

Yeah, absolutely.

JT 11:29

You know, you all are seeing that now. I think that’s, like you said, we’ve talked about it in the past, where it’s an area where you really got to put the feet on the ground, and it just takes kind of the the work to do it.

Jason 11:49
Well, you’re right. And so, if you think about, well, I’m going to spend money to drive people on site. And you have to optimize that entire continuum of, you know, the customer journey. So we’re spending money to drive traffic to your site. If they have a good experience, your collect contact information, they’re more likely… it’s an easier path to get them further down into the journey of coming back second time, becoming a member, that type of thing. So what we realized, to your point, is that you know, it’s not just about marketing, it’s about the intersection or the mesh point between operations and marketing. We didn’t understand that initially, you know, it was, why is this working over here, and it’s not working? Well, this is a great operator. And this operator is struggling with training, you know. One of your other points was, the larger the organization gets, the more sites you get… It’s [where] you get to economies of scale. And same thing with training. On the marketing side, same thing with training and operations scale. It’s so much easier if I’m going from one site to six sites, I don’t get that scale, if I’ve got one site in this state, once site three states over…You’re like, you’re starting over. You don’t have five sites, you have one site five times. If I have five or six in an area, that is a lot, it’s a lot easier. It’s not to say that it can’t be done because people have done it. But it’s much easier marketing wise, I can put up three billboards and an MSA and hit 60% of the market and, you know, different traffic patterns, that kind of thing and blanket with digital and, you know, you can train a regional person to manage this team, it becomes a lot harder to scale when geographically, you’re just not contiguous.

JT 13:32
Yeah, one of the things I find with entrepreneurs and being you know, an entrepreneur, I’ve definitely stepped into this trap, which is trying to do too much, right? A lot of these entrepreneurs, they’re just bad asses, right? They, you know, they know nothing about getting entitlements, but you know what, they go and buy a site and they figure it out. They know nothing about most of them came from a different industry other than carwash, they built the first car wash, they just kind of did it through brute force and figured stuff out. And they’re kind of the jack of all trades. And that works when you have one, two, even three sites, but it gets very… You become the limiting factor in your own growth when you don’t bring in the right people or the right resources or really looking at, you know, the areas where you need to get out of the way. And so I think from the marketing side, you know, most entrepreneurs have always, or at least in the carwash business initially, didn’t really put the money into marketing. And so it’s always been kind of an area where they don’t feel comfortable. And you know, spending is a little bit of a worry focus because you know, marketing, they say 50% of your money works, 50% of it doesn’t. The problem is you don’t know which 50 is the one that’s working, which one is not, so… And I think digital is allowing us to kind of get a lot more prescriptive and really be able to capture information and really kind of tell where your dollar is going. Talk a little bit about digital and how somebody can get more comfortable with, and what channels they should be looking at, to really kind of drive the most value and the most bang for their buck. What are you seeing?

Jason 15:08
So, you know, I’m going to go back to contact information as a starting point again, and I’ll probably hit that… hammer that home seven or eight times more throughout this conversation. But if we have, if we have a name, email address and phone number, we can enrich that information and find things like gender, age, home address, what type of car they drive, what kind of… what color car, they drive, you know? All of that then begins to paint a picture of the people that are already engaging with your site and are customers and are loyal.

And, you know, if you have that contact information, you can create what’s then called, like, a look alike audience. And so okay, well, I’ve got really good traction with, you know, males between the age of 35 and 54. And they represent 50% of my revenue, which these are real numbers at real sites, you know? But those types of percentages are huge, and 70% of them have an SUV. Well, now, with digital marketing, you know, we can say, Okay, Facebook, or Okay, Trade Desk, or wherever… We can create these profiles, and these people are more likely to respond to this message. And you get really strategic with the promotion, or the messaging, or the marketing, and, all of a sudden, you’ve got 13, 14 different personas that you know that this persona is more profitable, like males between the age of 45 and 55, they’re typically on the higher package, the highest package, and their utilization rate is half of what its typical user would be on average. So if I know that, then I’m going to spend a little bit more money to target males between the age of 45 to 55. And that’s where digital marketing can be really effective, because it allows you to get in there with a scalpel, right? But unless you know what you’re trying to target or who you’re trying to target and who your target is, and what message they’ll respond to, that tool is not as valuable without the rest of that data.

JT 16:55
Are you? How are you getting that? So how do you know… so when somebody pulls up, how do you know that they’re a male between the age of 45 and 55, right? Or whatever demographic they fall into? How are you? Are you asking that information?

Jason 17:09
We have in the past. And what we’re doing now, though, is we’re able to enrich that data set if we have name, email address, and phone number. So we have two points of contact and a full name… You know, if your name is Mike Johnson, we may not be able to get super accurate with it. Well, I’ll give you one example here. You know, if your name is Mike, Michael, you’re 99.9% positive, that person is a male. So you know, our data team created just a really simple script to just mine for first names on credit card transactions, and so all sudden, we’ve got gender, right? And we can do that without contact information. But then you add the contact information to that and relative, like, assuming that they’re within, you know, 20 minute drive time… Now I get Mike Johnson. Now, how many Mike Johnsons are there going to be within a three mile radius? And how many Mike Johnsons that have mike.johnson@gmail.com, or whatever. And then, so the more data points you do collect, then the more accurate the enrichment can get. And it’s expensive to do that enrichment, but you don’t have to do it all the time on every single contact. So the data enrichment… We pay, I don’t know, exactly; it depends on the number of categories, but you know, it could be up to $1 or $2 per customer contact to enrich that data. So, if you get 1000 or 2000 contacts, just to get an idea of what’s happening at your site, that’s part of your marketing spent. That’s market research. And so you spent $2000, $3000 $4,000, to understand your member base as it is right now. And then from that information, we create those look alike audiences. But you can’t do it without the contact information.

JT 18:43
Interesting. Are you finding… so like, give so as you talk about kind of moving from a shotgun approach to more of a rifle approach, and you’re kind of trying to pinpoint it, things like Facebook or Instagram… Are those mediums that you are seeing much luck within in our space?

Jason 18:59
Oh, yeah, absolutely. Facebook owns Instagram, so that there’s an ad platform. So we have a digital management, digital marketing management team. And that’s literally all they do is they are creating those ads; they’re absorbing all that information. And again, going back to the perspective that that we’re able to have, and then our clients can leverage that perspective. You know, every region is a little bit different, every state, every DMA. So, you know, you may have six or seven in the same DMA. But there’s, you know, one closer to the border that’s 70% cash, and is completely different demographically. We want to know that, too, because then you can carve out that particular site. You can’t communicate to them in the same way or, you know, if you have really like a wealthier demographic and the males 45 to 55 that are on the top package, your messaging may be a little less promotional. You don’t have to spend money. They’re not responding to $5 off coupons. Let’s put it that way. Where, you know, you’re in a different market, or you have a different side, maybe in the same market that in that 8 to 10 minute drive time just looks a little bit different. And then you’re understanding your customers that are already coming to your site, where you already have momentum, then you may market to those people a little bit differently. And that’s where it gets really, really fun for us is when we have a lot of information, we can make better strategic decisions, and then there’s greater marketing efficacy, and then it just becomes… You know, you’re right, on the digital side, it’s easier to attribute revenue back to a campaign. And you know, if you have a billboard up or something like that, and we love billboard awareness type of advertising, but it’s more lift that you’re creating; you can’t attribute it back to individual campaigns. The combination of the two works really well.

JT 19:22
So awareness versus kind of a call to action.

Jason 20:48
Yeah, direct response.

JT 20:49
So, in my mind, a call to action would be, you know, a promotion or something that drives them in. So like on Facebook, or some of those, are you finding that the the awarenesses more effective or, you know, if I’m a guy’s got three or four units, would I be better to try to do a call to action?

Jason 21:06
Facebook actually is great for direct response. So if you want people to take action, right then, in a digital environment, it’s digital to digital, I can click… And Facebook, you can auto capture contact information, because Facebook already has. You can make it really easy for them. We’re driving to a landing page to collect contact information; use the contact information as the reason to distribute a coupon. Facebook’s a great place for direct response. The thing that we found is that the combination of direct response and awareness actually lifts both. So, if you if you only have direct response, and it’s only in one channel, it’s not going to be as effective as if you’re in multiple channels, direct response and awareness.

You know, if you think about, like, you know, like Amazon or Apple, you know… A lot of these companies, they have something that’s really feature rich, like a iPhone, that they’re promoting. But they also have just like the think different type of campaign where there’s nothing to do with the product itself. It’s more awareness branding, and, you know, gets… you’re creating emotions and that kind of thing. The combination of the two is where is where it’s at, and then being able to be in multiple channels creates some trust with the consumer.

So, oh, okay, yeah, I saw that ad, you know, on a billboard. And then I’ve seen it on Facebook, and I got a direct mail piece, so I’m more likely to take the direct response action — which would be on Facebook, typically, or direct mail — if I’ve seen it somewhere else, you just… You know, high tide raises all ships, so definitely, you got to have both. Think of it like the Air Force, you know, the Air Force is going to soften up targets, but in order to take a town and stuff that infantry has to come in, and secure the camp. You can’t do it all by air force; it’s way more effective if you use air force along with infantry.

JT 22:44
Yeah, the old one, two. That’s right. Yeah. Tell me about websites. Are websites even relevant, like do people in our business go to them? Is it all mobile? I mean, what would you recommend for somebody? You know, should they be putting… You know, how much effort and time and money should they be putting in a website?

Jason 23:03
You have to have a website, because it’s a legitimacy thing. What we’re finding is that people 80% of traffic is mobile. So we’re designing these websites to be mobile first design, which means we’re going to design it for a mobile phone first, and then we’ll build out the desktop version. I think what people get wrapped up in making a site that is overly complex, and a lot of times, you know, we just have to have conversations with [them]: “You hired us to make you more money. This is not the thing that’s going to make you more money; it’s the thing that you just should have.” You have to have a bathroom on site, right? You have to have a website, but it’s not the thing that’s going to create a lot of value. People go there to figure out where your locations are. And it’s really helpful in Google searches to make sure that it’s SEO compatible. And then they’re looking for features of the wash and pricing, like packages. But it’s really a great recruiting tool. So, if you have a really nice website, that’s really brand positive, and you can see that there’s culture and, and you know, you can hire more effectively, which is… You know, there’s a lot of ancillary benefits to the website. You can use it as like an intranet type of site; you can do all kinds of things with it, and use it as a way to capture contact information for promotions. But in and of itself, a website is just something that you have to have as part of doing business. Any business really.

JT 24:18
When you talked about the mobile aspect of it, anything going on there, that’s like? You know, because it seems like the world is shifting underneath our feet so rapidly today… Anything that people should be aware of that as they’re trying to target people? Anything that… any tips that they should think about?

Jason 24:35
You know, it’s interesting that you bring that up, because there’s a lot of privacy things going on with you know… Apple and Facebook are in a big battle. And Google, lucky for us, punted their decision on on privacy and cookie collection until 2023. Because what all that data is going through these providers, and that’s how we serve ads, right? So imagine if they don’t have all that information on people from iPhone users, which is, you know… A majority of the people who are going on Facebook are not doing it on a desktop, they do it on a mobile. You don’t have that information, you don’t have the targeting capabilities, and then the ad platform is less relevant and not as valuable. So we do think there’s going to be a shift. We haven’t seen that fully yet. We’re starting to see it a little bit in like programmatic type of ad advertising, where we just have less and less data, as these releases come out with new iOS updates. And so I think that the mobile piece of it’s going to be interesting more on the data side than on the like user experience, actual website side, but, you know, used to be that we would be able to track… And we still, we can still do this, luckily, but we don’t know if that’s going to always be the case. And so we are building in pivots, anticipating that the market will change in 2023. But it’s something that you got to be aware of that you may not always have access to this information; now’s the time to learn as much as you can, because you may be out there advertising a little more blind than you are today.

JT 25:59
Interesting. Well, the whole privacy thing is definitely, you know, on everybody’s mind these days. I think it’s been pretty incredible how much stuff that we’re able to grab on customers, I mean, even as they drive by the site. You know, so it is scary. But you know, from a user’s standpoint, I can see where, at least, you know, like on some of the campaigns that we ran, right, where you can go and target, you know, a Walmart parking lot to try to push ads to, and really try to, you know, be a lot more focused in how you’re communicating out to your potential customers is pretty powerful. So I just was curious to see on the on the mobile site, so if somebody is looking for you, or if there’s, you know, anything that people should be focused on making sure that their website, you know, the mobile aspect of it is as customer-friendly as possible, right?

Jason 26:56
Yeah. You want it to be clean. You want it to be simple, easy to use. I think what people don’t realize is that you can’t put a lot of flash, kind of bells and whistles and movement and video… that stuff is all great, it looks really really cool. But 80% of your clientele, it’s going to slow down the load page. So you may have a mobile… your mobile version is going to be a lot stripped down because it’s stripped everything down to one column. You know, it’s going to be responsive, but you may not have like all the bells and whistles that we come… The people that are only sites today, like carwash sites, and are building websites that… We’re thinking of it’s still like what was being built when we were doing something else, and kind of what we thought was cool. And we’re looking at it, we’re viewing our websites on desktops, because we’re not the user, we’re not the target user, for the most part. Like I said, 80% of it’s mobile, and the mobile experience is going to be more stripped down because it has to be, and that’s what the consumer wants. You know, more minimalist, and not as busy and not as over the top. You don’t have to do that; you know, the website is something that… you have to have it but it’s not something that’s going to move the needle financially for you.

JT 28:02
Great. A topic that is always controversial is pricing. You know, should I have four packages? Should I have two? Should I have three, five? You know, I’ve seen it all over the map. And I used to tell people, and I still… I actually feel like this today, which is one package has always been intriguing to me. Because, you know, as we look at our… As operators, it used to be a lot easier when you didn’t have… You know, when the unlimited revenue stream wasn’t like it is today, but you know, when you’re really just trying to figure out what’s your average ticket? Like? So I did, I did 1,000 cars today at $9.80 ticket average? Well, you know, $10 is my goal, or $12, or, you know, whatever that goal is, you’re trying to balance out these packages in order to kind of hit your target.

And I used to be like… and I still kind of wrestle with this, which is, well, if you’re trying to get to call it a $10 ticket average. (And I’m just making up the numbers, because everybody’s all over the map.) But you’re saying listen, $10 is really where I need to be. Why not just have one package, charge 10 bucks, and call it a day? Right? You know, you think about how easy your flow through is. You know, I had a couple sites that were very, very busy. And I was just trying to get people in and out as quickly as possible. Like I did not want them to go through all these, you know, layers of bells and whistles and add on this and add on that. And so I just felt like, gosh, if I’m trying to get to $10, should I just have one package, charge 10 bucks, and then all they do is they pay and they move through? You even have to worry about sequencing because guess what, everybody’s got the same package. Not everybody prescribes to that… I don’t know; I’ve never had the nerve to do it, but in the back of my mind I’m like, “Gosh, that’s what I should do.” What are your thoughts on pricing packages?

Jason 29:42
I love that idea. Well, so first of all, I love the simplicity. I do really like that idea. We had a client that ended up getting bought out before they opened, but they were going to do something really similar. One one package, just our best wash and at the most reasonable price, and then our best unlimited at the most reasonable price. It simplifies everything in the tunnel, through put, all that… Nobody’s pulled the trigger on that that I’m aware of yet. But I love that idea. I think that’s where it could end up going. You mentioned getting people in and out. I mean, in and out is kind of the model, right? Like you get a hamburger, or cheeseburger, or a double. And that’s it. Like, those are your options. And they just process people like crazy. I mean, how much… If you go to a fast food place, how much time you spend, by the time you get the cash register, like going, “Ummmm…” I mean 15, 20, 30, 35 seconds. Imagine that times 1,000 or 1,500 cars at a really busy site. That starts to really add up.

But the way we look at it… So one would be fun to do, I would love that. And then so the next option would be two, right? Two is simple. But what we found is that the two isn’t actually optimal. The introduction of a third allows you to create this dominated alternative, where instead of having an A, B, and C option, we price it in such a way that it doesn’t make sense to have the middle package. So you know, your $10/ $18 / $20 instead of $10 / $15 / $20. Well, the middle package becomes a nonoption. You kind of simplify. You know, I’m either the bottom or the top. And a lot of times that drives…

JT 31:10
Yeah, for $2 more, why not just go for the $20? Right. That’s the theory.

Jason 31:13
It’s the movie theater popcorn kind of model, right? Yeah, $6, small, $7, medium and $7.25 extra large with a refill? Like why would anybody choose the medium? And they’re getting an extra $.25, $.50, or $1, whatever. So, that’s where we usually start out, but then you know, every site has a lifecycle to it. And at first, you know, when you open up a site, Greenfield or renovated or buy new carwash, or whatever… you’re trying to just drive as much as you can and get them to understand what it is you’re all about. And so we like the three package [model] at first. And then when you get to a point where you’ve hit critical mass, you know, let’s say 3,500 or 4,000 or 5,000 members, there is an optimization play on pricing, where then you can introduce a topside anchor. We’ve got a lot of data behind that. But if you do that too early, then you actually kill your distribution mix. And your distribution… It’s really, like you said, it’s a distribution play. Because at the end of the day, it’s about where the ticket average is.

That’s really all you care about.

The distribution… Yeah. So if you can get 60 people at the top instead of the bottom, that’s where the the nudging people will comes into play. And it’s easier with three packages early, because it’s easier to draw those comparisons, and there’s not as much noise on the menu, but then there is an optimization play. So, I mean, we were big three package people. And then, as we got more data, we realized that there, okay, let’s introduce this top side anchor, and Chris and his team have done a great job of it. And now we’ve got 175 or so different brands that we’ve moved through kind of the life cycle, and can show you. But it’s not three or four… which one’s best? It’s which one is best right now. And what are you trying to solve for, right? Are you trying to solve for unlimited member growth? Then, you know, you probably want your retail pricing to be a little higher. If you have good traffic on site, and you have a lot of opportunities to sell, raise your retail price, and be more aggressive on your Unlimiteds if that’s what you’re trying to solve for, and as you get to that point, you can grandfather those people in. You hit that point of critical mass, and then you optimize, and then now you’re getting another $4 or $5 or $6 per customer, and you’re more profitable on those people, but you’ve secured your base. That’s kind of the way we look at it.

JT 33:26
Yeah, and you guys, I have to say, an incredible, really a kind of a powerful base of data that you’re able to look at, so it’s always intriguing to me to hear kind of your perspective on what you’re seeing. Because you’re most guys like me, just historically, it’s all been anecdotal and kind of gut feel, but now as the business and the industry is really maturing, and we’re really getting a lot better data and more data, like now that we have license plate recognition, and you can capture information on every single customer, not just the unlimited customers, but you know, 100% of your base… So, there’s a lot more data out there. And I think is we’re really starting to try to process that and look at it a little bit differently and make data centric decisions as opposed to kind of gut feel, it’s going to be interesting to see where the industry goes.

Well, Jason, this has been just fascinating. You know, again, I love working with you guys, you know, talking to all the people on your team. So it’s been, you know, a good relationship over the, over the years. Kind of the parting question: what drives Jason Baumgartner? Like, what is it that gets you out of bed every day?

Jason 34:33
Oh, man, you know, for us… When we got into this industry, we were really like anti-establishment kind of, you know, not to not annoyingly, but we were just like, Why? Why are we doing it this way? And the answer we got a lot was, well, this is… You know, “why did you choose your pricing to be this?” “Well, I went into the market and this is where everyone else was, and I went here.” And we saw that so often that why are we doing it this way? Well, this is what some consultant over here said… and that had permeated the market in such a kind of a small enough industry that those became like gospel, like these strategies. And we will say, that doesn’t feel right. And so being disruptive I think, to the good of the client… Just being able to try things, and we have our battle cry at Suds is “Create what’s next.” And I think that’s what gets me out of bed is, you know, we’re doing cool things right now. And six months from now, we’re not doing the same things. We’re trying something completely new. We’re iterating and learning from data and backpropagation. And, I mean, we’re processing millions of transactions every couple of days. And we know that this market is not going to sit still. If we don’t go create what’s next, somebody else is going to, and that’s what motivates me.

JT 35:43
Awesome. All right, man. Well, hey, best of luck to you and everybody over there… I know you guys just got acquired by a big private equity group, so…

Jason 35:53
Publicly traded.

JT 35:54
Probably some exciting things on the horizon for you, so best of luck and thanks so much for you know, sharing this! What is your email? So people listening, if they wanted to reach out and just have a couple questions, how would they get in touch with you, Jason?

Jason 36:05
So it’s jason@sudscreative.com. And if you want to go to our site and learn a little bit more, it’s www.sudscreative.com, and you can check out what we’re all about. But thank you, JT. Anytime you want to have me I enjoy just having conversation with you! I always have.

JT 36:23
Alrighty, Brother. Good talking with you, Man. Take care.

Thanks for listening to the Scaling Car Washes podcast interview today with Jason Baumgartner. I’m your host, JT Thompson. I had a great time. Hopefully, you did pick up some things that you’ll find useful in your business. And as you guys are looking at growing your business, again, the thesis of this podcast is really to just bring on people who are experts that have different areas that are really important to the scaling of your business. Thanks for listening.

Thanks for listening to today’s episode of the Scaling Car Washes podcast. Please subscribe to stay current with all of our episodes coming up. Thanks and I’m JT Thompson, your host.