About the Episode:

Want to know the Amplify team’s key takeaways and market insights gleaned from The Car Wash Show 2023? In this episode, Lanese talks with Amplify COO Chris Jenks about themes and sentiments that emerged from this year’s show in Las Vegas. With the cost of capital high, mergers and acquisitions activity is picking back up as many platforms are adjusting their path to growth. This is good news for car wash owners considering an exit, with inventory currently lower than demand. But as buyers return to the table, they are more sophisticated and looking for well-performing car washes in strong MSA’s.

As the car wash industry evolves, so does its embrace of new technology, especially solutions providers that are bringing tangible benefits to operators and boosting their cash flow by streamlining operations. Lanese and Chris highlight case study examples of how businesses like Amp Ventures partners Retention Express, AMP Memberships, and Merchant Advocate can significantly strengthen operations, customer experience, and the bottom line. Listen in for these key takeaways from The Car Wash Show and how they can improve your business.

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Check out the full transcript below:

Lanese

Welcome to Episode 16 of Car Wash M&A, The Podcast. I am here today with my colleague, Chris Jenks. Chris is our COO at Amplify Car Wash Advisors, and he is also a car wash owner and operator with Driven Car Wash in the Chicagoland area. So Hi, Chris.

Chris

Good morning, Lanese. How are you?

Lanese

I’m doing great. And so today we’re going to spend a little bit of time just kind of giving some thoughts on The Car Wash Show in Las Vegas that happened earlier in May, and sharing some of our team’s takeaways from what we saw there at the show. So Chris, we’ll just dive right in. We’re going to cover three things that we really took away. We’ll start with number one, which one of the things that we really saw was that there are still a lot of buyers that are interested in quality car washes. So can you just kind of talk a little bit about that?

Chris

Yeah, absolutely. I think we saw a little bit of a pause here in transactional activity in the car wash space towards the end of Q4, going into the first quarter of 2023 here. And it was refreshing to see… I mean, there was certainly a buzz at the show. I think that speaks volumes to the overall continuation of interest in this space and the continuation of growth in the car wash industry. And I was personally just very encouraged to see that buzz. But as we talk specifically about deal flow and the transactions that are occurring in the car wash industry today, there is certainly a lot going on here. As we look at the second quarter now, you know, I mentioned the pause that we had, or at least the slowdown earlier on this year. We are shaping up now, as relates to our business, in having the record setting second quarter. In fact, right now as we look at deal flow, we have in excess of 90 units that are either under LOI or escrow at the moment. And again, this is record breaking for our business.

Lanese

Right. And I think that that’s really important because as we saw this lull or this a little bit of… I don’t want to say fear, but you know, there’s uncertainty in the marketplace, and it’s just showing the resiliency of the car wash industry and of that sector in general.

Chris

Absolutely. I think there’s a little bit more clarity in terms of where rates are expected to go to the future. As we look at what was an unprecedented series of rate hikes from the Federal Reserve, in fact the most aggressive series of rate hikes in excess of 40 years, a lot of these consolidators and financial sponsor backed platforms in the market kind of paused for a bit. Cost of capital is increasing at such a fast pace. But now as we look at the future state, I think there’s a little bit more certainty. Now granted, we have the upcoming budget crisis here that needs to be addressed. But nonetheless, I think as we look going forward…

Lanese

Always something.

Chris

Always something, always something. But as it relates to the Fed’s efforts to combat inflation, you know, we’re starting to see core CPI come down a little bit more clarity. So I think there’s a little bit more appetite interest now to get back to the table and get deals done. But definitely the type of deals are different. I’d say last year, we saw a lot to be let’s call it larger 10 Plus unit deals come to market. Today it’s more add on activity. So smaller number of units, let’s call it onesie / twosie add-on deals. And that being said, I’d say some other dynamics that are clearly evident here is just the length of time to get these deals to close is certainly a little bit longer.

Lanese

For sure.

Chris

Last year, you know, the seller had so much power, right? Now things have shifted where all of the power has shifted to the buyer. So you know before you’re able to get a lot of credit in your pro forma to get these deals underwritten, where now you know those pro formas are a little less meaningful, a little bit more on actual cash flows. And that said, you know, it’s a little bit longer to get these deals to completion. We saw a lot of activity last year closing it 30 days. Now it’s extended a little bit longer, a little bit more rigorous due diligence, and the appetite for risk is a lot less than what it was last year.

Lanese

And that’s something that we’ve talked about before that the playbook that buyers in the private equity firms and groups in general are… They’ve sophisticated their playbook, so they know what they’re looking for more; they know what the criteria is. But this isn’t all bad news. This is showing that there’s more of a normalcy in the car wash industry. Would you agree with that?

Chris

Absolutely. In general, I think that we’ve talked about this a lot over the last year. What we saw the past, you know, let’s call it three years… That wasn’t normal, right? That was unprecedented. We were in an environment with zero interest rates, cost of capital is free; you had such tremendous pace of consolidation in this space… I’d say that was not normal. What we’re starting to see now is normal. I’m personally, again, encouraged by what we’re seeing here. A little bit more discipline in the transactional activity. You think about that in the long run… that’s better for the health of our industry.

Lanese

Absolutely. And I think that’s one of the drums that we keep beating here is that just because things change, and there’s some uncertainty in the middle, the trajectory that we’re on, and the path forward still shows that this is a very healthy market to be in, and that the car wash industry does have that resiliency and that continued growth avenue for sustained smart growth in the longer run.

Chris

For sure. There are very few businesses… I mean, we still have conversations amongst our peers in the private equity community, and there are very few industries that are as attractive as car washing. You know, you look at kind of the secular growth story is still very much intact, the consumers continue to embrace the express car wash model. As you look at what average unit economics look like once you achieve scale, there are very few places to park your money to really grow a franchise. And again, still highly fragmented, despite a lot of the explosive growth we’ve seen over the last five years here. So you put all that together, and it’s still a place that’s very attractive for institutional investors, as well as these emerging platforms. And I don’t see that stopping anytime soon. Again, bumps and blips in between, a little bit more discipline in the underwriting process, but I think all that bodes well to the long term prospects of the car wash industry.

Lanese

Absolutely. And you know, we’re talking about the adoption of the general consumer to our current model of the express exterior car wash, and it just kind of dawned on me that at some point, I think that we may not even need to say express exterior. This is just what car washes are to a lot of people that are used to this being the way that it’s done. So it’s just as we keep going along, it has become the established norm and consumers have adopted it. And that’s now what they expect. So we don’t have to make that explanation that it’s not going to be the inside of your car. That might be crazy for some consumers to think, “You would go in my car?”

Chris

Yeah. I mean, it’s just the exposure to the product over the last couple of years with the growth and new units coming online. All ships are rising with the tide. They know exactly they’re getting into now the model itself is tailored perfectly for the emerging consumer today just given ease, convenience of just getting in and out in a very quick and efficient manner. You have the unlimited subscription base, which again, consumers have adopted and embraced across multiple industries. You put all that together, and I completely agree, Lanese. It’s now becoming the common product and a common operating model in the marketplace.

Lanese

As my last aside on that note, from a branding standpoint, it’s very exciting because that’s one less word that you have to fit in every time when you’re trying to make a logo. You just put car wash and people know what it is.

Chris

Yes. Just put car wash in big bold letters.

Lanese

Yeah, exactly. Okay, so we talked about that there’s still buyers coming to the table. Let’s talk about what we’ve seen and what we are seeing with platforms, growth strategy, and their scalability and their path to growth. How is that changing over what we saw last year?

Chris

Yeah, so the playbook up until the last year has been you get in, and you enter the space, and let’s say you pay a high teens multiple for an existing platform, You’re then able to blend that multiple down by way of de novo or Greenfield developments. For example, let’s say you know, a couple of years ago, you’re building a new car wash at, let’s say $5 million a unit. Let’s say that that car wash is expected to generate about a million dollars in EBITDA. So that new unit is essentially being built at a 5x multiple. Therein lies the blending down of that high teen multiple to get in by buying an existing, you blend it down by way of greenfields, and you’re at a little bit more of a reasonable valuation multiple in terms of your entry point. Those economics have completely changed here the last two years.

Lanese

Yeah, 5 million sounds cheap now!

Chris

5 million is cheap. I mean, we’re personally looking at budgets today with a seven handle on it, and it’s getting me a little queasy, but you know, you hit it right on the head. It’s now let’s call it six and a half best case up to seven and a half million dollars to build a new unit. I mean, again, it all depends on your market, how much you’re paying for real estate, and your above ground cost, and just your overall standard of quality of build. But for the sake of numbers, let’s just say it’s about seven and a half million dollars. So that 5x to build is more like 7.5x. I’m gonna further complicate that. Delays, right? It is taking longer to get these things built now. We’re in Chicago; we have a finite allotment of just concrete for our projects for the year ahead, right? We can’t take on more just because we have only so many resources. Rooftop units are still an issue, anything related to electrical panels… We’re still struggling to get transformers from our power utility providers on site. So why does that matter? Well, it’s now you take into consideration your ramp up time and your build time. You’re now out of pocket for… You could be looking at two years before that thing has cashflow and you’re breaking even. So if you think about the opportunity cost there, that 7.5x maybe is more like 9x, right? Because you’re now sitting on your hands for about a year to get these things built, or more. You have a ramp up period of about a year to actually get to a point where EBITDA is at a point where it’s attractive. It’s more like 9x when you factor in those costs. On the other end of the equation, now let’s talk about acquisition activity. Multiples today we’re seeing on the bolt-on side are anywhere between 8 to 10, which is almost parity to your new your new builds, your denovos. As you think about the economics and the incentives there, it’s not paying a high teen acquisition of blending down by Greenfield. I think those add-on acquisitions are certainly little bit more attractive than they once were.

Chris

Right. It’s just flipped. That’s bringing it down; the acquisition is what’s bringing it down.

Chris

Absolutely. The playbook is completely different today.

Lanese

And that’s not all bad news for sellers, though, because even though maybe it’s not those teen numbers that we were looking at, these are still fair, healthy numbers and multiples that sellers can expect. So it’s not bad.

Chris

Yeah, of course. I mean, especially if you’re a quality business today… And again, I want to emphasize: sellers, if you have a quality business, now’s a great time, because that buyer pool is so hyper focused on the quality of your business. If you could demonstrate, you know, prudent capital deployment, strong same store sales comps, just overall financial discipline, a clean balance sheet and a healthy profile and growth trajectory of your business, there are buyers out there today for you. I will tell you that for certain.

Lanese

And especially in certain geographic areas, or MSAs that are harder to get into, those are the ones that we’re seeing are the most attractive,

Chris

Of course. Absolutely.

Lanese

We’re seeing now that the people are still growing, but they’ve just kind of shifted the growth plan and how that looks. And then the other thing that was really apparent at this show, in particular, was this intense focus on operations and strengthening the quality of your operations, streamlining, optimizing… all of those things.

Chris

Yep. You know, it’s been interesting. Shows in the past have been focused more on the transactional side of things, right? How to get more deals done, how to pick up more units… I got a sense from this show that there was a heightened focus on just operations. And I think the reason for that is if you think about, again, multiples compressing… So that 15x today is more like 10x. You know, that’s a 33% loss to enterprise value just based on multiples compressing. How do you make that up? Well, you focus on operations. You improve your operating margins; you add more to the bottom line. And that’s how you make it up. And I think that that heightened sense of focus on operations was very evident in the show.

Lanese

Absolutely. And again, that points to the longevity and the health overall of the industry. As we’re strengthening the operations and providing the end user with a really quality service, that that’s protecting the car wash industry by making it and keeping it desirable for consumers. They’ve got ever-improving service that they’re receiving.

Chris

Yeah, I think in an environment of explosive growth, you could lose handle on how you operate your business. And I think now that things are pausing to a certain extent, it gives operators of these platforms a chance to take a step back and think about what am I doing my business? Effectively integrating teams after you’re after new add ons, preserving the culture of your business training staff, using new and innovative technologies and solutions to expand those margins and improve efficiencies in your operations… Those are all key themes today. You know, one thing I think was very interesting, and Lanese and I were talking about this is Innovation Ally was something that has been around the ICA shows for a little bit now. But the presence there this year was remarkable. A lot of really neat solution providers there; a lot of buzz around that particular section of the showroom floor. I think again, that just speaks volumes to just the heightened importance of using some of these new innovative technology solutions to improve your operations in today’s environment.

Lanese

And it seems like the car wash industry has kind of finally gotten to where it garners that attraction from outside tech innovators, that they see that the car wash industry is a really surprisingly robust market for them to tailor fit these solutions for, and I love that, and I’m sure you do too, because it just shows you know what we already know that this is such a cool industry. You gave a talk at The Car Wash Show, and it was on how car wash owners can use these emerging operational solutions, and partner with these operational solutions providers, to better the business. And you gave three case studies. And these are all Amp Venture partners of ours, so we are intimately familiar with their capabilities and everything, but they’re also phenomenal resources. So it was AMP Memberships, Retention Express, and Merchant Advocate. Could you just give our listeners a little overview of why you were sharing about those, and what they can do for operators?

Chris

Sure. As reminder, you know, Amplify was founded with the mission statement of serving the car wash community, right? We want to put the best interests of owners and operators first and foremost, and our legacy has been purely… I’m on the transactional side, whether that be M&A, capital advisory, or brokerage, we want to step up and represent the best interests of car wash owners and operators nationwide. And we achieve this mission by being operators ourselves. You can plug in any investment banker and M&A attorney or broker into a deal, and they’re going to run the same rinse and repeat process. What makes us unique is that we sit your shoes, we understand the problems, we speak a language, and that allows us to better represent you throughout the process, right? I always say you don’t want to have a ship captain land a plane, right? It’s important to ask for that has that real life industry experience.

Chris

Yes, that seems very true.

Chris

And we’ve expanded that mission statement towards Amp Ventures. You know, we’ve seen some really unique and innovative technologies and solutions, as we’ve seen kind of almost a renaissance of technology over the last five years. That said, there’s also a lot of creative marketing and Amp Ventures was founded to really vet and bring what we see to be some of the best in class emerging technology solutions in the car wash space. So we’ve inked a couple of partnerships. You’ve named all three of them right now: Retention Express, AMP Memberships, and Merchant Advocate. And with such explosive growth in the car wash industry, we’ve seen the tech and solution side follow suit. And there’s also been a lot of really clever and creative marketing. And these technology solutions have all been centered really around one thing: data. Data has been the lifeblood, and it permeates across all industries for really the last five to 10 years now. But really, the use of the data is only as good as a practical insights derived from that data set to improve your business. So but I wanted to do during that session was provide some practical and tangible use cases of how you could use data driven technologies to improve your business. So we had a couple of really interesting case studies. And I’m more than happy to talk through some of those in more detail. But again, I think the constant theme, and I’m gonna steal Adam Trien’s line from Amp Memberships: weaponize your data. There’s a lot of really interesting stuff out there, and you could use that data to improve your operations.

Lanese

So in that talk, you just gave kind of some high level descriptions about what it is. For example, with Merchant Advocate, it was “uncovering the black box,” or what did you say?

Chris

Yeah, adding transparency to the black box.

Lanese

Yes! I love that. Adding transparency to the black box. So really, just all of these tools that you highlighted… For example, that one where it’s related to credit card fees, but it’s just diving deep into these things that maybe you don’t even know about. So what are easy ways that can be low hanging fruit that just saves you money by partnering with someone?

Chris

Yeah, Merchant Advocate is a great example of that. So if we have anybody in the credit card processing, space listening, I’m going to apologize in advance. But, you know, if you ask anybody in the car wash business, or any retail business, for that matter, what do you pay in credit card processing fees? You’ll typically hear between 1.5 to 3.5 percent. In today’s world, where everybody’s moving towards credit cards, that 2% delta there, that spread, is incredibly meaningful. And just to make it a little more tangible, let’s say, you’re a 10 unit operator. Let’s say your average unit is processing $2 million in top line, about 95% of that or so is coming through credit card transactions. So you’re really clipping, give or take, let’s say $1.8 million in credit card transactions every year per unit. That 2% of that 1.8 is a big dollar amount, especially when you extrapolate that across 10 units. So what Merchant Advocate does is they essentially have a really neat, innovative technology in the back end; they use a machine learning model. And what that model is going to do is it’s going to look at just the activity of your credit card processing charges relative to your history as well as relative to like peers. And what it’s going to do is it’s going to learn from your activity, learn from peers, and flag categories that seem unusual. At that point, Merchant Advocate will dig into a little deeper, and they’ll advocate on your behalf to lower those fees. So, a really good example: at our carwash, right, we recharge the first of every month. And if that credit card declines, we’re going to keep trying to get you to recharge that card. What you may not know is that there’s a fee associated with that charge every single time.

Lanese

I actually did not know that.

Chris

Yes, there is! And that fee… let’s say it’s five cents the first time; well it might go up to 10 cents a second time, 25 cents a third time. And that could continue to increase with each subsequent recharge. Now you think about this: again, let’s say your 10 side operator, your average unit has 4,000 members or 4,000 charges. Those can be big dollars, so this is something where they have a model on the back end that could flag that as something that’s unusual. And they’ll go ahead and they’ll work with the credit card processing companies to lower that and bring that back to an acceptable range. Another really interesting example that I found to be fascinating… In that case study, they found a multi-site operator with 80 units, they were looking at their their credit card processing charges, and they were incurring $60,000 a year in charges for failure to respond. Now, I don’t know about you, but when I get our credit card processing statements sent to our office, I’m not opening those things up. To me, it’s like a cell phone bill. I just toss it; I’m not going through it line item by line item. I just don’t have the bandwidth to do so, and neither does my team. But if you actually dig into that, you’re going to see charges like that, and if you think about $60,000 a year, if your business is worth 10x, that’s a big, big dollar amount towards enterprise value that you could save.

Lanese

Absolutely. And I think the neat thing about that particular provider, Merchant Advocate, is that they do all of that. They’re not asking you to switch credit cards; they’re not the credit card provider. They’re just the forensic side to try to save money.

Chris

That’s exactly it. They’re forensic accountants at the end of the day, right? So, they are a consulting-based service. You don’t have to change your credit card, you don’t pay anything unless they bring you savings to the table, so it’s a model that’s truly aligned between the operator and the service provider.

Lanese

Just the last thing on that one, and all of these services… What operators really want, like you just said, you only have so many hours a day and so much bandwidth, even if you’re growing your team. There’s still a finite amount that you can do. And so how can you partner with these other solutions providers to help better your business that’s not making you reinvent the wheel?

Chris

Yeah, exactly. Interesting example here, that’s kind of pivoting from the the case studies at the show, something we’re actually doing in real time in our car wash… We use Retention Express. And, again, as a refresh, Retention Express is really a full suite, 360 degree customer experience platform. And there are really two components their service. One is the outsourcing of servicing incoming inquiries from your customer base, whether it be you know, outsource call centers, text messages, email, web chat… All of that is taking off site into a professional setting with a goal and intention to manage churn and increase retention, which reduces the overall churn of your membership base. But on the back end of that, they’re capturing a lot of the data from your customers and providing those insights through a comprehensive dashboard. I think that’s really important. If you look at kind of the bell curve of call volume on the sites, it almost matches perfectly to the bell curve of wash volume, meaning that your customers are calling more during the height of your peak busy hours in the car wash. So what you’re doing now is you’re taking one really vital resource away from the line, and plugging them into a situation now to service that incoming inquiry. And you’re really missing a big opportunity to (A) effectively serve that customer, and (B) take the insights from that dialogue and conversation. So good example here of how we’re using this. One of our locations, it’s on a really busy road right by the highway, fairly transient community. And I’m looking through our churn, and one neat features that Retention Express will measure the exit sentiment when a member calls to cancel their plan. So in other words, you have a score of 1 to 10: 1 is I’m canceling I hate your service and never coming back. 10 is I’m canceling for a reason; I really don’t want to cancel, I love everything, but unfortunately I’ve got to cancel this plan. This particular site, we’ve noticed that over the last 90 days, our average exit sentiment was 9.2, meaning people were canceling but didn’t want to cancel. So we dug into this deeper, and we found that a large reason why our members were canceling was because they’re either (A) moving, again it’s a transit community, or (B), they love the wash, it’s just not close enough to their home. So those are some good insights there. So now as we’re looking to expand our geographical footprint, we’re able to, through Retention Express, pull the zip codes of those cancellations, understand where customers are moving to, where they live, if they’re not using to help us in our development efforts to build our footprint there. And those are just some really, really important insights that otherwise would not be captured for your servicing on site.

Lanese

Totally, because just even recapping what you just said, when it’s the busy time of the day… It’s a Saturday, you’ve got cars lined up, there’s a customer that needs to cancel… The person that’s there at maybe the pay stations, or whatever, they have to go away from that. Now the line is longer, now all those people are getting more upset because they have to wait longer. And then they don’t have time to capture that data. So it’s moved, canceled, moved. That’s it. And so, you actually have no real data: if they really did move, or if they hate your service, or what it is. I love that, that they’re trained to do that, and that they don’t let any of those customers leave out, as they say, the backdoor unnoticed. And they’re talking with them. And they’re that first line of defense to showcase your other services. Maybe you do have a wash that’s coming into the area that they’re moving to that they didn’t know about.

Chris

Yeah, exactly.

Lanese

It’s It’s really incredible, so I love that.

Chris

It seems so rudimentary, but you hit it right on the head, right? You’re losing the battle on two fronts there. You’re losing it on site by distracting your staff from doing what you want them to do, which is service the customer, produce a clean, dry, shiny car. That is your focus on site… Fast and convenient. The on the back end, you’re losing those insights from that conversation because they are so distracted with dealing with multiple issues on site where you’re able to put in a this professional setting, how to train professionals to service those customers, know what questions to ask to extract those insights, but more importantly, provide that data back to the operator.

Lanese

And the third thing is that usually the staff that are being pulled away to facilitate these conversations on site, it’s… I’m going to go ahead and go on a limb… it’s not their favorite thing, so it’s helpful for them, too. Okay, so we kind of talked about that a little bit with Retention Express. And then let’s talk about AMP Memberships, while we’re on the topic of monthly memberships.

Chris

Yeah, another solution developed by car wash operators… That’s we love. As we talk about all these groups here, they’re all solutions and technologies developed by folks that have sat in all of our shoes as operators. And, you know, again, we just want to highlight the importance there. We believe in that philosophically on the Amplify and Commercial Plus side of our business that, in order for us to effectively serve the car wash community, we need to be from that community. And these folks have that same kind of DNA and background, which is why we love AMP. So AMP was founded by Dennis Dreeszen and Adam Trien. Dennis is a car wash operator himself, so they’re able to actually provide a white label app solution for car wash owners and operators. And really, the crux of their solution is to produce a mechanism to better engage and nourish relationships with your customer base, but what’s interesting about that is once you get that customer on this thing right here, a whole world opens up just data, and understanding your customer base. You’re able to pull in demographic information of their financials, how much do they earn, where do they live, age, sex, the type of car they drive. And when you mesh that together with your business insights, that can be a pretty powerful tool, as relates to marketing customers, attracting new customers, and retaining new customers.

Lanese

One of the programs that they’ve shared about is they were saying that they did this for Auto Wash, the service that Dennis has there in Colorado, that they were marketing about their local sports team, and they were sending out a blasts to their customers like, “Okay, you love the Colorado Rockies…” But not everybody does. Maybe they are fans of other sports teams. And so then they started drilling down, and they found out who actually they are fans of, and then they could start sending them marketing information based on that, but it’s having the ability to process that information, and to drill down and to gather it from their customers and then use it. So I just loved that even though my sports knowledge is not great. On the marketing front, I see that they are trying to really make connections with their customers, they’re trying to reach them and to show that they are giving as well as receiving in that relationship to try to get to know them.

Chris

Totally agree. And that’s what makes them new and unique is it’s not just data for the sake of of extracting data. It’s providing useful, tangible insights to again, Adam’s favorite word “weaponizing the data to improve your business.” The one thing they talked about at the show for their case study — and I think this is just fascinating, what they’re doing on this front — but they’re able to sign a essentially a lifetime value or prediction of lifetime value to each customer that uses your car wash. And again, going back to the power of just what you’re able to collect by getting that individual on your app, you could combine and understand. Okay, so lifetime value of a customer is essentially how much revenue they expect to bring in, what’s the operating costs associated that customer, and what’s the expected duration of that relationship. And then when you have those inputs, you could say, okay, my expected lifetime value for customer X is Y amount of dollars. But what’s interesting about that is by knowing the demographic profile of that customer, as well as how they interact with your business, you can predict what that number is. And you can optimize that lifetime value around that prediction. So a really good example, let’s say Lanese, you are a customer at Driven Car Wash. You have the demographic profile that makes you the perfect customer from a lifetime value perspective. But we noticed that you’re not engaging with our app when you’re on site and playing kind of the in-app gaming. And we know that as you’re engaging with our brand while you’re on site, that’s an important predictive factor of maximizing lifetime value of you as a customer. So I’m going to do is I’m going to incentivize you and try to get you to use that app while you’re on site, and nurture that relationship. Or let’s say, leaving a review or making a referral to a friend… We also know that those are two really important factors of maximizing lifetime value. Well, now I’m going to focus on you, as well as your like peers in the cohort of customers that I have, and I’m going to really target you, and I want you to make a referral to a friend because I know once you make that referral, and you commit, and you make that commitment out there in the universe, your stickier customer. So it’s a super interesting way to better understand your customers, but more importantly, break them out into cohorts to understand where you can optimize lifetime value to ensure that you’re maximizing every penny from that potential customer.

Lanese

I’m imagining in that situation that the incentive that that’s being offered to me in this example, is something that’s of value to me, because otherwise why would I do it?

Chris

It’s a two way street.

Lanese

That’s what I like to is that it’s a win win. It’s not pestering someone; it is trying to really find out what they want and to make the service more helpful, usable, stickier… all of those things. And then it benefits both sides of that equation.

Chris

Absolutely.

Lanese

Well, I love all of those. And again, it’s just, like you said, the goal of maximizing value for car wash owners, for their customers, and then for this industry as a whole. We really are so passionate about the car wash industry and the car wash community and want to be good advocates of any new solutions that are out there and just let people know that these are options available. And then also, it’s really great because we have you as a test case, so you can give us the real deal on on how it works.

Chris

We always love being the guinea pig at Driven Car Wash.

Lanese

Good thing! Okay, so I thought it was a great show. I had a lot of fun in Las Vegas, I won a little bit of money, so that was good. Not very much. But at least I didn’t walk away empty handed. And one of my other favorite things about traveling with our team, especially when we’re in Las Vegas, is just being together because we are a group of people that are geographically spread out throughout the US. And I just love that time to get to spend together. And then also with our peers in the industry, there’s a lot of this information that’s there at the show that, truth be told, you could find without being physically there. But what you miss is that camaraderie and that time together, and that shared experience on the personal level, as well as expanding and strengthening your business.

Chris

I couldn’t agree more. I was cut from the cloth of financial services. And that was, you know… It was actually this show that drew me to this industry, just kind of seeing the camaraderie, the tight knit relationships in this business and how collegial it was, and still is today. It’s always just a great reminder of why are we in this, and what are we doing? And I think we’re all here to serve under a common mission and a greater good. And I’ll tell you why. It’s just such a humbling experience to get the whole group together, you know, sit back at our booth and see everybody individually having engaging conversations with relationships across the industry. It’s just it’s special to see; it’s really something that you can’t put words to.

Lanese

I agree, totally agree. And kudos to the International Car Wash Association, I thought they put on a great show. I really liked the neat Las Vegas loop with the underground tunnel and just getting to try that stuff out. So that stuff is fun. But I really thought that this was a really well run show, and I appreciate all the educational sessions and activities that they put on. I think that kind of wraps up our time for today. If anyone has any questions for Chris, or would like to know any more about any of the topics that we talked about, we would love to share more about that. And if you are so inclined to leave a review for this show, you can do so on Apple or Google, wherever you listen to the podcast, or Spotify. And check back next month as we release a new episode the last Thursday of every month. So, thank you!

Chris

Thanks, Lanese.