Do discounts lead to more customers in the car wash?
Does giving discounts lead to more washes? According to scientific research yes, but reality is not so straightforward. “You also don’t want a customer to wait for a discount,” says Niels Wessels of Niels Autowas.
American researchers examined the change in purchasing behavior when products and services are offered at a discount. It has been found that purchases that are not perceived as absolutely necessary are perceived as more necessary if the offer contains a discount.
The purchasing behavior of customers was studied at the Texan St. Edward’s University. Three studies examined the relationship between customers who classified themselves as frugal buyers and the impulsive buying behavior of discount offers. “Essentially, frugal consumers are convinced that they ‘really’ need the product to justify the high discount. (…) It seems that high discounts are really the recklessness of frugal buyers,” the researchers write.
Discount in the car wash
In a sub-study, the purchasing behavior for offers of a practical service, in this case a car wash, was compared with a less practical product, a selfie stick. It has been found that when there is moderate demand, the perception of demand increases when the supply contains a discount. The car wash was classified as usually moderately necessary, but not as urgent. The selfie stick was classified as not necessary.
It is striking that customers feel a greater need to make a purchase when the car wash offered a discount. This did not apply to the selfie stick, where a discount did not more often lead to a purchase.
Waiting for promotion period
Even though the use of discounts has been scientifically proven, in practice there are always companies that deliberately do not want this. In marketing this is known as the ‘practitioner trap’: those who often offer discounts run the risk that customers will wait for the promotion periods.
In principle, Laurens Metternich of cleaning agent manufacturer Spectro pursues a different price philosophy. They avoid discounts because in the long run this can reduce the perception of the value of the products. Instead, Metternich prefers to negotiate the amount of quantities purchased or additional services provided by his company. “With this strategy, our customers know that our products are always worth their price and they benefit more from the additional services than from price discounts.”
Niels Wessels of Niels Autowas says that working with discount promotions for a car wash also depends on the phase a company is in. “The first five years I think you have to do quite a lot with discounts. In this phase you buy customers at a discount. Then you can taper it off and do it less often. You can also do other actions with, for example, other entrepreneurs. Competition can also be a reason to advertise more in order to win customers over from the competitor.” According to Wessels, it is sometimes also a matter of feeling. “I don’t know where the golden mean is, after all, you don’t want your customer to wait for the discount. But with a discount, you may also be able to entice the customer to come and wash extra once or twice a year.”
Roel Verhagen of Carwash A2 in Zaltbommel agrees. This car wash has been open for less than a year. “We are working on introducing as many people as possible to Carwash A2. We started with an opening promotion of 6 euros for our best program, which attracted a lot of customers. After the first month and a half with 6 euros, we washed for two months for 8 euros. Then another two months for 10 euros. That was all under the motto of opening action. Because there were still a lot of new customers who we would like to receive at least twice, we have converted the opening promotion to summer promotion: June, July and August the best program for 12 euros.”
Verhagen started in September with the program board with the associated prices and a discount for our washing pass holders. “We have yet to experience what the reactions are like. For the future, we have a supermarket promotion, Social Deal and a Black Friday promotion for upgrading the laundry pass.”
In any case, according to the entrepreneur, it is good to stay in the picture with actions. “We have to continue working for at least another year to expand the regular customer base and bring in new customers.”