Here Are the 3 Biggest Takeaways from The Car Wash Show

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.

For a full transcript of the episode and more, check out the post.

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Transcript

SPEAKER_01 0:07

Welcome to Car Wash M ⁇ A, the podcast, brought to you by Amplify Car Wash Advisors, the number one advisors of car wash chains nationwide on mergers and acquisitions in capital advisory services.

SPEAKER_02 0:24

Hi, I'm Lenise Barnett, Vice President of Business Development at Amplify Car Wash Advisors, and your host of Car Wash MA, the podcast. Here we'll take a deep dive into the current mergers and acquisitions activity of the car wash industry with the goal of keeping car wash owners informed on where the market is today and where it's going tomorrow so that you can make informed decisions about your business. We'll help you answer the question should I sell my car wash now or should I enter growth mode and really scale my operation? Each month, I'll speak with industry experts who will share practical advice on how to sell or scale your car wash. While the industry is undoubtedly changing, what remains constant is the need for solid information so you can evaluate where you are and chart the course for the future of your business. Welcome to episode 16 of Car Wash MA, 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 uh driven car wash in the Chicagoland area. So hi, Chris.

SPEAKER_00 1:42

Good morning, ladies. How are you?

SPEAKER_02 1:43

I'm doing great.

SPEAKER_00 1:44

Great.

SPEAKER_02 1:44

And um, so today we're gonna spend a little bit of time just kind of giving some thoughts on the car wash show in Las Vegas that happened recently in May and sharing some of our team's takeaways from what we saw there at the show. So uh, Chris, we'll just dive right in. And so we're gonna cover three things that we really took away and 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?

SPEAKER_00 2:15

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

SPEAKER_02 3:08

Right. And I think that that's uh really important because as we saw kind of 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.

SPEAKER_00 3:24

Absolutely. I think you know, there's a little bit more clarity in terms of where rates are expected to go in the future. You know, 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 pause for a bit, right? 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 you know upcoming budget crisis here uh that needs to be addressed. But nonetheless, I think as we look going forward, always something. Always something, always something. But as it relates to the Fed's efforts to combat inflation, you know, we're starting to see course API 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 of the 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.

SPEAKER_02 4:29

For sure.

SPEAKER_00 4:30

Last year, you know, the the seller had so much power, right? And 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 proformas are a little less meaningful, uh, a little bit more on actual cash flows. And uh that said, you know, it's a little bit longer to get these deals to completion. You know, we saw a lot of activity last year closing in 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.

SPEAKER_02 5:01

And that's something that we've talked about before that the playbook that that buyers and that 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. Is that would you agree with that?

SPEAKER_00 5:23

Absolutely. In general, I think, and we've talked about this a lot uh over the last year. What we saw the past, you know, let's call three years, that wasn't normal, right? Uh, that was unprecedented. We're in an environment, zero interest rates, cost of capital is free. You had such tremendous uh tremendous pace of just consolidation in this space where I'd say that was not normal. What we're starting to see now is 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.

SPEAKER_02 5:55

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.

SPEAKER_00 6:19

For sure. There are very few businesses. I mean, we we still have conversations amongst you know 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 still very much intact. The consumers continue to embrace the express car wash model. As you look at kind of what average unit economics look like once you achieve scale, there are very few places to park your money uh 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. I mean, it's still a place that's very attractive for institutional investors, as well as these emerging platforms. And uh, 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 bows well to the long-term prospects of the car wash industry.

SPEAKER_02 7:08

Absolutely. And, you know, we're talking about the adoption of the general consumer to our 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. Like 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 kind of 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. They don't, I mean, that might be crazy for you know some consumers to think you would go in my car.

SPEAKER_00 7:48

Yeah. Yeah. I mean, just the exposure of the product over the last couple of years with the growth and new units coming online. It's it's all ships are rising with the tide, right? Right. They know exactly what 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, completely agree, Lanise. It's it's now becoming the common product and the common uh operating model in the marketplace.

SPEAKER_02 8:20

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 when to do it.

SPEAKER_00 8:30

Just put car wash. Yes. Just put car wash, big bold letters.

SPEAKER_02 8:34

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?

SPEAKER_00 8:48

Yeah. So the the playbook up until the last year has been, you know, you you get in, you enter the space, and let's say you pay a high-change multiple for an existing platform. You're then able to blend that multiple down by way of de novo or greenfield developments. So, 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 buying 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 in the last two years.

SPEAKER_02 9:33

Yeah, 5 million sounds cheap now.

SPEAKER_00 9:35

5 million is cheap. I mean, we're personally looking at budgets today with the seven handle on it, and it's getting me a little queasy, but you know, that you hit it right in the head. You know, 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. Um, and again, it all depends on your market, how much you're paying for real estate and your above-ground cost and your zero overall standard and quality of build. But for the sake of numbers, let's just say it's about seven and a half million dollars. So that five X to build is now more like seven and a half X. But I'm gonna further complicate that. Delays, right? It's it's taking longer to get these things built now. Um, we're in Chicago. We have a finite allotment of just concrete for our projects for the year ahead, right? That we can't take on more just because we have only so many resources. Rooftop units still an issue, anything related to your 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 up to two years before that thing's cash flow and you're breaking even. So when you think about the opportunity cost there, that's seven and a half X maybe is more like nine X, right? Because you're now sitting, you're 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 you know EBITDA is at a point where it's it's attractive. You're just more like 9x to you factor in those costs.

SPEAKER_02 10:55

Right.

SPEAKER_00 10:56

On the other end of the equation, now let's talk about acquisition activity. Multiples today, we're seeing on the bullet-on side, are anywhere between eight to 10, which is almost parity to your new uh your new builds, your de novos.

SPEAKER_02 11:08

Right.

SPEAKER_00 11:08

So as you think about the economics and the incentives there, it's not paying a high teen on the acquisition and blending down by Greenfield. I think those add-on acquisitions are certainly a little bit more attractive today than they once were.

SPEAKER_02 11:18

Right. It's it's it's just flipped.

SPEAKER_00 11:20

It's totally flipped back.

SPEAKER_02 11:21

That's bringing it down. The acquisition is what's bringing it down.

SPEAKER_00 11:24

The playbook is completely different today.

SPEAKER_02 11:26

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 and multiples that sellers can expect. So not all bad.

SPEAKER_00 11:41

Yeah, of course. And I mean, especially if if you are a quality business today. And again, 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, the clean balance sheet and a healthy profile and growth trajectory of your business, that there are buyers out there today for you. I will tell you that for certain.

SPEAKER_02 12:08

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.

SPEAKER_00 12:16

Of course. Absolutely.

SPEAKER_02 12:18

So 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.

SPEAKER_00 12:39

Yep. You know, it's been interesting. So shows in the past have been focused, you know, more on the transactional side of things, right? How do you get more deals done? How do I 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. Um, 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, uh, you add more to the bottom line, and that's how you make it up. And I think that that that heightened sense of focus in operations was very evident in this show.

SPEAKER_02 13:14

Absolutely. And again, that points to the longevity and the health overall of the industry. That 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 that, you know, they've got ever-improving service that they're receiving.

SPEAKER_00 13:38

Yeah, I think, you know, in an environment of explosive growth, you can lose, lose your handle on how you operate your business. And I think now that things are pausing to a certain extent, gives operators and these platforms a chance to take a step back and think, well, what am I doing with my business, right? Effectively integrating teams after your after new 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 Lanisi and I were talking about this, you know, innovation Ally was, you know, something 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 buzzer on that particular section of the showroom floor. Um I think, again, that just speaks volumes to just the height and importance of using some of these new innovative technologies and solutions to improve your operations in today's environment.

SPEAKER_02 14:29

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 um is a really surprisingly robust market for them to, you know, tailor-fit these solutions for. And uh, 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 uh 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?

SPEAKER_00 15:30

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

SPEAKER_02 16:16

Yes, that seems very true.

SPEAKER_00 16:17

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 technologies and solutions in the car wash space. So we we've inked a couple of partnerships. You've named all three of them right now, retention express, AMP memberships, and merchant advocates. 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 you know really clever and creative marketing. And these technology solutions have all been centered really around one thing it's data, right? 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 good as the practical insights derived from that data set to improve your business. So, what 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. Uh, so we had a couple of really interesting case studies, and I'm more than happy to talk through uh some of those in more detail. But again, I think the constant theme, and I'm gonna steal Adam Treen's line from AMP memberships weaponize your data, right? There's a lot of really interesting stuff out there, and you could use that data to improve your operations.

SPEAKER_02 17:35

So, in that talk, you you just gave kind of some high-level descriptions about what it is, like for example, with merchant advocates, it was uncovering the black box or what what did you say?

SPEAKER_00 17:46

Yeah, adding transparency to the black box.

SPEAKER_02 17:48

Yes. So I love that. So adding transparency to the black box. So really just all of these tools that you highlighted, for example, that one where it's you know 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 you know partnering with someone?

SPEAKER_00 18:06

Yeah, merch advocates, great example of that. So if we have anybody in the credit card processing space listening, I'm gonna apologize in advance. But you know, if you ask anybody in the car wash business or any retail business for that matter, you know, what do you pay in credit card processing fees? You'll you'll typically hear between one and a half to three and a half percent. In today's world where everybody's moving towards credit cards, that 2% delta there and that spread is incredibly meaningful. And just to make 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. Uh, 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 advocates 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 gonna 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 gonna learn from your activity, learn from peers, and flag categories that seem unusual. And at that point, merchant advocates will dig into a little deeper and they'll advocate on your behalf to lower those fees. So, really good example. At our car wash, right, we we recharge the first of every month. And if that credit card declines, we're gonna 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.

SPEAKER_02 19:37

I actually did not know that.

SPEAKER_00 19:38

Yes, there is. And that fee, let's say it's five cents the first time. Well, it might go up to 10 cents the second time, 25 cents the third time. And that could continue to increase with each subsequent recharge. Now, you think about this again, let's say you're a 10-side operator, your average unit has 4,000 members, 40,000 charges. Those could be big dollar amounts. Right. So this is something where they have a model in the back end that can flag that as something that's unusual, and they'll go ahead, 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, 80 units. They were looking at 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. 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'll just toss it. I'm not going through that line item by lineup. I just don't have the bandwidth to do so, neither is my team. But if you're to actually dig into that, you're gonna 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 to enterprise value that you could save.

SPEAKER_02 20:47

Absolutely. And I think the neat thing about that particular provider, merchant advocate, is that they do all of that. Like 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.

SPEAKER_00 20:59

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

SPEAKER_02 21:12

Just the last thing on that one, and all of these services, what operators really want, like you just said, that 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?

SPEAKER_00 21:30

Yeah, exactly. Interesting example here that's kind of pivoting from the the case studies at the show. Uh, something we're actually doing in real time in our car wash. So we use Retention Express. And, you know, again, as a refresh, Retention Express is really a full suite, you know, 360 degree customer experience platform. And there are really two components of their service. One is the outsourcing of servicing incoming inquiries from your customer base, uh, whether it be you know outsourced call centers, text messages, email, web chat, all of that is taking off site. Into a professional setting with the goal and intention to manage churn and increase retention, reduce just 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. Yes. And I think that's really important. You know, if you look at kind of the bell curve of call volume on the site, 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 plug them in a situation now to service that incoming inquiry. And you're really missing a big opportunity to A, effectively serve that customer, but B, take the insights from that dialogue and conversation. So, good example here, 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 feature is that Retention Express will measure the exit sentiment when a member calls to cancel their plan. So, in other words, you have a score one to 10. One, I'm canceling, I hate your service, I'm never coming back. Ten 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 over the last 90 days, our average exit sentiment was 9.2.

SPEAKER_02 23:16

Wow.

SPEAKER_00 23:17

Meaning people are canceling but didn't want to cancel. So we dug into this deeper and we found that a large reason while why our members were canceling was because they're either moving, again, transient 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 Attention 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 if you're just servicing on site.

SPEAKER_02 23:53

Totally. Because just even recapping what you just said, when it's when it's the busy time of the day, it's a Saturday, you got cars lined up. There's a customer that needs to cancel, the person that's you know, there at maybe the pay stations or whatever, they have to go away from that. Now the line's longer. Now all those people are getting more upset because they have to wait longer. Yep. And then they don't have time to capture that data. So it's moved, canceled, move, you know, that's it. And so like you actually have no real data if they really did move or if they hate your service, yep, or what it is. So I love that that they're trained to do that and that they they don't let any of those customers leave out, as they say, the back door unnoticed. Yeah. And like they're 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.

SPEAKER_00 24:43

Yeah, exactly.

SPEAKER_02 24:45

It's it's really incredible. So I I love that.

SPEAKER_00 24:47

It seems so rudimentary, but you hit it right on the head, right? Like you're losing the battle in 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, right? Fast. That is your focus on site, fast and convenient. Then 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 this professional setting, have trained professionals to service those customers, know what questions to ask to extract those insights, but more importantly, provide that data back to the operator.

SPEAKER_02 25:20

And the third thing is that usually the staff that are being pulled away to facilitate these conversations on site, it's I'm gonna go ahead and go on a limb, not their favorite thing. Yeah, absolutely. So it's helpful for them too. Yep. 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.

SPEAKER_00 25:41

Yeah. Uh, you know, 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 at right as operators. And, you know, again, we just want to highlight the importance there. We believe in that philosophically on the amplifying 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 Treason and Adam Treen, dentist a car wash operator himself. So they're able to actually provide a white-labeled 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 of just data and understanding your customer base. You're able to pull in demographic information of, you know, their financials, you know, how much do they earn, where do they live, age, sex, the type of car that they drive. And when you mesh that together with your business insights, that could be a pretty powerful tool as it relates to marketing customers, attracting new customers, and retaining new customers.

SPEAKER_02 26:51

One of the programs that they've shared about is they were saying that they did this for AutoWash, the service that Dennis has there in Colorado, that they were marketing about their local sports team and they were sending out 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 who actually they are fans of, and then they could start sending them marketing information based on that. But it's it's having the ability to process that information to drill down and to get 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. Yep. They're trying to reach them and to show that they they are giving as well as receiving in that relationship to try to get to know them.

SPEAKER_00 27:43

Totally agree. And that's what makes them new and unique is it it's not just data for the sake of extracting data, it's providing useful, tangible insights to again, Adam's favorite word, weaponizing the data and improve your business.

SPEAKER_02 27:53

Right.

SPEAKER_00 27:54

You know, the the one thing talked about 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 assign uh essentially a lifetime value or prediction lifetime value to each customer that uses your car wash. And you know, again, go back to the power of just what you're able to collect by getting that individual on your app, you know, you could combine and understand, okay, so lifetime value of the customer is essentially how much revenue they expect to be bring in, what's the operating cost associated with that customer, and what's the expected duration of that relationship. And 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 could predict what that number is and you can optimize that lifetime value around that prediction. So, really good example. Let's say, Lanise, you're a customer at driven car wash. You know, you have the demographic profile that makes you the perfect customer from a lifetime value perspective. But we notice 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 the lifetime value of you as a customer. So what I'm gonna do is I'm gonna 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 uh a referral to a friend. We also know that those are two really important factors of maximizing lifetime value. Well, now I'm gonna focus on you as well as your like peers in the cohort of customers that I have. And I'm gonna 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, you're a stickier customer. So it's a super interesting way to better understand your customers, but more importantly, break them out into cohorts, understand where you could optimize the lifetime value to ensure that you're maximizing every penny from that potential customer.

SPEAKER_02 29:44

I'm imagining in that situation that the incentive that that's being offered to me in this example is something that's a value to me because otherwise, why would I do it? It's two weeks. That's what I like too, 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.

SPEAKER_00 30:08

Absolutely.

SPEAKER_02 30:09

Well, I love all of those. And again, it's just with, like you said, the goal of maximizing value for car wash owners, for their customers, and then you know, for this industry as a whole. We really are so passionate about the car wash industry and the car wash community, and um 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 you can give us the real deal on how it works.

SPEAKER_00 30:43

We always love being the guinea pig-driven car wash.

SPEAKER_02 30:46

Mm-hmm. Good thing.

SPEAKER_00 30:46

Yep.

SPEAKER_02 30:47

Okay, so I 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 uh 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 on the personal level, as well as, you know, expanding and strengthening your business.

SPEAKER_00 31:29

I couldn't agree with you more. You know, I I I I was cut from the cloth of financial services. And um, that was, you know, it was actually this show that drew me to this industry, right? Just kind of seeing the camaraderie, the tight end 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 you know 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. And it's just, it's it's special to see. It's it's really something that you can't put words to.

SPEAKER_02 32:05

I agree. Totally agree. And kudos to the International Carmer 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 uh 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.

SPEAKER_00 32:50

Thanks, Lenice.

SPEAKER_01 32:53

Thank you for joining us on this episode of Car Wash MA, the podcast, with your host, Lenice Barnett. Like what you hear, subscribe to our podcast feed, and leave us a review or follow us on social media at Amplify Car Wash Advisors. Want more MA information? Visit our website at amplifywash.com and listen for new episodes on the last Thursday of each month.