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Monthly Unlimited for Express Tunnels
- Thread starter benny2
- Start date
depends on how far you grow the program really. 700+ enrollees could be a lot or not very many depending on the site. A small town site that does 40-50k cars a year, 700+ members would be a lot. A higher volume site doing 100k+ cars a year, 700 members isn't that many.
I think when you start to get above 60%, right around the 65% mark, it's really hard to grow the plan any further than that at that location.
I think when you start to get above 60%, right around the 65% mark, it's really hard to grow the plan any further than that at that location.
robert roman
Bob Roman
I’ve seen unlimited programs have a take rate of anywhere from between two and six percent of the initial customer base.
For example, Ken Brott, formerly with DRB, asserted some years ago that if we assume a normal distribution the median would indicate the typical customer visits an average of about four times a year.
So, if the business attracts 25,000 unique customers and we assume average usage, annual sales volume is 100,000.
Four percent of 25,000 equal 1,000 members. If each member visits three times a month, 1,000 X 3 X 12 = 36,000 washes.
25,000 – 1,000 = 24,000 X 4 = 96,000 washes
Thus, total volume is 36,000 + 96,000 = 132,000 washes or about 30 percent increase in total volume.
Important consideration when planning for new build or upgrade of going concern is peak hourly demand.
Peak hourly demand for 100K CPY is roughly 95 cars. So, peak hour with unlimited would increase to 127 cars.
For example, Ken Brott, formerly with DRB, asserted some years ago that if we assume a normal distribution the median would indicate the typical customer visits an average of about four times a year.
So, if the business attracts 25,000 unique customers and we assume average usage, annual sales volume is 100,000.
Four percent of 25,000 equal 1,000 members. If each member visits three times a month, 1,000 X 3 X 12 = 36,000 washes.
25,000 – 1,000 = 24,000 X 4 = 96,000 washes
Thus, total volume is 36,000 + 96,000 = 132,000 washes or about 30 percent increase in total volume.
Important consideration when planning for new build or upgrade of going concern is peak hourly demand.
Peak hourly demand for 100K CPY is roughly 95 cars. So, peak hour with unlimited would increase to 127 cars.
If we use Roberts numbers and assume this as a real scenario where is the benefit to the owner. Let's assume before Unlimited the wash had an average ticket of $9, that would be $900k in revenue. If we assume the ticket average will drop $2 per car and the owner now has a $7 ticket on 96k cars and a $20 average on the monthly pass program with 1k members total revenue is $912k. I don't see a real benefit to the operator. I would love to be wrong I just can't make the math work.
robert roman
Bob Roman
100K CPY X $10 ARP = $1.0 million
25,000 – 1,000 = 24K X 4 X $10 = $960K
1,000 X $20 X 12 = $240K
$960K + $240K = $1.2 million / 132K washes = $9.09 ARP
