What if Alexander the Great owned a carwash? How about Napoleon or maybe Genghis Khan? Aside from some unorthodox signage (“Foot Off Brake, Car In Neutral and Hands Off Flaming Arrows”), I bet they would be pretty good operators since they were all brilliant strategists.
The word “strategy” is a Greek military term that means the “art of the general.” Since the business world has always been fond of military analogies, it’s no wonder strategy has become the word we use for this core business principle. In fact, there is no greater element to sustainable success than good strategy.
We will talk primarily about marketing strategy here, but since marketing is the layer of the business that interacts with the world, it is impossible to separate your business strategy from your marketing strategy.
Strategy is monumentally important because it answers the question: Why should our customers buy from our carwash and not from our competitors? Or even broader: Why should they spend money on a professional carwash instead of doing it themselves in the driveway or skipping it all together in order to spend their money on something else?
Businesses without clear strategies are rudderless and have no foundation on which to base tactical decisions.
Simply put, strategy is how you differentiate yourself from the alternatives. It’s about finding differences that consumers value and making those differences crystal clear to everyone.
Write down your answer to this question: Why should a consumer in your community go to your carwash instead of the competition?
How easy was that? Did you instantly know what to write? If not, this must move to the top of your priority list. If you knew immediately what to write, how concise was your answer? If your answer was quick and concise, how well is that particular message being communicated at every customer touch point?
Think of any retail company that has succeeded and you will witness an organization that has made its differences clear. Starbucks experienced tremendous growth for more than 20 years, in part because its cafe-style stores and dark-roasted coffee were obviously different from its competition.
And when Starbucks seemingly occupied every corner in America, Dunkin’ Donuts capitalized and experienced its own growth, not because it copied Starbucks, but because it established itself as the anti-Starbucks, offering lighter roasted coffee for the “Average Joe.”
Another lesson we can learn from big retailers is that business owners who ignore strategy to instead focus on tools like coupons or social media, do so at their own peril. When Circuit City went bankrupt, do you think it was because it didn’t have a good Web site or wasn’t using Twitter and Facebook? Of course not. The electronics retailer was using those tools to the same extent as Best Buy.
The reason Circuit City failed was because the company lacked a strategy that made its differences clear. Was it price? Selection? Service? Company officials would likely tell you they were focused on all of those things, but they weren’t able to do any of them in a way that made the retailer different.
I believe one of the reasons the express exterior model has worked so well is that it is obviously different from the sea of full-service carwashes. Instead of $20 for a wash and spending 30 minutes, customers can choose $5 for five minutes. This is a difference that is blatantly obvious.
That said, guess what will happen when a market becomes saturated with express exterior carwashes? People will again look for differences, and that will open the door to consumers who are looking for more service and willing to pay for it.
I’m not saying we will see a complete reversal, but history has taught us that success comes not from features alone, but from being different in ways that customers value.
Like all elements of a successful business, strategy is not something that happens overnight. It may be simple, but it is not easy. Let’s break strategy creation into four steps: research, segmentation and targeting, positioning, and branding.
Research
Before a general can create a strategy, he must be able to answer key questions about his enemy, his own troops, the environment and his recent battle history. Similarly, a carwash owner must assemble some research before he can devise his strategy.
Demographics – Since most of your business will come from a three-mile radius, it is important that you understand the background and lifestyles of your neighbors. And while there are certainly similarities throughout the United States, your community is unique. Understanding this uniqueness is key. Demographic reports are widely available on the Web.
Strengths and Weaknesses – You cannot create a sustainable strategy unless you know what your capabilities are.
Competition – Since our goal here is to establish differences, it is essential that you know your competition very well. In fact, you should regularly have your car washed there. In The Art of War, Sun Tzu famously says, “If you know both yourself and your enemy, you can win a hundred battles without a single loss.”
Sales Trends – In order to create the best strategy, you have to know what you are up against. That means having an intimate understanding of your sales trends in revenue per car, gross sales, cars washed, sales mix