The Membership Ceiling Is a Myth

There has been a lot of conversation lately about whether unlimited memberships have started to put a ceiling on the express car wash model. I understand the argument. Every tunnel has a finite amount of capacity, members generally wash more frequently than retail customers, and at some point, every operator has to think about how those cars are using the capacity of the site. But I think we're asking the wrong question.

Memberships didn't put a ceiling on the car wash industry. They raised the floor, created predictable revenue, gave operators the confidence to invest and expand, and fundamentally changed the economics of the express car wash business. I would argue there is still a tremendous amount of room left before most operators need to worry about memberships becoming the thing that holds them back.

Retail is important. It always will be. Every great operator should care about retail traffic, average ticket, customer experience, marketing and getting more cars onto the property. But if I had to choose the single most controllable lever for growing an express car wash, I would choose memberships every time. Getting someone sitting at home or driving down the road to decide they need to wash their car today is difficult to predict. Converting a customer who has already made the decision to wash, has already chosen your business and is already sitting on your property is a much more controllable opportunity.

We also need to think differently about what loyalty actually means in our industry. A retail customer can love your wash. They can tell their friends about you and even consider you their favorite car wash. But they can still drive past a competitor offering a free wash next week, go three weeks without washing because they're busy, or simply decide they don't need a wash today. A member has made a different commitment. Your business is now part of their monthly budget and, more importantly, part of their routine. They have a financial reason to drive past the competition and return to you. To me, that is the strongest form of measurable loyalty we have.

That predictable relationship is also one of the biggest reasons the express car wash industry has been able to grow the way it has. Before memberships became such a large part of the model, operators were far more dependent on weather and retail traffic. You could operate a fantastic car wash and still have a terrible month because customers simply didn't wash their cars. That's a difficult way to run one location, and it's an even harder way to confidently invest millions of dollars into building another one.

Membership revenue changed that. When an operator walks into the first day of the month knowing a significant amount of revenue is already expected, the entire conversation changes. They can invest in equipment, people, leadership, maintenance and the customer experience. More importantly, predictable revenue can give an owner the financial confidence to build location two, three, four and beyond. I don't view that predictability as something that is holding our industry back. I view it as one of the greatest competitive advantages the car wash business has created.

The argument against unlimited memberships becomes more interesting when we talk about capacity. If members wash more frequently and eventually consume all the available tunnel capacity, haven't we created a ceiling? Mathematically, every tunnel obviously has a maximum number of vehicles it can process. Operationally, however, I think most washes are a very long way from reaching their true ceiling.

Before blaming memberships, we should first ask whether we're getting everything we can out of the asset itself. Throughput, staffing, traffic flow, equipment reliability, property design and the overall efficiency of the operation all affect how much volume a site can realistically handle. Great operators continue finding ways to create capacity long before they simply accept that they've run out of it.

If a wash eventually reaches the point where demand consistently exceeds what the property can process, I don't see that as evidence that the membership model failed. I see an extremely successful car wash that now has a capacity problem. Those are two very different things.

There is another part of the volume discussion that I don't think gets enough attention: busy businesses tend to create more demand. Think about two restaurants sitting next to each other on a Friday night. One parking lot is packed and there is a line out the door. The other has four cars sitting outside. Without knowing anything else about either restaurant, which one do you assume has the better product?

Car washes aren't that different. A busy wash creates energy. Customers see vehicles moving through the property, employees working and other people choosing that business. That creates social proof. Nobody wants to pull into the car wash that looks like it never washes cars. I would argue that a strong membership base can actually help generate retail volume because it keeps the property active and reinforces the perception that people want what you're selling. The goal shouldn't be memberships or retail. Great operations should be growing both.

Then there is churn, which has become one of the biggest conversations in the industry. It should be. Churn matters. But I think we have started looking at the number in isolation, and that can be dangerous.

Some amount of churn is going to happen no matter how good the operation is. There will always be a portion that operators have limited control over. Payments fail, customers move, vehicles are sold and circumstances change. Then there are customers who intentionally decide to cancel. There are certainly opportunities for operators to improve retention, but eliminating churn altogether isn't realistic.

More importantly, low churn by itself doesn't necessarily mean you have a healthy membership program.

Take a wash with 2,000 members that has an extremely low churn rate but only converts 5% to 10% of eligible retail customers into memberships. The operator may be proud of the churn number, but the business could still be barely replacing the members it loses every month. It grows a little during snow season or pollen season when traffic increases, then flattens again when volume returns to normal. The membership count stays around 2,000 and everyone starts believing they've reached the natural size of the program.

I don't consider that a membership ceiling. I consider it a growth problem.

If 90 or 95 out of every 100 eligible customers are leaving the property without joining, there is still a tremendous amount of opportunity walking through the wash every single day. The market isn't necessarily saturated. The business simply isn't capturing enough of it.

This is also why I don't believe operators can retain their way to meaningful membership growth. Retention is incredibly important, but eventually you also have to create new members. If the number coming in isn't meaningfully greater than the number going out, the membership base is going to stay relatively flat regardless of how impressive one individual metric may look.

The best operators shouldn't have to choose between acquisition and retention. They should be exceptional at both. Strong membership programs aren't built around one metric or one initiative. They require the right balance of sales, retention, customer experience and accountability working together. When those pieces are aligned, membership growth becomes much more predictable. When they aren't, operators often find themselves fighting the same membership count month after month.

I've seen versions of the 2,000-member trap repeatedly. A wash gets somewhere around 1,500 or 2,000 members and growth slows down. Eventually management starts believing they've sold memberships to everyone who wants one. Before accepting that conclusion, I would look at capture rate. If the site is converting 5%, 7% or 10% of eligible customers, I have a hard time believing the market is the primary problem. If nine out of every ten opportunities are walking away without becoming members, there is still a lot of room to improve.

Unfortunately, when membership growth stalls, one of the easiest levers for an operator to pull is price. Increase memberships a few dollars. Raise retail pricing. Add another product. Try to generate more revenue from the customer base already there. Sometimes price increases are absolutely necessary and justified, but raising prices to compensate for a membership base that isn't growing is a different conversation.

If an operator only has 2,000 members, the question becomes whether squeezing a few additional dollars out of that existing base creates as much long-term value as actually growing the base itself. There is also risk involved. A price increase can create additional revenue, but it can also create cancellations. I'd rather see an operator understand why the membership base isn't growing before automatically assuming price is the answer. In a changing economy, waiting years for memberships to slowly increase during busy seasons isn't much of a growth strategy either.

Retail traffic still matters tremendously, but it's simply a harder lever to pull. To generate another retail wash, you first have to get someone sitting at home, at work or driving down the road to decide their vehicle needs to be washed. Then they have to choose your wash instead of a competitor. Then they have to physically come onto the property. Weather matters. Location matters. Traffic patterns matter. Competition matters. Marketing matters. Seasonality matters. Consumer behavior matters. There are a lot of variables outside an operator's direct control.

Compare that with the retail customer already sitting at your pay station. They have already decided to wash their car. They already chose you. They are already on your property. The opportunity is already there. That's why I believe capture rate remains one of the most important numbers in an express car wash.

A lot of operators still grow memberships primarily when external conditions create the opportunity. Snow hits and traffic jumps. Pollen season arrives and cars line up. A marketing promotion creates a temporary spike. Membership sales go up, everyone gets excited, and then growth slows when traffic returns to normal. That's not a predictable growth strategy. That's seasonality doing the work for you.

A great membership operation should be able to grow during ordinary months because there is a system behind it. Strong operators understand the relationship between acquisition, retention, capture rate, churn and net gain, and they create accountability around the numbers that ultimately drive membership growth. The exact approach may look different from operator to operator, but the important distinction is that growth is being intentionally managed rather than simply hoped for.

When that happens, membership growth stops being something that happens to the business and becomes something the business produces.

Could a car wash eventually have so many members that capacity becomes a legitimate issue? Absolutely. Every physical asset has a limit. But I would love to see more operators have that problem before we decide the membership model itself has reached its limit.

For most of the industry, I don't believe our biggest problem is that memberships have become too successful. I believe the bigger opportunity is that we still haven't fully developed the systems necessary to maximize them. There are washes sitting at 2,000 members that could have significantly more. There are operators obsessing over churn without looking at the complete membership picture. There are teams expected to grow memberships without a strong sales culture behind them. And there are operators waiting for the next snowstorm, pollen season or marketing campaign to create growth for them.

Retail matters. Customer experience matters. Operational efficiency matters. Churn matters. Price matters. But none of those things change what I believe is still the most powerful economic engine the express car wash industry has ever created: predictable, recurring membership revenue.

The operators who win won't abandon that engine because they're worried about a theoretical ceiling. They'll continue becoming better operators. They'll find ways to create more capacity, improve the customer experience, strengthen their sales culture, improve retention, grow retail traffic and build systems that create consistent membership growth.

Because the biggest advantage of an unlimited membership isn't that the customer can wash their car as many times as they want.

It's that the operator doesn't have to wonder whether they're coming back.