(This article originally appeared in Forbes)
There exists a customer relationship management application called Rinsed. It’s aptly named. Rinsed is a CRM for car wash operators. Wait…a CRM for car washes? Can you believe that?
You would think that such a niche product would have a hard time getting financing. Turns out this is not such a niche. The car wash market size is about $15 billion, which is why Rinsed was able to not only grab an initial $3 million seed round, but also close last week on a $12 million a Series A venture capital deal.
So what’s so special about Rinsed?
According to the company Rinsed helps car washes of all sizes “delight their customers and grow their subscription revenue.” It manages all your customer interactions in a single place, from customer support tickets, to outbound email and text marketing. It helps “retain more customers, and grow membership revenue.”
When clients ask me about vertical — or industry specific — CRMs I generally poo-poo the idea. For me, a CRM is all about people and if you’re doing business with people than any mainstream application, with a little customization should usually be fine. I’m also wary about niche players because they oftentimes lack the resources, community and support infrastructure of their bigger competitors.
But reading about Rinsed has changed my mind a bit. Why? Because I must admit if I were operating a car wash I would probably want a CRM for car washes. Yes, a mainstream app could be configured to do that. But a vertical application like Rinsed seems like a better, easier choice and for a few reasons.
For starters it comes out of the box with an ecommerce platform already configured for a car wash and enabled to handle online checkouts as well as track both visits and conversions and support credit card payments. Just as importantly it automatically integrates with many of the popular point-of-sale systems used by car washes and is configured to setup memberships and subscriptions, which has become a critical revenue model for the industry. And, of course, it comes with analytics and reports specific to the industry.
“We are empowering operators with best-in-class subscription management tools built specifically for the needs of the car wash industry,” Austin Esecson, the company’s CEO and co-founder said in a press release. “As the car wash market shifts to a subscription model, the problems faced by operators now extend beyond the driveway to encompass every interaction the wash has with its customers and subscribers.”
Can all of this be done with a Salesforce, Zoho, Dynamics or other mainstream CRMs? Yes. But it would take some customization, perhaps a little development and certainly integrations with other third-party products. That means more time and money…and ongoing maintenance. But then again, the chances of one of those companies folding up and going away are pretty remote. That’s a pretty big deal, particularly if you’re a smaller operator who relies heavily on its CRM as a core business application.
Which means that if you decide to run your car wash on a platform like Rinsed, you’re also taking a risk of whether or not Rinsed will continue to be around for a while. But this hasn’t stopped the more than 300 car washes that the company says are its customers. And one thing’s for sure: when you partner with a niche CRM provider you’ll certainly have more of an influence on its future development plans.
So should you go with an industry-specific CRM like Rinsed? In the end, you’ll need to look beyond just its features and functionality. You’re making an investment and starting a partnership. You’ll need to decide whether or not you believe in the company’s model and trust both the leaders and the investors of the CRM platform that will be so significantly important for your business. Rinsed’s VC investors certainly trust them.
“The Rinsed team combines deep car wash expertise with experience building scalable technology products,” Eric Stromberg, co-founder and Managing Partner of Bedrock Capital. “We first invested in 2020 shortly after the company was started. Given the speed of execution and rapid growth since, we are thrilled to double down and lead the Series A.”
Bedrock Capital did their due diligence. Before taking a shot at a niche provider, do yours too.