Bells, Whistles and Neon Lights
Car-wash stakeholders come clean about what to expect in 2011.
When Angelo Apollonio and his father, Francesco, decided to open their Total Convenience store in Hickory, N.C., they wanted a car wash that would catch the eyes of passing motorists.
With highway access, four points of entry to the lot and a daily traffic count of about 28,000 commuters, the Apollonios sought more than a utilitarian system. And with a 65-foot transparent building flashing neon lights of purple, green, red and orange, “all that’s missing is a disco ball,” Angelo jokes.
Such an eye catcher is just one way retailers are stepping it up for car washes for 2011. Also on tap is an economically driven conservation of resources, an appeal for customer loyalty, multisite management and adding small touches to keep customers coming back.
MAKE IT A DESTINATION
Apollonio knew he was onto something when he took his family through the same system being demoed at the Autec Car Wash Systems facility in Statesville, N.C.
“My kids were jumping around in the car; they thought they were on a Six Flags ride,” he says. “With all the moving parts and all the lights flashing, it is kind of a fun little ride, but it also cleans your car in about a third of the time that it takes if you went to a place that hand-washes your car.”
Autec president Tom Hobby predicts the site, with the capability of washing 30 cars an hour, could generate $20,000 to $40,000 a month, while most c-stores are satisfied with $10,000 to $12,000 a month in car-wash revenue. “Rather than do what everyone else does and try to do it as cheaply as possible, he wanted the presentation and the most opportunity for the most revenue and profit,” Hobby says of Apollonio.
Apollonio agrees, adding with excitement, “With all the lights, the moving parts and the transparency, it looks like something that will spark your interest to give it a try, and then once you try it, it actually works.”
That said, drawing from his own experiences, thrills and frills cannot substitute for a high-quality wash. “In my opinion and based on trials and research, this is the closest drive-thru car wash that emulates a hand wash,” Apollonio says. The use of friction for the cleaning and a blow dryer for drying add to that efficiency.
The experience doesn’t come without cost. Although Apollonio didn’t share exact figures, he estimates he could have spent about 40% less on a car-wash system. But Quality Oil, a fuel partner of the company, projects 100 to 150 car washes per day for the site, and Apollonio conservatively estimates, at $3 to $4 profit per wash, it could translate to a return on investment in four to five years.
Meanwhile, he’s hoping to use that time to build loyal customers of both the car wash and the store. “If you look at it from a consumer standpoint, you can get those returns because you can build loyalty, and you’ll attract more folks potentially if you really do it right.”
DO MORE WITH LESS
A focus on doing more with less in car washes, due to the economy, also will continue in 2011. “Whereas in the past, a car-wash operator may have looked more so at the cost of a piece of equipment,” says Eric Wulf, executive director and CEO of the Chicago-based International Carwash Association, “now they’re looking at what are the inputs going to cost me and the maintenance going to cost me.”
That also coincidentally means a focus on “being green” by using fewer resources. “So in these times, when you can both save money and do good by the environment, which is something of interest to consumers, then it’s a winwin,” Wulf says.
One way that operators such as Apollonio are doing that is through friction equipment, believed to promise less water and energy usage. And touch washes have come a long way from times when you could hear abrasive brushes slapping against your car, Wulf says: “What you see is the neoprene, soft cloth and synthetics that are very gentle on the car.”
Technology has also led to savings in new touch-free washes as well. The Saber, from Northville, Mich.-based Belanger Inc., is a streamlined dual-arm wash system, using only two motors and three moving parts and consisting of no grease points (compared to 23 found in competing systems). It results in a car wash costing less than $75,000 and requiring less maintenance.
Marcus McLaughlin, a member of Belanger’s marketing team, says, “Dualarm wash systems that are priced below $75,000 become especially attractive for bay ‘reloads’—replacing tired equipment in a proven existing bay with the latest new machine.” The system, also popular for new constructions, can often pay for itself in less than two years, he says. Mike Sessler, sales and marketing director for West Palm Beach, Fla.- based IstobalUSA, says operators won’t necessarily have to choose between touch-free and touch washes next year. “If I have to select one or the other, am I potentially eliminating 50% of my potential customers?” he asks. Many of the machines, he continues, now offer both in a single bay. “Many of the machines also combine high pressure and the soft foam-brush modules in a single wash cycle,” and the combination provides cleaning power as well as energy conservation, he says.
Another popular trend in car-wash operations—multisite management— has been brought about by the divestiture of c-stores by big oil, leaving sites in the hands of small businesses. Wulf says, “Managing eight car washes, if you don’t have a really good service capability of your own or you don’t find one—it’s a pretty challenging proposition.”
John Carroll, president of Costa Mesa, Calif.-based Intelio Technologies Inc., agrees. “It takes somebody with experience to run it, but you can’t afford to have somebody with experience at every single gas station,” he says. “But you can afford to have one person at the corporate office use this tool to treat it as its own car-wash category.”
Intelio’s WashMax, and other similar programs, can help keep track of peak and down times, which assists in making appropriate marketing offers. “A $3 car wash isn’t necessarily a bad thing if it’s done at midnight on a Wednesday when I have no other business,” Carroll says. “But if I have somebody come in with a $2 coupon Saturday when I’m usually four deep, that’s terrible.”
WashMax also can be helpful in scheduling maintenance around nonpeak times, as well as improving uptime management. The program notifies operators immediately via text when a car wash is inoperable. As Carroll puts it, “The one time customers have a bad experience, even if it’s just a one-time fluke thing, they’re going to not only never come back, they’re going to tell 10 or 11 friends about it.
“So our first goal was to help the multisite operator achieve operational excellence— that they know what’s wrong and they get it fixed right the first time.”
MAKE THEM LOYAL
Attention to detail is a big component of the loyalty equation that operators should be more focused on in the upcoming year. Without it, industry consultant Mike Perry says car washes could be irrelevant by 2012. According to Perry, already in-bay car washes have declined from an estimated 50,000 a decade or so ago to 35,000 today.
“The fundamental flaw in car washes today,” he says, “is that operators don’t see their car wash as a retail business. As a result of that, they’re not doing promotions or marketing to build a customer base.” This, he says, is despite the fact that car washes are a top-five gross-margin contributor for c-stores.
However, devoting the proper attention will require a new way of thinking. While car washes were once considered impulse purchases, all impulses have been hit by the economy. Individual car-wash counts have gone from 1,500 to 2,000 cars per month in 2005 down to 800 or 1,000 cars per month in many parts of the country. The focus, he says, should be on creating customers that come to your location over any other.
David Whitaker, vice president of business development for High Ridge, Mo.-based D&S Car Wash Equipment Co., recommends using prepaid cards and punch cards to keep customers coming back. “It can be as simple as buy six washes and get one wash free, and the customer feels like they’re getting a reward for doing business with you,” he says.
According to McLaughlin of Belanger, you can use such incentives to get customers in the door as well. “Simply put, you can sell washes at the pump—but tell customers to come in the store for a ‘punch’ that helps them earn a free wash after 10 washes,” he says. “Imagine bringing the customer into the store 10 or 11 times, and giving away just one free car wash.” Operators can also offer free wash upgrades to patrons who come into the store to obtain the upgrade code. “Both of these promotions take a low-margin gas customer and convert them into someone buying gas, a car wash and possibly high-profit items like coffee and candy inside the store,” he says.
It’s also important to tie any carwash loyalty programs to the c-store’s existing loyalty programs to earn points for the car wash and redeem them on anything you want to in the store, Carroll says. “And I believe we’re taking that next leap, which is the car wash is an important category, but it can’t be its own island,” he says. “It’s got to be plugged into the overall strategy of the c-store chain.”
And while in the past operators might have offered a discounted car wash with gas purchase, decreased gas margins have presented the opposite opportunity. Whitaker says, “People say, ‘Gosh, if I can save 10 cents a gallon by going in and buying a car wash that I need to get anyway, that’s a tremendous value to me.’ ” He recommends offering only gas discounts with the top wash package: “Economically, it works out for the operator, because the average fill is still about 12 gallons.” That strategy also allows retailers to compete favorably with nearby operators who don’t operate car washes. “They don’t have the car-wash income to offset the gasoline discount that they gave away,” he says.
Quick Tips for Car Washes
- Remember that your car wash is a retail location, and treat it like you would your c-store.
- It’s possible to do more with less these days, but do your research.
- Turn to technology to more easily manage your multisite operations.
- Engage in several marketing programs at once to bring in loyal customers.
Little Things Mean a Lot
In today’s economic climate, little bonuses can go a long way toward cementing customer loyalty at the car wash. Finding resurging popularity is the offering of a free vacuum service. “That does mean a lot to a lot of people,” says David Whitaker, vice president of business development for High Ridge, Mo.-based D&S Car Wash Equipment Co. Tom Hobby, president of Statesville, N.C.-based Autec Car Wash Systems, has found that customers of his company’s demo unit enjoy adding a tire shine. While the cost to him is minimal, it raises the price of the car wash by $2. He says 50% of the customers who get car washes are using it. “Making more money out of the same square footage always helps,” Hobby says.
And Ian Burton, vice president of the BayWash division of Tamarac, Fla.-based Sonny’s Enterprises Inc., says the biggest of the small touches seems to be the addition of total-body protectants. That costs the operator approximately another 25 cents, but they can charge as much as $3 extra on the wash,” he says.
A multicolored foam can also be an attractive option to consumers. “When you shower the car with a multicolored foam, the perception to the customer is they’re getting a better wash— and it’s at a minimal cost to operators,” Burton says. “It’s purely a marketing strategy.”
Another of the small touches is more operators installing credit-card acceptors right at the entrance to the car wash, so the consumer doesn’t have to go inside to get a car wash if he or she isn’t purchasing gasoline. Whitaker of D&S recalls visiting a local car wash where three of the four people in front of him used the acceptors.
“Would they have done that had it not been convenient? Maybe, but they sure like it a lot better if they don’t have to get out of the car and walk inside the store,” he says.
The acceptor also can be particularly beneficial for self-serve washes. “If you’re constantly having to run over because that thing’s beeping at you to shove quarters in it, people tend to not do as good a job,” Whitaker says. “If they just stick in the credit card, they can take their time and do the wash as much as they want to and don’t have to worry about getting change.”
The trend of installing the acceptors has been around for about a year, he says, but some operators are slower to put them in because of the hardware and software costs.
“They need to take the same level of detail to the car wash that they do to the store,” he says. “If they do that, in a lot of cases, their car wash can actually be their No. 1 gross-margin producer in the store.” He estimates that it costs $5,000 to $6,000 for the card acceptors. But at his company’s demo washes, the average self-service washes have gone up from $2.25 to $7.65.
David Dougherty, senior product manager for De Pere, Wis.-based PDQ Inc., suggests making even better use of the acceptors by taking one more step. Dougherty says operators can run advertisement screens while vehicles are waiting for their wash, perhaps engaging in cross-promotions with other neighborhood locations.
And yet another step can be taken at the pay station to make things easier as well as create loyal customers. “Many manufacturers have software that can sell multiwash packages directly from the pay station, without the need for additional labor,” Dougherty says. “Selling five washes not only increases the purchase price, but it also will help build loyalty to a particular car wash.”