Owner Sanity & Customer Value - ’Tis the season to maximize profits

By: Anthony Analetto
Originally Published in AutoLaundry Magazine

As many car washes gear up for a hopefully busy winter season, the following quote from famous management guru Peter Drucker should play center stage in your preparations. “Quality in a product or service is not what the supplier puts in. It is what the customer gets out and is willing to pay for. Customers pay only for what is of use to them and gives them value. Nothing else constitutes quality.”

So as you look to invest in your business before the busy season, evaluate your options in terms of the value that an improvement will deliver to your customers. Ask yourself, what it is about your car wash that customers value most. Then honestly admit to yourself, what inefficient or ineffective procedures detract from your ability to deliver that value. I’ve outlined several key areas to consider below, but when trying to determine what your customers value most, don’t overlook the obvious – you can always ask them either in person, or through a survey. Price and wash quality are of course important but not always what your customers are most willing to pay for. On that note, I’m going to start this article with one of the most frequently neglected investments you can make.

Owner Sanity
Yes, you read that correctly. It’s hard to motivate your staff and lead them to work more efficiently and elevate your customer’s experience if you yourself aren’t in the right frame of mind. This doesn’t necessarily mean you should pack up and head to Florida for a week to lie in the sun. Instead, look at your business and list the top 5 incorrectly performed activities or missed opportunities that drive you crazy. Maybe it’s how your staff fails to earn loyalty and increase add-on sales when they interact with customers. Possibly you’re tired of unscheduled repairs because preventive maintenance tasks aren’t being completed on time. Whether it’s production efficiency, facility appearance, utility and detergent consumption, or wash quality, is there anything that stops you from looking at your business, taking a deep breath, and sighing with relief that everything is how it should be? Depending on your level of stress following that exercise, you might want to pack up and head to a trade-show instead. There’s nothing more soul cleansing for a car wash owner than spending a couple of days with fellow operators discussing solutions to problems. And if you can see problems at your car wash, chances are they are detracting from the value your customers perceive when they visit. For anyone who is struggling to list 5 opportunities to maximize the profitability of the season, you can be sure that they exist. Here are a couple of areas to consider.

Customer Experience
It would be naïve to disregard customer experience as part of the value proposition. Factors from staff appearance to the cleanliness of your bathroom impact the perceived quality of your wash. Assuming your site is clean and well maintained, your paved surfaces are in good repair, the landscaping is attractive and trimmed, employees are well groomed and in uniform, and buildings have been freshly painted, there may still be many things in need of changing. Be creative. Your ability to refine the added value your customer feels when visiting your wash can be a competitive advantage more powerful than wash quality or even price.

Hours of operation: Is your car wash consistently available when your customers want to wash? Just because you’ve had the same work hours for years doesn’t mean they fit the changing demands of customers in your market. Some operators have experimented and captured large car counts during hours they were previously closed. Look at your reports and trends. Has traffic in the morning dropped off and evenings picked up, or vice versa? Taking the time to look at the numbers and create graphs of the trends can highlight opportunities not noticeable on a daily basis.

Show them the love: Have you ever heard the expression that a horse can sense fear? Well I truly believe that a customer can sense if you truly love and value their business. Demonstrate that and you’ll garner loyalty and higher ticket averages. But how? You may be well connected to your community and know many of your customers by name, however this isn’t always possible. The overall appearance of your site makes an impact, but this season, you may consider revising your policies and how you present them. Rewash guarantees are effective, but also look at your signs and make sure they are friendly and inviting. And don’t overlook the power of sponsoring fundraising events in your community. You may already have a coupon redemption feature in your POS system that can easily deliver and track fundraising programs as an effective way to drive traffic and improve ties with your community. Make use of it. Evaluate the cost of delivering a VIP program. This type of effort not only shows customers you recognize their value, but provides you with an email or mailing address to send newsletters and promotions to.

Training: It’s difficult for managers to focus on improving customer service if they’re constantly struggling to keep up with the day to day operation of the wash. As you develop a training plan to improve the positive interactions between your staff and customers, don’t forget to address ways of expanding your manager’s abilities to maintain the wash more efficiently. By training basic repair skills, they have a much better chance of fixing problems quickly during an emergency. What else can deliver a better customer experience than being open for business when they expect you to be?

Wash Quality
We’re all familiar with the oath that doctor’s take, “first, do no harm.” Well I’d like to throw out one for car washers – “first, don’t break down.” Once you’re confident that your existing equipment package is prepared to reliably handle your peak anticipated wash hour, follow this procedure to identify means of improving the quality, consistency, and timeliness of the product you deliver.

Pick a slow Tuesday. Run a subcompact, SUV, and pickup truck through each of your wash packages. Don’t prep. Don’t wipe. Now, honestly list all deficiencies in descending order of how visible they are to a customer. Next increase the chain speed to where it would have to be to process your busiest day, the kind we all dream about, and list all areas missed for each vehicle profile again. Compare the lists. Evaluate the cost of options to either retrofit, supplement, or replace any part of the wash process that isn’t up to snuff. Rank each project in terms of your cost and the value you expect it will deliver to your customer’s satisfaction. Enhancing customer value begins with delivering a consistently clean, dry, shiny product. Without that foundation, everything else will be an uphill battle.

Efficiency
Automated equipment is for washing cars and labor is for improving a customer’s experience. In my opinion, that statement holds equally true for both the full-serve and express-exterior operator. Earlier, I touched upon using your staff to improve a customer’s experience at your wash. Now I want to emphasize the urgency of eliminating them from the wash process. You can’t begin a serious project to improve efficiency while using people to wash the exterior of the vehicle. Labor disrupts production, uses varying and costly amounts of chemical and utilities, and creates inconsistencies in your product that turn customers away. There are plenty of solutions from every equipment supplier to prep, wash, and dry a car online at almost any chain speed. Before exploring ways to reduce your utility or chemical expenses, look at your labor. Once you’re finished, look to reduce your consumption of the other variable expenses that eat into your profits. Documentation is crucial. Whether you keep a notebook, enter values into a spreadsheet, or get reports from your tunnel controller, make sure you have a system to easily compare year-to-year and month-to-month periods that can highlight spikes. Once you have a clear way to monitor the impact of your activities on controlling variable expenses, you’re ready to begin improving your business.

Electric: Absolutely consider programs to turn off any electrical appliance when not in use and explore the use of VFDs or other energy saving devices for vacuum and air dryer applications, but don’t stop there. Calculate the savings of replacing older motors on some equipment with newer, more efficient products on the market. Evaluate the estimated utility consumption on older compressors, pumps, and heaters, with that of newer, more economical designs.

Also make sure you’re utilizing all the options to tune your tunnel controller for more accurate activation of equipment in the wash process. Tunnel controller manufacturers have really leveraged advancements in computer technology to gain tighter control of equipment. Make it a habit to stay on top of advancing controller technologies. Also, if you’re in a cold climate, keep careful control of your thermostat.

Water: For the most part, water reclamation has become a standard practice in our industry, but there remains room for many locations to increase the percentage of water reused. 100% water reclamation is a reality. Also on the water side of the operation, look to incorporating check valves, and sizing nozzles accurately for maximum efficiency.

Detergent: As with electrical settings, accurate tuning of your controller for efficient equipment activation can deliver handsome savings on detergent. Whereas most equipment today arrives with check valves and properly sized nozzles, excessive detergent consumption can often occur as nozzles gradually wear and small leaks occur. Review your preventive maintenance routines and documentation to make sure you’re on top of this aspect of your wash. Attention to comprehensive daily preventive maintenance can literally save many locations tens of thousands of dollars each year.

SUMMARY

I’d like to wrap this article up with another quote from Peter Drucker, one of my all time favorites. “Efficiency is doing things right; effectiveness is doing the right things.” I hope you found something in this article to help you decide what the best investment is that you can make this season to improve both the value you deliver to your customers and maximize the return on your investment.

 

When Lightning Strikes - Assess, Wash, Recover, and Train.

By: Anthony Analetto
Originally Published in AutoLaundry Magazine

Stop, drop, and roll. Drilled into every child in the country, this simple, memorable plan of action during a fire has probably saved thousands of lives. During a crisis, it’s easy to lose your head, miscalculate priorities, and quickly lose valuable seconds or days on making a recovery. Last month I got a call from an operator on a Sunday morning. A lightning strike had taken out one of his two locations overnight. Distanced by several hundred miles and a good night’s sleep, it was relatively easy for me to view the situation objectively. If I were in his shoes, about to stare at a line of cars, I doubt I would have reacted with the same clarity. After the call and during the days that followed, I started to organize and outline the steps this location took to minimize the impact of the crisis. Everything settled into four categories; assess, wash, recover, and train. The fact is, during any crisis, it’s easy for even the most seasoned veteran to get distracted with one task and lose site of the big picture. Although I’m basing this article on what to do after a lightning strike, the same process can easily serve as a guideline for dealing with many catastrophes at a car wash. I hope you find some useful insights in this article to apply at your business.

Step 1a: Assess How to Quickly Satisfy Your Customers.
Computers and electronics are sophisticated but delicate. Nothing highlights how vital these technologically advanced controls are to today’s car wash operator than having a lightning strike wipe everything out. Installing appropriate industrial rated surge protectors and UPS battery backup systems goes without saying and can deliver some protection, but if your location suffers a direct lightning strike, there is little you can do to prevent serious damage. Its become so common to walk in, turn a switch, and start to run your car wash, that having it all burn up can be devastating if you’re not prepared. Imagine no credit card clearing, no internet, and not being able to power up your equipment. Now get started.

The first step in any crisis that threatens your business is to assess how you can most quickly satisfy your customers. Ideally this is simply restoring your ability to wash cars and I’ll go through a step-by-step process to achieve that goal efficiently. However, if a quick recovery just isn’t possible, divert all your energy into making sure your customers leave as satisfied as possible. Get someone out front to greet them and explain the situation. If you keep a supply of pre-printed business cards or coupons that are good for a free car wash, hand them out. Alternatively send one of your employees to an office supply store to print a flyer. Depending on the day of the week and how busy you are, you may offer a hand wash or a detailing service. Offer something until you’re confident that you’ve satisfied your customers the best you can and move on.

Step 1b: Assess how to most quickly wash cars.

1. Call the power company immediately. Even if it appears you have power to the building, you can’t trust that it is stable until the electric company tests everything - so you will want to schedule them as soon as possible.
2. Determine whether or not there is 3-phase power to the building. Try to start the conveyor. If it comes online, breathe a sigh of relief. Otherwise, go to the main breaker for your motor control center and do a reset. Next, try to override each component from the on/off switch. If you can’t override, then there is a problem with your 3-phase power supply and you’ll have to wait for the power company to resolve it.
3. Once you’ve established that 3-phase power is available, test the conveyor start/stop button again. If the conveyor won’t start, reset your 110 volt circuitry and begin testing. Check your conveyor enable circuit. If your horn sounds but the conveyor doesn’t move, check your timers and relays. If they’re bad, replace them. If you don’t have spares, borrow from other components. This may require contacting your panel builder or electrician to temporarily bypass or rewire the panel to get the conveyor running.
4. Now that your conveyor is running, go to the override switches on your relay station and test every function from the beginning to the end of your tunnel.  Document all failures and develop a repair plan for each. For example, if you have no 24 volt functions, go to your motor control center and test the power in and out of your transformer. Check all fuses and circuit breakers. If a whole relay station or board has failed, contact the manufacturer or service technician and start the troubleshooting process. Look for opportunities to steal parts from less critical components to get more vital parts of the wash working.

Step 2: Wash

1. The second you have enough functions working to wash a car, put someone outside to take cash only and start washing cars. Slow the conveyor speed, add prep labor, do whatever you have to, but reopen your business as soon as your equipment is functioning adequately, if not optimally.
2. Next look at your electronics. This can be complicated. You may have to replace a motherboard, for example, just to be able to diagnose other component failures. With multiple automated attendants and workstations, there are often opportunities to steal parts from one component to get another working. Order everything you think you may need, and send back what you don’t use. Look for creative solutions. At this location, the owner had an idea to use the cellular connection on his laptop to process credit cards which worked brilliantly.

Step 3: Recover
Are you covered? I wish I could say that I’ve experienced every catastrophe, knowing the answer to that question, but I can’t. Most operators I know can’t. What I can do, is recommend that you get with your insurance agent immediately and schedule a meeting at least once a year. I can also share several interesting insights that arose from this incident.

First, many policies handle power surges differently than lightning strikes, often providing less coverage for the former and more for the latter. That means that you must prove quickly that it was an actual lightning strike. In this case, the insurance company was able to look up the information that confirmed it from the electric company, but that may not apply everywhere and it’s a good idea to establish it immediately after the strike.

Also, office computers are covered differently than the computers that control your car wash equipment. Don’t get the two confused when talking to your insurance company. Making sure that the computers that run the car wash are properly classified as car wash equipment on your claim can help make sure you’re correctly compensated on your settlement.

Step 4: Train
Murphy’s Law would suggest that all lightning strikes and other crisis situations are more likely to occur on the first day you’ve decided to take a long overdue vacation. Make sure your employees know what to do. On rainy days, teach them how to operate the wash in manual mode. Turn off the auto-cashiers and POS systems and let them learn how to activate the wash using the key pad. Make a cash bank. Have a paper based reconciliation procedure. You may still have to talk your manager through the steps to recover, but it will go a lot smoother if their first reaction isn’t to panic and close the business until you return.

Summary
All’s well that ends well. This location was able to wash cars by 10:30 that Sunday morning, and to take money by hand. With a second location just a few miles up the road, they cycled staff through both locations to experience first-hand how to operate the business manually. The owner took things a step further and had his managers rebuild the failed auto-cashiers that he had borrowed parts from with the new replacement parts when they arrived. It’s impossible to predict every complication that may arise during a catastrophe, but if you stick with the formula of assess, wash, recover, and train, with a little luck, each crisis will be merely a small blip on your road to success.

What Goes Around Comes Around - Inspiring your employees to make raving fans of your customers

By: Anthony Analetto
Originally Published in AutoLaundry Magazine

In many ways, every new trend is an old idea refined. In car washing, the latest trend in response to our sagging economy seems to be building customer loyalty. It’s certainly not a new idea, but the means have definitely been refined and are, increasingly, on the top of everyone’s mind.

 

You may already be in the throes of evaluating some of the car wash POS systems that promise to make building a loyalty program fast and easy. While not new, these systems have certainly become more powerful in their ability to improve wash frequency and ticket averages. But today I don’t want to write about new technology. I want to dust off an old idea that is probably the most instrumental in turning your customers into raving fans: Customer Service. In particular, I want to focus on training, elevating, and empowering your staff. Some people enjoy this aspect of being an entrepreneur. Others shy away from it at their own peril. For both, I want to throw out a tried and true way to enroll your employees in a common vision of creating loyal customers out of every patron to your wash. It is called the “Manager Book-Around.” An oldie but goodie for building customer relationships that I hope you enjoy.

The Manager Book-Around

The concept is simple. Each week at your manager meetings you and your staff will discuss a popular book related to management and customer service. This isn’t an informal chat between you and the location manager over a cup of coffee. Schedule a specific time that your managers, assistant managers, cashiers, head service writers, and any key people who manage other people or interact with customers can come together for a formal training session. After you’ve addressed all the regular issues that crop up at your manager meetings, get up and move to the front of the room. Make a show of it. Let your managers see how serious this topic is. Put up a flip chart with the following three lines, leaving space to write below each.

1.) The book title

2.) What you got out of it

3.) Lessons you have or could have applied

Share your review of the book, invite questions, and pass it on to the next person to present the following week.

More than meets the eye

You are your employees’ primary role model on how to interact with customers. You can explain your expectations until you’re blue in the face, but adding a manager book-around to your meetings takes it to a higher level. First, it establishes that you actively try to learn how to do a better job each day and that you expect them to do so as well. Second, it unifies everyone in a common belief that it’s their job to provide a better experience for your customers. Third, it sets down the expectation that their jobs involve them serving customers, not just washing cars. Yes, you read that right. Delivering a clean, dry, shiny car consistently isn’t enough. Maintaining your building, equipment, and even the flowers up front won’t keep customers loyal to your business. This article is on building customer loyalty and that demands delivering an experience that  your customers desire. Site appearance, policies, promotions, and product quality are all important, but if you can get your staff to smile and make patrons feel welcome, on their own desire and initiative, that’s when the magic that makes the cash register ring (or POS station beep) starts to happen.

Where to start

There are two books I like to use when starting a manager read-around and I struggled with which one to use for this article. Chances are you’ve already read both titles. The first, The One Minute Manager by Ken Blanchard and Spencer Johnson is often my first choice at established full-serve or flex-serve businesses with seasoned managers. The second, Raving Fans by Ken Blanchard and Sheldon Bowles, however, has broader immediate application to all wash types and has become my personal favorite to begin. The genre of short, inspirational, business books that can be read in a couple of hours is filled with many options. These two examples are fun, easy to read parables with dramatic impact. I’ve summarized Raving Fans below and provided an example of how it positively affected some of the washes I used to manage. Any book can work, and your enthusiasm for the titles you select can carry more weight than the words between their covers.

Why Raving Fans

The cover of Raving Fans claims it to be “A Revolutionary Approach to Customer Service.” Below that is a little gold star stating, “Satisfied Customers Just Aren’t Good Enough.”  And in a couple of hours, your employees will finish the book, enthusiastically ready to make raving fans out of your customers. It works. The book is that good.

It starts off by revealing the secret that you must “decide what you want.” Before, I mentioned that the magic of creating customer loyalty happens when your staff knows the right thing to do for your customers and feels empowered to do it independently. The book describes the process of deciding what you want, as creating a vision of perfection centered on the customer. Think about it. In one line of text, your managers now understand that it’s their job to create a perfect world for your customer. Even more, by giving them the book to read rather than telling them what to do, it implies that you expect them to maintain their customer-centric approach when they’re not being watched. Most importantly, it lets them know and appreciate how important their daily actions are to the success of the car wash. Wouldn’t you be more enthusiastic to work someplace where you were valued and important? Well guess what, your staff will be too. Suddenly it’s a whole lot easier for them to smile when talking to your customers.

Rather than spoil the rest of the Raving Fans parable, I’d like to, instead, provide an example of how it worked brilliantly at a chain of full-serve washes I was directing. At a manager meeting, while discussing another secret in the book entitled Deliver the Vision Plus One Percent, we came up with an idea to wow our customers. At the time, attendants would wave or yell “car ready” to alert customers to take possession of their vehicle and drive away. Already using a POS system to track license plates, many customer names were already entered into our system and automatically printed out on the receipt. The idea generated in the Manger Book-Around meeting was to print out a duplicate receipt and leave it on the dashboard for the finishing attendant. Instead of waving, they were trained to say “Mr. Doe, your car is ready” with the name prompted from the receipt. If the customer’s name wasn’t available, they knew to substitute the color, make, and model of the car. Frantic waving became “White Ford Mustang Ready.”

The beauty of the Manager Book-Around is that it focuses everybody’s attention on constant improvement. Soon after calling customers by name became standard practice, attendants were then trained to read back to the customer what they purchased. Instead of silently walking away, attendants said “Thank you Mr. Doe, you bought the super shine today. So we washed the outside of the car, we vacuumed the inside mats, seats, and cup holders. We also washed the windows inside and out, dusted your dashboard, cleaned the rims, dressed the tires, and did your undercarriage wash today. How does everything look to you?” This later evolved to include a towel on the ground which, in turn, became red carpets and so on – all originating from a Manager Book-Around meeting.

SUMMARY

What goes around comes around. A car wash is a service business and a simple smile can make a world of difference in creating customer loyalty. When your employees have a clear understanding of how you expect them to treat customers, along with the confidence to do the right thing without direction, magic things can start to happen at your business. Technology can make things easier, but it’s the people that make the difference. Your job as an entrepreneur is to elevate people who will then elevate your business and bring you huge rewards. For anyone interested, shoot me an email at aanaletto@sonnysdirect.com if you’d like more books that work well for Manager Book-Around meetings.

Crazy Clean! Crazy Fast! Crazy Good! - New Retrofit Delivers Moore Clean Cars Fast

Drive through Moore, Oklahoma and it would be hard to miss the neon sign towering over Interstate 35 proclaiming “Moore Clean Cars Fast!” Walk on the property and you’ll find bustling traffic and a friendly staff galvanized behind owner-operator Scott Bowen’s vision of “Crazy Clean, Crazy Fast, Crazy Good!” Look at the signage or listen to the internally broadcast radio station cross-selling the various profit centers and you might come to the conclusion that Scott is a marketing guru who just entered the car wash industry. Talk to Scott for a few minutes however, and you’ll quickly realize he’s a car wash veteran that’s about as seasoned as they come.

Having sold his two car washes, a full-serve and a 6-bay self-serve, Scott entertained retiring before coming across an 8-bay self-serve with two touch-free automatics for sale near his home. While running the full-serve he became interested in the express-exterior wash model as a solution to his labor headaches. The potential he saw at this older self-serve was to convert four of the bays along with some underutilized real-estate into a 135 ft express tunnel, while preserving the two automatics and four bays. One year after the conversion, he’s logged 130K washes on the tunnel, and annual self-serve vends have actually grown 13% from half the space. So what’s the secret of his success? I’ll let Scott tell you. Here are some excerpts from a recent conversation.

The White Elephant in the Room - Less room for error than ever before

By: Anthony Analetto
Originally Published in AutoLaundry Magazine
 
"In any moment of decision, the best thing you can do is the right thing. The worst thing you can do is nothing." - Theodore Roosevelt

There’s a huge white elephant in the backroom of every car wash. Although it’s impossible to overlook, lately, it seems many car wash owners I speak with are pretending the elephant has left the room for awhile and are concerning themselves more with less relevant matters of economy and gas pricing. For anyone in the car wash industry, the true white elephant always has, and always will be the weather.  When the skies are favorable, we will continue to wash cars in the midst of an economic crisis. During periods of torrential downpours, sleet, hurricanes, floods, draught, or some other new weather pattern that always seems to crop up first in the northeast, our business is all but shut down even if gasoline drops below $1 per gallon and the stock market has double digit gains.

There is no question that our current economic troubles exacerbate the problems associated with weather.  But unlike most industries that have the luxury of hunkering down for the recession; car washes still have to contend with the weather before, during, and after the recovery of our economy. It’s no secret that a well run car wash can “make hay when the sun shines”, but only if they worked hard to prepare during those periods that were less than favorable.  Recently, I’ve seen a greater number of operators than usual have their equipment fail on the first volume spike after a couple of months of bad weather. This has been entirely due to poor preventive maintenance and planning. You can’t afford to do that in this business, and our current economy means there is even less room for error than ever before.

So I decided to add a page to my “rainy day folder” where I jot down everything I intend to do at my washes when I have time.  If you don’t have a folder or notebook where you keep track of ideas you want to implement during slow periods then I recommend starting one immediately.  Below is the page I added, which is a basic outline to help me organize my activities. I hope it gives you a couple of ideas you can use at your own wash.

Category 1 – Prepare for the recovery
Fight the urge to take shortcuts on preventive maintenance when things are slow.  Like a person, mechanical equipment works best when it’s exercised. That means that it is actually more important to perform every detail of your preventive maintenance program when you only wash a handful of cars than when you wash 1,000. Streaks of bad weather are a part of our business. Not being able to capitalize on a volume spike when the weather turns good because your equipment fails is both tragic and preventable. If you have a comprehensive PM program, follow it. If you don’t, then creating one should be your first rainy day activity.

Category 2 – Review Marketing
What better thing to do on a rainy day then take stock of everything you do to get more people to your wash more frequently, while spending more on each visit? Unfortunately when things are good, it’s easy to fall into marketing and advertising habits. The same billboard, newspaper ad, or direct mail coupon may run for months on end with little or no evaluation on what return those investments are delivering.  Recruiting a talented marketing firm can really pay off, but if you go the do-it-yourself route then you have to be disciplined at documenting and organizing your ideas. That white elephant in the room may suddenly decide to move around a bit and give you a whole lot of time to implement all those marketing ideas you had when you were too busy washing cars to get them done.  When this happens, you’ll be grateful when you open your rainy day folder to a list of projects to get started.

Organize your customer file: If you’re not willing to ask your customers for their contact information and take the time to set them up in a database from which you can send them promotions, then don’t be surprised when your competition does.  Whether you have customers complete a survey while waiting for their car, or enter to win a free wash or detailing service, keep a running list of ideas to get customers to part with their contact information, especially their e-mail, while visiting your wash.  Once you capture the names, the next battle is entering them into a system you can use to call, mail, or e-mail. First look at your POS system. Many car washes have an existing POS system ready to do this function for you with just a little staff training. Even if you’re still using a cash register, you can easily use any online or computer based e-mail application to organize an address book of your customers.

Phone, mail, or e-mail:  I used to require each of my managers to read a short book titled The Nordstrom Way: The inside Story of America's #1 Customer Service Company as part of their training. One manager, during a 20-day period of solid rain, applied some of the principles and actually manufactured enough business to make bonuses.  What he did was to have his assistants and cashiers call detailing and premier customers with an offer to pick up and drop off their cars for service.  It worked and he was able to create his own opportunity for success.  

Develop Your Fund Raising: A car wash is a community based business. Aligning yourself with non-profit leaders through joint fund raising activities can create goodwill and strong networks of clients recommending your car wash. Unfortunately, making the phone calls, developing the documentation, and holding the meetings required to get these programs off the ground can take a lot of time that’s hard to fit in when you’re busy washing cars.  What better project for a rainy day?

Look at your Signage: Are your signs fresh and inviting? Do they guide a customer in understanding the benefits of selecting the next higher wash package? Slow times are ideal for refining your service offering and exploring new technology such as the growing number of affordable digital signs now available.

Review Your Advertising: Placing advertisements is as easy as paying the bill, but not always the most effective use of our marketing budget. If you’re advertising coupons in the newspaper for example, rainy days are a great time to count how many coupons were redeemed and begin estimating the actual return on your investment.

Category 3 – Review Efficiency
There are thousands of ways to shave labor, utility, and chemical expense at a car wash. Each one however takes time and investment to implement. Make sure you list things as small as installing motion activated bathroom light switches or re-programming and securing thermostats.  Your slow periods may be so brief that you never get that far down the list, but if you do, you’ll be glad that you have a list of projects that can put you in a better position once the weather turns in your favor.

Perform a chemical audit: Technology changes. Slow periods can be an ideal time to review your chemistry, add new service offerings, or identify more cost effective solutions.

Dial-in controller settings:  Accurately tuning equipment to not waste a single second of unnecessary motion can really pay off on high volume days. Slow days are a great opportunity to refine your controller settings for maximum efficiency.

Schedule an equipment audit: Nothing points out the need to eliminate labor in the wash process than a periodic slowdown due to weather. Being able to deliver a quality wash with no prep can allow you to remain open on questionable days by reducing the overall number of employees required to run the facility. The technology is readily available and slow periods are ideal for making any major changes that may require closure during installation.

Category 4 – Perform Facility Upgrades
At least once a quarter, walk across the street from your wash with your rainy day file and write down everything you see that needs to be repaired or replaced. Could you use some additional landscaping, a new awning, or just a fresh coat of paint? Now return to your wash and walk the perimeter of your property.  Are there any cracks in the pavement, ugly waste receptacles, or anything that doesn’t project a clean professional image? These are all easy and affordable tasks that are hard to get to when you’re busy, but easy to address if volume slows.

Summary
Although today’s economic challenges mean that there is less room for error in our planning, in my opinion, weather and its unpredictable nature remain the greatest threat to a car wash’s profitability. We can’t afford to ignore the impact that changing weather patterns are having on our industry as if it’s a white elephant in the room.  A day doesn’t make a week, which doesn’t make a month, which doesn’t make a year. When the sun is out, the business will be there.  When it’s not, we have to improve our efficiency and use the down time to manufacture some new business with marketing. That’s always been true and I suspect it will continue to be regardless of what economy we find ourselves in.

When Disaster Doubles Your Car Count

By: Anthony Analetto
Originally Published in AutoLaundry Magazine

Interview with Marcus Kittrell by Anthony Analetto

“When everything seems to be going against you, remember that the airplane takes off against the wind, not with it.” – Henry Ford

I sat down today to finish writing a column for this magazine on evaluating the effects of adding an express exterior lane to a full serve when I received an interesting e-mail. Regular readers may recall an interview that appeared in Auto Laundry just over a year ago when an F4 tornado severely damaged one of Marcus Kitrell’s three car washes near Birmingham Alabama. At that time, Marcus was trying to make heads or tails out of his insurance policy and determine if he would be able to recover. The e-mail I just received contained a series of before and after pictures documenting Marcus’s completely renovated facility. Having re-opened only five months ago, Marcus is washing nearly twice as many cars as he was before the tornado.

Recovering from a natural disaster that closes your business for 10 months is no small feat. Reopening to increased revenue and profitability is truly remarkable, even for a seasoned car wash veteran such as Marcus, with over 26 years of industry experience under his belt. Although in the middle of site selection for his fourth location, Marcus agreed to share some of his insights on insurance and disaster recovery. Below are some excerpts from the conversation that I’m sure will get you on the phone with your insurance agent.

ANALETTO: Looking at a picture of the new site, it doesn’t look anything at all like the original full-serve. How much of the building were you able to recover?

MARCUS KITTRELL, OWNER, MARC-1 CAR WASH: Zero. Nothing of the original building was salvaged. Enough of the building was destroyed that I had a choice: to try to repair what I had or rebuild everything from scratch. I had an opportunity to convert my dated full-serve wash into a completely new express exterior and decided to go for it.

ANALETTO: Did you have enough insurance?

KITTRELL: No, not entirely. The insurance policy I had only covered $800,000 and the entire project cost $1,050,000. I had to put in the other $250,000 myself.

ANALETTO: So you were underinsured on the property?

KITTRELL: Yes and no. I was certainly underinsured if the tornado had leveled my entire facility. We were lucky however and many parts of the property were salvageable. If I had to, I could have rebuilt my facility to the same level it was before the tornado within the $800,000 coverage. The only reason I even had the option to build a brand new express exterior for $250,000 was because I had a loss of income insurance policy – something I don’t think you can be without in this business.

ANALETTO: Could you explain what a loss of income insurance policy is?

KITTRELL: Whereas property insurance is required if you have a mortgage, loss of income is usually optional so you have to make sure you have it. The policy I had paid my ongoing expenses including rent and payroll for a few key employees for up to 12 months while we rebuilt. During the 10 months we were closed, they paid the actual incurred expenses. We reopened with two months left on the policy, so they paid us a makeup on the sales we would have had if the disaster had not occurred for the those months. I don’t remember the exact numbers but basically if I did $20,000 the month I reopened but the year before I had $40,000 in sales, then they sent me a check for the difference. We were able to provide the insurance company with very accurate records and they made calculations from them that were fair.

I really can’t emphasize enough how important it is to make sure you have this coverage. Without the policy, I would have had no choice but to reopen as fast as I could, with whatever I could, just to make my mortgage payment. Instead I was able to step back and evaluate my options. Another point I want to make regards real estate. In my situation, I have an LLC that owns my buildings and properties, with each wash operating as an S-Corp that owns the equipment but rents the location from the LLC. This is a pretty common structure for many car washes. It’s also normal for the Holding Company to make a profit on what it charges the Car Wash for rent. For example, if the Holding Company pays an $8,500 mortgage payment, the Car Wash might pay the Holding Company $15,000 in rent.  The reason I’m pointing this out is because it’s the Car Wash that holds the insurance policy, but you want to make sure that the policy names the Holding company as “additionally insured”. This extends your coverage to the Holding company so that in this scenario, you’d receive $15,000 instead of $8,500.

ANALETTO: Why did you decide to change to an express exterior and not a flex-serve or even stay as a full-serve?

KITTRELL: As the only full-serve in town I was hesitant to change. The decision was even harder, because if I stayed a full-serve I would not have had to invest $250,000 of my own money and could have reopened several months sooner. I did play with the flex model and had some site plans drawn up for property, but ultimately felt that the express-exterior model fit the location and my market best.

As a full-serve, my base wash was $12 and we averaged $18 washing between 2 and 3 thousand cars per month. I also had 20 employees and labor accounted for 38-40% of my revenue. To move to express I lengthened the tunnel and added more equipment so I could deliver a clean car without prep. Now I only have 4 employees and produce a cleaner car. After four months I’m already averaging 5,000 cars per month at $8, and labor is only 15-16% of my revenue. The bottom line is that I’m making more per month with a lot less headache. Volume is growing each month and I expect to recoup my initial investment in less than 24 months. Also, if I ever choose to sell the property, an express-exterior is more appealing to a larger base of investors.

ANALETTO: How did your customers respond to the format change?

KITTRELL: Great. We’re offering free vacuums and putting out a great car. Once we explain the difference, customers really appreciate the value. There were definitely some questions at first but the price is appealing, not to mention the convenience and speed.

ANALETTO:  Did you have any difficulties with the city, contractors, or the construction process?

KITTRELL: Not really. We sat down with the city and the city planner and worked very closely with them. The most important thing is to not rush into anything. Take a second to analyze the situation from every angle and get your ducks in a row. We took a hard look at fixing the building but realized we had to reposition it by a few feet to make the express format work. That required a variance which I had to make sure we could get before moving forward. Once you start either knocking things down or repairing them you really can’t go back easily.

ANALETTO:  What misconceptions do you think people may have about their insurance policy?

KITTRELL: Mainly that you’re not in any way obligated to rebuild what you had before. You certainly don’t expect to have a tornado wipe out your business, but if you’re properly insured, you can turn it into an opportunity to build a better one. Not only did I upgrade my equipment, I improved the overall efficiency of my entire location. I was able to change the motor voltage from 208 to 480 which will lower my electric bill. The tunnel controller is also new and dramatically better than what I had before. It’s helped me reduce my detergent, utility, and water consumption. Even maintenance is easier and less expensive with improvements like a self-cleaning conveyor pit. Overall, I’m producing a cleaner car than ever before at a lower cost in every aspect. One other thing I did was to install underground reclaim tanks. Our water situation doesn’t warrant me adding a reclaim system right now but if that changes it’ll be an easy conversion. Those are the type of things you have to keep in mind if you’re ever forced to rebuild your wash due to an unexpected disaster.

ANALETTO: What recommendations would you make to other operators to be better prepared for a disaster?

KITTRELL: First and foremost get with your insurance agent every year to review your policy. Make sure you know how much it will cost to replace things from the slab up and check that you have enough coverage. Also verify that you have a loss of income policy structured to cover your holding company if you’re set up that way, I can’t emphasize that enough.

Next, go to trade shows, talk to operators, and know what’s current so that you can make intelligent decisions quickly. When I went to rebuild this wash I already knew what wash format and equipment I wished I had if my tunnel were just a bit longer and the property laid out differently. I never expected it to happen this way, but I did have an idea of what I would do with the property if I had the money to do it.

Why Did the Chicken Cross The Road? - Navigating Hydraulic vs. Electric Motors for a Profitable Conveyorized Car Wash.

By: Anthony Analetto
Originally Published in AutoLaundry Magazine

Sometime in the early 1940s, electric drive conveyorized car wash equipment hit the market. Sometime in the mid 1970s, the industry shifted to hydraulically driven motors. Now, sometime every other day or so, I get asked the question “which is better, electric or hydraulic drive?”  It brings to mind the classic joke – “Why Did the Chicken Cross the Road?”  My favorite answer has always been – “to get to the other side”, but just like car washing, there are many responses that can make a straight-forward proposition more complex.  Before going down the path of deciding that you believe in exclusively using either electric or hydraulic drive components, first define what it is you need to find on the other side of the road to maximize the profitability of your business. The choice may just be a means to end, but it’s no joke.

As with most engaging arguments, both sides have their pros and cons. However, in consideration of hydraulic vs. electric use in a conveyorized car wash, those strengths and weaknesses change as different variables enter the picture. Although this makes for a lively debate or discussion, it’s often confusing when trying to select the best equipment for your car wash business.  So, let’s take “best” to mean the solution that delivers the highest quality product at the lowest possible cost with the least maintenance and greatest reliability – and examine your choices.

 

Not Your Father’s Electric Car Wash

The first tunnel carwash that my dad built had an electric drive conveyor, wraps, side brushes and wheel brushes. These were still the days when a brush was simply called a brush and the only computer managing the wash was its owner.  Needless to say, this wash also predated today’s advanced VFD motor controls, sealant technology, and other engineering improvements that make electric drive technology relevant to the modern car wash operator.

Our back room was stocked with spare electric motors, sprockets and chain. The ratios of the gear boxes were limited so different size sprockets and torque convertors were used to set the speed of the equipment.  At 17 years of age, commuting to my local college, I would often remove and replace a motor between 6:30 and 7:30 am, go to class, drop off that motor and pick up the one that had just been rewound before returning to the wash. If you ever have a chance to visit the Henry Ford museum in Naples Florida, you’ll see a fully operational machine shop from the early 20^th century. One main electric motor is driving many pieces of equipment via an ingenious series of leather belts and pulleys. Speed was adjusted by moving the belt to a larger or smaller pulley. Seeing the whole thing run reminds me a lot of the early electric car wash equipment.

I know some of you veterans may be laughing at your own memories right now, but these early wash systems really highlighted the underlying truth that electricity and water just don’t mix well. With the introduction of hydraulic motors to the car wash industry in the early 1970s, operators began converting to the then new technology in droves. A single hydraulic power pack could be located in the equipment room away from the wet environment.  This configuration was more reliable, easier to maintain, and improved the safety of the wash.  One power pack could be sized to drive multiple pieces of equipment at different speeds with the ability to adjust them with the turn of a knob.  Toss in the fact that the initial purchase price of a hydraulically driven component is normally less than a comparable electric drive component and it’s no wonder that to this day, hydraulic is still the preferred technology for most car wash operators.

Hydraulic - By No Means Perfect

If hydraulic was perfect, there would be no debate. The first drawback is energy loss. As a rule of thumb, it takes 1.5 horsepower from an electric motor running a hydraulic power pack to deliver 1 horsepower of energy to a hydraulic motor.  Second, hydraulic motors can leak oil into the surrounding environment when not properly maintained.  Although water-based hydraulic fluids in part nullify the latter weakness, the energy loss issue is an inescapable fact. Until recently, the additional electrical cost of hydraulic motors was relatively minor and easily justified by their lower purchase and replacement price. The new reality is that utility prices are rising, dramatically in some areas. Another consideration is that many municipalities have imposed escalating impact fees for larger electrical service capacity. That means that if a location is able to run the wash with a smaller incoming service by using electric instead of hydraulic, there is a potential savings not only on monthly consumption, but on the service connection itself.

Electric - By No Means Perfect

 

What’s spurred the comeback of electric drive components to the carwash? Mainly the dropping prices of variable frequency drive (VFD) technology. These drives allow us to adjust the rotational speed of the motor driving the gear box which directly adjusts the speed of the brush, conveyor, or dryer without changing gears or belts in a way that’s reminiscent of equipment in the Henry Ford museum.  When combined with rising utility costs, VFDs, once too expensive for the carwash industry, are becoming increasingly popular. There are also a growing number of motor gear box combinations that are IP 66 rated. These sealed components feature windings that are coated in an epoxy, urethane or double varnish that makes them much less susceptible to shorting out the motor.  Based on some research with these manufacturers and a number of customers using electric drive components, the greatest risk remaining and most prevalent source of failure is at the point of connection. No amount of technology can eliminate the fact that water and electricity don’t mix well. Despite tremendous advancements, the harsh environment of a tunnel car wash seems determined to help water wear down a path to sensitive electrical components. Constant motion, varied detergents, and drastic temperature fluctuations continue to frustrate many attempts to prevent water intrusion, so the number of short circuits and problems remain significant.

Electric Drive to the Rescue

There’s no question that those of us with long memories and livelihoods in this industry have a natural tendency to shy away from placing electric motors in our tunnels. That said, there’s more benefit to using today’s VFD controlled electric drive components than a slightly reduced monthly electric bill. The other side of electric drive energy efficiency is an overall reduction in electrical requirements of the entire site. There are many reasons to add wash equipment to a tunnel after its original construction. Whether you’re looking to eliminate labor or improve wash performance and consistency, often the first barrier to adding equipment is that many locations are already at capacity for the electric service in the building. Rather than upgrade the service, it is sometimes more economical to convert some items to electric drive to free up service for the additional components.

Additionally, this is also a popular path for the increasingly common conversions of in-bay automatics to mini-exterior tunnels. It’s often possible to drive all the new tunnel equipment electrically with the existing electrical service.  This allows the operator to modify their business model with minimum cost and plan the next expansion when it is affordable.

In-Summary

Although a true admirer of the engineering advancements and potential of using electric drive components in a conveyorized wash, I’ll never be able to escape the belief that what can go wrong, will go wrong. To me, the risk of using electricity at a car wash goes up as you get closer to the ground. I believe it’s nearly inevitable that one day the conveyor pit will not drain correctly and there is no reasonably priced electric motor that I know of which will survive complete submersion. For operators looking to add equipment without increasing their electrical service, VFDs offer a great opportunity; just make sure you plan for additional training. Being able to keep your car wash open for business demands having the ability to perform routine maintenance and make emergency repairs. Working with three phase electric power in a wet environment presents real risks and liabilities. It should be done by a licensed electrician or certified personnel. At 17, I was very well trained, but I’m not sure that I would let my own son do what I used to do without an actual license. I would however keep the back room stocked with spare motors.

Weather Trumps All - Northeast Rollercoaster Breaks Records

Interview with Fred Frattaroli, Owner Triangle Car Wash

By Anthony Analetto

Just when you thought it was safe to assume the worst, it seems car wash traffic and profits are spiking in several regions of the country, most notably the Northeastern United States. For over six years, operators in these states have been in dire straits. First, horrible weather patterns were made worse by four dollar a gallon gas. Then, gas prices start to drop, but only because the entire world entered an economic recession. Now, defying the downturn, many operators in the Northeast are seeing their best numbers in years and there’s no shortage of washes reporting record sales. There’s cautious optimism and even a little bit of enthusiasm coming from one of the most difficult places to wash cars for some time now.

So what’s going on? For this, I called an old time friend, amateur meteorologist, and veteran car wash operator with 16 locations throughout Pennsylvania. When you ask Fred Frattaroli, owner of Triangle Car Wash, how he runs his business with locations separated by up to 150 miles, he’ll famously answer “poorly”; something that anyone who knows him realizes is very far from the truth. Fred is one of those people who make things happen. While many plan to do things, Fred’s the guy who just does it.

For the 45 years Fred has been a professional car washer, he has tracked the weather. I’m not talking about checking the weather report to plan staffing, he’s kept detailed records. He has calendars for the last 30 years where he can pinpoint precipitation, wash volume, and even the water per car used at each of his locations. On top of that, Fred is a savvy businessman with a keen knowledge of real-estate – who better to analyze the situation?

I want to thank Fred for taking some time to share his ideas on weather, the economy, and consumer trends in car washing. I’ve included several excerpts from our conversation below.

Analetto: Are you experiencing the spike in volume being reported by many operators in the Northeast?

FRATTAROLI: It’s been absolutely wonderful. All 16 of our locations are up. At some sites we’ve washed more cars in January of 2009 than we washed in the first quarter of 2008. What more is there to say?

Analetto: For starters, how about why you think traffic is up?

FRATTAROLI: No doubt about it - there is a lot going on these days. That said, I’ve been doing this for 45 years and there’s one thing that always holds true. People don’t wash their cars when it rains. Our last really good year before now was in 2002. That year we had 108 days of measurable precipitation with 49 of those days on weekends. It’s been mostly downhill from there with a couple of decent periods. Last year, our worst, presented 177 days of precipitation with 78 of those falling on weekends. With only 52 weekends per year, 78 rainy weekend days doesn’t leave a lot of room to wash cars.  Our washes are all in smaller markets. Unless we have snow on the ground, it’s hard to make up for a lost weekend. We were repeatedly seeing five, six, and even seven days in a row with partial rain. Try making payroll without any income for a week. It’s not pretty. So far in 2009 we’re getting precipitation but it’s not continuous and the weekends have been decent. In January we had 12 days and in February 9 days of precipitation. March has been good too. Last weekend for example, Friday and Saturday were what I call 60% days, meaning 60% of the day was clear and sunny. Sunday was a 10% day, but after a strong Friday and Saturday it’s easy to take.

Analetto: Have you really tracked and documented your daily weather for 30 years?

FRATTAROLI: I don’t think you can be in this business and not track the weather at least mentally, if not in writing. To show you how much I like to aggravate myself, I’ve been tracking weather for at least 45 years, but I only have calendars and records for the last 30. Our washes are up to 150 miles apart so the weather isn’t always the same at all of our locations, but more often than not, the weather is similar. Whenever I’m in my office the weather channel is on. There have been occasions I’ve gotten really frustrated and have been tempted to throw my stapler at the TV, but so far I haven’t actually done it.

Analetto: You mentioned that all of your washes are in rural areas; what types of washes do you operate?

FRATTAROLI:  Full, flex, automatics, self-serve, really a little of everything. In my eyes, in all this time, I think the utopia in the car wash business is now an express tunnel with a flex-serve option, along with an automatic and  a couple of self-serve bays so that you’re utilizing the facility 24 hours per day. I believe you must have a conveyor to handle peaks. In my mind, it’s really the only way to go. We have one location that has two automatics and 4 self-serve bays, but we’re about three weeks away from tearing out one of the automatics and putting in a 70 foot conveyor. It’s a beautiful building so we’re leaving it in place and just using one of the bays. It’ll end up with a touch-free automatic and self-serve open 24 hours with the conveyor doing exterior services only. Action creates action so if you have the room; I always recommend installing a couple of in-bay automatics.

Analetto: What are your guiding principles for maintaining revenue during a prolonged period of bad weather?

FRATTAROLI:  You have to be in control of your expenses, especially labor, and you have to do what you can to drive traffic on cloudy days. You also can’t miss a single opportunity to make up revenue. Don’t get lulled into believing that your volumes will be off forever because they can change just like that. You have to know your equipment, how it works, how to maintain it, and how to fix it in an emergency. The other day I went to visit a new operator to find out he closed his wash and went home on a 400 car day because a limit switch broke and he didn’t know you could activate a roller up with your foot. I told him you can’t do that. Get in the car and drive it through yourself if you have to, but you can’t close if you have a line of customers willing to pay you to wash their car. You just can’t do it. The other thing I see are operators scared to put cars bumper to bumper on busy days and really make the most of volume spikes. Equipment today is unbelievable if you know how to use it. I’ll tell you, you got to be optimistic and look for the good things. People today keep talking about unemployment passing 8%. To me that means 92% of the population is employed and able to buy a car wash from me.

Analetto:  What activities do you do to drive traffic on cloudy days?

FRATTAROLI:  We do a lot of marketing, but one easy thing I recommend is putting out a sign at different times promoting some sort of special that you keep changing. I’m not a big fan of discounting and I’ll explain that in a minute, but putting out a sign with a special teaches people to look at your wash when they’re driving by to see what you’re offering.  We’ll do breakfast specials from 8am to 11am or evening specials - we have a sign company so it’s easy for us to change. The point is that customers are thinking about getting a car wash which means they’re one step closer to getting a car wash from you.

Be careful with discounting because it can cost you big time. Although you have to drive volume on cloudy days, you can’t increase volume where there is no volume. Right now I’m discounting for about 32 hours per week but have to be careful that I don’t just reduce my revenue from regular customers who would have paid full price. Don’t forget the purpose of discounting is to carefully build volume, not blindly reduce revenue.

Analetto:  Do you have any theories other than the weather that you think are contributing to your increased traffic?

FRATTAROLI:  Plain and simple, with gas at less than two dollars per gallon, people like their cars again. At four dollars per gallon, even if you could afford to pay, your car became your enemy. Now, for the 92% of the population that’s still employed, getting a car wash is an inexpensive pleasure.  

Getting Back to Basics - Automation, Innovation, & the ICA Car Care World Expo

By Anthony Analetto

President – SONNY’S Car Wash Equipment Division

Getting back to basics seems to be the battle cry of many businesses trying to navigate our current economy. The mood of our country seems to have changed overnight. Reckless speculation has been replaced by cautious deliberation … and, it’s show time!

Only a few weeks remain until professional car washing’s biggest event kicks off – the ICA Car Care World Expo in Las Vegas, Nevada opening April 1^st. It’s professional car washing’s annual opportunity to re-evaluate, recharge, and learn from other operators what is and isn’t working to grow our businesses.

Wall Street, Main Street, and Recession Preparedness.

Conversation with a Bank VP

By Anthony Analetto

President – SONNY’S Car Wash Equipment Division

I’m no economist. I’m no banker. But I doubt I’m the only car wash operator walking around with this tingling sense that I’m either about to be sideswiped by economic forces outside my control or miss out on one of those opportunities of a lifetime.

With two washes in a hurricane prone region, I’m no stranger to hurricane preparedness plans – but what do you do to prepare for a prolonged recession? None of us needed the official announcement that we were in a recession to tell us that business was down. Unfortunately, none of the experts seem able to predict if the storm is about to respond to the bail out programs and dissipate, or is about to hit the proverbial fan.