Innovate or Die - Interview with Terrance Elder of Triple Play Car Wash in Attleboro, Massachusetts.

“Innovation distinguishes between a leader and a follower” Steve Jobs, CEO Apple, Inc.

Triple Play Car Wash in Attleboro, MA is one of the most impressive car wash facilities I’ve ever seen. Opened nearly three years ago by Terrance Elder, this 3.2 acre property is home to a 157-foot express-exterior tunnel, touch-less in-bay automatic, 7-MPD Exxon-Mobil gas station, 6-Bay Detailing Center, 3-Bay Valvoline Instant Oil-Change, and a 4,500 Sq. Ft. On-The-Run C-Store with a drive-thru Dunkin Donuts and Jay’s Deli. Under Terrance’s vision, leadership, and hard work, his overall business has experienced year-to-year growth of 20% with the oil-change business alone posting a 58% gain. And just as he’s positioned to relax and reap the rewards of his efforts, Terrance is doing the opposite. Over the coming weeks, Triple Play is applying everything it has learned so far to create an innovative new cross marketing system that leverages technology to build loyalty and drive revenue. Having already done the heavy lifting, Terrance agreed to share some of his insights to bring an already successful car wash to the next level. Below are some excerpts from our conversation.

Swimming Upstream - Finding full-serve success by going against the grain

By: Anthony Analetto
Originally Published in AutoLaundry Magazine

Interview with Tim Jones, Owner of Champion Car Wash in Nashville, Tennessee

“If a man does not keep pace with his companions, perhaps it is because he hears a different drummer.”

Henry David Thoreau

Elimination of labor has been the battle cry of nearly every carwash operator I know for as long as I can remember. This passion has inspired equipment innovation and made automated kiosks a prevalent feature at many locations. Our industry has created self-serve carwashes and 24-hour unmanned in-bay automatics. Most new tunnel washes opening are either express-exterior or flex-serves, designed to minimize labor. And the traditional full-serve carwash, with its substantial labor requirement, has fallen from grace for most new investors. Now let’s meet Tim Jones, the owner of Champion Car Wash in Nashville, Tennessee.

Supply Chain - Defending your carwash business against what can go wrong

 By: Anthony Analetto
Originally Published in AutoLaundry Magazine

“Things may come to those who wait ... but only the things left by those who hustle.” Abraham Lincoln

So you’ve already organized your back room. Emergency replacement parts are carefully inventoried. You have a clean workbench stocked with all the tools, fittings, and supplies required for quick repair. Employees are trained to know exactly what to do in the event of a failure with documented procedures. Maintenance procedures are performed accurately and on schedule. You ask yourself, “am I fully prepared to maximize the uptime of my business?” Not always. It’s not uncommon for carwash owners to find themselves scrambling for qualified trade services during a catastrophe. Under the gun to reopen, many are forced to pay premium prices for subpar work.

If you can pull out what I like to refer to as a supply-chain contact book right this second, stop reading and go wash some cars. Otherwise, let’s take a look.

Create Your Supply-Chain Contact Book

What can go wrong, will go wrong. The job here is to make a list of every possible contractor you may ever need to perform service on your property. Start with the basics - a plumber, and an electrician. Next is having a primary and secondary waste water management company, and if they don’t also provide a drain cleaning service, you must have a supplier for that as well. That’s where most carwash operators stop. My recommendation, however, is to keep going. If, for example, you operate automated attendants, search for a local vending machine repair company. Although some aspects of these complicated machines will require service from the manufacturer, many breakdowns result from bill collectors and other problems common to all vending machines, which can often be fixed faster and cheaper by a local service tech.

Also locate service companies for all major support equipment including Air Compressors and HVAC equipment. Make sure they are certified to work on your brand of equipment with same day access to replacement parts. Murphy’s Law states that when the pump on one compressor fails, the motor on your backup will too. Being able to call one company and be back online in a matter of hours can add thousands of dollars to the bottom line.

Last, don’t assume anything. Every equipment vendor and service company offers a different array of services. Most, for example, have emergency welding and fabrication capabilities, but this isn’t a hard and fast rule. Confirm the services available before you have a problem and find contractors as appropriate.

Commercial, Licensed, Insured, and Recommended

Short of time in an emergency, the statement from a friend “I know a guy” can seem like a blessing. Unfortunately, carwashes are typically too complicated for the average plumber or electrician you’ll encounter through these referrals. Whenever possible, look for trades-people with specific carwash experience. Electricians must not only be skilled in commercial wiring and three-phase power, they must have experience in control voltage, not only low voltage controls. Additionally, the average plumber won’t have the necessary skills, fittings, and supplies on hand to service your equipment. I can recall countless stories of improperly insulated pipes bursting. And pipes always seem to leak over expensive computer controls making it imperative that you annually confirm that all contracted vendors are licensed and insured. Speaking of insurance, does your provider require you to use contractors from an approved vendor list? Some do. Trying to get reimbursed on a $30,000 claim isn’t the time to find out that the contractors you used aren’t covered, so conduct your due diligence now.

Negotiate Hourly Labor Rates

How much a repair will cost should never be a surprise. Before approving a vendor to work on your property you must negotiate an hourly labor rate for work performed both during, and outside regular hours. It’s also a good idea to establish payment terms that ideally afford you some time to submit any insurance claims.

Know Your Local Laws

There are two key areas of local law that a carwash owner must be aware of before approving a vendor. The first and most critical involves the handling of waste water. At minimum, these companies must be licensed for grease, oil, and commercial waste. I’ve also heard of requirements for EPA approval and in some municipalities you’ll want to confirm your carry through liability. If for example, the hauling truck has an accident and leaks sewage, you may be responsible for any damages. A scary thought that necessitates your understanding of the insurance requirement of any vendor you contract for these services. Another area of concern involves noise restrictions on before and after-hour work performed on your property. Although the contractors you select should be aware of these regulations and properly insured, you owe it to the success of your business to know your local laws.

Know Your Local Supply

Many emergency carwash repair parts can be sourced at a local industrial supply store. Others have to come from either the manufacturer or a third party vendor specializing in carwash parts. Never let yourself be caught waiting a day for a replacement part to arrive that forces you to close your doors. Solenoids, cylinders, bearings, hydraulic components, and certain pumps, are just a few examples of parts you may not be able to source locally that can be affordably kept on your shelves in case of an emergency.

Summary

The solution is simple. Get recommendations and locate the best talent before you have a problem. Negotiate an hourly labor rate, and establish payment terms with both a primary and secondary supplier. Lastly, request proof of insurance for every supplier and get an updated copy every year. Hiring service contractors in the midst of a crisis is like fighting with your hands tied behind your back. Don’t let it happen to you.

 

Steps to Planning a Remodel - Remaining competitive in an increasingly competitive world

By: Anthony Analetto
Originally Published in AutoLaundry Magazine

“The best we can do is size up the chances, calculate the risks involved, estimate our ability to deal with them, and then make our plans with confidence.” Henry Ford

I’m writing from the 2010 ICA Car Care World Expo where we’re breaking down the booth and packing up the trucks to go home. This year I had the good fortune to be invited by the ICA to present a session titled “Maximize your Property’s Profit Potential - Keys to a Remodel”. Having made similar presentations in years past, something about this year was different. The needs were different. The questions were different. The expectations were different. And what I learned is that more operators are looking to a remodel not only to produce a better product, but to reinvent their brand. To scream out to customers that what they do is different.

Surviving a 4-Year Downturn - Operating in the Black

 

by Anthony Analetto
Originally Published in AutoLaundry Magazine 

 

Interview with Mike Black of Valet Car Wash in Guelph Ontario

 

If Mike Black’s name sounds familiar, it should. As a past president of the International Carwash Association and Canadian Carwash Association, Mike has been actively working to help other carwash operators improve their businesses for as long as I can remember. Finding himself at the hopeful end of a four-year weather related downturn, Mike has managed to navigate Valet Car Wash through this difficult period to post record numbers in the last several months. Valet CarWash, with two flex-serve locations both offering aftercare services, unlimited self-serve wash bays, and express-exterior tunnels, is a prime example of everything that is right about professional car washing today. They’re beautiful locations, and what Mike has done to build and retain his business during the downturn is insightful and inspirational.

I want to extend my deepest appreciation to Mike for taking a few minutes to share his ideas on surviving a prolonged downturn for this article. Regardless of what type of wash you’re running or your current weather or market conditions, you’ll find some lessons on operating in the black from Mike’s experience. Below are some excerpts from our conversation.

Analetto: During a prolonged slow down due to weather or some other reason outside of your control, what’s the single most important recommendation you have for operators to survive?

Mike Black, Owner of Valet Car Wash in Guelph Ontario: As you know, along with most washes in the Northeast, we have gone through 4 years of hell. Now, having just posted our second highest monthly car count in 19 years at one of our locations, I feel like we’re waking up from a bad dream. So far, for the first few months of the New Year, we’ve had the highest car counts in our history. Having washed a few cars, I feel more comfortable talking about how to not only survive a slowdown that’s outside of your control, but how to actually come out of it stronger, and with a larger share of your market. But before I get into all of that, my first recommendation is probably what you’d expect – you’ve got to cut every expense that makes sense.

The other day however, when a colleague called to ask how much I was paying for a drum of drying agent, I realized that there’s a lot of room for interpretation on “what makes sense” when talking about cost control. I don’t know exactly what I pay for drying agent and it’s honestly not my primary interest. I have my equipment dialed in to deliver a consistent wash, have long term relationships established with detergent suppliers, and know to the cent how much it costs me to wash a car at each service level. There’s only so much time in a day. When your business is off, putting forth a lot of effort to shave pennies on variable expenses like detergent doesn’t make much sense. You’re simply not washing enough cars. Personally, I’d recommend first getting control of your labor expense. Each night I get an email with a detailed summary showing my hourly labor cost per car. I adjust my operation accordingly and couldn’t run my business without this information. After that it’s important to see if you can acquire better financing from private lenders. Once that part of the business is in order – spend every ounce of energy coming up with ways to get people on your property to get a car wash.

I’m a boater. When people ask me about surviving a long downturn in business I tell them to imagine they’re out on the water and the boat springs a leak. You most likely won’t have the tools or material to stop the leak. The best you can do is slow down the water rushing in enough so that the bilge pump can keep up with it. As long as you can do that, you’ll stay afloat.

Analetto: You mentioned looking for sources of refinancing. Where should an operator looking for this type of lending start?

Mike Black: First, understand that there are people out there who’d be happy to invest in your carwash. There are two sides to everything, and a recession is no different. On the one hand, money is tight, hard to get from traditional lenders, and operators are struggling under debt payments.  On the other hand, because of the low interest rates on invested money, there is tons of private money out there looking for a secure place to invest with a decent return. I'm talking about private individuals, charities, trust funds, estate money, and the like. These people can't survive with a 1% return from conventional investments. If you look, you’ll find some that are more than happy to take your property as security with a 7 - 9% return on their money. Interest rates may be slightly higher, but in many cases terms are longer, they are not looking for much of a principal return, providing you extra flexibility to stay afloat. By using contacts such as lawyers, accountants, real-estate agents, and even customers - you can find these people. We replaced two of our bank loans with private money last year. That move saved us over $200,000 a year in payments and eliminated the tedious reports and projections that the banks needed.

To be completely honest, I started keeping an eye out for alternative financing years ago when we had just opened two washes. I kept a list of potential lenders. I’d think of a person or different financial avenue and follow up. One financing opportunity I found was with a local credit union. With a little work, you will discover that a carwash can be a very attractive proposition for the right lender.

Analetto: What marketing activities were most effective in driving traffic to your car washes during the 4-year slowdown?

Mike Black: There’s really no magic bullet. You have to do lots of small stuff and keep figuring out new ways to get people onto your property. I remember stapling 1,000 business cards with a coupon code for a free express wash to copies of our wash menu. Driving to every realtor office I could find, I’d walk in, ask how many agents worked in the office, and leave a free wash for each of them.

A carwash is dominated by fixed costs, meaning that, to a point, it costs me the same amount of money whether I wash cars or not. Giving away free washes certainly has a downside, but it helped me keep the floor wet, and worked to continuously build our customer base. Now that the weather has changed, other operators I talk to are having decent months, while we’re breaking records! I attribute our current situation to all the work we did when business was off.

Analetto: Would you mind sharing some of the other advertising activities that worked well to get people on your property?

Mike Black: Especially now that the recession is in full swing, it’s important to realize that it’s not only the carwash industry that’s getting hurt – everyone is looking to hold onto their customer base. It’s important to search for advertising opportunities. One example I remember was with the newspapers. Running regular ads was expensive, and whenever we did run an ad, more often than not it would rain. Then, one local newspaper started holding auctions. Local businesses could auction a product or service for free. The newspaper kept the proceeds, and gave the business the full retail value of the auction in advertising credits. We auctioned 11 unlimited wash passes with a retail value of $4,000. Customers learned about our unlimited wash pass program from the auction, it cost us very little, we got 11 new customers, and a $4,000 budget to drive traffic with advertising in the paper. Everybody wins. Now we’re doing this with several other newspapers. Some of the local radio stations have also started a similar program where every Wednesday they have an online sale of gift certificates at 50% off. We donate a $100 gift certificate, get visibility from the auction, and $100 in free advertising on top of it. Basically, the rules have changed. There are a lot of other companies in the same boat – struggling to stay afloat.

We’ve been able to run cross-promotions with other local retailers where we offer coupons to each other’s customers. One of the local oil change centers has driven so many people to us that we’re now giving a free car wash with every oil change. The other thing that’s big is bartering services. If you need your place to look good, but can’t afford landscaping, try giving a local landscaper free passes that he can give to his customers. You’ll pick up more business from their customers, and your site will look more inviting to draw in more traffic.

Also, don’t underestimate the huge upside of offering fleet accounts. Whether it’s Joe’s Plumbing, or Mary’s Catering, we go out and bang on the door of any business with a truck that comes onto our property. Once they sign up, they get a free upgrade to the next wash package, a fleet card programmed only for the wash they select, and convenient monthly billing. Small businesses understand the value of keeping their cars clean but need to control cost. By being able to deliver a tremendous value, we get a regular customer that’s connected to the community and loyal for life.

Analetto: Wow – you just threw out example after example of marketing promotions to drive traffic, is there one common thread that ties everything together?

Mike Black: Yes. You have to build value. We did a package called the “Econoclean” which gave an $8 discount on interior services on Tuesdays, Wednesdays, and Thursdays. Normally $28 for an interior super clean with an express wash, the discount made this package only $20 which has been a magic number. These normally slow days are now some of our busiest. People stop in and ask “Don’t you have some special promotion today?” Everyone is looking for something. When you deliver a great value they talk about it.

We’ve had similar success with our “Kruz Klean - Unlimited Family Wash Pass”. Rather than try to control the pass to a single vehicle, we let customers register two cars for our middle package at $29.99 for the month. Kruz Klean has become a brand within the brand with its own logo and sticker. When the customer puts their card into the automated attendant it gives them a special menu with significant discounts. And now I’m going to other retailers and asking them to give my Kruz Klean customers exclusive discounts. The customer gets a tremendous value, and I get to sleep easier knowing that the revenue from the pass now pays the mortgage at one of my properties whether I open or not.

Analetto: You’ve told me before that you never changed your hours or closed early during the last 4 years that were slow. Can you tell us how you managed to do that?

Mike Black: At the end of the day it comes down to the customer service. At Valet, rain days are “practice” days when we do our training, maintenance, and preparation for the next “game day”. Except Christmas day and on the occasional brutal snow storm when we’ll close an hour early to get employees home safely, we never shut down. We were so slow at times over the last 4 years that we had to create training programs just to keep busy – but we’re in a better position now because of it.

Today’s customer is often tired and in a bad mood. If he can leave your site feeling like a winner, with respect, having received a great value – that’s the Holy Grail. When you deliver that level of customer service, you’re not competing for a carwash, you’re competing for the $10 that customer has in his pocket to spend on feeling good that day. We may be educated in carwashing, but the slow times are a chance to read, learn, and train in customer service. You’ve got to train in the downtime to educate yourself and your employees to be ready for the next “game day”.

Analetto: You’ve talked a lot about getting people on your property. What have you been doing to get more revenue from them while they’re there?

Mike Black: The real question is what haven’t we done. For us, vended drinking water has been a great seller. We installed a free standing, self serve, RO water filling station with an ozone rinse for the cap & bottle, put out a great big sign on the road that we refill 5 gallon jugs, and customers pull right up. It’s convenient for parents who can back in and fill the jugs while the kids stay in the car watching TV. And when a local business stops in to fill 10 jugs at a time, we’re out there asking if they use our car wash, free coupon in hand.

Windshield wiper blades are another great add-on. We offer free installation and when a customer buys blades we make a big production out of it. The attendant pulls out a tape measure to double check sizing, puts a towel down on the hood, lifts the wiper arm and places another towel on the cowling. By the time we’re done, the next customer in line is asking us to replace his blades too!

Analetto: So what’s next? What are you doing now to be better prepared for the next slowdown?

Mike Black: The most important thing I’m doing is building ways to communicate directly with my customers. You’ve got to embrace the new stuff. You’ve got to get onto Facebook and the other social networking sites. I don’t do this myself, my employees do! My job is just to make sure it gets done. We also recently signed up for a text marketing service. Customers subscribe by sending a text message to a number we advertise to receive special discounts. Once we get the database built up, we can send a promo to every subscriber’s phone in a matter of seconds. Now when it’s pouring rain, I can send out a text message with a code for a free set of our discount wiper blades with an interior detail. Once on my property I might be able to upgrade their wiper blades to our premium brand or possibly offer additional detailing services. Most important is that I’ll have an opportunity to make that customer feel good about getting their car detailed on an otherwise wet and dreary day.

Conditions like weather and economy are outside of our control. What you have to remember is that everything you do during a downturn can put you in a better position when things improve. Over the last four years, it seemed at times like we weren’t getting anywhere. Now it’s obvious that everything we did prepared us to take advantage of the change in weather we’re getting now. As difficult as these times are, a good operator will come out more successful at the end because of what he does during the downturn.

If it’s for free, it’s for me - Increasing your average ticket

By: Anthony Analetto
Originally Published in AutoLaundry Magazine

In just a few weeks, thousands of car wash operators will converge in Las Vegas at the ICA Car Care World Expo looking to find answers. In order to do that however, you first have to define your problems. Over the years, I've discovered better results at trade shows when I prioritize and hunt down the best solution to the single biggest issue facing my business. Coincidentally, on most years that I do this, the one solution I’m looking for turns out to be the same struggle everyone is talking about at the show.

Speaking with colleagues, I’ve found that most of them seem to think that finding ways to hunker down and reduce variable expenses like labor will be the only thing on people’s minds this year, in Las Vegas. Coming in a close second, many operators are certain that overcoming financing woes is going to steal the show. Personally, I’m looking for ways to solve my biggest challenge – how to raise my dollar per car average from my existing customers. Specifically, I’m looking for ideas in two areas. First, I want to find the best practices in menu layout, package design, and price differentials to raise ticket averages. Second, I hope to discuss customer loyalty program ideas with managers that have had success using them to keep their patrons coming back. I may be wrong, but seeing as the show is in Las Vegas again, I’m putting my money on those two topics to dominate informal discussion. Let’s take a look.

Delivering Value – Wash Package Design & Promotion

Always a critical number, with the growing percentage of operators having already reduced labor at the wash via automation or format change, the one number on everyone’s mind is the average dollar per car. There’s plenty of debate already going on about the viability of low price points in our industry. For my purposes, I’ll steer clear of the actual dollar amounts and focus on an art form that needs more open discussion. In a nutshell, we’ll be evaluating the optimal price differentials between wash packages, and which services delivered enough value to current customers for them to jump to the next higher package. Basically, how can you elevate your dollar per car average?

My next question, recognizing that car washing is not a commodity, is to discuss the most effective ways to use signage and wording to show customers that the incremental value exceeds the additional price paid. It’s a sensitive subject. Mastering it often becomes a competitive advantage of a business in their market. Now ask yourself, if you consistently produced a higher dollar average per car than a similar wash down the street, would you want to talk about it with your competitor? That’s the beauty of the ICA show. Once a year you have an opportunity to get together with other operators from all over the country. Also, there’s a firm rule in every business that you must deliver a consistent product and customer experience to be successful. Randomly changing your wash menu to try different pricing and service models will merely alienate your existing customers. With trial and error not being a viable option, my recommendation is, sharpen your pencils and head out to the trade show with the questions you have. Here’s a list of the things I’m bringing to this year’s expo.

Good-better-great-great-ultimate:

I see this pricing model more often these days. At an express-exterior it often plays out with a $5-$7-$9-$9-$12 structure. The actual prices would obviously vary by market. I’ve also seen it with only four packages, but the concept remains straight forward. You have a value priced offering to attract customers. You have two packages at an equal price in the middle that offer a distinct extra service such as tire dressing or triple foam conditioner. Finally, you have a top package that offers the combination of those services plus two extra services such as an underbody wash and a total body protectant. With the pricing scenario above, each of the middle packages, extra services have a $2 value. Buy them together and you have a combined incremental value of $4, or $11 for the wash. The ultimate package in this case provides an underbody wash bringing the perceived value to $12. That last extra service in the top package, total body protectant in this example, is promoted as a free bonus. My questions are; Where to best put each extra service” and “Which one of those that are offered on the ultimate package as a free bonus demonstrates the greatest value to push customers to the top”? Is it total body protectant, tire shine, triple foam, or something else?

Less is more:

It’s not uncommon for a car wash to have up to 6 progressive wash packages with a la carte services to boot, but the trend toward simplified menus means making some careful choices about what you offer. I’m hoping to gain some insight from operators who have been able to use them to their advantage. There are operators who’ve been extremely successful over the years by offering only a single exterior wash option. On the in-bay automatic side of the business, it’s very common to see a three package, good-better-best, scenario. But what’s new is that these limited menus seem to be gaining popularity at express-exterior and flex-serve sites. One interesting menu that I’ve recently seen at an in-bay automatic promotes $5-$7-$8 services. Another runs with $5-$7-$9. I’m curious about whether anyone has tried these, or similar pricing models at a conveyorized wash. Which one has the highest dollar per car average? Are customers more likely to buy the $8 service with a $1 price disparity resulting in a higher average than a $2 disparity to the $9 top package? Inquiring minds want to know.

If it’s for free, it’s for me:

Free Vacuums! Buy four get one more! Free with a fill-up! Free incentives are certainly not foreign to the car wash industry. But with more operators taking advantage of the growing effectiveness of direct coupon offers to an increasingly frugal customer to drive traffic, what are the best offers to promote? Are washes seeing better results offering a coupon for a free service such as total body protectant, or a discounted wash package?  How effective is it to offer free services or guarantees on the top wash package to make the buying decision easier? Is anyone giving a free 48 hour guarantee only on the top wash to take away the concern of making the extra investment? If you give a free wash after 10, how about making the top wash count double – meaning the customer gets a free wash after 5? Coming up with ideas is easy. Executing, testing, and evaluating them is a challenge. At this year’s ICA show, I hope to come back with some tested ideas to leverage the power of the word ‘free’ in raising my dollar per car average.

The perfect VIP:

Loyalty programs and their endless combinations of incentives are another hot topic I expect to discuss. The trick is offering the right combination of perks to keep customers engaged and coming back as well as providing you with incremental profits. Wash discounts, gift card discounts, and extended clean car guarantees are the norm. How can you really stand out from the competition? New technology has given us the ability to manage monthly subscriptions using radio frequency identification (RFID) tags and point-based loyalty programs tied into direct email and text messaging with clients, but do these products deliver results? This is exciting ground and one of the areas I expect many operators exploring this year in Las Vegas.

Summary

Times are tight but the opportunities are huge. If you don’t make it out to the ICA Trade Show this year, make sure you plan to attend one of the regional shows and make sure to contact your network of colleagues after the show to see what you missed. For those of you who don’t make it to Las Vegas but are dying to try various pricing models at your wash, I’ve been playing with a new idea that appears to be working. At a nearby location that offers a Whacky Wednesday promotion, they’ve experimented with offering a completely different menu with daily specials on that day, using varying combinations of extra services and price disparities to test ideas. It gives them an opportunity to evaluate signage and wash packages designed to increase their average dollar per car without disrupting their regular business. In these difficult times, having the ability to incorporate lessons learned to raise your average ticket without disrupting your business is absolutely priceless.

Where’s Oscar? - Balancing labor reduction and operating flexibility

By: Anthony Analetto
Originally Published in AutoLaundry Magazine

Cold, rain, or recession - take your pick. There is no shortage of inconsistent patterns wreaking havoc on the predictable hours to keep your doors open. It’s a catch 22 situation. If you close early or open late on questionable days, you risk alienating loyal customers who show up expecting to get a car wash. If you stay open during normal hours on questionable days, then you risk losing your shirt on excessive labor costs. To build yourself some breathing room, the answer is clear – reduce labor in the wash process. Each reduction in the headcount requirement to open your doors results in greater flexibility to plan your business. Although investing in equipment is the easy way out, you may not have the capital or access to financing to make that an option. So, what’s next? Go back to the basics. At its most fundamental, getting a clean, dry, shiny car is a balancing act between five functions: mechanical action, chemical concentration, water quality, temperature, and time. Increasing one function reduces demand from the other four, laying the foundation for reducing labor without necessarily adding equipment.

I’ll be addressing each area below, but first – where’s Oscar? This story, and lesson, comes from a full-serve operator who several years back upgraded his CTA, added a tire brush and set of wraps, and eliminated his prep labor. Cars were coming out cleaner, faster, labor reduced, but volume was dropping. Speaking with several customers, the manager quickly realized that loyal patrons didn’t notice the extra equipment. They only registered that Oscar, the man who had prepped their car from front to back for over a decade, was gone. When asked how they liked the wash, they replied with the question “where’s Oscar?” Running down to the local sign shop the manager put up a huge sign with the headline “Where’s Oscar?” The sign explained that their loyal patronage had allowed the wash to invest in new equipment to give them a cleaner car faster. It then asked them to say hi to Oscar at the exit end where he had been re-assigned to wiping down cars. While looking to eliminate labor, don’t overlook that we’re not in the business of washing cars ­- we’re in the business of satisfying customers. Satisfaction comes from both the product we deliver and customer experience at our sites. Labor is a big part of that experience. Use caution. Cutting prep and slowing the conveyor on Wednesday and then adding back the labor and speeding up production on Saturday may be a recipe for disaster. Wednesday’s customer is unlikely to appreciate that the conveyor was slower and that their car was actually cleaned better. More than likely, they’ll ask themselves “Where’s Oscar?” And either come on Saturday or not at all. That said, let’s take a look at each function at the wash.

 

Mechanical Action
Increasing mechanical action, either from equipment or labor, will produce a cleaner car. Although adding, repairing, or upgrading equipment is often the first line of defense in reducing labor costs, there is a new trend you may consider – self prep. Albeit somewhat ironic, many operators are reporting back with dramatic improvements in customer satisfaction by giving them the ability to prep their own vehicles. Go figure. It’s all in the presentation. Putting out a bucket of soapy water with a brush and a handwritten sign “Self-Wash” will most likely work against you. What’s worked well however is setting up distinct self-serve stations with professional signage and equipment to address excessive grime conditions that customers may not expect a standard automated wash to remove. Bug-Removal stations are the most common, but if that isn’t relevant for your location try something creative. Possibilities include Spot-Removal, Tar-Removal, or some other hard to remove condition. Although self-prep stations are most prevalent at express-exterior locations, if you are a full-serve or flex-serve that has tried them as a way to combat labor expense I’d love to hear from you.

Detergent Concentration
Focusing on the goal of reducing labor while maintaining wash quality, evaluate detergent concentration from two directions. First look at the type of detergents used. Second ensure the consistent concentration of their application. No amount of mechanical action will deliver consistent results without the right chemistry reaching every surface with an appropriate dwell time. So, before immediately looking to substitute prep labor’s mechanical action with that from equipment, evaluate if detergents are being applied properly. The cost of replacing nozzles or even updating your application manifold technology is far more affordable than adding equipment or labor. Once you’ve confirmed that detergents are applied in the proper concentration and consistency at each area of your wash, invite your detergent supplier in for an updated evaluation. Technology changes. Wouldn’t it be nice to discover that you can replace your prep labor with a newly designed application manifold and a few different detergents? It’s worth taking a few hours to evaluate.

Water Quality
Like detergent concentration, increasing the quality of water decreases the demand for the other functions of a wash including our target, mechanical action in the form of labor. Do you know the pH and hardness of the water entering your wash? You absolutely must if you want to maximize your profits in this business. Starting with pH, the assumption is that city water is neutral, or pH 7. Recommended detergent concentrations are commonly based on this value. Problems start with the fact that as the pH of your water supply becomes higher or more alkaline, reactivity of most detergents or pre-soaks weaken. The truth is that many city water supplies are intentionally alkaline, often with a pH over 8. While this practice helps reduce corrosion in the water mains, it also reduces the effectiveness of your detergents. That means if you increase the concentration of your detergents to match the pH of your water supply you’ll get a cleaner car without adding mechanical action.

Hardness is the other aspect of water quality that must be addressed. Softer water makes detergents more reactive. Any water with a hardness of 1 Grain or 17.1 PPM is considered hard and should be addressed with a softener to improve wash performance. If your detergent concentration is set out of the box with the assumption that your water is softer than 1 Grain with a pH of 7 and that isn’t true, then you have an easy fix that could reduce your need of labor in the wash process.

Water Temperature
Whether it’s a dishwasher, shower, or car wash, hot water helps detergents and pre-soaks become more active. When looking to eliminate prep-labor on a tight budget, don’t overlook the benefits of heating your detergents. Relatively inexpensive, both in equipment and utility consumption, this practice can deliver positive results provided you don’t have any issues with detergent concentration or water quality.

Time
Slower conveyor speeds produce cleaner, dryer, cars, regardless of your equipment package. At an exterior only wash, it makes a lot of sense to set the conveyor speed to match the wash quality, service time, and cost of production you plan to deliver and forget about it.  Full-serve, however, is different. Running the conveyor at a fast speed when volume is slow merely creates an unnecessary bottleneck in the wipe down area, assuming you’re running with a reduced crew. Learning how to develop a rhythm of balancing labor and adjusting conveyor speed to changing wash volume is an art form. Once you can reliably manage your conveyor speed to a point it makes sense to be open on questionable days, you’ll be poised to take advantage when the sun decides to shine.

 Summary
That’s it. Mastering the balancing act between mechanical action, chemical concentration, water quality, temperature, and time is the foundation of reducing your labor requirements. Don’t get stuck in a rut. Conditions change. Just because your water quality and chemical concentrations were correct the last time you checked, don’t assume they still are. Often the first reaction to problems in wash quality is to prep vehicles. Adding labor must always be the last thing to do after every other possibility has been exhausted. Removing labor must always be the highest priority to operate profitably and gain flexibility in scheduling. And, when changing anything, don’t forget to ask yourself “where’s Oscar?”

Not Valid With Any Other Offer - Revisiting your marketing plan in a changing economy

Like most businesses scrambling to keep ahead of our current economy, the only rule that seems consistently true is that everything is changing. Your customers’ needs and the criteria for their choices are changing. Media companies are innovating new ways to reach customers, and in some markets, the cost of traditional advertising is plummeting. When taken together, a savvy car wash operator is presented with an opportunity to increase their market share.

In the words of Winston Churchill, “If you're going through hell, keep going.” Assuming you’re already delivering a clean, dry, shiny car with a reasonable amount of labor, “keep going” means dust off your marketing plan. It means aligning your competitive advantages with what your market desires, and advertising it to them. Here are a couple of ideas to get you started.

Fish, or Cut Bait - Jumping on the loyalty program bandwagon

 By Anthony Analetto
Originally Published in AutoLaundry Magazine

According to Thomas Edison, “genius is 1% inspiration and 99% perspiration.” For everyone who has managed to sweat out the events of 2009, it’s time for the annual challenge to organize your best inspirational projects to grow your business over the coming year. One topic that seems to be blipping on radars all over the car wash industry is the need to implement a customer loyalty program.  After you complete the 1% inspirational part of the task and decide that you do indeed want to increase the frequency and amount of money your best customers spend at your business, the question becomes ‘what does the other 99% of the job entail?’ The potential is huge. Just take your average monthly wash volume and multiply by 20%. According to the magic number from the 80/20 rule that provides you with an approximate number of existing customers likely to be influenced by an effective loyalty program. Now take that number and predict that 20% may wash once more in a month due to your efforts and the other 80% could spend 20% more if your incentives are strong. Chances are you’re looking at an annual number in the tens of thousands of dollars, which is why everyone is talking about building customer loyalty programs. If it was as simple as putting out a punch card offering the tenth wash free, you wouldn’t have read this far. If it was as easy as buying a fancy POS system then nearly every car wash in the country would already have one – we’ve already established that the numbers make sense. Unfortunately it’s not that easy and having the right tools only gets you to the dock. Whether you ultimately fish with your loyalty tools or just cut bait demands a lot of sweat. So let’s take a look as some fundamentals before I race into a nuts & bolts discussion on loyalty points at the end of this article.

 

Thank Your Customers
In a nutshell, a loyalty program is simply a formal process to say thank you to your best customers. Why wait? Why make them jump through hoops? Before developing a formal program make sure you and your staff consistently walk up to customers, shake their hands, and say “thank you for visiting our car wash, we’ve seen you wash here before and want you to know how much we appreciate your business.” Giving a sincere thank you is powerful, and arguably the best loyalty program you could ever implement. There’s a restaurant near our office where a group of us eat three to four times a week. Great food. Great service. And a loyalty program that makes me want to take my business elsewhere. For a while, during each meal, the waitress would throw down a new punch card without saying anything.  I would throw them in the center console of my car and forget. One day I brought in the whole stack, asked that they combine them, and was told “we can’t do that.” After some joking, the manager agreed to combine the cards and honor the free lunch but still never thanked us for our business. One thank you, one time, would have more impact than even the most sophisticated loyalty program. Establishing processes and training to ensure staff consistently thank customers requires work. If you haven’t already, pick up a copy of Raving Fans by Ken Blanchard and Sheldon Bowles to spark some ideas on accomplishing this.

 

Be Known for Something
Cultivating loyalty from your customers is impossible if they don’t first have a positive memory of their experience at your car wash. Grab onto a competitive advantage, feature, or activity at your wash and promote it on every advertisement and sign you create. You might be the fastest, cheapest, greenest, or offer a 48 hour rewash guarantee, but it means nothing if your customers don’t know about it. Over the years I’ve seen operators offer proprietary wax services complete with smoke machines, free snow-cones with every wash, and one of my all-time favorites – the pumpkin promotion - which I shamelessly copied. Each year this operator went out and bought $2,000 worth of pumpkins and created a pumpkin patch at his full-serve wash. Every customer that bought the top package was able to pick a free pumpkin. Kids in the cars driving by would point and ask their parents to stop for a car wash. His sales and average ticket skyrocketed, and people remembered it year after year. The point is that in order for a loyalty program to work, you have to be known. Whether it’s your logo, branding, stellar customer service, a red carpet on the ground, wash quality, or a patch of 1000 pumpkins - you have to stand out.

 

Be Consistent
Once started, loyalty programs demand absolute commitment. They can only be discontinued by rolling them into a better reward system. Although it’s obvious that once you give out a punch card that you must always give out punch cards or risk alienating the few precious customers that collect and redeem them, consistency should apply to every promotional effort. If for example, you heavily promote a “Whacky Wednesday” or “Early Bird” special and see huge volume spikes week after week, you are successfully rewarding your loyal repeat customers by default. Don’t stop. Don’t suddenly raise the price. Be careful. Taking away these perks that your customers expect can have a greater negative impact on your business than if you never offered a discount in the first place.

 

Make it Easy
Now that you’ve made the commitment to implement and consistently deliver a loyalty program, look to one of the available technology solutions to make it easy for both you and your customer.  To drive up your ticket average and increase your volume, you’ll want to reward customers more frequently with incentives that are compelling yet make sense, financially, for you. Computer-based point systems make this easy. Here’s an overview of the basic loyalty programs and how they work.

 

Points Program: Very simply, you’ll establish how many points your customers get for each dollar spent. Next, you’ll define rewards that can be redeemed with points that can be printed automatically on receipts. At its most basic level, it can simplify the common ‘buy 9 car washes and get the 10^th free’ program for both you and your customers. They are infinitely customizable however, and you can easily use points for offers to drive sales at other profit centers such as detailing, lobby sales, quick-lube, or premium online extra services.

Prepaid Cards: Most POS systems make it easy to sell and track prepaid card sales, but gift cards are not only for the holidays. Many operators will discount these cards as a form of loyalty program and some locations use discounted prepaid cards in lieu of a fleet program, eliminating difficult invoicing paperwork.

Prepaid Items: Instead of a prepaid dollar amount, consider selling a prepaid group of services. This can be done as a washbook or a prepaid card with a balance for items such as ten washes for the price of eight.

Fleet Wash Programs: Waning in popularity due to extra paperwork and invoicing procedures, establishing discounted fleet wash agreements remains a great way to reward loyalty in this valuable market. Creative branding of prepaid cards for specific markets, such as a special discounted “Realtor” card, can be an effective way to show appreciation for these regular washers.

Gate-Keeper Campaigns: Loyalty program software can also be used to reward loyal gate-keepers to otherwise inaccessible audiences. When you want to reach employees at a nearby company or members of local social clubs, carefully negotiated programs that track and reward the organization for each client they send over can be very effective. Rewards may be in the form of free services or gift cards for the gate-keeper, or possibly a group discounted rate.

Reward Client Referrals: These programs give your current clients an incentive to become evangelists for your business. Not only is it an incentive for new customers, but it also acts to reinforce your original customers’ attachment to your business. One possibility would be to reward members of your existing unlimited wash club with a free detailing service for them and a new friend that joins when they both prepay for an entire year.

Fundraising Programs: Filled with the potential to build bonds with the community you serve and even define what your car wash is known for, fundraising is a complex topic that warrants detailed consideration. Most POS systems have functions using gift cards or scan readable coupons to make executing these programs easier for both car wash owners and non-profit organizations.

Summary
Before jumping on the loyalty program bandwagon, first make sure that you truly believe in it. Although a tremendous opportunity to drive volume and revenue, your program will only be as effective as the sweat you put into it.