Driving Car Wash Profits

Increasing profits at the car wash depends on two tasks: drawing new customers and tempting current customers to increase the frequency of their visits. Determining which tactics will best accomplish these feats is where it gets complicated.

Tactics that are working for many in the industry include touting loyalty programs, embarking on water-saving initiatives, participating in fundraisers and following maintenance programs to prolong the life of equipment. And when all else fails, social networking can remind c-store customers it might be time to give that car a good scrub. But perhaps the most difficult hurdle is converting the non-car washing segment of the population to take a whirl in a professional wash tunnel.

“There is a segment of the population that doesn’t wash their cars or they do it themselves. We want to get those people to the car wash,” said Eric Wulf, executive director and CEO of the International Carwash Association (ICA).

For these car wash newbies, the deciding factor could be the fact that a car wash is a more environmental-friendly way to clean their vehicle.

In a recent study, a water conservation specialist from the Lower Colorado River Authority, did an experiment to determine whether home washing or professional car washes actually used more water. The results revealed that self-service car washes use about 17 gallons of water per vehicle. In-bay car washes at gas stations use about 20-40 gallons per vehicle. Full-service car washes can use up to 60 gallons per vehicle. And washing the car at home? That uses a whopping 100 gallons per vehicle, or 10 gallons per minute from the garden hose.

What’s more, some car washes are taking water conservation up a notch, not only to appeal to eco-conscious customers, but to save on costs, too.

Save Water, Save Costs
When it comes to strategies for driving business, Leo Vercollone, president of Verc Enterprises, which operates 21 c-stores and four Briteway car washes in New Hampshire and Massachusetts, has tried it all. Having been in the car wash/c-store business for 35 years, he’s used promotions that have included gas discounts, buy one get one free washes and couponing, among others.

“With the car wash business, the environment is always changing and you have to adapt. Right now with the recession, we are focused on creating value, so we’re running a promotion called Wacky Wednesday where car washes are half price on Wednesdays,” Vercollone said.

The car wash chain is also catering to customers’ increased focus on sustainability.

“The thing we’re pushing now is that we’re environmentally sensitive. We’re making an investment into our equipment so we can make our washes 90% recyclable,” Vercollone said. “As that becomes better known to our customers and as we become better at that, we’ll be known as having a good car wash that is also environmentally sensitive and that offers a good value. As we accomplish this, we will also increase customer loyalty.”

As part of its commitment to being more environmentally friendly, Briteway is also part of the Watersavers program. Watersavers was launched by ICA at the beginning of 2009 to help professional car washes educate customers about their eco-friendly ways.

Just 18 months later the program has more than 300 members with a collective 1,000 locations. To join, car washes must show they reclaim or recycle treated water for future wash cycles and discharge effluent into a sanitary sewer or septic field. The program costs between $49 and $250 annually, depending on the number of locations a company owns, and includes marketing signage and brochures to get the word out to customers.

“You can hand a brochure to your customers that explains, I’m ‘green’ and here’s how and why, and you get the credibility of an association and a program behind it,” Wulf explained.

Vercollone’s goal is to use fresh water only for the final rinse cycle and use recycled water for the washing process. “Right now in two of the communities where we have car washes there are water conservation days and the towns like us because our business model allows us to use less water than the consumer does,” he said.

Wulf by contrast has seen water regulators shut down car washes in times of drought—yet another reason why educating customers about water-recycling can be a powerful businesses tool.

Water conservation also can help retailers save on costs in the long run as reducing water usage also helps decrease sewer and water supply bills. “A payback on a water reclaim system can be as quick as two years and by 3-4 years it’s a net improvement in your bottom line,” Wulf said.

Weathering the Weather
The slow season at car washes depends largely on location. For Briteway in the Northeast, summers are slow while winters are the busiest season as snow and salt keeps cars continuously in need of a decent cleaning and customers find it too cold outside to think about washing the car themselves.

To drive the slow summers, Briteway added an additional half-price car wash day from June to August this year on Sundays and marketed the promotion calling it “Super Sundays.”

On the opposite side of the country, Pastime Auto Wash, a flex-serve car wash business in California, finds early spring and summer to be the most popular time for car washes, while winter rains keep carwash customers away.

Wulf noted that social networking can be a useful tool for reaching customers on slow businesses days. “On an overcast day, which typically isn’t good for car washing, for example, operators can tweet about their special interior cleaning. So on any given day an operator can post about a promotion and it reaches customers at their homes instantaneously,” he said.

Still, social networking remains a niche marketing channel. “It’s not replacing traditional advertising or promotions, but we have a lot of operators talking about social media because it can be instant, and so they are doing great things with it,” Wulf said.

Beyond social media, many car washes are looking to monthly wash programs to increase frequency among current customers. Monthly or unlimited wash programs can encourage customers to return for frequent basic washes and possibly chose to upgrade to a more expensive wash option.

Pastime Auto Wash is driving repeat business in a similar way with prepaid cards through AutoPilot Carwash Control Systems. The program allows Pastime to customize and print its own cards.

“We have prepaid cards that offer buy three washes get one free, buy four get two, buy 10 get four and so on, and we have it customized for the different types of washes,” said Mike Berger, president of Pastime Auto Wash.

The prepaid cards lock customers into multiple washes, which brings them back to the car wash. “I’ve seen people go through one prepaid card in a day. They’ll buy one and then wash the cars of everyone in their house,” Berger noted.

The cards come in handy, especially when it comes to Pastime’s Helping Hands fundraiser program, which it started two years ago. Through Helping Hands, Pastime partners with local schools, sports teams or other charitable organizations to help them raise money, and they split the profits.

“When we do fundraisers we’ll sell the prepaid cards to the schools for a discount, so we’ll give them the $10 prepaid card for $5 and then they sell the cards,” Berger said.

Most recently, Pastime partnered with a group raising money for a camping trip. “We gave them 200 cards and they had
a week to sell as many as they could. They came out to the car wash with posters and encouraged customers to upgrade their washes. Anything over $10 we donated back to them, so they told family and friends,” Berger said. “We did pretty well that day and they made a little over $400. They also sold soda out front and took donations.”

The fundraisers not only increased the traffic at the car wash, but introduced a range of new customers to Pastime. “To sell the washes they went door-to-door, to businesses and to grandparents to sell them, so it’s free marketing for us,” Berger added.

Maintenance Matters
Keeping car wash equipment in top shape also helps save on costs and lost revenue in the long run. Just ask Tim Jones, president and CEO of Champion Carwash, which operates five locations in Nashville, Tenn.

Last year, Jones was installing some new tunnels at a couple of his locations and wanted to make sure he was able to care for them in the proper way so they lasted as long as possible. He and his wife attended the Sonny’s Car Wash College seminar on maintenance.

“When you invest in your car wash program, you want to make sure you get the most out of it and that you care for that investment. When you train yourself and get your people trained to care for your investment it lasts longer, and you’re going to save money in the long run,” Jones said.

The course gave Jones a better understanding of what he needed to do weekly, monthly, quarterly and yearly with the equipment to ensure longer life. “Now we have those things on a schedule, so we can take care of our equipment to prevent costly repairs, and it prevents us from having downtime where I would be losing revenue,” he said. “Downtime also means you’re losing customers, because if your car wash breaks down and the customers see that, they lose confidence in you.”

Just recently Jones saw first hand what can happen to a carwash if it isn’t well maintained when he purchased a full-service car wash in May. “It was obvious the previous owner didn’t take care of the equipment and so we had to gut all the equipment and start from scratch,” he said.

The new car wash has been up and running since early July, and Jones is confident he’s armed with the proper information on maintenance to keep it and his other sites from a similar fate.

In addition to being diligent on maintenance, Champion Car Wash offers gift cards and a loyalty card where every 10th wash is free. But the most important obstacle is grabbing customers from the get-go.

To stay ahead of the curve, Champion works with Moving Targets, a company that tracks the new customers in a particular market. “Anytime someone moves into the area from outside that zip code, we send them a (coupon for) a free Best Wash,” Jones said. “We try to get ahead of the competition by getting them to come to our car wash first because then they’ll come back. It builds customer loyalty.” CSD

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