I’ve moved to a new server! Visit www.washideas.com

There are a lot of big changes I’ve made to the blog – namely two things worth talking about.

1) I’ve moved to my own WordPress server – please visit www.washideas.com for all of my latest posts and information.

2) I’ve started what is turning out to be a very successful podcast all about the car wash industry! The shows are recorded weekly and are available for download by midnight every wednesday. Listen to the pilot episode by clicking here.

My Top 10 Recommendations for 2009

I Present to you the Top 10 ways in which to improve profitability and sales on a budget in 2009.

Because of the economic conditions that we are faced with in the car washing industry it is time to follow the lead of our own customers. Now is the time to take care of the car(wash) that we already have and focus on getting the most out of it we can. There is far too much waste on labor, lost sales due to equipment failures, and not nearly enough attention on marketing and finding ways of appealing to the next generation of wash customers.

10. Fresh Paint and New Bulbs – This may seem insignificant but now is the time to realize that those customers that are still washing their cars want a clean and well lit environment to wash their car. Applying a fresh coat of paint and replacing old light fixtures (or bulbs) is a great way to appeal to the consumer populace that assimilates 83% of their information visually.

9. New Equipment Decals – Now is the time to contact your equipment dealer and order up some new equipment decals to spruce up the hardware that you already have. For a small additional cost wash owners are also turning to replace their old peeling decals with new customer equipment decals as part of their business branding efforts and onsite marketing and promotions.

8. Targeted Marketing Campaign – Every community has it’s own form of “New Neighbor” program for people moving into a new area. These are those packets you get in the mail containing coupons from local businesses and information about the community. Wash owners have had great success when offering a valuable promotion to those new potential customers moving within 5 square miles of their car wash location. Wash owners such as Robert Greene of Carwash Express in Georgia (USA), offers a redeemable coupon for a free $20.00 prepaid card usable at his location – which has had a great response and according to Robert is bringing in lots of new first time customers to his wash before they visit another wash in town. The call to action here is that you need to start building your customer database ASAP if you don’t have one already. Don’t know where to get started? Get a customer loyalty program that gives incentives for customers to register online through your website. Don’t have a website to collect customer data? You had better get one because a website is a LOT more than just a digital billboard that people find by searching for carwashes on Google, far from it! See my previous article on online marketing for additional details.

7. Join the Chamber of Commerce - This advice is perhaps the one suggestion I hear over and over again from car wash owners that are looking to establish business-to-business relationships. The Chamber meetings will offer many networking opportunities and puts you face-to-face with actual business owners and decision makers. Brett Pace of Swipe-n-Shine Carwash (swipenshine.com) in Murray, Utah (USA) has found a lot of commercial fleet customers at his local Chamber networking events.

6. Remote Wash Monitoring - Wash owners that take advantage of a system that monitors their wash equipment, tracks, revenue, and alerts them to critical situations is a proven way to reduce unnecessary trips to the wash, reduces service calls, reduces employee theft/fraud, and prevents lost revenue from running out of chemical. The reporting offered by these systems also allows for smarter staffing by identifying the slow and busy periods of a wash operation which allows for greater efficiency at the wash.

5. Develop Business-to-Business Relationships - Car wash operations that reach out to businesses in their community as part of their marketing plan find that their peaks and valleys in wash counts are far smaller than those washes that rely solely on consumer washing. Most of these business operations are looking for ways in which to reduce their administration and labor costs starts by finding an automated “Commercial Fleet Program”. Reducing these costs starts by finding an automated solution that leverages computers and software – many times involving a card-based or code-based system of some kind. Increasing business and reducing labor – thats a win-win situation.

4. “Go Green” with Sustainable Chemicals and Practices - Whether you want to admit it or not, car washing AND the environment will be finding it’s way into the spotlight more often in the coming years. It is far more important to be seen as a trend-setter than it is to be a trend-follower in situations like this. It’s a lot like buying a stock when it’s only valued at a few dollars a share (knowing that it’s going to go up in value) and cashing in at a high point. There is a growing sentiment among the consumer populace that is looking for more environmentally friendly services as the years go on.

3. Credit Card Acceptance - Now that we have had a chance to evaluate the spending habits of consumers for 2008 it has NEVER been more clear that credit card acceptance should be one of the top equipment upgrades that every car wash operation needs to consider. Consumers are reducing the amount of cash they carry due to the current economic crunch. On top of the contributing factors of consumers keeping their cash in the bank, the service and retail industry is reporting record numbers of card-carrying customers in the past three years and the numbers are growing every year. Consumers that fall into the age demographic of 16-43 are now falling into the ‘cashless society’ that companies like Visa and MasterCard have been eagerly awaiting. Now that the cat is out of the bag there is no putting it back in – consumers now demand that they can pay for their goods and services with their credit or debit card. Failing to provide customers with the ability to pay with their preferred form of payment in 2009 is going to hasten the loss of customers to competitors that will accept their convenient cards in the bay.

2. Customer Loyalty Programs - I had the opportunity to sit in on the Future of the Industry panel at the NRCC in Atlantic City and listened to leaders in our industry (as both manufacturers and successful operators) and they explained that of all of the challenges for 2009 that car wash owners will face fall into a few specific areas. Wash owners need to find ways of engaging their customers and capturing their business. Two key areas of this involve marketing and retention – the second half of the equation requires technology to step in and automate the busywork. Automation is what keeps the labor costs down and allows a business owner to leverage one of many customer loyalty programs. The panelists made reference to the importance of taking advantage of a prepaid loyalty program, unlimited wash pass program, and commercial fleet business programs. The walk-away is that you must not confuse ‘Advertising’ with ‘Marketing’ – because customers are changing with the times. Advertising brings a customer in for the first time, customer loyalty programs get them to come back a second time to your wash. These industry leaders that were talking to the assembly of car wash owners and operators were very clear about the times that we are in. In 2009 the primary focus of a business is going to be to increase their focus on marketing and customer retention rather than making that the first budget to be slashed or reduced.

1. Raising Prices – Whenever talk about raising prices is brought up amongst wash owners there is a general consensus of both fear and disbelief. Now is not the time to cut your own wrists and build a marketing plan based on “hope” by staying the course and living on reduced margins. Secretly every wash owner wants to raise their prices but is so fearful of losing business it is this very paralysis in the decision making process that leads to nothing happening at all. Admittedly raising prices may not be feasible in some markets, but in MOST markets if you are showing that you are making visible improvements to the wash (see points 10, 9, and 4) and you are finding ways in which to reward frequent wash use and improve convenience (see 3 and 2) you are well within your rights as a business owner to ask for more money for your services. I’m blown away with how much money is left on the table because of ‘fear of change’ or a fear of losing your worst (and cheapest) customers! When you make more money per-customer you need to wash fewer vehicles than before for the same amount of profit and lower operating costs. You spend less on water, electricity and chemical when you make more per car. Be smart about your price increases and make certain that your customers see a visible change to the facility that coincides with the price increase. The only change in your business will be that you are taking more money to the bank every month and you will be sending the low-cost ‘cut throat’ customers to your competitor who can keep trying to survive on on their razor thin margins. Final closing thought – when the economy takes a dip or gas prices go up, which consumer do you suppose can afford to continue washing their car?

How Technology is Reducing Labor Costs and Increasing Efficiency

Business owners are always looking for ways in which to increase profitability, reduce reliability on labor (thus reducing the cost), and seek to reduce wash downtime as a result of equipment failure or human error. There are three areas in particular in which technology and software-based systems have made a significant impact on a wash operations bottom line.

Point of Sale and Administration Software: Anytime you can reduce the amount of time in which a task takes has a direct impact on the overall operating cost. There are a number of companies in the car washing industry that have made significant strides in automating the back-office of a wash operation. Companies like ICS and DRB have long been offering point of sale solutions and back end software that provides significant value and savings for business owners through automation.

Automatic Entry Stations: Automated greeting stations have come a long way since their introduction into the marketplace. These units go far beyond time savings and represent a technology that directly reduces the number of employees needed by a car wash business. The second primary benefit is in the consistency they provide for the car wash customer – never short changing a customer or forgetting to offer any number of package upgrades or additional services during the sales process. Entry stations don’t call in sick, forget to tuck in their shirt, or steal from you.

Remote Wash Monitoring Systems: Wash operations that take advantage of wash monitoring systems have a significantly reduced amount of downtime, employee theft, and a greater understanding of when and where employee staffing will be needed. Wash monitoring systems are a relatively old concept that has been given a greater significance given the power of internet-based communication and remote access. It was always one thing to have a back office solution tracking wash counts and chemical usage. It is another thing to have a system that automatically contacts wash owners, service managers, and chemical companies when equipment has failed, water pressure has dropped, or chemical is running low. In a business in which time is money it is incredibly useful to have real-time knowledge of exactly what the health and wealth of your business is at any given time.

2009 – Survival of the Smartest, I don’t care how Strong you are.

 

Making the best of your situation.

 

 

What I have to say could be seen as unpopular to a lot of business owners because with it comes both a condemnation in addition to a message of hope. The truth is that there are many car wash businesses that that are not having the same issues that are being reported by failing wash owners. The success of one business means that there is going to be the failure of another – this is the very nature of competition. Right now there may be fewer vehicles being washes, although this does not mean that all washing has stopped. The simple truth is that there are a vast number of vehicles that will need to be cleaned no matter the economics of the day. For most American’s, car care is a necessary expense, no different than fuel and engine maintenance.

I’ve seen some amazing wash business operators thrive in areas that previously were according to failed business owners, “a terrible market for a carwash”. And this just strengthens my beliefs that there are car wash operations that have far too long been taking advantage of what we will look back on as “the golden years of car washing”. There was a period of strong business for carwash operators and it required nothing more than some land, a building, and the equipment to fill it. You could build a carwash in the middle of a corn field in Iowa and customers would line up. But the sad fact is that our current economic ecosystem can only handle limited number of car washes at any given time. Those car washes that are currently not experience economic woes are those that are operating with a plan and it is plainly obvious to me that the businesses having difficulty have no plan and no exit strategy.

So why are so many businesses having difficult times? Unfortunately there are no simple answers that can be applied to every situation but there are indications and trends that have been identified since rising energy costs have started to take their toll on the complacent business owner.

Trend 1) The businesses that are largely unaffected by the current economy in the United States are those that make a concerted effort to appeal to a wider range of consumers. I’ve noticed that all of the washes that I drive by with open bays are doing nothing to advertise, promote, or understand what customers want.

Trend 2) Business owners that will succeed in 2009 will be those that invest in new technologies to modernize their carwash. Is it only me that sees all of my nieces and nephews getting their first car and carrying no cash in their pocket for the car wash? Do you see that the cash-only carwash a sinking ship with limited profitability? Business owners that will come out ahead of the pack over the next few years of economic downturn will be those that increased spending on advertising, marketing, and new technologies – the same was true of businesses that survived the disastrous effects of the great depression that took Wall Street and Main Street to it’s knees. Sound familiar?

How do I “Go Green” with my business?

Green Businesses Flourish

There are a growing number of examples in our marketplace of both business owners and manufactures that are leading the way for the rest of us in the ‘green movement’. Several of the chemical manufacturers have been making a huge effort to get out their message about sustainable chemical offerings. Their biggest challenge is trying to break the perception that sustainable chemicals are not nearly as good as the chemicals wash owners have been using for years. The good news is that chemistry has come a LONG way and we are now seeing through various comparison studies that the quality of sustainable chemicals is now on par with traditional chemical. Companies like Ecolab have a vehicle care division that has devoted considerable resources and research into how car wash businesses can be both sustainable and successful. Not just manufacturers and chemical providers have these resources, but the car wash associations have been rallying resources and data for their members to take advantage of.

The next place to look for an example of yet another way to be a more green facility is in the water treatment and boiler niche of the car washing industry. We all know that we can call environmental friendliness, sustainability, or conservation by whatever catchy “green” term we want because at the end of the day it’s all about using less resources and providing the same service. To me this is running an efficient business, saving a dollar, and investing in the future of your business. Companies like Huron Valley have been recognized for their new technologies to reduce waste, reduce pollution, and reduce energy consumption. Although it is important to point out that no one company has the monopoly on being green – it is through competition and innovation from the manufacturers within this industry (and others) that make it a success.

There are several west coast car wash owners that have been pioneers in harnessing solar energy for heating their water and reducing their energy bills or hydrogen power to offset fossil fuel consumption. Business operations like Easy Wash of Vancouver  are finding that the upfront costs can be substantial for these projects, but the savings are definitely there if you know where to look for them. Both by reducing the amount of resources used and giving the business the angle it needs to promote environmental friendliness the marketing gains are huge when you plan things properly. We are watching a new generation of car owners enter the marketplace – unlike their parents or grandparents they are an entirely new generation that has taken being ‘green’ to heart. Supporting businesses that are environmentally safe or green is second nature to them. We have a long way to go in finding the best way to reach out to these new customers and earn their business – but remember, if it were easy everybody would be doing it. The best advice I have for local business owners looking to market their ‘green’ business improvements is to look to other businesses in your part of the country and see how companies are successfully marketing their environmental benefits to your demographic and see if what they are doing can be applied to your business and your marketing campaign.

Carwash Monitoring and Video Surveillance

Car wash operators are always looking for ways in which to both cut costs and save time. Most new car wash facilities start with both a monitoring system and a video surveillance system from day one. Many existing facilities are seeing the need to create accountability for not just criminals, customers, and employees. Monitoring systems keep honest people honest and helps eliminate shrinkage as well.

Video Surveillance – Be aware when your not there.
Car wash operators already know the value of having a digital record of what happens at their wash when they are not there and when employees ARE there. Having cameras in each bay that can be viewed from the comfort of your home office can help you sleep better at night knowing all is safe and secure. Modern camera systems are now accessible through a Internet connection at your wash which puts you one click away from seeing your facility.

Settling Customer Disputes
A second value in getting a video system is in an instance in which a customer makes a false damage claim. “Your machine dented the side of my car, you need to pay to get it fixed!” is a common thing heard by a wash operator. These instances are quickly put to rest when an operator can show footage of the vehicle (already damaged) when they drove in onto the lot. If a picture is worth a thousand words, imagine the worth of 10 seconds of video footage!

Capturing Crimes of Smashin’ on Video
Having quality video footage can help you work closely with local law enforcement to catch destructive vandals and would-be thieves as they destroy your wash equipment in order to get at the money inside. Most DVR equipment can be wired directly into your alarm system which upon triggering an alarm all cameras can begin to record at full resolution in order to have a better chance at getting the footage needed to convict.

Carwash Monitoring – The Secret of the All-Stars
The most successful carwash operations rely heavily on their carwash monitoring system to keep them well-informed about the health and wealth of their wash business. Information is the most powerful tool that a business owner can have to help make informed decisions. Carwash owners and operators that have monitoring systems are able to maintain a higher degree of control over their entire wash operation.

It’s a Coin Changer, not an ATM
One of the big loss-leaders at a carwash facility is uncounted money from changer units. One dishonest employee that had been caught told the investigator that the change machines were just like an ATM that was never counted. Many wash operators report that they have been the target of theft involving stringing scams or stolen credit cards that wipes them out of their coins and tokens. Carwash monitoring equipment can detect these types of crimes in the act and simultaneously cut power to the changer, send a text message to the wash owner, and turn on a video camera wired into the security system. Even employee theft will drop to zero when every coin, token, and bill is accounted for throughout the wash facility.

Never Run Out of Chemical
A huge benefit of a carwash monitoring system is that you can make certain that the main tanks never run out of chemical. You can configure your sensors to alert your wash manager and your chemical distributor with a text message and an email when a monitored tank starts running low. This saves you money on rush service calls for chemical fills and delivery. This saves chemical distributors the time it takes to send a driver around on their route the ‘check’ chemical levels. Wash owners that never have to worry about running out of chemical before a busy weekend means they never have to worry about the associated losses of having to turn away business. Now you can go on vacation and know that if chemical runs low your chemical distributor is also sent the same text message and will have a delivery sent out without you even making the call.

Your Evening Status Report Delivered
Wash owners with carwash monitoring equipment tell me that they sleep easier at night because every evening they get a text message to their phone that gives them their car counts, daily totals, cash counts, credit card counts, and loyalty card counts. Knowing whether you hit your number for the day was never possible before monitoring systems were installed. The following morning a followup text message arrives to the wash owners phone while sipping a cup of coffee with the full report for the previous day.

Monitoring Makes Investors Happy
For wash businesses that have investors or would like to attract potential investors will be pleased to know that having a remote monitoring system is exactly what the doctor ordered. Investors want to be getting regular reports on how the investment is doing. Since monitoring equipment tracks all revenue including cash it makes it easy for investors to remain the silent partner and allow wash operators to do their day to day operations without being bogged down with regular progress reports and financial updates. Consider how you can get more done during the day if your most of your paperwork was automated by a monitoring system?

Learn from Your Mistakes – Historical Trends
Monitoring systems are powered by powerful software that can compare months against previous months or the same time period the year before. By looking at weather data, car counts, and pricing at the time you can help identify trends and business growth or loss. The reason monitoring systems play such a large role in a successful wash operation is that wash owners are able to find out where the loss leaders are early on before it can largely impact overall revenue. Just as important as knowing when something is wrong, monitoring lets you know when things are going right. The key to growth is to identify what works and replicate those efforts. Many wash operators have told me that with the assistance of their monitoring system that they learned that they were not charging enough. Bobby Willis of Cool Wave Carwash says that if you have more than 20% of your customers buying the top wash package your not charging enough. How valuable would it be to know whether or not your leaving money on the table?

Catch the Small Problems before they become BIG Problems
Lastly, if not most importantly monitoring systems can tell you when there are issues at the wash. Error codes from entry stations, faulty equipment errors, doors that stay open in the winter and won’t close, and any number of other potentially disastrous problems. Monitoring systems are invaluable for a wash operator that wants to operate lean and make the most out of the equipment that they have. As any vehicle owner can tell you, it’s better to catch a problem early on before you end up replacing entire engines or having to get a whole new vehicle all together.

Ignorance is not bliss and running a business in the dark is no means to run a business at all. Whether your building a new facility or have an existing site – wash monitoring and video surveillance may be exactly what you’ve been looking for because if you aren’t, employees and criminals looking to rip you off certainly are.

Appealing to the Next Generation of Vehicle Owners

At the risk of sounding like a broken record I need to stress that in every consumer-driven society in the world there are going to be buying-trends with each new generation. A trend in consumer spending can easily be identified by looking at the big picture, not just spending habits within a particular industry. You do not need to have prophetic sight and the ability to read the future in tea leaves to see the proverbial ‘writing on the wall’. Our society is changing and the way people spend money has changed and the reasons consumers choose a business has changed. Keeping older customers is easy because we know what they want because they are likely already your customer. Making sure that your business appeals to the next generation of vehicle owners is what business should be thinking about today. The fact of life is that your older customers will continue to get older. The next generation is where your marketing sights should be set.

There are three trends that the current generation has identified as ‘important’ to them. We have to face it that the current young population and next generation of drivers and vehicle owners lives in a very different world than the one in which we grew up in. In the pre-Nintendo era we spent a lot of time (and money) on our vehicles. We took care of what we had because the thought of trading-up every few years did not make economical sense.

#1 It’s All About Me

Face it, young consumers are selfish and demand a certain level of convenience, speedy service, and they want it now. A business that appeals to the consumer by making their experience easy and convenient will get the repeat business of this younger generation. Previous generations of consumers knew that good things were worth waiting for and if it meant driving a bit farther, using a frontage road, or running to the bank to get quarters was what you needed to do to get a good wash, so be it. Younger drivers want easy access, simple instruction, quick service, and no-hassle payment options.

#2 Can I borrow a Dollar?

There are significant studies on demographics and cash usage in North America. The 16-27 age group does not carry cash. Less than 10% of youth ranging from high school sophomores to seniors in college carry cash on their person in quantities sufficient to buy anything more than a soda pop. College campuses have to offer students card-activated systems for their students in order to get them to use the on-campus laundry facilities. Car wash operators that do not accept credit cards at every service will fail to appeal to the younger consumers in the marketplace or just fail to sell those particular services.

#3 The Green Movement

According to market research there are a growing number of young consumers that are falling into a category of socially conscious consumers. Although this has been covered in previous discussions, it is important to recognize that creating awareness about ’sustainable and responsible’ car washing should be worked into your marketing message. Get people out of their driveways, get charities out of the parking lot, and focus on value statements that will resonate with those customers who are willing to pay a little extra for a service that is reducing their impact on the environment.

Customer Marketing & Retention: Back to Basics

Creating marketing and promotions that work are a great challenge for car wash owners and operators. The fundamental problem that many car washes run into is that they will never generate the level of customer loyalty that they are hoping for unless they meet the basic needs of their customers first. If a wash owner can identify consumer behavior, he or she will be in a better position to target products and services at them. Buyer behavior is focused upon the needs of individuals, groups, and organizations.

 

Background

It is important to understand the relevance of human needs to buyer behavior because marketing is about satisfying needs. Mazlow’s Hierarchy of Needs is taught in psychology classes around the world and the theory outlines the very basic human needs that must be provided in order to truly experience higher emotions such as achievement, respect, and self-esteem. At the lowest tier of this hierarchy are the basic needs such as food, air, water, heat, and the basic necessities of survival need to be satisfied. You cannot move up to higher levels of the hierarchy unless your basic needs are met.

 

Consumers also have a very specific set of needs that must be addressed. To understand consumer buyer behavior is to understand how the person interacts with your marketing message. 

 

Consider that every consumer is going to be influenced by their culture and word of mouth, attitude towards washing, their ability to learn by instruction (customer education), and their perceptions of the wash facility. There are a number of NEEDS that must first be met before a consumer can move to making a purchasing decision, location choice, brand choice, and any other choices they will inevitably make.

 

Customer Needs

At the very basic level a car wash operator must appeal to the basic needs of their customer before they can consider focusing on establishing customer loyalty. 

 

The decision making process for a customer of a car wash will be to first determine which car wash facilities they will use followed by comparing the available choices against a number of other criterion.

 

Basic Need 1: Quality

This is where it comes down to truth in advertising. You need to provide the very basics for a customer to properly wash their vehicle. If you cannot clean the car with soap and water your failing as a business that specializes in vehicle care. It should be no surprise to a wash owner that people will stop using your wash if it does not get their car clean. The second aspect of quality is when a customer has access to problem-free equipment. If wash equipment is damage or in disrepair this will impact whether a customer will use your facility.

 

Basic Need 2: Appearance

Most wash customers rate cleanliness as one of the most important factors of a car wash. Locations with dirty walls, peeling instruction signs and faded decals will see a noticeable drop in customer retention.

 

Basic Need 3: Safety

Customers that visit car wash facilities next consider their safety when using a wash facility. Locations with poor lighting and excessive loitering will drive customers away and keep them from coming back if they did not feel safe when using the wash facility.

 

Basic Need 4: Value

In order to create a loyal customer a car wash owner needs to create value in the service that they provide. Value is going to be perceived differently by every customer and as a wash owner you need to evaluate your demographics to find out what will be the most important to them.

 

Examples of Value Propositions:

 

Environmentally Friendly - A car wash that focuses on environmental stewardship, water conservation, energy conservation, sustainable chemicals, and promotes this will create value for a wide demographic.

 

Charity Support - Car wash owners have the opportunity to get involved in their local community by supporting local charities and organizations. Car wash operations have a huge opportunity to be known as the community-based wash business in town.

 

Car Wash Club - By taking advantage of a loyalty card system car wash operators can give customers a reason to ‘buy-in’ to their loyalty program through incentives and promotions. Consumers have been trained by big-box retail to be a card-carrying customer and operations that take advantage of loyalty card programs are highly competitive in their local markets.

 

Rain Guarantees – Many full service and express wash operations offer a rain guarantee which gives a consumer piece of mind and security in their wash purchase.

 

Unlimited Wash Programs - Programs that allow for unlimited washes in exchange for a monthly payment or an annual subscription have been found to be highly successful in certain markets.

 

Low Price Guarantee – There has been a huge explosion in the number of low-cost express washes opening up around the country. This model will not work for every owner or even every market, but the growing trend is worth watching. Some markets are having record-breaking profits and others struggle to make ends meet with such low margins. 

 

Superior Customer Service - Having great services has long been one of the big selling points for going to a full service carwash. Whenever you have employees on site you have a wonderful opportunity to provide great customer service. 

 

Customer Loyalty

Customer loyalty is something that is earned by a business by satisfying your customers needs as a consumer. If you can meet the basic needs, establish value in your services, and remain consistent in the delivery of your service your customers will remain regular customers.

 

What does success look like?

In order to appeal to the widest number of customers your focus should be to focus on getting back to basics. Once you can be the clean, safe, quality carwash that offers simple value statements to your customers you can then focus on additional value added promotions to bring customers back.

The difference between a successfully promoted business and a business that fails to promote successfully is that in the long run you are remembered by your customers for what you’ve done for them. Far too many car wash businesses think that by slashing prices and giving huge discounts will win over new customers. Discounting only goes so far when you are trying to bring in new customers because discounting is temporary and long-term price cuts hurt your bottom line. As long as you are meeting your customers basic needs a successful promotion will engage your customers and community in ways that will endear themselves to you and your business. A successfully promoted car wash business will not be known as “the cheap wash” in their community. The successful wash in town will be known as “the charity wash”, “the fundraiser wash”, “the wash that drives the funny car in the local parade”, “the fast wash”, “the convenient wash”, or we can hope at the very least the wash is known as, “the wash that gets my car clean”. These are the value statements that we should strive for within our local communities and with the customers we do business with.

 

 

Carwash Executive Roundtable Discussion

I was in Calgary for the C-Store Canada Trade show last week to give a seminar on Cashless Acceptance technologies, promotions, and marketing tools. The seminar went very well and I ended up holding several breakout sessions with attendees out on the plush leather furniture outside of the ballroom in the convention center.

The following day I attended the Carwash Executive Round Table Discussion which went very well. They covered a variety of issues and the talk centered around the current economic downturn in North America. I started taking notes by hand and realized that I just cannot write nearly as fast I could type, so I opened up my trusty MacBook and took a running transcript of the hour-long discussion.

———————————————————–

C-Store Canada – Carwashing Executive Roundtable Discussion ( 6/3/08 )

Attendees:

Mark Thorsby - Executive Director, International Carwash Association (Moderator)
Charlie Lieb - President, PDQ (Manufacturer)
Paul Fazio - President, Sonny’s (Manufacturer)
Murray Kennedy - President, Mark VII (Manufacturer)
Vince MacNeil - Vice President, MacNeil Manufacturer (Manufacturer)
Richelle Matthews - President, thecarwash.ca (Operator)
Al McDonald - Operations Manager, Canadian Tire Corporation (Operator)

Q – Describe the current status of our Industry from your perspective.

Charlie Lieb - These are certainly challenging times. Increased prices in gas, problems with US financing and a general uncertainty in the marketplace is making for interesting times.

Paul Fazio - I would say this is a time of challenge and change. Both for retail and OEM we have got to be willing to accept NEW ways of showing value.

Murray Kennedy - We are in an industry that is changing. Those that can lower the cost of operation will win. It is so important to find new ways to differentiate ourselves.

Richelle Matthews - As an operator is is necessary to focus on branding. One of the ways to distinquish how we operate. It is more imprtant that ever to standardize the expereience,especially with multiple locations. Keep people coming back by using branding and take advantage of new ways of marketing to your customers. For instance, we are using washcards to get customers to keep coming back after the first time.

Al McDonald - Our industry is impacted by a lot of uncontrallable factors that we have to learn how to live with. We have an oppertunity to grow as operators. Using the resources at hand we have an opportunity for grow within our industry. The best thing as always is to focus on efficinecy of opperation.

Vince MacNeil – One word that describes the state of the industry is ‘pump shock’. Gas is causing people to skip a carwash due to this ’shock’. The need for understanding our customers is going to be key in finding the value propositions for carwashing. Pump shock will go away as people normalize to the pricing (which is a temporary issue). The real question is to ask how are we going to be presenting ourselves to the end user? There is a lot of room to raise the bar in these difficult times when it’s all about controlling costs.

Q- Is Green Here to stay? What are you doing from a company perspective?

Murray Kennedy - Green is here to stay for sure and will be driven by regulations and the consumer themselves that want to feel good about the experience. Power, chemical, water consumption are the obvious places. It is driving the trend towards more of a friction wash – the operatiors and the consumers will drive this change to friction because it uses less chemical and water. Wash businesses NEED to use green business to add a value statement – this also comes down to being proactive.

Paul Fazio - There are two sides – denpends on where you are – the econoics have to make sense for your business. Water in draught, marketing in others. Especially when you look at the Canadian market, it is far different than say the south in the States.

Murray - Going green goes a long way.

Paul Fazio - We have a lot of grounds to make up – people do not have enough of an understanding WHY it is so much better to go to a green facility.

Vince MacNeil - As an industry we need to take a more active roll in the eco-friendly aspect FROM the business level. Education happens at the community level. THere are huge marketing advantages in promoting ecological resresponsibley to wash a car.

Al McDonald – Insofar as how you are eco friendly, I get reugular inquires whether we reclaim, how it impacts the environment. the single most common question that I get which may be unique to CA – how much salt is in the reclaimed water when I wash my car? Whether there is salt left in the water doesn’t really matter since it is rinsed away – so it is a matter of educatiing your customer.

Mark Thorsby (Moderator) – 4 years ago a local ABC affiliate did an interview about salt in the reclaim water – I was ready for a bad interview – ready for this reporter – this is going to be easy, the sample says that there are less salt in the reclaim than there is in the tap water of Chicago. Of course this will depend on your reclaim system – there are ways to assure your customers of your particular situation.

Q – what kind of things are we starting to see pressure on reclaim and water disposal without being dependant on sewer system.

Charlie Lieb – Our main focus as a manufactureer is to find out how to use less power and less water to get a clean car. Motors, nozzeling, smaller pumps. I tend to agree with Paul that in Canada you must ask whether it make economical sense. In the US it is a different ballgame due to local madates about water uses in areas of draught. I think that in the US there is a bigger push for reclaim from an economic viewpoint. It is a good marketing tool, but when everybody “goes green” how do you differentiate yourself from the other washes when all things are created equal?

Mark Thorsby (Moderator) – [What is your persepective?] You will see that we move forward with a larger “Green” movement – New Product displays for companies with Green products to showcase them. There have been significant discussions from a marketing standpoint that carwash owners could use to Self Manage this by promoting “eco friendly”. You will see more in the next number of months.

Vince MacNeil – Lets talk about Untility Costs a bit – our future is about low cost of operations right? What do the other panelists think about this?

Al McDonald - “it’s been a big focus for us – automated systems that control the heat for on and off, humidity sensors, lighting, this is to reduce the costs. The ROI is about 1 year for the payback on these systems. If you manage several sites and cannot be hands-on these systems are a pretty imporatnt tool to utilize.

Richelle Matthews – One of our carwashes – use all on-demand heating (no boilers), Big topic after the winter whether to make any changes. Technology is changing and must be closely watched.

Q- Solar Heating

Al McDonald - 40-60% of cycles, not enough full cycles in the sunlight for heat. Year round there is not enough power in solar heat to make a signficant impact for us. The Federal/Provincial paybacks are nice for breaks and assistance in implimenting. It clearly has an impact on marketing though.

Q- there has been a lot of marketing on waterless carwash – i don’t even know what this is? Please explain – is anybody pursuing this as a product?

Charlie Lieb – we are not, although we are looking at the new technologies. My biggest fear is that somebody comes up with a technology in which you hook a batery and some cables to the car bumper the dirt will just jump right off!

Murray Kennedy – this is not a threat at this time, although you don’t want to be Kodak making film and be broadsided by this new technology.

Q- Any changes in paint technology that impacts washing?

Charlie Lieb - indications are that paint technology will only make the vehicles more resistent.

Q – GM and Toyota are charging a premium for green cars – will the public be willing to pay more for an eco friendly car wash?

Charlie Lieb – I think it will be somewhat dependant on demographics. Some sections of the population will pay more, but in my opinion most of the population will vote with their pcoket book.

Murray Kennedy - It’s up to you to determine what the value is to you and your customers.. Equal to equal you will have more demand at your carwash. it is a law of supply and demand so you COULD add more value to your wash – although I agree with Charlie that it depends on the value to YOU and the value to the community you live in. In some areas of thecontry they just don’t care about eco-frienldy!

Susan Glander (comment) – offering a premium would be nice, enveronmental stewardship we just expect from our wash suppliers, charging more seems to be out of line.

Q – R&D in the next 3-5 years – how will Eco be addressed by manufactuers.

Murray Kennedy - The focus of our company is to reduce lower operating costs.

Paul Fazio – “Business economics” – is this top of mind with young people? Do they really care about this?

Murray Kennedy - My kids are very very concious of this.

Richelle Matthews - Not that I’m younger than any of these fine gentlemen I think that in my generation thingss like recycling and “green” are part of my mindset and I would look to the option of green versus less-green. As part of community you are a sponser, green, AND in thecommunity as an opoerator this is where it is important.

Dan Yarusso, WashCard Systems (Audience Comment) – How do you market to a younger crowd to the “disposaable generation” Kids don’t seem to care about their cars like our generation did.

Richelle Matthews – When you market you need to get into the electronic age – start a facebook group *which may be strange* – keep the conversation going on FB group on CW chemicals it’s a way to start to differentiate yourself. Younger generations require a different approach, that is to be sure.

(Comment from Audience) – Demographics makes a big deal but at what price? People would not pay more for green , i’ve experiemented with enviro chemicals but don’t work as well – so your always going back. People are not ready to pay more for a lesser product.

Susan Glander, Ecolab Vehicle Care (Audience Comment) – I feel that is just not correct, sustaninable products are not a lesser product. I bet that if you ran a blind study you would be very surprised with the results. Whether people would pay more for for a green wash will depend greatly on your customer base.

Q – Proprietary Parts and Technology – some manufacturers are using proprietary parts and technology- does this build customer loyalty or does it create resentment? how does this effect the distribution channel?

Murray Kennedy – there are a lot of things going on in that question. You can have common parts till your blue in the face, but you will always have proprietary parts. You cannot get away from that since each company has its own shops. When you have a piece of equipment and a customer wants to service his own equipment it comes back to bite you years later (since a qualified service technician requires a lot of training and education, of which most of these guys do not have) and the company gets a bad rap for a lack of education. It’s bad for the operators and the manufacturers too. In the US in least the change in ownership at C-stores is astounding. Change of ownership is one-third within the past year – this means different businesses are are getting different kinds of equipment. They want 1 person to do all of the service – we have the same challenge that the rogue service guy has by not having access to proprietary training, chips, programing, documentation, etc.

Charlie Lieb – As a manufacture you have an obligation to support your older models even after they are made obsolete. PDQ keeps and maintains parts for 10 years after they are no longer built. The big problems are from when dealing with distributors that are very willing to service customer but often times (on occasion) there is a dispute over getting paid for something and there is a reluctance to service the customer in the future due to lack of payment. At the local level this could mean that getting parts is going to be a problem since that distributor in the area is the only means of getting certain parts. If that bridge is burned the customer is put into a tight spot.

Paul Fazio - When i was an owner, proprietary did not bother me so much – but when a manufacture takes a standard part and makes a minor changes so you have to buy more expensive parts for no good reason. That really made me upset.

(left the room for a short break)

Q – Talking about Service and Repairs.

Murray Kennedy – with remote monitoring you will solve some big problems.

Paul Fazio - when we have a lot of really long distance problem we use Skype and a video camera and diagnose issues remotely.

Richelle Matthews – when we hire we look for a mechanically inclined individuals to do our own repairs. They are involved in the installation process if possible and are constantly being trained.

Paul Fazio - lots of the new investors want to be independent and want to do the service on their own.

Charlie Lieb - With the increase in technology it is being more sophisticated. Much more software driven so on the flip side, what kid is NOT computer literate?

Vince MacNeil – We use the internet to post service bulletins, tech notes, and documentation. This has changed significantly than in the past.

Charlie Lieb - We have a place on our website where you can register for a forum and access product information.

Q – As a manufacturer, how do you know when something is ready to go on the market, realizing that there WILL be issues and nothing is perfect in the 1.0 phase, how do you present this to your customers and early adopters?

Vince MacNeil - We move through a 24-step process in our R&D center first of all – where the process begins, what does the market need, proof of concept, prototype, final version, field testing, work with selected washes with agreements for ‘beta testing’ and these are locations with high volume and we test with various environmental conditions, testing testing testing, during that process you hope that you get all the feedback that the product will experience in the real world. You anticipate further problems that may arise due to a variety of circumstances. As you go though that process you uncover alot of those issues. thinking about the customer that will OWN this equipment, see it from his position. Seed units, pre-production prototypes with customers that have agreed to use the product. if that gets the green light after the last minute changes, plenty of rushes things along due to a show date on the horizon. Many times salesmen have sold them, no documentation, no support, but we try and do the best job we can. There will always be the unforeseen thing that you just can anticipate.

Murray Kennedy - Finding the early adopters is easy and they are clamoring to be first, the challenge is in explaining to them that there WILL be problems. Hopefully find one that is local. Change is initiated by change and you work with them on that side knowing that there will be changes and this will be a team approch. You just have a team that is ready to get on a plane at the last notice.

Q – Rumors of plant downsizing, smaller booths, what will be future in 2009? What does 2009 look like in your crystal ball?

Paul Fazio - This is easily one of the toughest times I can remember, changes are taking place in different markets throughout the industry. Both the self-service markets and the OEM side is down as well as the in-bay market. More players in it (these markets) will mean that certain companies will be feeling the pinch. Its tough and it’s a huge challenge and it’s not going to change in the near future.

I see how the internet is effecting the way customers have been investigating there options, the information is freely available to learn a lot. There are big things changing on the OEM side which is effecting the distributor side. Serving multiple brands is going to be the only way to keep the company alive – this even means representing several brands.

Charlie Lieb - Business has been very challenging – raw material costs increasing – we cannot pass the cost on to the customers. We have to try and reduce our own own costs and still provide quality dependable products to the marketplace. I agree with Paul that tradeshows are not as important as they used to be because of the internet. The payback for a OEM at a tradeshow is becoming much less. Reducing tradeshow expenses, number of tradeshows, amount of equipment brought to shows, this is the only way to keep from increasing the prices on equipment. Tradeshows simply do not pay off like they used to. The only thing we see from our perspective is more shows, less attendance. We will be doign more web-based things here in the future. We are already focusing on putting more information online, product demonstrations, and using online technology to reach out to potential customers.

Murray Kennedy - We have had this discussion- I could have flown all my customers into Colorado and take them ALL skiing for the cost of ICA. The big question comes down to how we are going to handle [the rising costs of shows]? Reduce the money spent at each show or reduce the number of shows? Honestly, I would prefer to see fewer shows but make them BIGGER so you don’t water down which shows to go to. Make the bigger shows bigger which makes it clear to operators which they need to go do every-other-year. This would give us an extra year to develop equipment in those off years!

Charlie Lieb – (Question directed to Mark Thorsby) What is the position on the ICA?

Mark Thorsby (Moderator) – ICA is studying this Charlie. / (abrupt subject change.)

Q – If times are tough now, what will likely come of these times?

Paul Fazio – Redoing factories to create efficiency has been big.

Charlie Lieb - I suppose the question does remain how much consolidation in the industry will we see?

Q – That then begs the question, is now the time ripe for mergers or failures?

Murray Kennedy – Both. Your seeing this in the change of C-stores AND the manufacture side of things.

Q – We got studies back that people usually washed in self service has declined by 12% since 96. What are you doing to address this?

Richelle Matthews – We have not seen a decline, we see sales increase every month. We do have pet washes which is another service that we offer to bring people in. Multi-site with friction or touch-less. We do a fully stocked retail store because we always have someone on hand which is important. The sale of additional products and the opportunity to upsell rather than a vending machine because you can then educate your customer. Goes into the added value services that you can get into. We are now trying to perfect our model of labor/ services. Shortage of labor in Calgary is down.

Richelle Matthews – We always promote washcards that causes the increase in our business. Everything we do goes into selling a washcard. It is always a way for us to have our name and our hand in our customers pocket.

Q – Touchless vs. Friction – trends?

Al McDonald – we have both kinds of washes and we have seen growth in our touchless washes in western Canada. To say one other the other we do not have enough control sites to point a finger. We built based on our regional services based on the market demand. It is easier to build based on demand rather than forcing the choice.

Murray Kennedy- We have control sites and the touchless line is longer. On the days in which the line is too long we have an employee wave customers out of line into the friction wash and we give them a free or discounted wash just to give it a try. Over time and given education the line to the friction wash (after given the free opportunity) people like Friction better. There are a lot of preconceived notions about how a customer feels about a particular kind of wash.

Vince MacNeil - Hybrid is a growing market where touchless and friction are both used. In-bays and tunnels are now offering a combination of touch and touchless. The quality of the product that is coming out is looking just fantastic.

/general discussion and comments from audience.

Vince MacNeil – Things were going great in tunnel until oil when up.

Charlie Lieb - In the US it is a dichotomy. Tunnel is touch and in-bay is touchless. With new materials introduced into the industry we are seeing a loss in touchless and touch is gaining some traction. Today it is 65% touchfree and 35% touch in the US. Canada in particular is committed to touchfree in the west. Not sure how this market would take touch. At least what we see up here (canada) there is not a lot of traction with in-bay touch. Some parts of the US market will have a clear dominance of one particular type of wash.

Paul Fazio - What is driving the growth in friction? What differentiates today from several years ago?

Charlie Lieb - We differentiate because there is so much touchfree out there and more locations are offering a choice – some of it is 2 bays of various kinds – also new technology that really has less threat of damage – lower operating costs of friction.

Paul Fazio - I see that as the price on the street goes down as the final product gets better for more money. Thanks to Charlie they have pulled a lot of people out of the driveway due to touchfree. I think today from a value proposition, speed will be a big component in what people choose for their wash. Consumers want (and expect) a level of convenience that comes from a fast wash.

Mark Thorsby (Moderator) – Consumer studies show a 28% increase in usage in in-bay usage. 20% of population washes in an in-bay. 21% uses express/tunnel. In research, the preference comes into whether people stay IN the vehicle they would prefer touchless. When you get out of the car they don’t care whether it is touchless or touch (friction).

Charlie Lieb – The trend you see is that the equipment manufacturers are offering the full line these days.

Vince MacNeil- What makes it such a big significance is the foam brushes technology. The debate is pretty much dead as consumer confidence increased. Conveniences, speed, price, are going to be the thought process for the customer. The word value proposition is SO important moving forward – this is especially being done from a manufacture perspective.

Mark Thorsby (Moderator) – Between cleaning technology AND advanced paint technology on vehicles this combined effort has has done a lot towards improving professional car care.

Q/Comment – as a distributor selling the among of touch machines 10/1 as touchless machines the bigget thing to recoup is that are they accepted up here [Canada]? The biggest thing is excuses for the customer to try it. Getting the volume up here is important as well.

Q/Comment – Opportunities are good here up in Canada. The oil industry is the one that is going to be taking the hit in the industry because they have the high price of gas to make the customer sour. The need for car washing has NOT gone away so it is a good time for independents to take advantage of this.

/General comments on pricing, raising prices OR lowering prices.

Vince MacNeil – $3,$7,$11 pricing is the best so the average wash is 5.50, right?

Murray Kennedy - Having more than a few washes, wash types, and wash services means more options and gets more people out of the driveway.

Paul Fazio - Biggest problem of full service was to get the consistency of product and time. This is why automation is just killer. Being able to provide the SAME wash each time and at each wash location of the same company is SO important.

Charlie Lieb - What you will see at the biggest investor sites you will see more services on all on the same site. So you can appeal to the customers desire to the service that they want for that day.

Paul Fazio - “Uh oh, i agree with him (Charlie)”. /laughter

Mark Thorsby (Moderator) - Our consumer study will be released in August. According to preliminary data 65.2% American motorists say that they USUALLY use a professional wash facility. Of the 34.8% that usually wash at home, how many of them never wash anywhere? 17% of 170 million cars does not wash. This is a shrinking amount of non-washing cars.

Q – Any final thoughts or comments from the panel?

Al McDonald – it’s a downturn but its going to change for us “hold the line” “Chin Up”.

Murray Kennedy - There is general agreement on these trends and on how they are going to address the issues. This should give us some comfort knowing that those that weather the storm will come out ahead.

Paul Fazio - I learned a lot about Canada! … and if we do this again, i’m not sitting next to Charlie.

Charlie Lieb - I agree with Al, that although it is tough it is going to bounce back. There are a lot of cars out there that are dirty and need cleaning.

/ Applause and handshaking ensued.

Branding Your Wash Business

What is Business Branding?

Business branding is your business identity that is perceived by your customers and the general public. Consumers have a far easier time connecting with a business that is identifiable in some way. There are many ways in which a company can be unique and distinct amongst the vast array of local washes with the non-descript sign, “CAR WASH”.

 

Branding Guidelines:

• Personalized logo - avoid clip-art or ’stock’ logos offered by the printing company. You need to have a crisp and clean identity that can be used on cards, shirts, signs, and decals.

 

• Identify what your business does in the name - If the name of your company does not imply what your company does, how will your customer know what you do?

 

• Brand everything - In order to set yourself apart make sure that no matter where your customer is or what service they are using they are being reminded of where they are and are being subjected to your business branding (logo, company name, website address, company slogan).

 

 What is Brand Awareness?

Brand awareness goes far beyond having a flash logo or a snazzy color scheme. Brand awareness is when you are able to get consumers to associate things such as value, quality, and service with your business. Every business strives to have their customers associate positive attributes with their business and branding. One of the primary goals of a marketing campaign is to create brand awareness with existing customers as well as potential customers.

 

What is Brand Loyalty?

Brand loyalty is a combination of leveraging your branding (positive aspects of your company) and giving customers and potential customers reasons for coming back. Customers will become loyal customers for a variety of reasons and it isn’t because of a logo or color scheme. 

 

Consumers are creatures of habit and  are also inherently selfish. Businesses that understand the importance of generating both brand awareness and brand loyalty understand that at times running a business feels like a big game. Like most games, this one has rules as well.

 

Basic Rules of Creating Brand Loyalty

1) Convenience is king; All things created equal the business that is easier to find, easier to get to, and easier to use will come out on top every time. Consider how much time and effort goes into paying for the wash? Activating a service? Getting Change? Getting a Receipt?

 

2) Consistency is king; In order to establish brand loyalty a business must also prove to the customer that the quality and service is going to be good on a consistent basis! When employees are only helpful half of the time or the equipment “mostly works” this is counter-productive to establishing positive brand awareness.

 

3) Community is king; A business that is able to actively generate brand loyalty and brand awareness does so by taking an active role within their community. By sponsoring local events, sports teams, and community organizations with your time, effort, and participation in fundraising you tap into the very fiber of humanity – being part of a community. The business that supports it’s community will in turn be supported BY their community.