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Business Operations

An Industry Perspective: Finishing the drill

August 09, 2011
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For the carwash industry today, nothing is more important than increasing wash counts and revenues at every site. And, as we know now, when operators experience chronic, declining revenues, industry suppliers, even the best ones, suffer painful losses too.

In fact, nothing creates more stress, hardship and upset in the industry than declining revenues. And over time, a listless, inconsistent and impotent marketing effort at the operator level migrates upward, and will relentlessly (if silently) attack and erode both the image and the service capability (and ultimately, the sales and profitability) of even the best and most well-established manufacturers and distributors.

Carwash revenue in the field, it must be said, is the true lifeblood of the industry. Only when operators become more successful by increasing their wash counts and building a bigger customer base will the industry return to a healthier position.

The surest way to a quicker and stronger recovery in this tight market, then, is to pursue this still unchartered path: Build higher wash counts and revenues at all carwash sites. The game-changing success of this sustained effort by operators and suppliers alike will signal that our industry finally is headed in the right direction, with true growth potential again.

During better economic times, when unemployment figures were much less frightening, and consumers had more discretionary income, operators could be forgiven if their marketing and promotional efforts to build wash counts and revenues each month were inconsistent. In today’s constricted economy, however, this continued indifference will be life-threatening for both retail operators and their suppliers. To be sure, the carwash industry has encountered and overcome serious challenges before. But the past few years, I fear, have been unlike any others and have been especially costly.

“I cannot remember any recession affecting us like this one has,” said Jack Anthony, an experienced, successful operator and former International Carwash Association™ president.

Onward and upward

Ironically, it is at times like these that many business owners can experience their greatest success. If traumatic change creates many unforeseen but new opportunities, then astute carwash owners who take corrective action now can expect more lucrative days ahead! Management consultants, in fact, have long recognized that when the economy is in flux, consumer-based businesses can either flounder or flourish.

For instance, a timely report in 2008 published by Bain and Company noted that “economic downturns create more opportunities for companies to move … into leadership positions than any other time in business.”

This report also contained a very clear warning to top-tier companies as well: “Many industry leaders fall from the top during recessions because they assume that a strong market position is an insurance policy against trouble.”

Regardless of your current position or tenure in the carwash industry, my specific intent is to provide a new way to position your business in a crowded marketplace and encourage you to communicate your marketing message more enthusiastically with your customers. I want to see every owner move forward confidently and build a bigger customer base during these still very challenging, adverse circumstances.

Imagine this

If you could increase your wash counts and revenues by 30-50 percent in the next 180 days, would you fully commit to do it? Before you can undertake such a journey, be sure you have the necessary determination and desire to complete this noteworthy venture.

Here, carwash owners can learn from another group of performance-oriented individuals. Professional athletes faithfully strive to “finish the drill” in completing the mundane but necessary, day-in and day-out conditioning and maintenance activities before they can play with the best. You too must be ready and able to make that complete commitment to become the “best in class.”

There are three other steps you must take to place your wash in a growth-oriented position. First, understand that you are not in the “carwash business.” Yes, you do indeed wash, polish and dry vehicles, but in fact, yours is a “retail business,” and you must compete with a hundred other store front businesses (restaurants, florists, drug stores, to name just a few) each day to capture your share of every disposable consumer dollar.

This is a critical paradigm shift. Moreover, when you understand that yours is a retail business, you will also discover to your great chagrin, that most of the other retailers enjoy a significant competitive advantage over your business. They will have a much more powerful and consistent marketing message than you. It is at this irritating moment that most committed owners will develop a much greater sense of urgency.

Armed with this alarming insight, operators also will quickly take action, I believe, on two other important matters. They will create a detailed, written carwash marketing plan for the next six to twelve months, and next, they will also make someone accountable to implement that plan and be responsible to achieve their carwash goals. (See the sidebar for five more useful steps to help you “break the carwash code” and achieve better financial success for your wash this year).

These aren’t baby steps

But this is not enough. Developing a new business model, having a more pro-active mindset, creating a detailed marketing plan, reaching wash counts and revenue goals, and finding a talented, determined and energetic person to “take ownership” of your carwash, these are all important and necessary steps.

In today’s “new normal,” however, the best leaders and businesses will raise the bar even higher and will address three more profoundly relevant questions.

  1. What can you be “best in the world” at?
  2. What are you deeply passionate about?
  3. What drives your economic engine?

This final part of your journey is not simply an intellectual exercise. These three revealing questions are at the heart of what business writer Jim Collins calls his “hedgehog concept.”

Jim Collins is the author of “Good to Great. Why Some Companies Make the Leap…And Others Don’t.” For carwash companies, it is especially encouraging and noteworthy to report that, of the hundreds of businesses which Collins researched to complete this detailed study, he stated very confidently, “you absolutely do not need to be in a great industry to produce sustained great results.”

More importantly, if every operator is going to master only one key idea this year, it should be Collins’ “hedgehog concept.” Taking this last step, of course, is where the most committed business owners must be willing and able to “finish the drill.” Don’t become a slacker now! Also, I would venture an optimistic prediction that any carwash company which creatively formulates and then carefully implements its own “hedgehog concept” will be miles ahead of its biggest competitors by the end of the year.

For these first two questions, you may wish to engage your employees, your most knowledgeable suppliers and even your best customers. Their feedback could surprisingly reveal something truly important about your wash that you had totally overlooked.

To begin, what can your wash be “best in the world” at? Is it in training your employees? Does your wash have the best curb appeal? Maybe you can be best in your world at having the most consistent community outreach? Are your greeters or sales advisors the best at diagnosing customer needs and recommending a particular wash package? You get the picture. A handy pencil and note pad are your best friends in this important exercise.

Next, what are you deeply passionate about? Many will say “wash quality.” Others will say having a courteous staff and offering exceptional customer service. Maybe you are most passionate about capturing a particular market segment or demographic, like school teachers and administrators, or senior citizens. You will want to uncover these specific attributes as it will help you better position your business.

Identifying these defining qualities also will help differentiate it from the other washes in your market. This is who you are, this is what you do and this is how you built your business. This is your unique brand. Once you have defined your brand, and described it, celebrate it!

Take Muhammad Ali for example. He knew in his teens what he could be best in the world at, and he also became very passionate about working faithfully — he finished every drill — to become the heavyweight champion of the world.

This example contains a powerful message: If you build a brand as strong and as memorable as did Ali, and you can communicate it as clearly and as effectively to your customers as he did with his fans, you too can be the greatest!

For Ali-like results, your marketing message must be creative, comprehensive, persistent and on-point to earn your customers’ business. Then your customers will reward you and your business quite handsomely because your carefully positioned carwash consistently gains their favorable attention, fits nicely into their regular lifestyle and does so at a reasonable price.

Lastly, you must ask, what is your most important economic driver? What common economic denominator, which you can track each week, drives your business? This vital metric, says Collins, is commonly expressed in the statement, “profit per X.” Many businesses use profit per employee, profit per customer visit or even profit per square foot.

To adapt your wash into Collins’ economic equation, operators will want to use an industry-specific metric, such as profit per wash package, profit per weekday or profit per shift. This new data could reveal some useful information: for instance, that Thursdays are your most profitable day, or that your morning shifts early in the week are very profitable too.

Next is the most important step

Having this information at your ready disposal, and benefitting monetarily from it, however, are two very different things. Successful operators, even those who have “broken the carwash code,” must also take concentrated action to implement these improvements and bring many more customers into their washes.

It is a difficult and frustrating task, however, to push your wash to the next level. Operators with the very best plans and intentions frequently become overwhelmed by many unexpected distractions and challenges, and they all too often fail to achieve their desired result.

Business writer Gerhard Gschwandtner shed valuable light on this perplexing issue. “Competition is not about companies, products or price. Competition is about ideas,” he said. “The best ideas, combined with the best execution, always wins.”

In closing, the quality and design of our carwash systems have not failed the industry. There are some 80,000 washes in the field that are still operational, many with hundreds of thousands of wash cycles recorded on them.

The industry has struggled mightily in recent years, instead, because it has not developed and executed new ideas and services in the field to help operators wash more cars and make more money.

With a dedicated and consistent effort to market these carwashes properly, this potentially fatal shortcoming can be corrected. For the continued success of the industry, for the survival of its operators and their suppliers, I hope every operator and all carwash suppliers will take Gschwandtner’s wise words to heart: This is a drill we have to finish!


Mike Perry has more than 30 years of experience in business-to-business sales and in retail marketing. He can be reached at mpccws5@aol.com, or at 770-330-2490.