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An Industry Perspective: Will the in-bay code ever be broken?

Let's see if the second half of the year brings better financial results for operators and their suppliers.

May 08, 2012
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The Perry thesis, regrettably, remains intact: Until operators make more money, they won't buy more equipment. Will the second half of this year bring significantly better financial results for in-bay operators and their suppliers?

It was a simple statement.

Not intended, I am sure, to fracture my supremely optimistic belief that the in-bay market was, at long last, headed in the right direction.

The immediate impact of a seemingly innocent statement was devastating, however, in part because of the demeanor of the speaker, his unquestioned veracity, but also because of his tenure as a successful c-store operator.

I recently asked an experienced retailer what was happening at his in-bay washes. He responded in an eerily subdued manner.

"Everything is ominously silent," he stated.


That loud, crashing noise you just heard in the background was an explosion emanating from my shattered belief system.

Never have I feared more than now that the much needed in-bay recovery will not take place.

What is more destructive, a drought or a revenue shortage?

During a potentially devastating drought in October 2007, Bill Sartor, former president of the International Carwash Association, provided an invaluable service to Georgia operators, as he worked closely with Gary Dennis, Zeev Josman, Bruce Arnett, Jr. and other operators in Atlanta to prevent city officials from shutting down local washes during a proposed city-wide ban on the use of outside water.

Sartor's experience in working through an earlier carwashing ban in Texas proved to be a much needed game-changer.

Fortunately, this pending crisis was averted, in part because of Sartor's timely intervention, and also because of a clear, compelling and thoughtful plan of action. (To learn how the Georgia operators worked to achieve a win-win agreement with the city officials in Atlanta, see the May 2010 Professional Carwashing & Detailing article, "Save the Water.")

But who do carwash operators turn to today in Georgia, or in any other market for that matter, when their carwash revenues drop by 50 percent?

Where are the skilled people, the Sartor-like game-changers, who can help operators increase their sales and build a larger customer base during those funky, extended periods of declining sales?

As we know now, carwash revenue in the field is the vital life-blood of the industry, and when in-bay revenues begin a slow but unmistakable downward spiral, this ominous development represents a greater threat, I fear, than even the worst drought. But more importantly, how will this common problem be corrected without a properly trained marketing team, as well as another clear, compelling and thoughtful plan of action?

Operators and suppliers, however, seem frightfully indifferent and unable to take corrective action to reverse this industry-threatening issue.

I frequently wonder how many current operators, suppliers and industry veterans are similarly vexed by three very obvious obstacles to future growth?

It is troubling that operators, and their suppliers too, mistakenly believe they can return to a positive trajectory when a fatal combination of ineffective marketing, old equipment and an outdated business model persists at so many in-bay sites.

Operators: Become better marketers

Nothing is more important to the in-bay market than operators washing more cars and making more money.

In today's market, successful in-bay operators must thoughtfully plan and diligently work each day to build a larger customer base.

Yet many operators do not have a written six- or 12-month marketing plan.

And too few operators have appointed one trained person to "take ownership" completely to increase carwash revenues.

These two glaring shortcomings must not be overlooked by either operators or their equipment suppliers. To be sure, businesses of all types are seriously challenged to communicate effectively with their current customers, and to reach out to new ones.

And during periods of economic uncertainty, a consistent marketing program frequently is placed on the back burner. But rarely will this misguided plan get your wash back into a profitable position.

Indeed, the Jay Levinson-inspired Law of Carwash Marketing emphatically states the negative consequences of an indifferent marketing effort: "If you don't take active control of your carwash marketing, your customers and your carwash's future will be in the hands of your competitors."

Yikes! Not too many successful operators are going to sign up for that program!

(To see how your carwash marketing plan grades out, complete the 2012 Carwash Marketing Report Card below).


Suppliers: Become value-added partners

Why should equipment suppliers, I am often asked, be concerned about declining wash revenues in the field? It is the operators, of course, who actually own and operate these washes. It is their responsibility to manage, maintain and market their washes to the best of their abilities.

These sentiments are true, of course. Manufacturers and distributors have their own set of challenges, I agree.

Yet manufacturers and distributors should consider this painful observation: Over the course of a few years, the corrosive effect of a listless and inconsistent marketing effort at the operator level migrates upwards, and begins to tarnish and erode the image and service capability (and eventually, the sales and profitability) of even the best and most well-established manufacturers and distributors.

Declining wash counts are not your fault, but they are surely your problem, too. In truth, it is in your best self-interest to build wash counts and revenues.

Will suppliers realize this year, that their ultimate success is best assured by the financial performance of their customers, the retail operators?

The Perry Corollary to the Law of Carwash Marketing describes a chilling view of an inevitable outcome for uninterested suppliers. "If you allow your customers to place the success or failure of their washes in the hands of their competitors, then this stunning indifference on your part also strengthens the grip of your competition, and further allows your competitor deeper penetration into your market, and ultimately, into your pocket."

This key point cannot be overstated, given the critical health of the in-bay market: Suppliers too have a great and vested interest in increasing carwash revenues in the field.

Final thoughts

In a lengthy analysis for Professional Carwashing and Detailing in October 2006, Craig Campbell went on the record to state his predictions for the in-bay market. Campbell's article is both courageous and noteworthy. At the time, he was vice president of sales and marketing for Mark VII Equipment Inc., and he had more than 10 years' experience in the carwash industry.

(Campbell, incidentally, remains active in the carwash industry. He is currently CEO and Managing Director of WashTec Australia).

But more interesting to serious readers is what Campbell saw in his crystal ball, and what escaped his view completely.

I am troubled, truthfully, even at the outset of his article. Its title is a bit unsettling: "In-Bay Automatics: Has Their Time Passed?"

Posing this leading question at the start of an influential article is somewhat akin to one Atlanta Braves fan asking another one, "So, will this be Chipper's last year?"

But, in-bays, Campbell stated in 2006, were not on their last legs. "In-bays aren't going away," he concluded. Wash counts, he predicted, would decline somewhat, but ultimately, the in-bay market would "adapt to competitive and macroeconomic forces."

Given the benefit of 20/20 hindsight, we can see now that Campbell overestimated the impact hypermarkets presented to existing operators, and he greatly underestimated the real threat which express washes today have become. In fact, express washes should now be viewed as in-bay category-killers.

Also, Campbell's discussion of the slight impact of $3 gas on wash counts is not very convincing. Finally, I think he was too optimistic in assessing the appeal of the combination touch-free and friction units for the typical in-bay operator.

But nowhere in his analysis of a market and product already in some decline does Campbell discuss the necessity of operators building a larger customer base, or what new role equipment suppliers must assume to move the industry forward.

Indeed, the in-bay market segment remains stagnant and in genuine jeopardy today precisely because the considerable damage caused by these two pervasive but neglected issues has not been properly understood and addressed.

Moving soon into the second half of 2012, both operators and suppliers remain, alas, in a nearly untenable position.

With single-digit capture rates at many retail petroleum sites, in-bay washes are only marginally profitable. Why should cash-strapped operators replace these underperforming units?

The in-bay manufacturers also face a steep challenge. Equipment sales at North American in-bay factories have crashed some 40 percent, from $189,367,283 in 2007, to $108,423,945 in 2010. (At press time, the International Carwash Association had not yet released equipment sales figures for 2011.)

Campbell's closing words, "it should be a fun run," hardly indicate the true severity of these relentless and unforgiving problems.

In closing, without a much greater sense of urgency, and a clear and comprehensive plan of action for both operators and suppliers to increase in-bay wash counts and revenues, I fear this once exciting race could soon be over!

By the way, I do hope, incidentally, that this is Chipper's last year.

In this exclusive Professional Carwashing & Detailing series, Perry next month discusses the most important question which continues to threaten any recovery of the in-bay market.

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

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