For years the carwash industry has wrestled with both rising labor costs and the availability of good labor. To counter these problems many full service carwash operators are moving to the conveyorized express or exterior wash concept with great success.
Certainly there are many full service carwashes that are very profitable, experiencing high volumes and generating excellent revenues per car. They shouldn’t change. Then again, many operators are asking themselves if they need or even want the aggravation that goes with operating a traditional full service carwash. As any experienced operator will tell you, profits aside, operating a full service car wash with its high labor requirements and uncertain weather conditions in many areas of the country creates nothing but daily aggravation — and who needs that in life?
The express/exterior carwash
Today’s consumers want convenience. Marketing experts and historians say that this is what made Ray Kroc of McDonald’s a success. He recognized he was selling convenience, not just hamburgers and french fries.
If you apply this to the carwash industry today, you see customers who are in a hurry, possessive of their time, have vehicles loaded with children and pets, and others who simply do not want strangers in their vehicle.
What about value?
Today, carwash operators have to honestly ask themselves, “What is a carwash worth?”
It is not a question of what the customer can afford, but what “value” they place on the carwash.
Does the consumer really feel that a carwash is worth $20? If an operator honestly asked themselves that question, as a consumer, they would have to say ‘no’. That is what I believe a large majority of motorists believe.
Independent studies clearly reveal that when the prices at full service carwashes began to rise, volumes began to decrease for many carwash operations across the country.
While full service carwash operators are struggling with those problems, other operators are switching to or building exterior carwash operations.
The conveyorized exterior carwash made its major impact on the industry in the early 70’s when oil companies discovered that a free carwash with a fill-up could dramatically increase the sales of gasoline. As a result, they dumped millions of dollars into the development of thousands of exterior wash operations with gasoline all over the USA.
Some operations were company-owned and many others were privately-owned but financed by the oil companies.
While many of the traditional full service carwash operators bemoaned the oil company encroachment into the carwash industry and felt they were “prostituting” the carwash business with their free carwash concept, the fact remained that the free carwash with a gas purchase brought millions of motorists into professional carwashes for the first time.
When the oil embargo of the mid-seventies hit, it put an immediate halt to the development oil company owned or financed exterior gas/washes.
However, the die was cast, a few astute carwash operators across the country recognized the exterior carwash concept was viable and that, like Ray Kroc, were selling convenience and not just a carwash.
These operators began to develop chains of exterior-only carwashes that today are thriving businesses unaffected by many of the problems faced by the traditional full service carwash operator.
Is it about revenue or volume?
Exterior carwash operators today are finding that the key to success with an exterior carwash is high volume fueled by a lower price, fast and convenient service.
Some operations across the country are pricing their exterior wash as low as $3, with the average at about $5. These operators are reporting huge volumes, not to mention labor costs less than 20 percent of gross sales.
In spite of the obvious success of the exterior concept many full service carwash advocates still argue against the concept by citing the “revenue per car” position. They believe that high revenue per car will offset the lower volumes and higher labor costs.
If a full service operator is enjoying high or moderate volumes and experiencing a high revenue per car, a nice pre-tax profit and does not mind the aggravation of operating a full service wash, you don’t tell a winning horse how to run the race.
But there are many more existing carwash operators and many new to the industry operators who are not enjoying good volumes or high revenues per car, or are simply not interested in the aggravation of managing a full service carwash. The exterior is for them.
The exterior wash maximizes your investment
Forget all these arguments — for many, the exterior carwash is a realistic way to maximize investment.
In an existing carwash facility you have paid for the land, construction, building, equipment and labor on site. But you are rarely operating at anywhere near capacity.
By offering a low-priced exterior wash you literally “drive” business into the carwash. What is the $3 car wash with free vacuuming but a form of “guerilla marketing?” This is about attracting new customers who would not pay the higher full service car wash prices, and bringing your regular customers in more often.
It is reported that exterior washes offering a low-price are bringing customers in at least once a week, and more. Customer turnout is high on both rainy and forecasted rainy days. Why? Because it is now a “value” to drive a clean car.
Both customers and carwash operators benefit from regularly cleaned cars: high profit, ease of washing and satisfied customers.
Express washing and express detailing
It is easy to transition to the concept of express detailing services once the benefits of exterior carwashing are realized: lower labor, higher volume, easier management and more revenue.
Recall the point made earlier: the motorist has a ceiling on what they feel a carwash is worth - that might be $4 or $5. For those who know what detailing services are, and might purchase them, what do you suppose their perception or value of these detail services might be?
Before answering, keep in mind that the market for auto detailing services is probably only about 20 percent of the motoring public. The big marketing question is: “Who are these customers?” They’re not the coupon clippers! They are motorists who recognize the need for cosmetic car care but do not want to do it themselves and are willing to pay someone else do it for them. In short, they are your current carwash customers.
What to know about detail customers
The important factors to remember about detailing customers are:
All this inconvenience and they pay a high price. At a Full Service Restoration Detailing Center a motorist will pay at least $75 to $100 for a wash and wax service.
The benefits of express detailing services at the carwash
Considering the demand for the detail services and the inconvenience a motorist has to go through to purchase the services, let's look at how express detailing at an exterior carwash can benefit both the carwash operator and the motorist at the same time.
Steven Covey in his highly acclaimed book, The Seven Habits of Highly Successful People, introduces the Win-Win concept. The carwash operator provides detailing services to the motorist, eliminating the inconvenience and the high prices. If that is not a formula for success what could be?
An express detailing operation at a car wash offers the motorist prices that are at least 50-60 percent less expensive than they would pay at a Full Service Detail Center.
The motorist is offered convenience because they can purchase at the carwash.
No appointment is necessary because the services can be purchased “on-demand,” whenever they want them.
Speed. The services can be completed in 15 - 30 minutes so the motorist does not have to leave their vehicle.
You do not have to be a marketing genius to see that by offering express detailing services at an exterior carwash you are in a position to maximize your investment in land, construction, building and equipment. You are giving the motorist what they want and eliminating the high price and hassle.
How to market express detailing services
Typically the exterior carwash would offer only two wash packages as to not compete with the express detail service or confuse the customer:
The express detailing program would offer a choice of four express detailing services that can be completed by one person in 30 minutes and two people in 15 minutes.
There is also a discount attached to the services.
This discount program for some operators can result in an average sale of two services per customer. That is gross revenue of $69.95 per car.
“But my customers want interior vacuuming!”
Full service carwash operations considering the transition from traditional full service to an exterior wash with express detailing could offer a fifth Service called “Interior Clean” as opposed to the “Super Interior Clean.”
This service could be offered with the wash, but priced at $19.95, which is $20 less than the “Super Interior Clean” express detail service.
What does the customer receive with an “interior clean?”
Besides the exterior carwash, the service includes:
Some might say, “Hey, this is nothing but a glorified full service wash!” It may be glorified, but it is a lot more service. The key factor is that it is not a carwash service, it is a detail service. Remember the services the customer perceives as being more valuable than a carwash and, for which they will pay more money.
Recognize that you are offering the carwash at price where it will attract more customers, more often. On the other hand, you are offering detail services at prices much less than the customer normally pays, as well as being far more convenient to purchase.
Even if the customer should complain about the interior clean at $19.95, remind them that besides getting far more service than they would get with a traditional full service wash, they can purchase the “interior clean’ for only $9.95 if they purchase a second Express Service, such as a wax.
What are the costs associated with express detailing?
The owner of an Exterior Carwash will reduce labor costs from 40 percent and 50 percent of gross sales to somewhere around 20 percent or less.
The Express Detailing Services have labor and material costs less than 15 percent of gross revenues. Because all the other costs are being paid by the carwash, the only real costs are for labor, materials and possibly sales commissions.
For example, if you received $39.95 for an Express Service and your costs for labor, materials and the carwash were $10, the net profit would be $30 per car.
What kind of volumes can be expected?
The answer depends on the car wash location, layout, pricing, speed, quality and consistency of service. Assuming these are in line you can expect double or triple the volume you would get in a typical full service wash.
One operator who converted an older existing full service wash to a lower priced exterior only went from 6,000 cars a month with 50 percent labor to 18,000 cars per month with 20 percent labor.
Because the Express Detail Operation feeds off the carwash volume, it is critical for the operator to understand that it is in their best interest to do all they can to increase and maintain the highest carwash volumes to feed their express detail operation.
Express Detail volume can range from 5 percent to over 25 percent of carwash volume. Some existing exterior washes that have converted to an exit-end express detailing operation are reporting 5 percent to 15 percent. These might be lower than reports from full service car washes offering express detailing because the exterior customers are “in a hurry,” and typically come to the exterior wash as they are already conditioned to staying in their vehicle.
What is needed for an express detail operation?
The following are requirements for a high volume Express Detailing operation:
To operate an express detailing operation in any carwash requires a minimum of two bays. With two bays and four attendants you can turn out a minimum of eight to 12 cars per hour, depending on the services sold. Two bays is a minimum, whether you should have more than two bays is determined by your carwash volume.
For example, if you wash 500 cars per day and sold 10 percent of your customers an express detail service, you have the potential of doing 50 express services a day. Like your carwash business, the volume will not be consistent from hour to hour. You might be slow one hour and slammed the next hour. So it is critical to balance the amount of space allocated for expressing detailing to the volume of your carwash.
Keep in mind also, that the ability to perform the express services quickly will result in greater volume.
Believe it or not, operators are always saying to me, “I really don't need more than one bay and one person, because we do not have the volume to justify more.” What the operators don’t realize is the fact that they are responsible for the lack of volume by their attitude and failure to allocate the necessary space for the potential volume.