Pondering the year ahead
In looking at the year ahead, the only sure thing is that there are no sure things. It's easy to try and predict the future, or foresee and ultimately prepare oneself for what may come, but as small business owners, we all know that it's always best to expect the unexpected and hold on tight. Disproportionate weather patterns, natural disasters, an up-and-down economy and customers' fluctuating spending habits and budgets can make any car care business owner feel as if they are on unstable ground, so it's important to get a hold of what we can control. Therefore, to help ease the pain of not necessarily knowing what's to come, experts and industry veterans are stepping up to the plate and donning their thinking caps to give their insight into the imminent year ahead.
Is going green still red hot?
That's the question many are still pondering. Going green was the big thing over the past three years, although many will argue that environmental issues have always been a priority, but let's face it, the eco-friendly cause really took flight just a few years back. So, now some must wonder if going green is going away. Not so, according to Bobby Willis who has been in the industry for 16 years and currently owns Cool Wave Carwashes in Virginia and the consulting firm Wash Consultants LLC. He said it's still big and will be for years to come.
"It really doesn't matter to most customers if their local carwash is going green. It does, however, matter to the site owner due to increased utility costs. Water, sewer, electric and natural gas rates continue to rise. There are no indications that this trend will change," said Willis.
The upfront costs to going, being and staying green are staggering, Willis continued, but the long-term cost savings more than justify the upfront costs. "As the cost of going green decreases, more and more, operators will start 'going green' for the simple fact that it makes economic since," he said.
Marc Wilson, a carwash owner and executive director of the Southeastern Car Wash Association, said efficiency is a definite theme and said they're making efforts to save the environment and help their bottom line by concentrating on their water usage and sewer bills, lighting, power and equipment. Wilson's tips for operators, if they have not already done so, are to:
- Use fluorescent or LED lighting which can save 30-40 percent on a power bill.
- Drill for a well and look at reclaim units which can also save 30-40 percent on water and sewer bills.
- Consider more efficient equipment like chemical applicators which can save up to 20 percent on chemical usage.
- Consider different power-saving devices like the Black Hawk Power Saver which can save you 15-30 percent on a power bill.
"All the above ideas can bring $20,000 to $50,000 savings per year," Wilson said. "With the economy the way it is, we need to be more aware of the things that can make us more money to the bottom line. Between the problem of the weather patterns and economy, we are not growing, so we have to take care of the other items in which we have some control."
Here are the cold, hard facts in terms of the economic health in the United States. Towards the end of 2011, things were looking okay. Unemployment rates were down and consumer spending was up. However, just because things seem "okay," that doesn't mean things are great, and, even if things are slightly improving, the economy has a long way to go.
Michael Schuman, who writes about the global economy for Time magazine, said in a Jan. 3, 2012 column, "So here we are, at the start of 2012, facing the same question: Will this year finally, really, truly bring an end to the economic crisis, and a strong, meaningful rebound to growth, job creation and financial stability? … Though there are some reasons to be hopeful, I don't think we're out of the woods just yet. There is still too much uncertainty, too many problems left unresolved from the financial crisis, and too few tools in the hands of policymakers to act to support growth. Sure, there are some bits of good news. The U.S. economy has been creating more jobs, the improved optimism can be seen in a strong holiday shopping season. …But let's not kid ourselves. There is no avoiding the reality that the bad news clearly outweighs the good, just about everywhere."
So, what does this mean for the car care industry? For starters, it means money-spending should still be well-calculated, and efficiency needs to be a top priority. It also means that the aforementioned optimism could very well mean more customers willing to make repeat visits.
Suzanne Stansbury, editor and publisher of Northeast Carwasher magazine; executive director of the New York State Car Wash Association, the Connecticut Carwash Association and the Car Wash Operators of New Jersey, said the only trend she predicts is more consolidation. "The economy and weather patterns have really weeded out the good and bad operators, and as a result you will see more washes owned by fewer operators," she said.
"Those who have been able to survive and profit, and there are many operators boasting volume increases, have done so because they have changed their business model. They aren't waiting for the weather or economy to cooperate; they are making changes to how they wash cars and what they offer their customers."
So, what does this mean for the owners and operators? It means you are going to still have to work hard to bring in new customers and make sure your current customers come back and don't go to your competitor or become at-home carwashers.
The 2012 carwash customer
According to Willis, for the most part, customers haven't changed. "They will continue to look for value, choice of options and services, good customer service, clean facilities, short wait times and most of all a clean vehicle."
However, the influx of the Internet-savvy, Generation Z (see sidebar) customer base should influence the way you do business. Steve Gaudreau, a carwash consultant with 20 years of experience and founder of Steve Gaudreau & Associates, said, "One of the biggest trends that is continuing to accelerate into 2012 that operators need to be aware of is the change to their customers and potential customers that are occurring because of the increasing usage of the Internet by everyone."
Today, continued Gaudreau, consumers find you, shop, communicate to your customers about you and make decisions about doing business with you — via the Internet. "The result is that a carwash's website, search engine optimization, presence on social media, use of increasingly popular Internet marketing venues and day-to-day management of their image on the Internet is becoming a minimum requirement for survival rather than a marketing add-on."
Understanding, Gaudreau said, and really working with this trend means getting feedback from your customers that if utilized successfully can increase business and position you for the future.
David Dugoff, owner of College Park Car Wash, in College Park, MD, and the operator vice president of the Mid-Atlantic Carwash Association, said, "Customers are looking for consistent value — good thick soap, hot water and good pressure in the gun. I have been able raise prices a little, without complaint."
Dugoff also said that smartphone apps that bring in customers looking for your business at that moment are great, but as all of the different apps proliferate, you can't subscribe to them all. "We have to be selective, and careful," he said.
Willis also said of apps that as the smartphone market continues to evolve, more and more applications will cater to both operators (controlling equipment) and customers (information, payment options and couponing). "I have equipment that is completely programmed and is remotely monitored by my smartphone." But, as for customer-based apps and Internet marketing, be sure to do your homework. "As payment technologies continue to evolve in the industry," he said, "this will become less cumbersome."
What's ahead for social media?
According to Social Media Project Coordinator Erin Sullivan Capellman, who works for Thomson CompuMark, Twitter will continue its upward trend. "I'm certain it's continuing to trend upward. A good piece of evidence is that all politicians in the current election utilize it."
Something to look out for is Google+, a social networking platform which is set to rival Facebook. "This is a space to watch," said Capellman. "I know their traffic grew by something like 50 percent or more in December, and I've noticed they're advertising on TV. I'm not convinced it will be around forever, but it's certainly the most viable competition to Facebook that I can recall."
Linkedin, a networking site for professionals, went nuts in 2011, and it should to continue to "go nuts," said Capellman. Helping its popularity is that they have added lots of new functionality and promises of much more. "From personal experience (and that of some friends) their customer service is abysmal and not prepared to handle the obscene amount of users, so that's something to consider," Capellman said. "But, I think given their unique platform and lack of competitors, it certainly won't be a deal breaker."
It's not all stories of growth, however, as Capellman noted that one once prominent Myspace will "continue its downward spiral."
As for mobile Smartphone usage, Capellman said, "Generally speaking, mobile for social platforms continues to grow exponentially. I think I read recently that something like 50 percent-plus of Facebook traffic is from mobile users, and that number might be even higher."
As for Groupon, Stansbury said she thinks it, along with LivingSocial, are great tools to use to build exposure and create new customers. "You need to be smart about your offer, however, and really understand that this is not a moneymaker, but a way to build your brand and hopefully your customer base," she said. "I'd be surprised if it didn't pick up momentum in the industry this year. At least one association, the Car Wash Operators of New Jersey, ran a successful program for its members with Groupon."