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In-bay Automatic

The third option: Hybrid washing

October 11, 2010
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It’s one of the arguments in the carwash industry that never seems to come close to being settled: “What should I choose for my in-bay automatic; touch-free or friction?”

Each wash has a very valid argument, playing to a specific market segment: touch-free to the “safety” crowd, and friction to the “consistent wash-quality” crowd. Both are right.

Nonetheless, recent trends seem to favor friction, climbing from an almost 9:1 disadvantage in industry surveys to nearly 30 percent of the traditional carwashing market.

Many industry experts expect to see friction’s market share climb from roughly 40 percent of the retail petroleum market to about 50 percent in the next few years.

An opportunity for a third way
Despite friction’s ascendancy at the moment, there is still a distinct customer base for both friction and touch-free in almost every market in North America. So why not offer a machine that can do it all — twice the work in the space of one machine?

This third concept, the hybrid, has been growing in popularity over the last several years. And it makes sense, for a lot of reasons:

Sophistication: Motorists are increasingly sophisticated. Enough hybrid units have been sold in the past few years that the public is starting to respond to the marketing of a machine that does both.

Differentiation: Many operators are looking for a way to differentiate themselves. In most of the U.S. there is an established base of both touch-free and friction units.

Installing a hybrid offers the operator a way to attract a new type of customer, and even to increase the prices on the wash menu.

Supplier base: There is an ever-increasing supplier base. Growing competition in this segment means more aggressive pricing and more options being offered to the operators.

Acceptance: There is an increasing acceptance of a combination option as a high-end wash package. This has served to effectively raise prices of friction wash packages to be on par with, or even higher than, either touch-free or friction alone.

The twist
A few years ago, when hybrids were new, it seemed logical to put one in and expect a wash mix that was slightly tilted toward the touch-free packages. After all, this would mirror the offerings in the industry as a whole.

But something completely different happened: operators were finding that pure touch-free washes were a very small part of the wash volumes in hybrid units.

In retrospect, this is logical, given the one glaring problem that is systemic to all hybrid units — they look like friction machines, at least to the casual eye.

Regardless of the amount of signage telling people differently; most customers will look at one and see brushes.

So the core touch-free customers were never coming close to the hybrids because they looked like friction units.

Those few customers that did buy touch-free washes were actually friction customers who decided on touch-free once they got to the point of sale and realized that there was a choice.

Consider the experience of a retail petroleum marketer with a large number of sites across several climate zones in the Southwest. A sample of his fleet showed the following:

Source: Major Retail Petroleum Operator in Southwestern USA

Bottom line: touch-free customers don’t use hybrids (or at least not many of them do).

Yet another twist
But it wasn’t only that touch-free customers stayed away from hybrids. Customers were doing something else — buying up to a combination wash offering.

A combination wash offering is basically a high-end friction wash with high-pressure (touch-free) components to it.

Because over 90 percent of the customers of hybrids are core friction customers, adding high-pressure cycles increases their perception of value, and correspondingly, what they are willing to pay.

Touch-free sales were much less than the industry average overall, but so were friction washes.

In fact, hybrid operators were seeing that friction washes were only 30-35 percent of the overall washes, with the balance being a wash package that combines touch-free and friction cycles into a combination wash.

Source: Mark VII Customer Research

Not only that, but at many sites similar percentages of customers were purchasing the combination wash packages at $1 - $2 above normal market price.

Why? Simply put, motorists perceive value in adding a high-pressure component to a friction wash and they are willing to pay more for that service.

In short, hybrids do work, but not because customers choose touch-free or friction; rather because they choose friction or a combination friction wash.

Harnessing the market power
A hybrid with the capability of performing a full touch-free cycle is overkill for most markets. For a lower investment, operators can tap 90 percent of the hybrid market and never have to worry about marketing to pure touch-free customers.

Remember that hybrid touch-free units, as a rule, don’t perform the same on a touch-free wash as touch-free only units do.

Most touch-free washes use high-tech water treatment and high-pressure application systems that are not always included in the hybrid touch-free component, so be prepared to build a mostly friction menu with a touch-free component.

Play to the strengths of the unit — the combination wash.

The reduction in throughput should be offset by higher retail prices for the combination package, but be prepared for longer lines than in a friction-only or solely touch-free system.

Finally, don’t be afraid to price above the market on the combination offering.

In general, operators around North America who offer combination packages command a price premium of $1 or more in the market.

If the prevailing friction or touch-free top-end wash package in a given market is $7, a combination can usually retail for $8 or more.

So is it for me?
If you are in a friction market and want to differentiate, yes.

If you’re in a touch-free area and want to differentiate, yes.

If you are in a predominantly touch-free area and friction is frowned upon, no.

Hybrids can offer more flexibile wash packages and a lot of profit potential to a friction-based wash, but if you are trying to compete in a touch-free market, hybrids probably aren’t your ticket.

Bottom line — if you position them as a top-end friction wash with a high-pressure option, you will succeed. If you try to take on the touch-free only units head to head, you will probably fail and realize you just spent a lot of money for a friction wash.

But in the end, it’s really up to your customers — the motorists. They will respond positively to a well-marketed, differentiated offering, and they will pay a premium price if they perceive a premium value.


Craig Campbell is VP of Sales & Marketing for Mark VII Equipment LLC and has over 10 years experience in the carwash industry. He also owns and operates a seven bay self-serve carwash in the metro Denver area. For more information, e-mail Craig at ccampbell@markvii.net.

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