Auto Laundry News - June 2011

Wash Volume — Bucking Gas-Price Hikes

By Robert Roman

Last month’s column describ-ed what is generally known about how highway travel will change or be changed by gas-price hikes and sustained higher fuel costs, and how this may impact car wash sales volume.

This column describes strategies and tactics that car wash operators can use to help offset the potential and realized impacts.

One strategy a retail-store owner can deploy to make up for less highway traffic is to increase a site’s visibility. A proven tactic is to hire a costumed guerrilla marketer. You have seen them standing on sidewalks holding an advertising poster, waving at traffic. Some do whatever is necessary to get noticed, from doing flips to dancing to just being silly.

For example, Liberty Tax Services dresses people in an Uncle Sam costume and stands them outside during tax season. According to Teresa McEchron, general manager, St. Petersburg, FL, “It’s the most effective marketing tool to date, about 50 percent of our business.”

McEchron adds that the key is to be energetic and enthusiastic, making traffic look up at you, beep at you. “The more beeps I hear, the more I know they’re doing their job.”

Little Caesars and New York Pizza shops and even Jiffy Lube are now relying on sign waving to generate door swings, some stores using their own employees. The typical pay range for costumed marketers is between $7.00 and $15.00 an hour.

Another proven tactic car wash operators can choose is a highway billboard.

One advantage of billboards is the ability to use high-resolution graphics and colors to create visual impact. People driving to/from work or running errands see billboards repeatedly. Driving by the same sign, they begin to memorize the ad and business advertised.

The cost of a billboard can vary significantly. One on Sunset Boulevard in West Hollywood, California may cost as much as $10,000 a month whereas a 10’ by 40’ board in Polk County, FL may run $20,000, annually.

A compelling reason to use a billboard is its low cost relative to other choices. Cost-per-thousand (CPM) is a term used by advertisers to measure the cost of reaching an audience of 1,000 people. Most advertising mediums have a CPM between $30 and $150. A billboard can have a CPM between $2 and $5 by comparison.

Another way to gain more attention is the front-yard sign. Some operators waste valuable space and impact by including the business name on yard signs instead of simply say-ing “CAR WASH” with big letters and bold colors.

For example, a front-yard sign with bright yellow letters on a black background may not be the most appealing combination but it can be seen from a very great distance.

Visibility can also be enhanced with improvements like adding a backlit mansard or painting the building with bold colors or patterns to create an appealing image and distinguish the wash from its immediate surroundings.

Car wash owners I know that have used these tactics have realized sales volume gains between 10 percent and 30 percent.

If you own a car wash that sells gasoline, discounting the price of gas with a car wash purchase is proving to be an effective tactic to offset fuel price hikes.

A friend of mine with a multiple-facilities car wash is doing this in a big way by discounting the price of gas by $0.20 a gallon when customers purchase any car wash at the pumps. This owner is now selling between 60 percent and 70 percent of washes at the pumps. He also has no qualms about increasing the discount as gas-price hikes warrant.
If you own an express-exterior wash, lower traffic volumes can be countered by pursuing incremental revenues.

A friend of mine decided to do this at his express wash late last year. He started out slowly by offering one service, a hand-prep for $4. Within several weeks, 25 percent of his customers were buying this and requesting more services.

A few months later, he introduced a wheel deal for $8: towel dry in the vacuum area, wipe door jams plus tire shine and wheel dressing. Ten percent of his customers bought this service out of the gate and asked for even more services. Later this spring he plans to offer a basic interior cleaning service, also at the request of customers.
If or when gasoline finally hits $5 a gallon is anyone’s guess. However, sustained higher fuel prices and volatility
in prices are most likely in the cards for the foreseeable future.

Consequently, car wash operators should be prepared for this eventuality.

Bob Roman is president of RJR Enterprises — Consulting Services (www.carwashplan.com). You can reach Bob via e-mail at bob@carwashplan.com.

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