Past Issue

IBA - Enhancing Profitability

By Craig Eilers

11/01/14

The majority of car washes operating in North America today use in-bay automatics (IBA) as their main source for generating revenue. The investment required to install an IBA can be considerable, depending on the location and type of equipment purchased. In order to maximize the return on the investment (ROI), many operators look for ways to generate the most income per wash while, at the same time, keeping their cost per wash at a minimum. What they’re really trying to do as an operator is increase that bottom line profit each year and grow their business in the process.

This article offers ideas and suggestions on how to increase the profitability of IBA operations.

 

TOUCH-FREE OR FRICTION

When IBAs first started to appear in the U.S. market, the standards for quality and reliability were lacking. Friction machines damaged a lot of cars and the brush material available at that time was hard on the vehicle’s paint and clear-coat finishes. Touch-free machines did not profile or size cars as well as they do today, and the pre-soak chemicals available at the time offered mixed results at best. However, most operators felt that touch-free machines seemed to be the better choice at the time. As a result, there was a big movement towards touch-free IBAs. In many areas, touch-free machines still dominate the market today. However, during the past five to 10 years, as the cost of utilities and chemicals have continued to rise, many operators have opted to buy friction machin

Today’s friction machines are built to much higher quality standards than they were 15 or 20 years ago. They are highly efficient, do little damage to vehicles, and offer superior cleaning results compared to touch-free IBAs. They also use much less water, power, and chemical to clean a car, resulting in a much higher profit per car washed for most operators. Several of the leading companies that currently offer friction IBAs, have them available in three offerings: friction only, friction with high pressure (hybrid), and machines that offer friction, hybrid, or totally touch-free wash selections all in one machine, known as “Combi” or “Combination” machines. Operators who are planning to build new IBA locations or looking to upgrade an existing site, would be well advised to consider one of these newer style machines.

 

EXPRESS

Another option some IBA operators may want to consider is an “Express Wash” type layout for the wash bay. This option is ideal for operators who have high volume sites and are looking to increase their throughput (cars washed per hour), without converting their wash bay to a mini-express, conveyor-type tunnel system. Several equipment manufacturers now offer an in-bay automatic “Express Wash” configuration as part of their product line. This type of layout usually requires an extended wash bay, with a minimum bay length of 55’ to 60’. These layouts incorporate the use of freestanding wax and rinse arches along with a freestanding dryer system, and possibly a tire shiner, depending on market conditions. With this type of layout, the IBA is used only to do a quick wash of the car, usually a 2- to 3-minute process. The customer then exits from the automatic and slowly drives through the remaining arches in the bay, which apply wax and spot-free rinse, and dry the car as it exits the bay. These systems have been in use now for several years and are proving to be highly profitable in the right location with proper management.

 

RECLAIM

As the cost of utilities continue to rise, especially water and sewer rates, this is also a good time to consider adding a wash water recycling system to the car wash operation. Today’s wash water recycling systems (WWRS) are highly efficient and do an excellent job of providing recycled water that is compatible with all IBAs being sold today. Although the initial capital cost can be significant to install a WWRS, the ROI or payback on one of these systems is usually excellent. In most cases, an operator can pay for the cost of a good-quality reclaim system in two to three years or less. Once it’s paid for, the profitability of your car wash operation will increase significantly, even after factoring in the annual cost to properly maintain the WWRS. 

 

 

 

 

 

UPGRADE OFFERINGS

Many operators offer a variety of services that can be added to their wash packages at the time of purchase through the entry pay station or POS system. Some of the more common upgrade offerings may include the following:

• Undercarriage wash with rust inhibitor

  Wheel and rocker panel blasters

  Rain/water repellant

  Tire shine applicator

  Token for free vacuum

With the variety of products and marketing options available today from the companies that manufacture entry pay stations and POS systems, operators should learn all they can about these products and their capabilities when buying or upgrading to a new IBA. The new combination IBAs on the market today allow operators to offer up to eight wash selections at the point of sale. As a result, most entry pay stations can now display up to eight menu selections and allow for one or two upgrade offerings for each selection as well.

 

MARKETING OPTIONS

In addition to offering upgrades to the wash selections at the time of purchase, there are a variety of ways to promote and market the IBA with the entry pay stations that are now available.

• New touch-screen technology and user-friendly menus quickly guide customers through the transaction process.

• Operators can offer customers the choice of paying for their wash with currency, credit cards, fleet or customer loyalty cards, car wash codes, and RFID tags. Cashless pay stations are also available for site-specific applications.

• Customer loyalty programs can help build a base of frequent users.

• Cross merchandising can be presented to customers through video right at the entry pay station at the time of purchase.

• Gift cards, POS discounts, or weekly specials can all be set up and offered to customers as a way of building customer loyalty and generating additional car wash revenue.

• Remote access is now available, allowing operators to generate detailed reports to help manage their operations.

• Website development and hosting is available from several manufacturers that will allow multi-site operators to offer cards and code purchases for their customers at all locations linked to the system.

In the near future we will also see smartphone apps available that will allow customers to pay for their IBA wash right from their smartphone, completely bypassing the POS or entry pay station process.

 

CUSTOMER SERVICE IS KEY

All of the comments provided above have the potential of helping operators improve and increase the profitability of their IBA car wash operations. However, the most important factor, as with most businesses, is to provide unsurpassed customer service at all times. By doing so, you should always have a highly profitable and successful operation. Having excellent equipment and good marketing won’t help much if you offer poor customer service.

Here is a list of things to review and make sure you have implemented in your car wash operations:

• Facilities should be clean and have plenty of lighting.

• The condition and appearance of facilities, landscaping, paving, etc., should be excellent.

• All equipment should be clean, well maintained, and operating properly.

• A preventative maintenance program should be in place for all equipment requiring periodic maintenance.

• An ongoing marketing program should be in effect to bring customers into the business and keep them coming back.

• Staff should be well trained and focused on being attentive and helpful whenever they are in contact with customers.

  Promote the business throughout the local community and market area. 

If you talk to operators from around the country, you will find that everyone has a different opinion about which type of equipment to use, how to market the car wash, and how to price the wash selections. However, the one thing you’ll find in common with all of the operators who are successful and making money, is that they all have well managed facilities and offer great customer service as outlined above.

I hope you find some of my comments and suggestions helpful as you consider ways to improve the profitability of your car wash operation. Car washing is a great business. I wish you great success in your car washing endeavors.

  

Craig Eilers is the northwest region sales manager for Istobal USA. You can contact Craig via e-mail at craige@istobalusa.com.

  



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