Past Issue

IBA Prognosis - An Interview with Kevin Collette

By Mike Perry

07/01/14

A lifelong entrepreneur, Kevin Collette was a co-founder of Istobal USA, where he served as president, responsible for Istobal operations in the United States and Canada. In March of this year, he was appointed vice president of sales – compact tunnel organization (CTO) for Sonny’s Enterprises Inc.

Confidently anticipating a more promising future for the recovering in-bay automatic (IBA) and convenience store markets, Collette sees many imminent opportunities for operators who are able and willing to closely evaluate their current wash systems and programs. He strongly encourages car wash owners to partner with value-added suppliers who are seriously committed to helping them wash more cars. 

MIKE PERRY: Given your experience and tenure in the industry, what do you know now that you wished you had known earlier about the car wash business?

KEVIN COLLETTE: How much a truly involved manufacturer and distributor can help a car wash operator be successful.

What has impressed you the most about the car wash industry the past five years?

How quickly the industry adjusted to the economic collapse of 2008.

What has surprised or even inspired you the most about the industry the past five years?

Again, how the operators, distributors, and manufacturers all adjusted to the collapsing market; it crashed virtually overnight.
The loss of disposable income dramatically reduced wash counts and revenues, affecting all players in our industry. Our combined creativity in developing new washing concepts including wash clubs, loyalty programs, upselling chemistry, entry systems, and high-volume mini tunnels resulting in increased wash counts and revenues has inspired and surprised me.

What role do you think suppliers should play in the success of any wash?

Suppliers are critical. Knowing the needs of each customer, and advising them of changes in their market, new equipment, accessories, and innovative ways to capture market share and improve their customer’s washing experience are just a sampling of the attributes your supplier should possess. It’s not enough to just provide service today. Manufacturers and distributors must be on the leading edge, creating value for their washing and servicing partners.

How should a current operator or a first-time investor evaluate a potential supplier?

I think it’s important that every car wash operator truly evaluate his suppliers. Are they just an equipment manufacturer, or are they a real partner? I would encourage operators to seek out and partner with suppliers who would help them evaluate every aspect of their new or existing business. This would include, among other things, property review and business pro formas, architectural level drawings, installation, and the essential ongoing service and support. Also, operators today must be sure all of their vendors are financially solid and capable of providing parts and supply inventories as well as professionally-trained service technicians. This is just smart business sense.

In your opinion, what has to happen for the in-bay market to recover?

A few things are needed. First, owners and operators in the c-store industry must become committed to car washing. To understand the true potential of their sites is important. After all, they own some of the best pieces of real estate in the world. Once they’ve committed, then they should focus on creating more revenues. Operators should utilize equipment designs which maximize peak demand periods by being able to successfully process more cars per hour. This creates value-added purchasing options to increase average wash ticket prices without adding time. We need to create a better wash experience for customers.

Based on your experience, would you agree with many in-bay operators that an in-bay wash is an “impulse purchase?”

Yes. And this type of frequency can be also converted and sustained. Loyalty programs, free vacs, and a professional-level wash experience can build loyalty and ultimately, earn the higher profits that go along with an enhanced wash experience.

As you look to coach and to add value to your in-bay customers, would you encourage them to have one professionally trained person who is specifically tasked to in-crease car wash revenue?

All successful businesses are based on accountability and productivity. So a professionally trained car wash manager, who “takes ownership” for car wash counts, is an absolute must.

Does it seem ironic that most manufacturers are making very functional equipment, yet operators seem to be washing fewer cars now at their sites than they were 10 years ago?

Not at all. Keep in mind, equipment continues to improve, and so are the operators. Don’t forget, disposable income was drastically cut, but we all survived those challenging years. In 2014, with all of the exciting format and accessory changes becoming available, I think we are headed finally in the right direction.

At in-bay sites, what wash quality issues are still very important for consumers and operators?

Clean, shiny, and dry cars are a must. Operators must pay particular attention to the wheels, as they stand out when they are not attended to. However, speed, show, value, and overall experience are also very important. It takes the right combination of all of these to excel.

Especially in the in-bay market, don’t you believe that sometimes operators simply overprice their car wash menus?

Yes, but further explanation is needed here. When operators charge $12 for an 8-minute, simple friction wash with basic “me too” chemistry in a dirty bay, then yes their menu is overpriced. However, a wash with free vacs, lava, and a wash club program with real benefits at the same $12 price point, this is perceived as, and truly is, a real value. 

What will be the next “breakthrough” in the in-bay car wash market?

I think we are seeing it. There’s no one big thing. Manufacturers today are designing machines that do more in less space, that provide better cleaning and chemistry, and result in safer and faster washing and drying. This is true convenience, performance, and value.

Do you see any real or potential threat looming in an uncertain future, which could negatively impact suppliers?

No, I do not. There does not seem to be any “magic pill” product that would reduce or eliminate the need for regular washing. Thus, so long as people are washing cars, high-quality manufacturers and distributors will be needed. Their success or failure will be determined by how valuable they are to their customers.

When do you think it makes sense for an in-bay operator to replace a current car wash?

I think operators have to look at their equipment’s functionality but equally important, they need to look at how they are operating. Specifically, are they maximizing their wash potential? Are they being competitive within their market? When savvy operators today analyze their wash, and their business model, and gain an understanding of its true potential, this might then lead the most successful ones to an equipment change, an upgrade, or even more. Today, just changing equipment may be only a part of the solution.

What one thing would you like to see your customers do better in the second half of this year?

View their wash through their customer’s eyes. Do some real serious competitive analysis, consult with experts and view the automatic bay as a business by itself. Doing so will create new business models and concepts, which will lead to increased revenues and profits. Of course, we hope most of these hard-earned profits will stay within our own industry.

 

Mike Perry is a retail-marketing consultant with more than 30 years experience in retail marketing and business-to-business sales. He can be reached at mpccws5@aol.com.



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