On May 9 I was in Nashville at the International Carwash Association’s The Car Wash Show. It is a great place to network and find out about new and innovative products. The educational sessions are a good place to start. If you have not been to The Car Wash Show in recent years, you have no idea what you are missing.
Because of time constraints, I was able to attend only two educational sessions. As a 30-year veteran in the car wash industry and the author of two books about the business, I would like to share some of the lessons with you.
REVENUE GROWTH SESSION
The subject being discussed in this session was how to manage time and work on the business to grow profit. The speaker asked for a volunteer. After few seconds, when no one else stood up, I volunteered and I was asked to step on the stage. The dialog that followed went something like this:
Speaker: What do you do?
He was expecting a simple and straightforward answer.
AJ: I solve problems and create happiness.
The speaker became confused.
Speaker: That is not the answer I was looking for.
I kept silent and smiled to see his reaction. The speaker then looked toward the audience and pointed to individuals and asked the same question. Each one answered by saying, “I own a car wash,” or “I am in the car wash business.” The speaker looked at me.
Speaker: This is what I wanted to hear. You are in the car wash business, aren’t you?
AJ: Do you know how many millions of people drive their cars on the road every day? My job is to make their driving experience very enjoyable. My job is for them to say “wow” every time they get in their car.”
Speaker: But you are in the car wash business, aren’t you?
AJ: I solve problems and create happiness by washing and detailing cars.
Manipulate or Inspire
Entrepreneurs are in business to make money. However the money is not the main reason, it is the end result. It is the measurement of how successful you are in solving a problem while providing a great overall experience. If the money is the main reason you are in business, customers will sense this and you cannot build loyalty. From the customer’s perspective, the question becomes, “How cheap can I get this service?” Providing incentives and low prices to attract customers is called manipulative promotions. No one denies that it works, and it is part of doing business. But all the marketing and promotions do not build loyalty and cannot assure that the customer will come back. For customers to choose to follow you voluntarily and be willing to drive past other similar businesses just to come to you, you have to inspire them.
It’s the Experience…
Extensive research has been done in the restaurant industry about service and overall experience. The data show that overall experience is the number one influencer of return visits, not the food (or, in our case, the car wash) alone.
Don’t confuse best price with cheapest price.
Based on 99,000 verified diner surveys, Rewards Network data concluded that if the food rating is one point higher than the rating for overall experience, there is a 20 percent drop in the likelihood the diner will return to the restaurant. When the food rating is two points higher than that of overall experience, the chance of the customer returning is 38 percent lower than if the ratings were equal. If the overall experience is only rated three stars, the likelihood of a recommendation to friends and family drops to 6 percent. If the overall experience is rated one or two stars, then the likelihood of a recommendation drops to 1 percent. The question is, if you wouldn’t recommend a business to friends and family why would you go back?
Just as in the restaurant business, the overall experience in the car wash starts moments before the customer drives into your lot. It starts with the marquee sign, landscape, building colors, and the number of cars in the parking lot. The overall experience continues with the customers’ interaction with the greeter, cashier, and staff. The experience is enhanced with free coffee, popcorn, newspaper, attractive waiting area, clean restrooms, all free perks, incentives, quality, speed, and overall value the business provides.
…And Your Vision
Once upon a time, a tourist saw three masons at work.
He approached the first and asked, “What are you doing?” The man replied, “I am cutting stones.” The traveler walked toward the second and asked the same question. The man replied, “Can’t you see, I am building a wall.” The tourist walked towards the third worker and repeated the question.
The mason paused, made eye contact with the tourist and then looked at the space beyond the brick wall, drawing the tourist’s eyes to the same direction. “I am building a cathedral,” he said, “I know how important this cathedral will be to the thousands of people who will come from all parts to worship here. I know this because the bishop once told me his vision for this great place.”
Your business depends on employees to create happiness and overall experience. At the end of the day, you’re asking your employees to help you build your vision. Why should they help you? The simple answer can be found in the difference between a true leader and a person of authority. It is the difference between someone who started the business for the money and someone who started the business to solve a problem and create happiness.
To clarify: as an entrepreneur you must make money. You must charge adequately for the services you provide in order to stay in business to continue to provide the services needed by your customers, employment for your staff, and to achieve the life you deserve for you and your family.
EXPERT PANEL: VALUE-ADDED SERVICES
Anytime I have an opportunity to listen to a marketing panel I do. You never know what new idea you could come across that, implemented at your car wash, could help to increase your revenue by thousands of dollars.
As I was listening to the expert panel at The Car Wash Show, someone from the audience asked one particular question that struck me the most. The question was: do you offer detail services?
One panelist did not offer detail and the other two panelists only offered express detail. When asked why full detail was not offered, one panelist responded by saying, “We do not make enough money from full detail and it takes too much time, therefore we do not offer it.”
The solution to the problem is obvious. If you do not make enough money from any service that means you are not charging enough. If the detail service takes too much time that means you need to provide your staff with the right tools and training to finish faster, so you have time to detail even more cars per day and to make a very handsome profit.
Today, as fewer car washes offer detail services, the opportunity exists more than ever for those that still provide the services to raise prices and realize higher profits. As business expenses and labor costs rise, businesses have legitimate reasons to raise prices and pass the cost to the consumer. The problem starts with owners’ misconception that by raising their detail prices they will lose customers. The big mistake is that owners make the price the main issue instead of concentrating on the value, quality, and the customer experience.
If the price is the main reason for consumers to make a purchase decision, then why do Mercedes Benz, BMW, and many high-end brands sell tens of thousands of cars each every year?
Best Price vs. Cheapest Price
Consumers always seek to purchase the best quality and service at the best price possible. Most businesses confuse the customers’ understanding of “best price” with “cheapest price.” Experience shows you can never buy the highest quality and expect the best service at the cheapest price, however you may demand the finest quality and top service at the best price. When customers insist on the cheapest price they have to understand that they must give up on asking for the best quality and service. Ultimately, you get what you pay for.
Imagine if a vehicle MSRP is $20,000 and the dealer listed it at $25,000. Another vehicle MSRP is $100,000 and the dealer has it listed at $90,000. Which one has the best price, or what I like to call “better value?”
This is the same principle we use at our car wash. We do not concentrate on the price but rather on customer education and the detail process. We offer the highest detail quality, the best guarantee, and the greatest value.
Do we lose some customers to the competition because of the price? Yes, we lose some of the customers who are looking for the cheapest price, however we gain a lot more customers because we provide the best quality, service, and value.
Price vs. Value
Our main competitor offers interior detail for $75; our interior detail starts at $245 and moves up to $500, plus extra charge for size and condition. An average interior detail takes between one to two hours depending on size and condition. The same competitor charges $99 for exterior buff and wax; our basic exterior detail starts at $295 and can exceed $1,000, plus extra charge for size and condition. It takes one to one and half hours to finish the exterior detail.
Our average complete interior and exterior detail is $450 and takes about two hours to finish. Every week, we have some detail purchases that run between $700 and $800. Our competitor’s complete detail price averages about $130. It is very rare that our detail center is empty even though our prices are much higher.
When you go to a fast-food restaurant to purchase a hamburger, they will ask if you want to add fries, soda, or anything else? We use the same principle at the car wash, i.e., we offer fabric protection, leather protection, paint sealant, headlight restoration, and many more options with every detail.
Our express detail starts at $70 and up to $150 plus extra charge depending on size and condition. Orbital wax takes 15 minutes after the wash; seats cleaned or carpet cleaning, each takes about 20 minutes after the wash. Every express detail vehicle is an opportunity to upgrade to a full detail with the proper education. It is much easier to upgrade a customer to a full detail once they have committed to an express detail service. People who are already buying from you will be open to upgrading their purchase to a higher priced package.
Yes, those prices may seem very high to some and unbelievable to others. However, we only provide the highest quality detail services and we expect to be paid accordingly. We never make the price the main issue. Because we focus on educating the customer rather then selling, many customers, after they agree to do the detail, will say, “By the way, you didn’t mention the price, how much is it?”
I constantly train my sales advisors and assist them to either close the transactions or to upgrade the customer to a better package.
Here are some examples of what I personally sold in one recent week: • $1,000 exterior detail for a brand new Nissan 370Z that the customer purchased a week prior; we finished the detail in one and half hours. • $1,150 for a complete interior, exterior detail, which was done in four hours. • $600 interior detail that we finished in one hour. And the list goes on.
Are these prices the norm? Of course not; but each and every one of these customers is a raving fan and they see the value in their purchase, which makes their investment worth every penny.
With the cost of doing business on the rise, our goal is to make a minimum of $85 per hour per employee on all our detail services.
These types of detail results do not happen overnight. To achieve similar results, you must invest time, energy, and money training people to provide the highest quality service and to build a great reputation that draws people to your business.
Some of you, after reading this article, may think how lucky we are: our car wash must be located in a wealthy neighborhood and we have no competition. Well, our car wash is located in a lower-income area, or what I call the “wrong side of the tracks,” and we have many competitors around us. Yet, when it comes to detailing cars, customers drive past many other car washes and detail centers just to come to us.
“If you keep on doing what you’ve been doing, you will keep on getting what you’ve been getting” is a familiar saying. I hope this article will help many car wash operators and detail centers to start thinking out of the box. Why some people are willing to purchase a $1,000 purse when they could buy one for $5 is not a great mystery. It is the same principle that could be applied to your detail services.
AJ Rassamni is the author of Increase Business 30% in 30 Days, and Dirty Cars Filthy Rich. He is a 30-year car wash veteran and owner of Great American Car Wash in Fresno, CA. Founder of My Loyalty Apps, a technology company to help businesses automate their marketing strategies to increase profit, AJ has been featured in Forbes magazine, Business Journal, many other magazines, and major broadcast television programs. You may contact AJ via e-mail at info@myLoyaltyApps.com or by phone at (559) 284-1919. You can also visit his website at www.DirtyCarsFilthyRich.com