Operations - March 2006

Chemicals: How Yours Can Help
Generate Revenue & Profits

By Jim Thomes

There are several approaches to take to improving the profit picture of your car wash. The first approach deals with reducing your cost of operation by maximizing the efficiency of your chemical application. The second approach deals with driving wash volume or changing the mix of your wash packages to increase revenue. For purposes of this article I will focus primarily on the touch-free in-bay automatic market, although many of the ideas discussed apply equally as well to the tunnel and self-serve markets.

GENERAL CAR WASH OPPORTUNITIES

While this article is primarily about the cost-saving and revenue-generating aspects of your car wash chemicals, there are a couple of aspects of your wash not directly related to chemical application that need to be addressed.

Preventive Maintenance
In order to either save money or to improve profits in your wash, it has to be up and operating. I strongly urge you to implement a preventive maintenance program for your wash. If a customer drives up to a wash and finds it down, he may be understanding and probably return at another time, but if it happens on multiple occasions that customer is going to look for another more dependable wash. Spending a few dollars on preventive maintenance is definitely a worthwhile investment that will minimize downtime and retain customers.

Bay Cleanliness
I have seen various demographics of today’s car wash user. The common element in most of the surveys is that over 60 percent of today’s in-bay automatic users are female. Some common elements desired by this customer base are a clean, well-lit, and safe environment. Take the time to clean your bays, perform pit maintenance, and add lighting if needed. Make your wash an environment that your customer feels comfortable using. The customer is there to get a clean, dry, shiny vehicle, and driving into a dirty, dingy, foul-smelling bay is not very reassuring.

Soft Water
One area that I can’t overemphasize is the use of soft water. For each grain of hardness in your water, chemical costs will increase 5 percent — regardless of the brand of chemicals you are using. The “hardness” elements in the water tie up the surfactants, leaving less-effective product to clean the vehicle. If you get beyond 3 grains of hardness, effective cleaning in a touch-free environment becomes almost impossible. Take the time to work through the math with your distributor. A softener will more than pay for itself in a very short period of time. If you already have a softener, monitor its output on a regular basis so that it is indeed providing the soft water and chemical savings you’ve paid for.

CHEMICAL COST SAVING OPPORTUNITIES

When looking at cost savings in a wash, the chemicals normally are the first thing reviewed. This is somewhat natural, as there is little that can be done about electricity, water, taxes, or fixed overhead. Chemicals traditionally make up about 11 percent of a wash expense.

The greatest cost-savings potential in chemicals is normally found in the presoak applications of the wash. Minimizing presoak-chemical costs is not about paying less for a drum of chemicals. The concentration of the chemical and effectiveness of the product must be evaluated on a cost-per-car basis to do get a true picture of your cost. You may have the opportunity to purchase a $300 drum of presoak or a $600 drum of presoak. The assumption can’t automatically be made that the $300 drum is less expensive. If you have to use 10 oz of product per car of the $300 drum and can get by with 5 oz. per car with the $600 drum, your cost per car is identical — and you save on the additional freight and handling associated with using more drums of product during the course of a year. Do yourself a favor and either learn how to do a true cost-per-car analysis or ask your distributor to perform one for you on a regular basis.

Regardless of the presoak chemicals you are using, there are savings opportunities available to you on a seasonal basis. Again, working with a reliable distributor that knows his market will allow you to reduce chemical usage during the easy cleaning periods of the year and turn up the usage during more difficult cleaning periods. Within the limits of your equipment, there is also an opportunity to save some money on presoak by increasing the speed of the wash or presoak pass, thereby reducing the chemical usage during the easy cleaning time periods.

If you are using dual passes of alkaline presoak or a low pH/high pH combination, there may be an opportunity to use a single pass of the alkaline presoak on the basic wash package. This will save on both chemical and water costs — and will also speed up the total wash time in the process. Again, the most important measurement is whether you are still providing a clean, dry, shiny car after making this adjustment.

Some operators have shifted from using triple-foaming polish to using foaming conditioners instead. You can put on a similar show with good color, scent, and foam for less cost per application. This could, however, end up being a false saving. Often the polish helps in the drying process and, if you have to use additional drying agent to compensate for the elimination of the polish, your savings may not be as dramatic.

Purchasing chemicals in the largest practical container size can also save you some money. In most cases, the cost per gallon decreases the larger the container size. Work with your distributor to determine what is the best compromise between cost per gallon and turning your chemical inventory on a reasonable basis. Most car wash cleaning and protection products today have very good shelf lives, but once a container is opened it can become contaminated after a period of time, so you want reasonable turnover of your chemical inventory.

REVENUE-DRIVING OPTIONS

Thus far we’ve looked at some of the potential savings to be found by maximizing chemical efficiencies. It is certainly worth looking at the cost side of the chemical equation on a regular basis. The average in-bay automatic uses approximately $10,000 in chemical products annually. Even if you could save 20 percent of these costs that would equate to $2,000. Not an insignificant amount — but if you can improve revenues, the net effect to your bottom line would be much greater.

Based on averages, today’s in-bay automatic washes 35,000 cars annually. The average basic package is sold for $5, with the average best package sold at $8. If you could drive just an additional 5 percent of the customers from that $5 basic wash to the $8 best wash, you could increase your gross revenues by $5,250. (35,000 vehicles x 5% x $3 = $5,250)

Marketing Materials
Driving that shift is not complicated or expensive. You have to educate customers as to the additional value and benefit they will be receiving by purchasing the polish or sealant offerings. At the gas pump, that education requires attractive, informative and educational POP materials — giving the customer a reason to spend the extra $2 or $3 and move up from the basic wash. Most chemical manufacturers will help you design these marketing materials and supply them at a minimal cost — if you are using their chemicals.

Cashiers’ Role
If you have a c-store in conjunction with the wash, make sure your cashiers are familiar with the customer benefits of the added-value products and that they ask every customer to purchase a deluxe wash. Again, your solution representatives would be more than happy to help with the training of the cashiers.

4th Wash Package
Several successful operators have also improved profits by adding a fourth package to their wash offerings. This fourth package can take several different formats. The first is a “dirt buster,” “bug buster,” or “ultimate wash” package. The name can be changed, but the intent is the same. This is the ultimate cleaning package when your customer has a particularly dirty vehicle. It includes a third presoak application and an extra high-pressure rinse. With this $10 package, you use an extra 30 cents to 35 cents in presoak and generate an extra $2 in revenue.

Another option for a fourth package is the addition of a “super sealant” package. Marketing of this package promotes the return of that “showroom shine,” while providing vehicle protection from the elements and beading the customer will see until the next wash. We, like many of the full-service manufacturers offering such a product, will supply unique marketing materials to help you promote to the customer the benefit of purchasing this ultimate protection package for his or her vehicle. With most in-bay equipment this product and a fourth package can be added with little or no equipment changes. In a tunnel, an arch may have to be added to provide this additional service, but the return on that investment is fairly short. With just a little promotion, you could realize several thousands of dollars of additional monthly revenue with such an offering.

 

SUMMARY

The bottom line is improving the profits of your wash. As we’ve discussed, there are opportunities to save some monies in chemical applications and those should indeed be explored. The greatest opportunity, however, exists on the revenue-generating side of the equation. There is no one answer that works for everyone. Talk to your distributor partner and seek his help in evaluating what would work best in your location and with your wash.

Jim Thomes is vice president sales and marketing of Cleaning Systems Inc. of DePere, WI. You can visit the company on the web at www.lustrabear.com.

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