On the Wash Front - November 2008

Profitability: Finding it
in a Changing Marketplace
By Anthony Analetto

Go to your local bookstore and you’ll find no shortage of business and motivational books instructing people and organizations to continuously reinvent themselves and their businesses to find success. Good advice, but often the real trick is to implement change that complements and elevates existing parts of your business that are already successful. Basically, change is best when it doesn’t fix what is not broken or throw out the proverbial baby with the dirty bath water.

Talk to Tim Jones, owner of Champion Car Wash, for just a few minutes and you’ll leave the conversation with a feeling that reinventing a company’s operating model is easy. Entering the car wash business in 1993, Tim was a co-founder of one of our industry’s largest self-serve chains before starting Champion. Today, Champion Car Wash consists of four locations offering a mix of self-serve, in-bay automatic, and most recently conveyorized tunnel wash services. Completing a renovation of one of his sites less than two weeks ago, Tim was kind enough to share some of his insights on where the market is going and how he’s planning to adapt for continued growth. What happens when you replace a touch-free in-bay automatic at a six-bay self-serve wash with a mini-friction express tunnel? I’ve included a few excerpts from the conversation below.

ANALETTO: What changes led you to convert a touch-free in-bay automatic at your six-bay self-serve wash to a mini-friction express tunnel?

JONES: Competition has changed, our customers have changed, and the area surrounding our business has changed. We built this wash back in 1995 as a 6-and-1 during what I like to call the good-old days. “Build it and they will come” was true back then, and this has always been a good location for us. It’s on a main road and over the last 13 years, daily traffic has grown dramatically. Some new residential has been built, and a lot of older houses have been revitalized. Fast-food and other major retailers now surround the wash and the location sits between a wealthier community and an up-and-coming residential area, drawing customers from both.

Two things led me to make this investment. First, I had a busy touch-free automatic that was worn out and needed replacement. Second, I had a threat of competition when an express-exterior franchise looked to build a new wash across the street from me but ran into some zoning problems. This has been a busy automatic for us, but replacing it with a new in-bay would still limit me to eight to 10 cars per hour. I’ve had some experience with conveyors and knew I could increase my volume with an express tunnel. I also wanted to eliminate the threat of one opening up near me. Tunnels and conveyors have changed a lot over the years. They’re safer now and can deliver a good clean car. To me the conversion seemed the best choice I could make at this site.

What staffing changes have you had to make?

The self-serve is still open 24 hours, but we’ve always staffed it with a single attendant for eight hours a day to keep traffic flowing and the site maintained. Right now I have the tunnel open from 7 a.m. to 8 p.m. and I’m staffing the location with one person Monday through Thursday, and two people Friday through Sunday. One person is always available to guide customers onto the conveyor for safety. When volume picks up during the week I call in a second. We’ve been open less than two weeks and one person has been able to handle things. There hasn’t been a big lineup of cars yet, but as the wash matures I expect to have two people on staff all the time. I’m also planning to send my managers to outsourced courses for training on the maintenance, repair, and management of the tunnel. I have to be able to deliver a consistent product and service time for the express tunnel to work, and have to train adequately for that to happen.

How have customers reacted to the change? Is it what you were expecting?

I’ve had very good responses and not one negative comment from my customers. The cars leave cleaner in less time, and I can offer extra services I wasn’t able to before. In less than three minutes, a customer is through the tunnel and can choose to get a tire shine, triple foam, and even a total body-and-glass protectant. It’s not just extra revenue, it offers customers better quality and more choices. I haven’t had a single person leave that was looking for the touch-free in-bay automatic. Although we just opened the tunnel, the self-serve remained open during the entire renovation and revenue has remained constant. We did a complete facelift on the whole property. Everything is clean and bright and we added more options to our bays including credit card acceptance and dryers. After only a week and a half it’s too early to predict exactly what will happen but I’ve already begun renovating my next location where I’m replacing two touch-free in-bay automatics with a slightly longer tunnel.

Are there specific conditions or locations where you feel this format fits best?

You need to have a high population density, but other than that I think the whole country has been conditioned to expect better quality faster, for less money. Every business has to be ready to adapt to changing conditions. Things are changing, and changing at an accelerating pace. To keep my current customers and attract new ones, I have to deliver what they want, which is better quality, faster, with more choices, at a lower price. Having both the self-serve and tunnel on the same property lets me deliver that and appeal to a wider base of customers.

What pricing models have you tried or are you considering?

I’ve started with $5, $8, and $10 dollar packages for the express wash and am already averaging $8. Before, with the automatic, I had $5, $6, $7, and $8 packages and averaged $7. Again, it’s still very early, but I’m averaging a higher ticket on more cars and couldn’t be happier. I’m using a single video kiosk and gated entry, which will let me refine the packages and options, but for now I’m going to stay with what I started with, it’s working.

Do you offer free vacuums to express customers?

Yes, express wash customers have free push button vacuums available in a gated area. Self-serve customers still have coin-op vacuums available as well. For marketing we’re also distributing free wash coupons and heavily promoting discounted wash cards. I’m also looking at an RFID (Radio-Frequency Identification) system and starting an unlimited wash club subscription. Like I said before, build it and they will come doesn’t cut it anymore; you need to have a marketing plan. When we built the self-serve we did little in the way of marketing. Those days are gone. I miss them, but today I have to focus on promoting the wash and delivering value-added services like free vacuums to attract and keep new customers.

What type of conveyor did you select for the conversion?

It’s a 60-foot front-wheel-pull over/ under conveyor with a roller fired after the rear wheel to push vehicles off the conveyor. We’re running 65 cars per hour, which gives us the right balance. I originally started at 90 cars per hour but had some rinse problems removing all the soap. I can run it faster, but the 65-car-per-hour chain speed gives me the best product with about a 2 1/2-minute wash cycle. The original plan was to install a surface conveyor that required less concrete work, but I decided to spend the extra money up front to install an over/under conveyor that loads better and improves productivity. It’s working great. With absolutely no prepping and no wipe-down, we’re putting out a clean, dry, shiny car.

Looking back, what surprises did you have; what would you do differently next time?

Upgrading the electrical service from 400amps to 800amps cost $69,000, which was $24,000 more than I thought. Excavation of the ground to put in the conveyor came in at $28,000, which was also more than I planned. Other than that, I had originally budgeted $300,000 for the renovation and managed to stay on budget. I’m happy with how things went. I’ve already begun renovating my next location, which will replace two automatics with a conveyor, leaving the third touch-free automatic and three self-serve bays on the property with the express tunnel.

What are your future plans?

Ask me in a couple of months. I might have an answer then, but right now, I’m happy.

Tim can be contacted directly at championcarwash@yahoo.com.

Anthony Analetto has over 26 years experience in the car wash business and is the president of SONNY’S The Car Wash Factory’s Equipment Division. Before coming to SONNY’S, Anthony was the director of operations for a 74-location national car wash chain. Anthony can be reached at (800) 327-8723 x 104 or at AAnaletto@SonnysDirect.com.

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