How Have Express Washes' Free Vacuums Strategy Affected You / Changed Your Biz Model?

[Carl]

I would be a fool to think that when the express washes many years ago sprouted up everywhere offering their "free vacuums", that they did not at all have an impact on where many former customers of mine decided elsewhere to wash! I haven't honestly changed anything w/ my vacuums to respond but can't help but wonder when I go to the KFC next to the Express Wash closest to me and see SO, SO MANY CUSTOMERS getting on those free vacuums, if there isn't something I need to do to respond now? I did see another self-service carwash owner make all his vacuums free w/ a silly banner that said, "OUR VACUUMS SUCK!"...but a few months later, I saw he went back to "pay vacuums", probably because of the loitering and "bad element" the "free vacuums" attracted to his self-service carwash where people basically hung out at his wash freely detailing their cars depositing nothing at his "vacs that suck". LOL! My vacuums are a $1.00 start-up for 5 minutes. Pondering whether dropping those to .25/start would help bring back more customers but then those would still be "pay vacs"? What a pain trying to combat my competitors' "freebies". Gotta admit, their business model w/ the free vacuums sure has paid off for them, huh? Your input? Thanks! - Carl

 

[MEP001]

I don't think the free vacuums at the nearby express wash have hurt us as much as the $3 wash with fill-up has.

Rather than drop the vac price that low (The vacs still have a very good income) I've considered offering free vac tokens with an automatic wash purchase. I'd advertise it in large lettering over the auto entrance, just like they advertise $3 wash with fill-up.

 

[Ric]

We have also considered the free token with wash concept. We have looked into this http://www.cpcarwash.com/token-dispenser.htm

 

[robert roman]

“I …..can't help but wonder when I go…. see SO, SO MANY CUSTOMERS getting on those free vacuums, if there isn't something I need to do to respond now?”

In business modeling, it is customary to first understand competitive threats before deciding to respond.

Express value proposition is convenience (i.e. speed), quality (i.e. clean, shine, protect) and value (i.e. price, free vacuums and prep area).

Average time on site for express is 8-min. Average wand is 10 plus dry/vacuum so, 20. Average IBA is 5 plus vac plus 5 for each car waiting in line.

50’ and + are designed to produce equivalent hand-finished qualities respective to operating speed. Foam shines, express is heavy on protection – rust inhibitor, tri-foam, total body, hot wax and tire shine - SS, not so much.

Express is extended hours, 7-days a week, rain or shine and attended.

Express targets 60 to 70 percent of HH, blurs distinction between segments. SS is weighted towards wands, segment in decline, and automatic, dominate segment, constrained.

Experience shows when market is sufficiently populated with carwash a new wash will not capture great value. Express provides evidence SS has to re-position to capture more value from the chain.

Wands sell time and materials, IBA and express sell solutions and express is high volume at about same expense ratio as IBA.

Express delivers more value than SS; controlled access to property, loyalty programs, unlimited, attendants, virtual marketing, etc.

Express sustains a competitive advantage by pursuing subsets of consumers that most SS does not.

”Gotta admit, their business model w/ the free vacuums sure has paid off for them, huh?”

Arguably, each element in the business model above shows the threat involves more than just free vacuums.

Similarly, countering the threat will involve more than chipping away at small pieces of the puzzle (i.e. IBA offering a vacuum token).

 

[Jeff_L]

For once Robert's post was actually worth reading. lol - sorry Robert, but I usually skip over your posts until this one.

I like how you described the difference between express and SS, the former offers a solution and the latter offers time & materials. You're spot on with that, and unfortunately many people are looking for the easier way of doing tasks such as washing their cars. Of course there will still be that segment of the market of people who want to do it themselves, and that's who our SS's cater to. The problem is the express washes and such have taken much of the market of individuals who used to do it themselves and have left us with some loyal customers but also made more room for those undesirables (truck bed washers, trash dumpers, etc.).

The question we all have in the back of our minds is how do we revolutionize our industry to bring back customers who have gone the easy route. I too have thought about going the free vacuum route, but we don't have the advantage that an express wash does with controlled access and such. My competition next door went to free vacs at his self serve a couple years ago, but I haven't seen my vacuum revenue decline from it. So not sure that's quite the answer either.

Always looking to add value to the experience at the wash.

 

[soapy]

I added token vendors to my automatics at one location a couple of years ago in response to a recently opened express wash. At the time it was my 3rd busiest wash. It took a while but people started to catch on to the tokens. At first I would find several tokens in the vendor but now I rarely find any and actually see regulars pull into the wash just to check to token vendor to see if anyone has forgotten theirs. This wash location has now moved to my #1 location and gained yearly sales volume even though it is my closest wash to the new express wash. The tokens are valued at $1 and can be used for a free vac, tire shine, credit in the SS bays or $1 off the next auto wash. Most tokens get redeemed when people come back to wash again. I think it gives them a little more reason to come back. I like the results so much that I just added token vendors to all my locations on my automatics. Now I can advertise and promote it more and I think it will be even better. I have not found a need to add anymore vacs. When you point out to a customer that they are getting something free and hand them a token they all have a smile. FREE VACS is the main thing express washes have promoted, not speed, quality or anything else that I have seen. IMO "FREE" brings in more people than anything else. Only about 50% of the people at the express washes use the free vacs. I wonder if the the other 50% feel cheated when they do not use a vac. With the token no one feels cheated, they know they can use the token anytime they want and have not left any thing on the table so to speak.

 

[Ric]

Soapy - Thanks for sharing. I've been wanting to hear first hand from someone doing that. This dispenser http://www.cpcarwash.com/token-dispenser.htm caught my eye because because it requires the customer to push the lighted button to get their free token. Therefore no tokens are left behind for others to snatch up.

 

[robert roman]

“The question we all have in the back of our minds is how do we revolutionize our industry to bring back customers who have gone the easy route.”

Actually, the revolution has already occurred and there will be no turning back of the clock.

If we compare the two models, self-service would be like selling a hamburger for $5.00 while the express is selling a steak for $4.00.

How would you pen a begging letter for self-service?

Please visit our self-service wash Mr. and Mrs. Motorist rather than express so you can pay us more money, spend a lot more time and do all of the work yourself, its good exercise.

You might as well be asking women if they would like to give up their voting rights.

Perhaps the best chance for self-service is to exploit the remaining customer base and prospect new customers. There are several paths to accomplish this.

In other words, it’s the self-service operator that needs revolutionized to remain relevant and not the carwash industry or motorists.

 

[soapy]

I think the push button is a good idea. The only draw back I can see is that a few people will forget to push the button and will call you wanting you to send them tokens. I get that with my ACWs that require they push a button for a receipt.

 

[Greg Pack]

I like the pushbtton idea too. I had planned on modifying mine, I just hadn't gotten around to it.

 

[SHINEY2]

soapy is there a link to the token vendor you installed? can you also post a pic of your set up?

 

[mjwalsh]

I don't think the free vacuums at the nearby express wash have hurt us as much as the $3 wash with fill-up has.

Rather than drop the vac price that low (The vacs still have a very good income) I've considered offering free vac tokens with an automatic wash purchase. I'd advertise it in large lettering over the auto entrance, just like they advertise $3 wash with fill-up.

I am not saying this is true in every market & I would never want to falsely accuse any large mega corporation ... but since the main profit center is their gasoline & diesel sales ... I just wonder if there are not isolated instances of a "predatory practice" by way of some of them offering the car wash at somewhat of a loss to shore up their actual "bread & butter"?

poor & extra humble little mommee & poppee mike

 

[Greg Pack]

Many of the washes make money at $3 for their base wash. Perhaps not a lot, but it's probably not a loss leader.

 

[MEP001]

I am not saying this is true in every market & I would never want to falsely accuse any large mega corporation ... but since the main profit center is their gasoline & diesel sales ... I just wonder if there are not isolated instances of a "predatory practice" by way of some of them offering the car wash at somewhat of a loss to shore up their actual "bread & butter"?

poor & extra humble little mommee & poppee mike

What does that have to do with anything I said or the subject at hand?

 

[mjwalsh]

What does that have to do with anything I said or the subject at hand?[/QUO
TE]

No offense ... but you did make for "better or for worse" a reference to $3 Express with fill-up. The overall thread does lend itself a bit to pricing & marketing .... so I do not consider the post way out of line as to what may be happening to some extent in some localities.

 

[MEP001]

No offense ... but you did make for "better or for worse" a reference to $3 Express with fill-up. The overall thread does lend itself a bit to pricing & marketing .... so I do not consider the post way out of line as to what may be happening to some extent in some localities.

The topic of this thread is how free vacuums offered by express washes have affected self-serve operators, not the price of the express wash.

 

[robert roman]

“FREE VACS is the main thing express washes have promoted, not speed, quality or anything else that I have seen. IMO”

If you believe free vacuum is more valuable than speed (time), quality and the other attributes and benefits described, the only sound you will hear is the big sucking sound as your customers are drained away.

"FREE" brings in more people than anything else.”

It also brings in all the cheapskates and bottom-dwellers (little lifetime value).

Self-service using free vacuum to counter the express business model (see my previous comments), is like using a bandage to stop the bleeding from a gunshot wound.

As for $3 wash with fill-up, this is the same short-sighted mentality used to sell carwash and gas in the past. Buy 10 gallons and get $2.00 off carwash price. In other words, pay full price for something you must buy and get a mediocre discount on something you don’t need to buy.

What works a lot better is discounting the price of gas. Purchase carwash at the pumps at regular price and get $0.25 off per gallon of gasoline. Buy something you don’t need and get liberal discount on something you must buy.

Gas margins are slim. Less cost of goods, overhead and delivery, net profit might be five cents or so.

Wash at gas site is not like self-service or express. Capital is improvement on land (site work, building, equipment). Labor and management is zero (share expense with c-store). Operating expense is variable unit cost: chemical, electric, water/sewer, maintenance and insurance.

With this capital budget, there is no need to give the farm away selling $3.00 wash.

 

[soapy]

Giving away free vacs at the first location has resulted in almost a 20 percent increase this year at the first wash I tried it at. That RR is not sucking away profits. Seems RR always condemns any idea the SS AND IBA industry tries.

 

[mjwalsh]

Robert,

From a somewhat philosophical standpoint, we definitely have common ground on your above statement. I might add that I have observed some local stations offering discount per gallon for cash vs credit card & honestly seeing them noticeably more busy than the ones who treat the cash & non cash identical cost wise.

On some of your posts when you describe amenities including CC acceptance on all pieces of equipment at a Self Serve, I can't help but think that your women folk might put the amenity of a "free to use" clean well maintained rest room at the self serve with a "free to use" ATM that dispenses higher denomination coins & $5 bills over the Self Serves who focused a bit too much on just credit cards. I know the positive revenue flow from our ATM more than pays for the clean & well maintained rest room at our facility. I don't believe you need to repeat your mantra that self serves are drastically in the decline ... my thought is that we will always have our "albeit less flashy" niche ... just like with the self serve dog wash vs groomers & that frightful automatic dog wash setup that some adventurous entrepreneurs marketed a few years back. I will qualify the "free to use ATM" as unique to a possibly healthier competitive-wise banking situation here in Bismarck ... & to be fair ... this may not apply to all localities.

Mike Walsh http://kingkoin.com/USA_Deficit_Reduction.html

 

[soapy]

I hope the pictures come through. One is a Hamilton Token teller and the other is a American Changer token teller. If you have a current hamilton goldline with the proper controller it offers many more features than others I have seen. If you have to change out your controller in the Hamilton it will cost you another $1200 per unit. Most of these tellers are around $1600 or so. I do like the Carolina Pride unit also.