Tunnel Wash Competition

[Car Wash Man]

We recently had a tunnel wash come in to our town that we operate it in. I will be honest it is very impressive and can tell there was millions of dollars put in to this wash. They are offering huge discounts in the first six months for customers to sign up with their unlimited plan. First month was $1 washes. First six months is 75 percent off unlimited. I can tell that this had had a huge impact on all the regular carwashes in the town like the one we operate. Our numbers have been down ever since they opened. What have you done to combat when a tunnel moves in to the area that you are operating in? We operate a Kondor KL2 and run premium products and there is always someone on site as the wash is one part of our business. The wash stays very clean for the public.

 

[AnalyticWash]

Do you offer memberships?

 

[Car Wash Man]

We used to. We had an app where customers would have an account set up and get discounts. Washes would be activated by their phone. We saw our profits go up substantially when we ended it and before we had it. We are also located in an area where cell service can be very poor at times, specifically where we are located, which was a hard obstacle to get through with a lot of customers. We offer a great wash for an affordable price and most customers even told us they preferred just using cash. We are in a very old demographic town. We have CC and tap to pay and a lot of our customers still prefer to use cash. I am sure if we were able to offer discounts as big as the tunnel does lots of customers would be on board with it but financially it is not feasible.

 

[Car Wash Man]

Their current unlimited plan is only $10 a month for top tunnel wash through end of summer.

 

[washnshine]

It’s tough. You have to differentiate by emphasizing that you are touchless and try to appeal to the segment that prefers that type of wash.

I own a friction tunnel and compete with the type of washes you are talking about. I have to differentiate by giving the customers more attention to detail and a more thorough and consistent clean. I also use outstanding products very generously and also focus on the appearance of the tunnel, the foam show, the lights, the scents and the helpfulness and courteousness of my staff.

I have lost customers to the big chains that come in to town, but I have also gained new ones who appreciate the way we operate. Of course I have a base of loyal customers who I have always had.

 

[tdlconceptsllc]

Free vac with purchase or get a Dencar paystation. What's the town population?

 

[Dan kamsickas]

Put up a sign that says "After your cheap car wash come here and get it clean".

 

[Greg Pack]

Dealing with that now too at my better location. We had a wash open in February of this year a block away from a good 4/2 site. I hear a fairly consistent story from several operators that the impact is not much on the self serve side, and up to a 60% impact on the automatic side. Overall long term site revenue recovers somewhat but the following year is about a 30% decrease from the "pre tunnel" year. I've been told that the first six months is the toughest and customers will start to trickle back in after that.

I'm still trying to do the math on memberships and am very resistant but perhaps should have considered it prior to their opening. I'm not sure I want to wash many more cars just to retain market share, even if it is more profitable. I know that sounds ridiculous but I translate my wash volume doubling to a substantial increase in workload that I'm basically stuck doing due to the lack of good local service companies.If my net doubled I'd be willing to do that, but a little math indicates it won't. To do memberships in a competitive format I'd need to drop 300-350K on a new high volume auto and a Dencar system, still not sure I'd recover that quickly enough before I sell to worry with it.

So far my counters have been:

1) I offer a single wash price point lower than the tunnel, and all wash levels get a blower.
2) All IBA customers can get a free vacuum token from the wash select if they want one.
3) I offer free drying towels, an idea gotten here many years ago from Soapy and another member.
4) Late last year I began offering a loyalty program through coinless.

I'm already seeing what looks to be a greater impact on my friction wash than my Touchfree, so this may be the Touchfree's great comeback in my area.

I feel like I've run an above average wash at this site and plan on sharing my revenue impact when it all shakes in the interest of what others might can expect. I don't mind sharing numbers now that my competition is in place. It was a good site and grossed 530K last year. This year looks like the gross might drop to 400K. Still a good site but that is a huge hit out of pocket resulting in what might be close to a 100K drop in net revenue. I've resubscribed to site cryptopay analytics so I can get a better breakdown of numbers and hope to share them in the near future.

 

[Car Wash Man]

Free vac with purchase or get a Dencar paystation. What's the town population?

35K is town size. It is the first big tunnel to come in to town. So I think a big part of it is the wow factor for people driving past it.

 

[Car Wash Man]

Dealing with that now too at my better location. We had a wash open in February of this year a block away from a good 4/2 site. I hear a fairly consistent story from several operators that the impact is not much on the self serve side, and up to a 60% impact on the automatic side. Overall long term site revenue recovers somewhat but the following year is about a 30% decrease from the "pre tunnel" year. I've been told that the first six months is the toughest and customers will start to trickle back in after that.

I'm still trying to do the math on memberships and am very resistant but perhaps should have considered it prior to their opening. I'm not sure I want to wash many more cars just to retain market share, even if it is more profitable. I know that sounds ridiculous but I translate my wash volume doubling to a substantial increase in workload that I'm basically stuck doing due to the lack of good local service companies.If my net doubled I'd be willing to do that, but a little math indicates it won't. To do memberships in a competitive format I'd need to drop 300-350K on a new high volume auto and a Dencar system, still not sure I'd recover that quickly enough before I sell to worry with it.

So far my counters have been:

1) I offer a single wash price point lower than the tunnel, and all wash levels get a blower.
2) All IBA customers can get a free vacuum token from the wash select if they want one.
3) I offer free drying towels, an idea gotten here many years ago from Soapy and another member.
4) Late last year I began offering a loyalty program through coinless.

I'm already seeing what looks to be a greater impact on my friction wash than my Touchfree, so this may be the Touchfree's great comeback in my area.

I feel like I've run an above average wash at this site and plan on sharing my revenue impact when it all shakes in the interest of what others might can expect. I don't mind sharing numbers now that my competition is in place. It was a good site and grossed 530K last year. This year looks like the gross might drop to 400K. Still a good site but that is a huge hit out of pocket resulting in what might be close to a 100K drop in net revenue. I've resubscribed to site cryptopay analytics so I can get a better breakdown of numbers and hope to share them in the near future.

Thank you for all the feedback. Our big thing is that we have in my honest opinion the best IBA in town for touchless. Most other washes are running old equipment or bad chemicals. We have a lot of loyal customers with expensive vehicles who will not take their cars through a non automatic wash. I can tell that most of the cars that are switching over to the tunnels are old cars that are already swirled up or people that aren't educated on the benefits of touchless. Also I know a lot of people have found success in Memberships but we have had a bad experience with it in the past and were on the fence to begin with, so if you are on the fence I would say don't do it.

 

[washnshine]

Remember that all the big new EE’s are not created equally. I can honestly say that the ones near me are very good and provide an outstanding wash. They are using quality chems- like CSI Lustra and have new, modern equipment and have employees trained to prep properly and are using sfr, have plenty of drying horsepower and for the most part are offering a pretty darn clean, shiny and dry car. They also have local service techs that are on top of PM and I never really see the washes down or operating under capacity. If you have the good fortune to be competing with one of the more poorly run operations, it should be that much easier for you to retain customers, and maybe even pull in some new ones.

 

[traveler17]

Put up a sign that says "After your cheap car wash come here and get it clean".

I like it

 

[Dan kamsickas]

I like it

Not totally joking. I know a couple operators who've done it with positive results. Too many of the new tunnels popping up all over the place aren't in the business of turning out clean cars, they're in the business of selling memberships.

 

[traveler17]

Not totally joking. I know a couple operators who've done it with positive results. Too many of the new tunnels popping up all over the place aren't in the business of turning out clean cars, they're in the business of selling memberships.

Had a tunnel open in February. Gave me a little bump but back to normal again. Place is already getting a bad reviews because of damage to cars and cars not coming out clean. I just explained that to someone today. Those tunnels treat them as a number!!

 

[Islandwash]

I had one open up 1/2 mile away about 3 years ago. A very nice one with indoor Vacuums. I have a 4 bay self-serve with an express tunnel. Your customer base stabilizes after about 2 years. there is nothing good to say about the experience. You just have to change. About a 35 % loss in conveyor and 10 % in self service. What "Washnshine" said is right. Fortunately, they are at high dollar price points

 

[ShinePro]

Not totally joking. I know a couple operators who've done it with positive results. Too many of the new tunnels popping up all over the place aren't in the business of turning out clean cars, they're in the business of selling memberships.

Selling memberships and a 5+% return for their investors!
Or just to sell it to someone else.

 

[Dan kamsickas]

Selling memberships and a 5+% return for their investors!
Or just to sell it to someone else.

Short term it makes sense. Long term, selling memberships for a poor product sure doesn't seem like a good business model. There will be a crash. There has never been a boom that didn't precede a crash.

 

[washnshine]

How long have we had the membership plans around? I can’t even remember when it all started.

 

[Car_Wash_Guy]

How long have we had the membership plans around? I can’t even remember when it all started.

Probably coming on 10 years.

 

[Islandwash]

I had one over 15 years ago. What has brought traction is a dedicated salesman at the Entry Kiosk.