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Wash Club for IBA between two Tunnels

washregal

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I am thinking of installing a new IBA - I am coming from a unit that was not trust worthy and lost alot of credibility over the years with malfunctions and down time. Hoping to really step up my game.. I am concerned being between two tunnel washes that promote the wash club concept - should I follow suit? Thinking I would have a uniqueness in the market as being open 24/7 and I am going to go touchless wich adds to the unique quality of the IBA -

Would want to keep my price point per month lower than my two competitors on a wash club scenario - wash once a day every day for a low monthly payment - with (3) tiers of service.

Some have told me to stay away from the Wash CLub concept as the tunnels usually duke it out with each other on lower price.. I feel though that I need to have the technology and commit to it from the get go .. if I am going to be spending so much $$ in getting this right.

If the advise is to move forward with a wash club for the IBA - How much traffic could I anticipate - What really got my juices flowing was a tunnel operator told me his monthly wash club customers - I looked at his lowest package and did the math.. OMG ---Huge Dollars...Would I be missing the boat if I didnt do this?
 

robert roman

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“….thinking of installing a new IBA….concerned being between two tunnel washes that promote the wash club concept - should I follow suit?”

Loyalty programs are rewards programs offered by a company to customers who frequently make purchases.

One example is punch card program, buy eight get one free.

Another type of program is monthly unlimited washing where customers pay upfront fee for benefits like wash as often as you like and fast-pass (RFID).

Another example is VIP club card. Here, customers would enroll as member (share personal information) and the operator would implement a tiered system which rewards initial loyalty and encourages more purchases.

Problem or constraint of implementing unlimited washing at in-bay is hourly capacity.

If in-bay volume is 14,000 CPY, average hourly demand is 4.5 cars and peak hourly demand would be 13.5 cars.

Since typical in-bay can process only about 12 cars an hour, on very busy days, the average waiting time and length of waiting line would be exceeding long.

So, unlimited could only make this situation worse because the typical member visits between 4 and 5 times a month whereas typical customer visits about four times a year.

If this wasn’t the case, we would see OEM’s selling unlimited to in-bay operators as the next best thing to sliced bread.

However, we don’t. Instead, it’s marketed to conveyor operators.

Sandwiched between two tunnels calls for creating sustainable competitive advantage by means of differentiation (as you mentioned) and niche strategy (not mentioned) but not cost strategy.

For instance, there is no way possible for in-bay to compete against conveyor on basis of low price. The reason is conveyor is lower cost producer than in-bay.

Instead, you might want to look for ways to support higher price points to offset lack of productivity.

Consequently, you might want to consider VIP card-based system (POS) instead of unlimited.
 

BBE

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I agree with most of what RR said...not sure I've ever said those words before. I have both IBA's and a tunnel, one of our 4 and 2 locations is located a mile down the road from a tunnel. We don't try and compete with it directly, you flat out CAN'T compete with a tunnel on price, efficiency, speed, etc.. with an IBA. Instead we flip the script and do the opposite. With the hourly capacity of an in bay, if a customer is say the 3rd of 4th car in line, they are realistically looking at a wait time that is going to exceed 10 minutes, probably closer to 15 minutes. So we want our customers to feel like they got their money's worth, like our wash was worth waiting 10 minutes for rather than driving over to the tunnel and being in and out in 3 minutes. Slow passes on the IBA to get good pre soak coverage, adequate dwell time to allow chemicals to work. Slow high pressure passes, etc.. We do extremely well at this location. Just my two cents. It's also worth noting that another competing IBA in the area tried the unlimited wash program, and quit offering it after a year or two because of all of the constraints that Robert pointed out.
 

washregal

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BBE -

What did you wind up doing.. no unlimited wash programs? only allow users to select what the paystation offers?
 
Etowah

BBE

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BBE -

What did you wind up doing.. no unlimited wash programs? only allow users to select what the paystation offers?
Yes, correct. We do the unlimited wash at our EE tunnel, and have a membership base that exceeds a thousand members, but no we do not offer it in our IBA's. And after seeing the demand/volume that it creates, I don't think I would ever try and offer it in IBA's. Unless you are in a poor location, or there is too much competition in your area.

If you have 800 members, and they all wash an average of 3 times a month...which they will. I don't know anyone who runs an unlimited club that has an average of less than 3 times a month. You are already at almost 29k cars a year, which is already maxed out or more than one IBA can do in a year. And now what about your paying customers??
 

robert roman

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“Thinking perhaps I would limit my monthly pass membership to say 500 - 850 vehicals...”

Absent the math, I would suggest going for it.

Spend the money for RFID, pay terminal, website upgrades (new pages, shopping cart) and promotional budget, etc.

Also don’t forget the phone app so you can tell your customers how long they will have to wait in line.

This way you can find out for yourself how expensive the mistake was.
 

washregal

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Robert - I love the feedback.. Weighing this all out in my head - you guys are setting me straight. It is a big decision.. So true how an express or tunnel is really a different business than IBA. I am in a highly competative market - (2) tunnels with unlimited wash club and one with free vacs.

Also - my one wash is in a more poorer lower income area. My current IBA is a Pro Navigator - and I have to say - I am really only in the SS business - That PRO is worthless!
 

Eric H

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I had a conversation with a customer and we talked about how to make an unlimited work for am IBA. I asked if he would be interested if I limited the hours to before 9am and after 6pm and how much he would be willing to pay. He said the limited hours would work for him and he would do it for $30 per month. My pricing is 8,10,12,15 and he was interested in the $10 wash . Ultimately, I decided against doing a program but maybe someone else would be interested in doing it with limited hours.
BTW: the guy I was speaking with raved about our Razors. I couldn't justify taking less money from someone who loves the product compared to the tunnel up the road with the unlimited program.
I do have it on my to do list to develop a loyalty program but not until I have more time in the spring.
 

Jeff_L

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I have IBAs too, and don't offer an unlimited option, etc. I feel it's best to focus on quality versus volume. I just don't feel an IBA is designed to do the output like a tunnel.
 

robert roman

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“So true how an express or tunnel is really a different business than IBA.”

It’s not a different business because market segments all want the same thing – clean, shine, and protect their vehicles.

What people choose depends on availability and preference such as DIY (wash at home or self-serve) or DIFM - in-bay or conveyor (hand-wash, express, full-serve or flex-serve).

Difference between in-bay and conveyor is process.

In-bay is like building commercial jet or a bridge. Here, the job stays in place and the parts, equipment and labor are brought together.

Whereas conveyor is like auto assembly line where equipment and labor is arranged according to the steps necessary to clean, shine and protect vehicles.

Jets and bridges take a very long time to build and price is measured in millions whereas cars are built in hours and average price is $30,000.

Compared to the technology and capabilities of a modern commercial airliner, a typical motor vehicle is like a wheel barrow.

Number of aircraft produced in U.S. in 2016, 1,600 planes. Number of cars produced in 2016, eight million.

In-bay owner’s dilemma – conveyor produces three to four times the hourly capacity as in-bay on lineal foot basis.

Conveyor also provides hand-finished qualities and amenities (i.e. free vacuums) and usually at lower price (i.e. $4 or $5). And some are $3.00.

Physical constraint is time on machine. This can be broken or minimized by adding hourly capacity (i.e. install more in-bays or convert to conveyor).

Non-physical is demand for in-bay process (i.e. car remains stationary, could be friction, touchless or hybrid, open 24/7).

Challenge for in-bay is marketing strategy and tactics to cultivate customer base willing to pay higher price than conveyor to get this.
 

Scrub Free

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I have a 2 bay touchless surronded by 2 tunnels. I say no to monthly membership. I can not afford to tie my bays up with "free washes" on a busy day. We focus on a clean low pressure environment that offers a good value. We charge appropriately for our services, so thoes busy days weigh out the assumed value of a customer paying monthly. We still focus on selling wash packs for our loyalty programs.
 
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