Weather, economy, 3$ wash, Weather!!

[dogwasher]

Well I don't think I can put into words the frustration here in the Chicago area I'm just about brain dead to it all. So far winter is a bomb.
Day by day goes by and I keep saying its going to get better and that has been going on for about 4-6 months now. I'm not sure how much more I can take of this..but I'm excited and gearing up to offer some new options to my customers along with some advertising. I'm not giving up!
How are you all doing out there if your man(or woman) enough to admit it?

 

[Reds]

I am up for the year, although I have been a little slow thru the fall. I believe that the economy has impacted my sales to an extent, but weather is the main factor that drives my sales. Rainy weather or wet roads, which we have had a lot of, have been keeping people away in my area. Now that the DOT is salting the roads every day cars are rowed up to get in the IBA all day long. Ditto SS.

 

[borumrm]

Three locations....all are down for the year. For one location Dec has been the worst month in over 10 years. Good news is during the good times we paid ahead and our debt to equity ratios are very good. Cashflow is the issue at the moment...still positive but not very good. Hoping for some salt soon. The weather has really impacted us this year with more than 22 inches of rain above what we normally get. In October we had 17 days with rain and that is usually a strong month for us. Recovered quite a bit in Nov and we felt more optimistic but so far Dec has been a huge bust and the year has been subpar.

 

[Earl Weiss]

Three locations....all are down for the year. For one location Dec has been the worst month in over 10 years. Good news is during the good times we paid ahead and our debt to equity ratios are very good. Cashflow is the issue at the moment...still positive but not very good. Hoping for some salt soon. The weather has really impacted us this year with more than 22 inches of rain above what we normally get. In October we had 17 days with rain and that is usually a strong month for us. Recovered quite a bit in Nov and we felt more optimistic but so far Dec has been a huge bust and the year has been subpar.

I am in the Chicago area. Thought things couldn't get worse than 2008. I was wrong.

Come on sunshine.

 

[ProCarWashes]

Ditto

I'm about the same as Borum. I'll be glad when 2010 is here. Have been talking to a few in the industry and they all are effected by the slow economy. In 24 years, I've seen two slow downs but by far this is the worse. I will not go into what did this to us. But when my close nit buddies get together we will discuss this. Btw, I'm entering into a new venture. I'm not going to wash cars all my adult life. I'm doing a life style change, not a sex change Pat! I'm putting in a vineyard and a winery. Slow things down a bit in my advanded age. LOL

 

[Greg Pack]

Merry Christmas guys!

Well, the weather and economy here have absolutely killed us. If the weather will just stabilize I'll be a happy man. I'm off 25% this year from 2007. I'm down to one wash. It's still cash flowing, but have virtually no income coming in. I'm 44 and haven't brought home this little money since I was a teenager. I've been complacent the past few years but this situation is lighting a fire under me, I'm going to make some minor improvement to my place, but bottom line is I've got to pick up another wash, or do something new. Oh well, semi-retirement was kinda fun. But daddy's got to bring home more bacon. And I'm looking forwards to new challenges.

BTW, I don't mean to bitch too much. We should all keep it in perspective. We have much to be thankful for.

Here's to a fresh start in 2010!

 

[Chiefs]

Well I don't think I can put into words the frustration here in the Chicago area I'm just about brain dead to it all. So far winter is a bomb.
Day by day goes by and I keep saying its going to get better and that has been going on for about 4-6 months now. I'm not sure how much more I can take of this..but I'm excited and gearing up to offer some new options to my customers along with some advertising. I'm not giving up!
How are you all doing out there if your man(or woman) enough to admit it?

Well we've had the worst September -November wash period since we went exterior only in 1997. While the economy hasn't helped, the weather has just been abysmal.

However, the one thing I am toying with is the idea of going back from a one wash operating format to a two wash format. Currently we are $10 and sell books @5 for $35 and Monthly passes for $50. Despite the fact that these are both excellent values, it still means that people have to have $35 or $50 to spend in the first place. What I mean is that it seems like we have lost the cheap seats - the customer who may have $6 or $7 to spend on a car wash but feel that $10 is too much and who don't have the money to plunk down for a books or pass - you know, the cheap seats.

Thus what I am contemplating is going with a $7 basic (and 5 wash books for $20) and the current $10 Works wash (and keep these books at 5 for $35). I believe that given the economy, this is the only hope of stimulating wash volume over the long term.

This is not something I wish to do. Rather, it is a step I believe we need to take to get back our wash volume.

Any feedback is appreciated.

Bill
Chief's Auto Wash

 

[Waxman]

My little carwash is net up from 2008 when combined with detailing. I am new, so the trend for me should probably be up for a few years.

It's hard to say where I am at overall (longer trend-wise) because my business changed so much in the past few years. I built a new carwash and then moved out of a rented location (detail shop) and into a new building I built. Many more tax advantages to owning and being incorporated vs sole prop..

I go crazy with trying to implement cost saving measures and improve the bottom line. Detailing helps alot. I sold over $2k in gift cards today alone(mainly detail but some carwash) for Christmas.

The weather is key to me. When it's right, we wash cars and the detail shop appointment book fills up. When it's not right, we do maintenance and play on the internet.

 

[dogwasher]

I am in the Chicago area. Thought things couldn't get worse than 2008. I was wrong.

Come on sunshine.

Earl, I see your in the Chicago area also so you know what I'm talking about.
I forgot what the sun looks like!

 

[Thomas3599]

Ouch!!!!!

I've been in wash bus for 10 yrs. 3yrs ago someone built wash on top of me, small town midwest. It has been fun the last couple of yrs. Don't even want to go get money out anymore. I've been self employed for 20 yrs. I do refrigeration and with all the job losses around here a lot of guys open heating /cooling businesses. I went to work for a great company no dept. Love it. I still do side jobs. Bottom line car wash business better turn around in 2010 are the bank may have a place to wash their cars. God Bless, Merry Christmas and a real Happy New Year and to all a Good Night.

 

[Earl Weiss]

Well we've had the worst September -November wash period since we went exterior only in 1997. While the economy hasn't helped, the weather has just been abysmal.

However, the one thing I am toying with is the idea of going back from a one wash operating format to a two wash format. Currently we are $10 and sell books @5 for $35 and Monthly passes for $50. Despite the fact that these are both excellent values, it still means that people have to have $35 or $50 to spend in the first place. What I mean is that it seems like we have lost the cheap seats - the customer who may have $6 or $7 to spend on a car wash but feel that $10 is too much and who don't have the money to plunk down for a books or pass - you know, the cheap seats.

Thus what I am contemplating is going with a $7 basic (and 5 wash books for $20) and the current $10 Works wash (and keep these books at 5 for $35). I believe that given the economy, this is the only hope of stimulating wash volume over the long term.

This is not something I wish to do. Rather, it is a step I believe we need to take to get back our wash volume.

Any feedback is appreciated.

Bill
Chief's Auto Wash

Bill, you have been around a long time, so you have seen and experienced plenty. I have seen you adapt your philosophy over time as well. You have bee an advocate of the single price and a critic of multi package pricing. Frankly if I could get what you get I would do the same. But my competitive environment would kill me.
So, I am only going to tell you what you already know. If the weather stinks people are not washing even it it's free. On the other hand, the competitive environment may require a revision of your operating model. You are likely the best judge of that.

 

[Washmee]

Bill, After I remodeled in 2006 I started offering a wash for $5. The "Budget Wash" did not include towel dry. Prior to that the only choice was Full Service($15) or Exterior($9). The budget wash now accounts for 20% of my volume. I felt I needed a low priced wash for 2 reasons. One was to be able to compete with all the gas station IBA's that had flooded the market in the past 10 years. The other was my feeling that at $9, our cheapest wash was just too expensive for large #'s of potential customers. When I started in the CW business in the late 70's, we were washing cars for $2($1 with a fillup) and had huge volumes. During that period large #'s of consumers were introduced to automatic carwashing. As time went on, we improved our operations and quality, but our pricing also edged up higher and higher. Alot of those loyal customers from the 70's and 80's are gone and now it is time to figure out how to entice the younger generation into our washes. I feel that this decision was a good one for my wash. I now charge $6 for that wash and the price increase didn't change my % at all.

 

[JMMUSTANG]

Bill I've always liked your one price concept and I think that a lot of us that have been in the wash business a long time would love to get $10 for every car coming in with minimual labor.
I only have two price points ($5 & 10) and with the weather business has been terrible. Price just doesn't matter right now.
I've been toying around with the idea of your one price point of $10 only for the top of the line wash package as an everyday price.
Then offering a $15 or $20 unlimited monthly package for what would have been the $5 wash customer. Right now we offer $25 to $45 unlimited monthly wash packages.
So either the customer in line pays us $10 for the top line wash or $15-20 for the monthly unlimited $5 wash.
What do you guys think?

 

[rph9168]

From my experience Bill's one price concept is unique and while it has worked for him it is not for most to use. I have never been much of a fan of anything more than a 3 level tier although I have seen some washes do well with as many as 5 tiers. In most 3 tier setups the middle wash is usually the less chosen by a wide margin so in effect they might even be considered to use only two tiers. It seems that most customers come in either just to get the basic wash while others go for the best.

The two options to any system I have seen are the sale of a discounted package of washes or the unlimited wash plan. I have seen both options work well. The unlimited seems to work best when you can get the customer to sign up for a monthly charge that is automatically deducted from their credit card. I know one large chain that does very well with that. The one that might work best for you depends on the makeup of your clientèle. In some cases I have seen washes use both forms of discounting. In any case, as we all know, the key is the quality of the wash and the perceived value of your customers.

 

[Chiefs]

I have a fewquestions for those of you who offer unlimited plans. First, Are they really unlimted? We market our Club Card as "You can wash once a day, any day for 30 days".

Next, what kind of redemption rates are you experiencing on your unlimited plans. DRB tells me that 3-4 washes a month is the average. Well, our redemtion rate is 10 washes per month! That is why our pass varies between 50-$60 depending on the season. Now I also just read in a DRB e-mail that essentially the higher the price, the more customers use it. Conversely of course, the lower the price the less customers would use it. I believe that in general motorists are creatures of habit which is why some customers use it 2-3 times a month and others 28 times a month. I always joke with those customers that I don't want any complaints when we get down to the primer.

Lastly, regarding this panacea of revenue - the Automatic Recharge Module (ARM). Maybe I am just strange, but as a consumer I do not like having any service automatically charged to my credit card every month. I can't help but think such a policy while maybe good to the bottom line, would create a tremendous number of headaches with many consumers. Their purchase of the monthly pass increases during our winter season and tsils off substantially Spring to Fall. With mostly the 12+ users purchase them then, despite having a lower price in the off season. What are your thoughts on this?

 

[Earl Weiss]

Lastly, regarding this panacea of revenue - the Automatic Recharge Module (ARM). Maybe I am just strange, but as a consumer I do not like having any service automatically charged to my credit card every month. I can't help but think such a policy while maybe good to the bottom line, would create a tremendous number of headaches with many consumers. Their purchase of the monthly pass increases during our winter season and tsils off substantially Spring to Fall. With mostly the 12+ users purchase them then, despite having a lower price in the off season. What are your thoughts on this?

I don't think your strange. I think this is a generational issue. Younger consumers are used to having everything done electronicaly. Older consumers feel it is a loss of control or invasion of privacy to allow automatic charges. As far as wash frequency goes. I think the program should be sold as a year program charged monthly. The consumer understands the frequency or useage may vary. This is done with everything from utility bills to health club memberships.

 

[JMMUSTANG]

Ours are truely unlimited, the customer can come in as often as they like per day or per month.
I'm sure someone will abuse but so far no one has but I do think it is a good marketing tool.
In the beginning the customer will come in 3-4 per week but eventually most end up coming in 5-6 times per month.

 

[dewey9876]

Our Passes are Truly Unlimited (for the registered vehicle). We have been selling unlimited passes for over 17 years way before it was popular or the trend. We started off selling 3 month passes then added 1 year passes. Now we also offer the 1 month Automatic recharge. It is true that some don't like this so thats why we still offer the 3 month and 1 year options. The 3 month is a higher price than 3 1 month ARM passes and the 1 year is equal to 12 1 Month ARM passes. This gives the customer an incentive to go with the 1 month over a 3 month but still allows for an option to those who are uncomfortable with the Auto recharge on their credit card.
This works for us.