Professional Carwashing & Detailing - Feb 2012
THE Busines CENTER An Industry perspective Continued from page 50 Why are in bay washes at retail petroleum sites not washing more cars Here are the three major reasons why these washes are underperforming 1 In bay washes are not seen as true retail businesses 2 No consistent or dedicated marketing plan to build 52 Professional Carwashing Detailing February 2012 Indeed the pent up demand which is so obvious to manufacturers will only materialize into actual orders for new carwash equipment when operators start making more money As we now know nothing creates more stress and upset in the carwash value chain manufacturer distributor operatorcustomer than declining revenues in the field Over time as we have painfully experienced these past few years a listless inconsistent and impotent marketing effort at the operator level migrates upward and this hidden and rarely diagnosed but potentially fatal disease surely and relentlessly attacks and erodes both the image and the service capability and ultimately the sales and profitability of even the best and most well established manufacturers and distributors Successful best in class suppliers in 2012 then must work as close partners with their customers the retail operators and together they must strive to wash more cars and make more money Survival of the fittest To be sure this partnership between the operators and their suppliers is not a done of the entire industry It is an extremely valuable exercise for both operators and suppliers to compare the financial performance of two retail petroleum wash sites with radically different capture ratios See Why Carwash Revenues Count As you can see it is evident that operators with higher capture ratios will wash more cars and make more money What is not at all obvious however is the incredible impact which higher wash counts and revenues have upon equipment suppliers too As industry veteran Ryan Beaty western region vice president of sales for Mark VII Equipment reminded me recently c store operators with higher capture ratios will upgrade their equipment more frequently than lower performing sites Suppliers Create a new business model Suppliers have a lot to gain in this breakthrough marketing initiative And in this no holds barred battle to compete with other retail businesses they too must think and act differently Best in class suppliers must partner with retail operators to seek new consumers and carwash customers and thus uncover many new sales opportunities ous problem Two and a half years ago for instance in the Economic Impact Survey published by Professional Carwashing and Detailing in August 2009 93 percent of the respondents indicated that either poor weather conditions 53 percent or a suffering economy 40 percent were the two most limiting factors that had negatively impacted their washes during the recent recession But carwash owners need not invest a lot of wasted effort to mitigate either of these two uncontrollable challenges They must be especially concerned however about declining wash counts and revenues This devastating and potentially fatal problem must be corrected Successful best in class operators must improve the performance of their washes by taking decisive corrective action on three other decidedly limiting factors First they must develop a different mindset Next they must make better management decisions Finally operators must plan and implement consistent revenue producing marketing programs each month for their washes It is not surprising incidentally that 32 percent of the operators surveyed in 2009 indicated that it was most difficult for them to attract new customers Another 16 percent found it most difficult for them to identify effective marketing and promotional strategies It is here in the area of marketing support where experienced value added suppliers can make their greatest contribution to the industry in todays economy In this new normal the most successful in bay operators will continue to deal with adverse weather conditions and a sluggish economy as best as they can but they must also become much more skilled and properly trained to build a bigger customer base and wash more cars The importance of carwash revenues Carwash revenues in the field at the operators sites not only are the most important predictor and indicator of success for both carwash operators and their suppliers They are also the vital life blood Concluded on page 54 wash counts and increase revenues 3 No serious attempt to bridge the hidden but deadly knowing doing gap While it is generally well known that in bay washes are performing poorly no one actually takes ownership of carwash revenues or does anything constructive to correct this chronic problem
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