“WASH AS LONG AS YOU WANT” A Pricing Concept By Jack Anthony III

Article is located at this link:  http://www.carwashmag.com/pdf/oct_2001/selfservice.htm

I cut and paste this article from AUTO LAUNDRY NEWS just so I would have it. But click the original link above. (The below article is for my personal archive.)

I will one day write an option on this concept.    🙂

 

October 2001

“WASH AS LONG AS YOU WANT”
A Pricing Concept
By Jack Anthony III
This is a very simple concept. Customers pay a flat fee for enough time to wash their vehicle in the self-service bay. The amount of time is variable, depending on the operator. It ranges from about 15 minutes to an hour. When the customer exits the bay, a loop detector buried in the concrete senses the vehicle movement and cancels any remaining time.
This concept is contradictory to the conventional wisdom that customers are renting the self-service bay by the minute. Many operators say it will not work or question the wisdom of discounting the wash. Some of the questions and comments we have heard include “How can I make any money when I am busy on weekends?” and “It will cost me money because I cannot get as many customers through the bays.” This pricing concept has been tried in many parts of the country and those who have tried it have found two things in common:o Customer satisfaction increases dramatically and
o Gross sales increase also.WHY DOES IT WORK?It is actually quite simple. People hate “being on the clock” at the car wash. This concept removes that barrier. It is very customer friendly. And guess what? People who used to wash in their driveways are now coming to the car wash. This means a larger customer base and more customers.
Probably the most important reason is that customers perceive they are getting a great deal for their money. Finding a price point that will attract customers to your car wash is important. Once they try it, they love it.
An important side note: We have found much less resistance to price increases with this concept.BACKGROUND

Let’s go back a few years and see how it all started. Bob Clements is the “Father” of the wash-as-long-as-you-want concept. Bob owns Wonder Wash, a large chain of self-service car washes (40+ locations) in small rural towns in the upper Midwest part of the country. In the early 1990s Bob was unhappy with seeing his bays “dry” too often. Bob is a numbers guy and he knew the operating cost per cycle was very small. His plan was to keep his bays “wet” by bringing more customers to his washes. A local competitor was charging $1.00 for 5 minutes. Bob reasoned that his competitor’s customers were using two cycles. He decided to charge what most customers were paying but give them as long as they wanted to wash their car. He came up with $2.00 for “Wash as Long as You Want,” literally. The first wash where he tried this concept doubled its gross income in two years. He tried it at a second wash and it’s income doubled in two years. He has since converted most of his washes to this new concept with an average gross-income increase of 50 percent over a two-year period. His income per car went down slightly, but the increase in gross income was substantial and, most importantly, so was the increase in his net income.

REPEAT

We have found the same to be true. We have converted three of our washes to “Wash as Long as You Want.” The income at these washes was well above the national average before we made the change, but still not where we felt it should be. The first location, a six-bay wash, was changed to the new pricing system in October 1996. It has shown consistent increases in gross sales: 50 percent in 1997, 3 percent in 1998, 7 percent in 1999, 4 percent in 2000, and 29
percent in 2001. The second wash, a five-bay, changed over in September 1997. Increases at this wash have been as gratifying: 34 percent in 1998, 27 percent in 1999, 26 percent in 2000, and 22 percent in 2001. The third wash, a six-bay, converted to “Wash as Long as You Want” in January 1998. Average annual income at this location increased 34 percent in 1999, 11 percent in 2000, and 23 percent in 2001.
The last few years have been good for many self-service operators around the country, but not many mature washes have seen the type of consistent income growth as demonstrated by these washes.

PROFITABILITY

The bottom line is, well, the bottom line. If you still doubt the feasibility of the wash-as-long-as-you-want concept, consider the following:

o Most major costs are fixed at a self-service wash. These would include rent, property
taxes, debt service, labor, insurance, etc.
o The actual cost-per-cycle of a self-service car wash is very small.
o The cost of goods provided to the customer for a conventional wash cycle would
include water, gas, electricity, chemicals, and wear and tear (maintenance). At our
washes, these costs, as a percent of sales, generally fall in the range of 10 percent to 14
percent of gross sales.
o The same cost elements are present in a “Wash as Long as You Want” cycle. In this
cycle, the cost of these same elements falls in the range of 14 percent to 18 percent.
o As you can see from the large increases in gross sales and the relatively small increase in
costs of good sold, the “Wash as Long as You Want” concept can have a major impact
on your bottom line.

PRICING

There are a number of different ways to price and market this concept. Bob Clements originally started out at $2.00 for “Wash as Long as You Want.” His timers were set to turn off after one hour. If a customer complained about not being able to finish, he would have the attendant restart the cycle for another hour. Fortunately these restarts were few and far between. Today, Bob charges $5.00 and he sets his “no-display” timers to cut off in 45 minutes. His attendants still give customers additional time if necessary.
We charge $3.75 (soon to be $4.00) and have large banners stating, “Wash as Long as You Want, Up to 20 Minutes”. We have found that 20 minutes offer more than enough time to wash most any vehicle, even Suburbans. We get virtually no complaints about the 20-minute time length. We do have signs stating the time length and
we use countdown timers so the customers always know how much time they have left.

VARIATIONS

Variations on the general theme are innumerable. Some operators have tripled their time and doubled their price, i.e., while they used to charge $1.50 for 4 minutes, their new price is $3.00 for 12 minutes. These operators, also, have shown large increases in gross income. And with the shorter time allotment, they have not had to install loop detectors.
Another variation would be a bonus type system: $2.00 for 4 minutes or put in $4.00 to “Wash as Long as You Want” – up to 20 minutes. As you can see, you can customize this approach and select the method that best suits your individual operation.

MARKETING AND PROMOTION

Just because you change your wash to the “Wash as Long as You Want” pricing system, will not necessarily make it successful. You need to get the word out, find a way to let all the potential customers know that you have a new system. Large colorful banners are very helpful. The most important part of the banner is the wording. The term “Wash as Long as You Want” is short and easy for potential customer to grasp. Under the “Wash as Long as You Want” wording the disclaimer of “Up to 20 Minutes” (or whatever time length you choose) should be stated. The banner could also say “Limited Time Offer”, which allows for flexibility. Obviously, promoting the new pricing system with radio and television ads will get the word out quicker. Direct mail works well also, but there needs to be a fulltime attendant or credit/debit card acceptance system in place to handle direct mail discount(s) you might offer.
A full time attendant can be a great marketing tool. There is a bit of an educational curve for your customers to contend with; they need to get used to the new system. An attendant or owner on site can answer any questions and really speed up their getting through the learning curve. An attendant can also make change for customers who are waiting so there will be no delay once they get into the bay. This is especially valuable on busy days.

CHOOSE WHAT’S RIGHT FOR YOU

Is the “Wash as Long as You Want” pricing system the right choice for all operators? Of course not! There are a number of reasons not to change. You may not want to change if your site is already maximizing its income potential. If your site is very small and you need room to stack cars, “Wash as Long as You Want” is probably not for you. This concept lends itself very well to car washes with a large number of bays. Since customers do spend more time in the bays, it is good to have extra bays during your busiest periods. Having fewer than four bays could be limiting. Bob converted a number of his two-bay sites to this new concept, but has reestablished conventional pricing structure at these locations. According to Bob, a two-bay setup just does not allow a large enough volume of cars to justify the new concept. Bob believes the
system requires a minimum of three bays.
For those operators who have under-performing washes, this is one way to possibly increase profitability. It is difficult to ignore any opportunity to increase customer-satisfaction levels – and to add to the bottom line.
Jack Anthony, a second-generation car wash operator, is the CEO of California-based Anthony Industries Inc., which owns and operates seven self-service car washes, two
full-service car washes, a 10-minute oil change, and a gourmet coffee shop. Jack is currently a member of the International Carwash Association Board of Directors, a position he also held from 1981 to 1984. In 1985 he was a member of the Northern California Car Wash Association Board of Directors. Jack recently also served on the Western Carwash Association Board of Directors.

AUTO LAUNDRY NEWS is published by EW Williams Publications Co., 2125 Center Avenue, Fort Lee, NJ 07024 (201) 592-7007 Fax (201) 592-7171.
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