When you think of a car wash, you probably don’t think of it needing a stellar sales team.
You’ve likely visited a full-service car wash in the past, and they typically have a person outside selling you on the best wash package for your prized investment. Then, once you select a package, they give you a receipt and write, with a wax stick, the package you chose so the person loading cars into the tunnel will know which option to fire up when your car arrives for its luxurious bath.
Now, that is how it typically happens in an older full-service car wash where they have you get out of the vehicle and go inside to wait for your car wash to be completed. Once your car exits the wash tunnel, depending on the package you selected, the wash techs on the other end of the tunnel will swarm over your vehicle to dry it, vacuum the inside, and wipe down the windows so your car looks clean and shiny. Once your car is fully completed, one of the wash managers will waive their hand to signify your car is ready. You head on over to inspect the car, hand them a tip for their work, and drive off with your freshly cleaned car.
De-Humanization of the Car Wash Industry
In the last 10 years, this full-service model has started to go away. The new replacement model is an express car wash model.
In this express car wash model, you pull up to a computerized pay station and the screen will try to sell you the car wash package for your prized investment. Once you select the car wash package and pay for your wash with cash or credit card, a receipt is printed, and the electronic arm gate control will lift up to allow you to move forward towards the car wash tunnel entrance.
The person loading your car in the tunnel (called a “wash technician” or “wash tech” for short) already knows based on your selection at the pay station which wash your car is getting. You now stay in your vehicle and are guided onto the conveyer to load your car in the wash tunnel.
You are then instructed to put your car in neutral, foot off the brake, hands off the wheel, and windshield wipers off so your car can go through the wash tunnel safely and securely.
Once you reach the other end of the wash tunnel, you put the car in drive and head on over to the vacuum court area to finish up the interior cleaning on your own.
The Coveted Unlimited Membership Car Wash Model
One of the other unique additions that this new express-service car wash model has brought to the industry is a membership-based model for washing your car. As a wash club member, you can sign up for a monthly membership for as a little as $20 per month and this allows you the ability to wash your car once a day as many times as you’d like.
This express-service model is very appealing for private equity since it has a lower labor burden and higher profit margins. The full-service model typically required 20-30 employees on the payroll and the typical express-service model only requires 8-12 employees depending on the wash volume.
Staffing the Pay Stations
The one component that I am convinced should not be automated fully is the attendant at the pay stations.
We call these people our “Check-in Greeters” as this is the primary purpose of having them at the pay stations: to greet our customers and welcome them to the car wash. This person must be jovial and full of smiles.
The secondary reason why this person is so important is that we have found that just relying on the pay station to sell those unlimited car wash memberships doesn’t work very well.
Being able to greet our customers and explain to them the benefits of our “Unlimited Storm Club” allows us to sell more memberships. More memberships allow us to capitalize on higher cash flows and more consistent profits.
Almost Doubling Our Memberships
We started staffing up our pay stations in January of this year and we started the year with ~11k total memberships across our portfolio. As of the end of February, we already have ~19k total memberships. We have almost doubled our membership count in a matter of 2 months.
Our goal is to get each of our existing sites to 5k total memberships per site by the end of this year, and the only way we are going to reach this goal is by putting a smiling face at the pay station to greet our customers and sell them the benefits of joining our wash club.
In February, we hired an experienced, full-time sales manager to help us hire the right sales team, train the sales team, and keep them motivated to achieve our goals.
Car Washes per Membership
Now you may be wondering how this impacts the expenses since many people may abuse the unlimited membership program. Well, according to our stats our average member only washes their car 2.7x per 4 week period. This is in line with the industry norm of 2.5-2.8x per 4 week period.
Grand Opening Success
Another way we boost our membership counts is by hosting a grand opening at our newly acquired car wash sites.
In February, we did one in Fort Myers for 4 days and signed up 786 new Unlimited Storm Club Members at $25 every 4 weeks which equates to an additional $255,450 in additional annual revenue from that 4-day blitz.
We also did one at our Greer, SC, location in February and signed up 433 new Unlimited Storm Club members at $25 every 4 weeks which equates to an additional $140,725 in additional annual revenue from that 4-day blitz. We had some weather that impacted our results for this grand opening, but the results still show a positive outcome, even with the weather issues.
Invest While You Can
If you have not started investing in our car wash offerings, I would highly encourage you to consider it for your portfolio. The higher cash flows are nice, and the back-end return projections are showing some phenomenal outcomes.
Our team is committed to the success of these car washes, and we truly believe we have discovered the way to produce even higher cash flows with even greater overall returns.