By Trevor Gile, Managing Partner, Motorcars Honda; and Partner, RFCarwash Consulting & National Carwash Solutions
Traditionally, car washes have always been viewed as an expense by dealerships. Taking into account the poor cleaning performance, causing customer complaints, lowering CSI, slower transaction time, constant maintenance, and damage claims, car washes have been a pain point in many dealerships. However, when implemented and run properly, a car wash can be a great alternative revenue stream for dealerships to combat market disruptions.
As a second-generation dealer myself, I‘ve seen the benefits of this in my own store – with our wash netting more than the average dealership’s new, used, or body shop net profit. It has also increased CSI, lowered transaction time in service, improved retention, and reduced staff.
Benefits of Retail-Facing Tunnel Car Washes
Car wash programs can bring customers back onto your property once a week, where you would otherwise only see them once a year in service. Loyalty programs around unlimited monthly wash packages in new/used car sales create more touch-points to recapture your existing customer base.
Retail-facing tunnel washes also provide a unique marketing opportunity to serve dealership specials to wash customers that have never been to your showroom (which will likely be around 70% of wash customers). You can market to this new audience through email sign-ups from unlimited wash memberships, on-site signage, social media cross-promoting, texting campaigns, and more.
One of the best aspects of this new business model is the efficiency of it. With the right setup, it’s possible to wash over 100 vehicles an hour with only one to two employees per shift. Instead of waiting for employees to run cars through your in-bay, customers can wash their cars on their own time (eliminating customer wait time, while saving your staff time as well).
While there are many benefits of implementing a wash in your own dealership, the start-up comes with its own unique set of challenges. Making sure you have the right location, equipment, point of sale system, layout, trusted partner, and more is all a factor in ROI. In many cases, start-up washes will have to replace their point of sale system, equipment, or change their layout within the first few years of operation. Also, a tip for avoiding costly mistakes: remember that the lowest price doesn’t always give you the best product or performance.
While it’s hard to predict the future for automotive dealerships, having a plan and investigating alternative revenue streams will help you to solidify your place in the market.
Join Trevor and Matt Gile for their session at Digital Dealer 27 Conference & Expo (Aug. 19-21, 2019 in Las Vegas, NV) where they will tell you their story and share how you can turn a wash from an expense into a profit center.
About the Author
Trevor Gile is an innovator. During his career running a Honda Dealership in NE Ohio, his store was recognized as the First Carbon Neutral Dealership in the world. Continuing his green initiative, he earned Cox Sustainability Award, Fixed Ops Innovative Dealership of the Year, Automotive News and Crain’s 40 under 40, and many more. His green vision has carried over to his other business ventures, such as eco-friendly retail facing car washes that use 40-50% reclaimed water.