Automotive News Canada - April 2020 - F23

FIXED OPS JOURNAL

PROFIT BUILDER

FINISHING TOUCHES

Car wash seemed like a good idea, but it took some tinkering to make it work

KEN WYSOCKY

Price points

foj@autonews.com

s fixed ops directors search for new
revenue streams, they might do well
to consider Ricart Automotive
Group, which has parlayed investments in car washes into additional income
while at the same time buffing up customer
satisfaction and retention.
The auto group operates two exterior,
100-foot-long tunnel car washes on its 67-acre
Ricart Mega Mall - seven new-car rooftops
and a used-car store in Groveport, Ohio, a
Columbus suburb.
The first car wash was built decades ago for
Ricart sales and service customers, to handle
internal car washes and offer retail washes to
the general public, says Ralph Sams, reconditioning manager for the group.
But that facility eventually became overwhelmed,
which peeved Ricart customers who had to wait for
their free washes. So about
18 months ago, the company invested roughly
$750,000 in a second facility that handles only internal sales and service car
Harkins: Great
washes.
retention tool
The new facility enabled
the auto group to dedicate the original car
wash to only free car washes for Ricart customers and retail washes for the general public, Sams says. In a typical year, about 100,000
cars go through this wash.

Reaching customers
In 2019, the car wash generated about
$110,000 in gross revenue. Operating expenses
totaled roughly $90,000 and included things
such as labor (an attendant is required), detergents and other chemicals, repairs, maintenance and utilities.
While the car wash only generates about
$20,000 in annual net profit, Sams says some
things you can't put a price tag on. He says the
car wash bolsters customer retention and increases customer satisfaction. If nothing else,
there's always good value in providing another touchpoint with customers.
"Some customers come through multiple
times a week and some even come through

Ricart Mega Mall in Groveport, Ohio, added a
second tunnel car wash about 18 months ago.

daily," Sams says. "So we're helping to build
customer relationships. It's still a win for us."
Lee Harkins, CEO of M5 Management Services, a fixed ops consulting firm, thinks car
washes are a logical and profitable extension
of services for car dealerships.
"I think they're a heck of an idea - a tremendous retention tool," he says. "Car owners
need four things: gas, maintenance, repairs
and cleaning. Providing just maintenance and
repairs fulfills only two of those needs. But
when you add a car wash, you're now fulfilling
75 percent of those needs."

Kiosks added
The popularity of the original car wash
posed problems, however. For starters, it was
difficult to distinguish between car-buying
customers and the paying general public. Too
many non-Ricart customers side-stepped the
honor system of payment. The auto group
tried checking each driver but stopped because that led to long lines and irritated legitimate Ricart customers.
To fix this, in May 2019 the auto group installed two automated kiosks - at a cost of
$120,000 - that use radio-frequency identifi-

Here are the rates for the Ricart car
wash.
 Customers who buy a vehicle from
Ricart get unlimited free basic
washes for as long as they own the
car.
 People who come in for service but
didn't purchase their vehicle from
a Ricart dealership still receive
unlimited free basic washes for 6
months.
 Customers who don't fit the first 2
categories pay $6 for a basic car
wash. They can upgrade to $10, $12
and $15 washes that provide
additional options such as a wheel
rim wash, a hot-wax application and
a tire wash.
 Ricart customers must pay for the 3
upgrades, but at a discounted rate of
$6 off per option.

cation stickers to distinguish Ricart customers
from retail customers. About 30,000 Ricart
customers have the windshield stickers,
which the kiosks read.
The upshot? Less volume and congestion
because some non-Ricart customers that
were gaming the system didn't want to pay for
washes. On the other hand, with all non-Ricart customers now paying for their washes,
revenue increased by about $50,000 in the
first year, Sams says.
"Having those kiosks is a must," he says. "It
gives you a way to control the washes and
boost profitability."
Customers at the two kiosks merge into one
line before entering the car wash. An attendant is needed to pace the cars, guide them
into the towing track and make sure drivers
put their vehicles in neutral gear, Sams says. It
takes cars about 2½ minutes to run through
the car wash.
Sams, a 17-year Ricart employee, understands why the car wash has been a Ricart fixture for so long. "It's such a great retention tool
because people get very accustomed to coming
back to our dealerships over and over again," he
says. "It definitely keeps us top-of-mind." 

APRIL 2020

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