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

As 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 washes.

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.

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 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."

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 identification 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."