Critical Density & Car Wash Development
What might the perfect car wash venture look like?
- Washes shielded from competition
- Recognized household brand name
- Visible, effectively designed marketing campaigns
- Supporting a full time maintenance worker and accountant
- Ample well-trained staff
- Outstanding car counts and ROI
- Low per-site overhead
- Diversification of investment between locations
Achieving this kind of market domination is about more than building a great car wash – it’s about building a brand that inspires loyalty and develops deep roots in a community. And despite some common car wash assumptions, that brand-building and domination is best achieved by the development of a local chain, rather than the establishment of isolated car washes in disparate communities.
The theory is known as ‘Critical Density’ or ‘Critical Saturation’ and it’s been shown to provide greater success than other car wash development plans.
According to Critical Density, between three to five sites are required to claim a particular market, depending on the situation. A rule of thumb is 1 tunnel wash per every 30,000 local population, and only 2-3 miles between your locations as most.
But wait, many investors and builders will say. Three miles of elbow room isn’t enough. Sites will begin to cannibalize one another or the area as a whole won’t be able to sustain multiple locations!
Except that they don’t. Critical density area development is all about achieving critical mass and appropriately saturating a local market with high quality car washes. By developing car washes and building more compactly in a target area you trigger a greater level of brand growth and market capture, entrenching your washes and making it very difficult for your competition. Advantages include:
- Divided Overhead – Maintenance, accounting, and administration costs can all be shared between multiple sites, giving you more income power for proportionately less expense.
- Increased Brand Recognition – More sites makes your brand more visible, leading to vastly expanded customer awareness and participation. You also transmit a greater sense of success and therefore value to discerning customers.
- Better Marketing Campaigns – Your marketing can cover all sites while still only targeting one particular area. Word of mouth marketing also becomes more effective with more washes within reach.
- Memberships and Coupon Values – With more washes in a local area boosting the convenience and closeness factors for more customers, memberships and coupon values become much more valuable. Customers don’t feel locked in to doing business with only one site.
- Market Command – Once your brand is established you will have strong control over the market, determining the pricing, quality of the wash, and style of wash. With a quality express experience from a Tommy Car Wash System, that’s bad news for the competition.
- Territory Command – You’ll also take physical control of the area. If your washes are two miles apart you create essentially a unique territory between them in which customers are particularly well served. This territory then becomes much less appealing to incoming car washes, whose old sites you may be be able to expand into as they fail or leave.
Single site washes can and do excel in many examples, but because most operators are afraid of cannibalizing their own site they leave huge potential on the table and forgo the increased efficiency and profitability that can come from critical density area development. For more information and a free consultation with some of the best experts in the car wash industry, call or email Tommy Car Wash Systems today using the contact options on the homepage. We’d be happy to share our expertise and give you some options with tremendous promise in the new car wash market.
Tommy Car Wash Systems_
Adapted from 'Auto Laundry News' September 2011 edition.
Original by Ryan Essenburg of Tommy Car Wash Systems. _