Members in the News
Frequently SCWA members are featured in national
publications. The following article recognized an
SCWA member, Bubbles Car Wash.
Embracing The Unexpected
Bubbles Hand Car Wash chain made
turn into the express market.
Sometimes, the sky is clear, winds are low and the
waters are calm; the conditions are optimal for smooth
car wash sailing. Other times, clouds gather, waves crash
and storms bluster. Frequently, the difference depends
on navigation. When surrounded by building storms
and choppy seas, many owners appear all-too content
to stay the course and inevitably go down with the ship.
Yet, others stand ready to take a risk and steer their businesses
into clear, safe waters.
As many operators have learned, even in the best
conditions, navigating the ebb and flow of the car wash
industry can be a massive challenge. The most successful
owners understand the need for flexibility, and they do
their best to prepare for a few unexpected turns. Though
a course has been charted, these owners realize that their
business’ survival depends on the ability to navigate and
change directions in response to different challenges in
the car care market.
A tale of two formats
One car wash company that flourished before and
after a surprising turn is the Bubbles Car Wash chain in
Texas. Today, Bubbles operates 13 locations in Houston:
Five hand tunnel washes and eight express tunnels. According to Chairman Bill Lawrence, the earliest concept
for Bubbles was a chain of luxury, high-end hand
washes.
“I was intrigued by the car wash business. But, having
owned a nice luxury car, was hesitant about taking it
through the car washes with all the bristles,” Lawrence
explained. “Back then, we didn’t even have soft cloth; it
was bristles and things like that. And I came up with the
idea of building a conveyorized hand wash.”
In the early 1990s, the basic business plan was to
attract mainly high-end customers who drove expensive
luxury cars. The first Bubbles Hand Car Wash, opened
in 1991, was created to be the “Neiman Marcus of car
washes,” Lawrence stated. Over the next 10 years, four
more Bubbles Hand Car Wash locations were added.
After 14 years of operation in the labor-intensive
hand wash format, Bubbles’ management decided to
alter their course and enter the express car wash market.
In 2005, the first Bubbles Express Wash opened. “We
saw the market leaning towards an alternative means of
washing, and by that I mean not every customer needed
a full-service wash every single time they washed their
car,” Lawrence said. “We just felt that if we didn’t start
building some exteriors, someone else would fill the
void in the market.” Seven more Bubbles Express Washes
have been added over the past seven years, with the
newest location opening recently.
Help from Houston
Bubbles has the advantage of being based in Houston,
one of the largest cities in the U.S. Bubbles locations are
lucky to call this metropolis home because the washes
can draw from, and market to, its huge population. Even
though Houston is large, it is still a very competitive car
washing market. Lawrence noted that, at last count, there
were approximately 175 conveyor washes in the city.
With this much competition, how does Bubbles decide
where to locate new car washes so that they have the best
chances of success?
“Well, we’ve spent a number of years working with
a real estate market research company that has profiled
our more successful locations,” Lawrence said. “When
we find a location we like, they go ahead and run all the
metrics on that location and can usually come within 2
to 3 percent of annual revenue. And then we decide, at
$700,000 a year revenue, can we spend $3 million and
make money. And it’s either a yes or a no.”
Still, the number one concern when it comes to new
locations is competition. Bubbles management definitely tries to look for and build in underserved markets.
Lawrence revealed that current plans call for Bubbles
to add another one or two hand washes in high-demographic
areas. On the express wash side, Bubbles hopes
to build another five to 10 locations before the city is
saturated.
Steps for continued success
Lawrence stated that the most important factors to
Bubbles’ success have been site investments, equipment
updates and the company’s selective hiring practices.
Over the years, the chain has reinvested a lot of earnings
into the different locations, and Bubbles is constantly
improving its facilities. The chain also spends a lot of
money recruiting and training the right employees. “We
have some pretty high standards, and if you don’t fit
those standards, we usually take a pass,” he said.
These steps make it easier for Bubbles locations
to deliver what is most important: Quality to the customer.
Lawrence pointed out that it is hard to deliver
a clean car consistently if a wash has equipment that is
constantly breaking down or if a manager just hires the
next person that walks in off the street. Thus, Bubbles’ continued investment in capital improvements and
high standards for associates allows the washes to provide
exactly what customers want — a clean car in an
efficient and affordable manner.
Turning to technology
Another secret to Bubbles’ success has been the use of
up-to-date computer technology that increases efficiency and
improves communication. In 1995, Bubbles management first
put computers in all of the hand car wash lobbies so that customers
could surf the Internet while they waited for their cars.
Soon after this addition, Bubbles installed an email server to
allow the wash managers and corporate staff to communicate
electronically. Next, Bubbles created its own private wide-area
network. Lawrence noted that this fast and secure network
allowed management to control on-site car wash computers
remotely, as if they were located in the next office.
About eight or nine years ago, the car washes graduated
to an IP-based phone system as well. With Bubbles’ IP phone system, a new location can be brought online,
and the only connection expense is a $95 IP phone. To
add a new location, the company does not have to pay
for another dial tone or request service from a phone provider.
Instead, the phone is simply plugged into Bubbles’ network and assigned an extension. Then, the manager
has immediate quick-dial access to voicemail, conference
calling, corporate offices and other Bubbles locations. The
company has realized big savings using this IP phone system,
according to Lawrence.
“We keep on embracing more and more technology
and incorporating it into our business,” Lawrence said.“We put in a document management system almost 10
years ago [and] we now have our remote locations, our
store managers, scanning documents into our system,
almost eliminating the need to transfer paper back and
forth between the stores. We’ve computed that just the
document management system itself saves us anywhere
between $30,000 and $40,000 a year.”
This calculation is based on Bubbles needing a fulltime
file clerk to do nothing but file away documents,
Lawrence stated. Now, every corporate document can be
handled electronically, including:
• Invoices;
• Reports;
• Weekly summaries;
• Correspondence; and
• Packing slips.
Marketing methods
The foundation of Bubbles’ dedication to technology
formed almost 17 years ago when the chain first shifted
all of its marketing efforts to database marketing. Today,
most of the chain’s special offers and all of its marketing
campaigns are directed to their existing database of customers.
According to Lawrence, Bubbles currently has a
database of about 350,000 to 375,000 customer names and
addresses. About 100,000 of these database listings also
include the customer’s email address.
When it comes to marketing, Lawrence explained
that Bubbles basically has three different types of customers.
First, there is the infrequent customer that is only
going to wash his or her car once every six months no
matter how dirty the vehicle gets.
Next up is the club plan customer. This customer
does not want to commit to a long-term or perpetual
investment, but he or she likes being part of a group and
saving money. To keep the club plan customers happy
and loyal, Bubbles has created an “affinity club” where
they receive occasional discounts and special offers.
Finally, there are loyalty and unlimited customers who
purchase pre-paid wash books or sign up for Bubbles’ monthly credit card charges. “We look at them both as
being loyalty programs. When a customer has a book of
five tickets sitting on his center console, you know he’s
going to be loyal to you for his next five visits,” Lawrence
said. “But that’s a different customer than the customer
who is going to sign up for a monthly unlimited plan and
agree to have his credit card charged every month.”
Bubbles has also turned to social media as another tool
for marketing the chain. About four years ago, the business
noticed the emergence of Facebook as a place where
Bubbles’ employees and management could interact with
customers in a unique way. The company posts frequently
on its Facebook page, and the posts are sometimes nothing
more than jokes of the day or on-site car washing pictures.“The more we engage our customers, the more posts we
put up, the more we interact, the more our customers
engage with us,” Lawrence said. “And we’ve done the
same with Twitter. We have somebody in our office whose
job it is just to monitor and post and interact with our customers
on Facebook and Twitter.”
Future challenges
Bubbles is currently taking steps to navigate beyond challenges
in the future as well. One challenge that the car washes
have met head on is increased OSHA enforcement. The chain
currently employs a company that visits once a quarter and performs
OSHA inspections at the car washes. “We’ve been able
to stay ahead of that curve. We take it seriously and it’s worth
the investment because they’ll point out things that could come
back and potentially represent a liability,” Lawrence said.
The biggest challenge that Bubbles now faces is how to
deal with the new health care legislation. When the federal
health care regulations take effect in 2013, businesses with
more than 50 employees must offer an affordable health
care plan and must pay for a portion of the premiums,
according to Lawrence. If a company does not offer health
plans, it will be penalized $2,000 per employee. Bubbles
currently has about 225 associates who do not qualify
under the defined benefit plan. Here, 225 employees times
the $2,000 fines equals $450,000 in potential penalties.
In this instance, smaller car wash operations will operate
at an advantage over the larger chains and operations.
Bubbles will be competing head-to-head with car washes
that do not comply to the legislation because they have
fewer than 50 employees, Lawrence stated.
“We’re not sure that we’re going to be able to keep all of
our full-time associates. We may have to transition to a parttime
company,” Lawrence noted. Moving forward, this
part-time shift may cause two problems for the car washes.
First, Bubbles will have associates who do not have health
insurance by their own choice. Next, the converted parttime
associates will have had their annual wages reduced
by 25 percent, going from 40 hours to 30 hours.
Moving forward, Lawrence thinks the entire fullservice
industry, due to the nature of the workforce and
the seasonality of the business, will struggle to meet the
challenges of the health care legislation. “Right now, that’s
our number one focus and our number one concern. We’re
taking care of business. We’ve got good technology. We’ve
got great associates. We’ve got great car counts. Texas is
enjoying a very robust economy. But all of that’s going to
go for naught if we have to start paying $450,000 a year
more in penalties and fines,” he concluded.
by Phillip Lawless, Managing Editor, Professional Carwashing & Detailing
