Making the Value Proposition Work for You
If you were fortunate enough to attend the SECWA Show in Nashville you might have noticed a change that is taking place in the car wash industry. There was a definite feeling of guarded optimism among vendors and attendees. While most attendees did not seem ready to open their wallets many were educating themselves on features and benefits of products displayed to enable them to make an intelligent decision on future purchases. There was a definite movement towards the value proposition among those attending - operators and manufacturers alike. In simplest terms the value proposition is recognizing the importance in any transaction of value and benefit over cost and risk. Wikipedia defines it this way "A value proposition is a promise of value to be delivered and a belief from the customer that value will be experienced. A value proposition can apply to an entire organization, or parts thereof, or customer accounts, or products or services." Providing or developing a value proposition is about taking a positive action to create the best atmosphere to offer a value experience to your customers.
In the current economic climate many businesses have decide that reducing prices was the best way to go rather than offering a value proposition. Some manufacturers began to eliminate some features and offer products that were marketed based on the cost rather than added value. Some distributors have turned to reducing service capabilities and offering alternative products that they could sell for less. Some operators turned to questionable reductions in the quality or quantity of their chemicals, minimal maintenance of equipment and discounting in various ways to offer washes at lower prices. Scanning over many of the ads in industry magazines and comments on Internet sites, the focus seemed to be offering goods and services at the lowest price was the best way to survive during tough times. While this may have worked in the short term, the long term effect of reducing profitability has caused many manufacturers and distributors to cut back on service and field support and operators to drive prices down in their area to dangerously low levels. All this put a squeeze on profitability. The end result put many in a serious financial difficulty or in even some cases bankruptcy.
To understand how to most effectively use the value proposition it is important to know what the market you are selling to values the most. Is it performance? Is it features? Is it cost versus quality? Is it a combination of all or some of those factors? I would argue that in the car wash market all these come into play in one aspect or another but I think the bottom line is “What gives me the best bang for the buck” or value. Consumers today are watching every dollar they spend but most are willing to pay a little more if the perceived value is there and it meets their need for a clean, dry vehicle. Lower prices often mean less quality or poor performance in the minds of most consumers – not something of value.
What does the value proposition mean for operators and how should they use it in their wash? The old saying that you get what you pay for has never been more relevant than today. Look for the manufacturers known for quality performance and products that offer equipment or goods that have the most desirable features with excellent performance at a reasonable cost. Also make sure they stand behind what they sell by offering easy access to technical support and warrantees or guarantees that prove to you that you are buying quality products. Make sure that product support is either done locally through a distributor or company representative or is readily available on line or direct from the factory. Good operators understand that the equipment or goods that are less expensive often come at the cost of inadequate field and technical support, fewer extra features, inferior performance or less durability. In the long run what you think you are saving may cost you in the long run. A very successful executive once told me "You can't save your way to real, long term profitability".
When choosing a supplier or distributor an operator needs to look for those offering a value proposition by having a top notch reputation for selling quality equipment and products and servicing or supporting them in a reliable and timely manner. Recent economic difficulties have caused some distributors to reduce their service capabilities by eliminating some personnel and limiting their inventories in both the number and amount of products they stock. This affects their ability to service their customers effectively causing extended waiting times for repairs to take place due to having fewer techs to dispatch and a reduced amount of needed parts in stock.
Even if you feel comfortable with your current supplier/distributor it would be worth your while to check out what is available in your area. You may find you are getting good value already or there may be an even better choice for you. Either way you will feel much better about the service or products you are getting. While I am big on customer loyalty I also feel it is a two way street. In return for your loyalty your supplier/distributor should offer you their best service/products and the best price for them.
What does the value proposition mean for your customers? It should be reflected in your employees, facility and operation. Basically it means providing the best quality wash by selecting and training your employees well, keeping your equipment in the best working condition and using quality chemicals in addition to offering value in the services they choose. They should expect you to maintain your facilities in good condition meaning landscaping, lighting, clean bays or tunnel, picking up trash or clutter frequently, easy to read signage and an attractive overall appearance. Your wash should provide the feeling of clean and orderly for your customers. You cannot expect the value proposition work for you if it is not reflected in everything you do or offer.
What does following the value proposition mean to you, the operator? It means going the extra mile in your operation. It means offering the best facility and services you can. It goes beyond doing the minimum. In return you can expect better, satisfied, loyal customers and in the long run a profitable business that you can be proud of. Is the value proposition worth the effort? I believe you will find that out when you make it the way you operate your wash.
Ron Holub currently works with Hydro-Spray, a manufacturer of quality automatic and self service equipment. He has been involved in the car wash industry for over 33 years. He has worked for several national carwash chemical companies, owned a car wash and detail supply company that manufactured car wash chemicals and been a general manager for a car wash chain. He can be reached at [email protected].