New Pricing Structure

I am looking for some opinions on a new pricing structure I have been kicking around. I currently have the following pricing plat form.

Basic Wash: Prep, Wash, Rinse and Hand Dry $4
Better Wash: Basic+Wheel and Tire Cleaner, Under Carriage Flush, Sealer Wax $5
Best Wash: Better+Triple Foam Polish Wax $7
Works: Best+Rain X, and Tire Shine $10

The problem I have is the customers around here are just cheap, it is hard to pry the money out of their hands. I compete with 2 washes that are both $2 for basic wash and also have a $3 and $5. There is no prep or drying with them and the wash is not very good. We took the position that we would put out a better wash and offer some freebies(free vacuums & free dash wipes) to make our starting price point more attractive. Seems like it has not worked. The 3 past years we have washed the same amount of cars even with heavy promotion and marketing.

On days that I am slow and not washing that much they are doing better from what I can see from the street and that is with no marketing other than the biggest $2 sign on the street possible. We are all located on different roads about 1.5 miles apart with the same traffic patterns.

The new price structure I have thought about is as follows:
Basic Wash:$2 prep,wash,air dry

Ala cart for everything else:
waxes, wheel and tire cleaners, undercarriage, towel dry would all be priced at $1 for each servece.
Rain X and Tire shine priced at $2 for each service.

Do away with the free vacuums and still give free dash wipes.

My thought is offer what the $2 guys offer and still offer what I have been offering not to piss off my current customers that like what we do. Just package it in a different way that gives the customer more customization of what they want.

Any Opinions?

Thanks,
Shannon

Your experience is most important. Few will have exactly the same competitive factors. If your competition does not offer free vacs thre is no reason you should.

I offer both a la carte and packages a system some don't like. The idea is to have the package offer a value over a la carte. So my basic wash is $3.50 (Which would be to high for you) no free vacs. Super wash is $7.50 and includes a la carte items, of Sealer $1.00, Polish Wax $3.00, Undercarriage, $1.00 and Rust Inhibitor $2.00 . (Winter has strong a la carte sales for undercarriage and rust inhibitor makes for a good upsell opportunity to the Superwash) A+ Wash is $11.50 and adds Rain X $3.00 and Tire Shine $3.00 plus a free gift such as air freshener and 5 day clean car guarantee. (Probably 20% redemption on the guarantee.)

You may find that changing the equation is a sensible... and much more profitable alternative.

Instead of riding the devaluation fast-lane, you may consider what other flex-serve operator clients have tried successfully: After-Care Express.

Many have found that using the carwash as a traffic builder, and focusing most of their energy and service expertise on delivering a wide array of express detailing options. That's not to say that their carwash professionalism is lackluster, but rather the perception of extra-special hands-on options drive the value equation.

So, rather than following others who risk circling the carwash drain, reflect on being in the rapid-delivery detail business where every vehicle needs to be prepped first anyway. The captive audience is better positioned to respond impulsively if your marketing is good... and the quality of your product is even better.

-Steve

www.SMOKUN.com

The problem – despite heavy promotion and marketing, you have washed the same amount of vehicles over the past three years.

Current situation - three express washes competing within 1.5 miles of each other. The market competes on the basis of low price. A base wash with free use of vacuums has a street price of $2.00. You charge $4.00 for a base wash because you towel dry. Your assessment is the quality of the $2.00 wash is not very good.

Regardless of your assessment of finished quality, your competitors are pricing car wash like it’s a commodity. When you sell a commodity, you have to be a low cost producer to win.

Since I cannot speak about producer costs in your market, one opinion would be to simply match competitor prices to offset the competitive advantage they currently have over you in terms of economical distance to consumers.

Of course, to make it worthwhile, you would need to attract or pull enough extra business to offset the lower average ticket that would be caused by dropping the base price by $2.00.

Another option would be to find some way to significantly improve the operational efficiency of your plant to reduce operating expenses (i.e. helping to offset the lower average ticket).

The only other option is to increase throughout; the rate at which the wash generates money through sales (price minus materials).

There are several ways to increase throughput of an express wash.

1) Improve the value proposition through marketing strategies and tactics. Because you have been unsuccessful with marketing to date only means that you have not hit the cords that resonate most in the minds of consumers in the market.

2) Offer more products and services. This can be done in baby-steps. It starts by identifying what can and should be done to maximize the performance of the tunnel. Next, you could offer a basic interior cleaning service; two people towel dry, vacuum, dash/console and clean windows. I helped an express owner with this. He did 10 or 15 percent of his wash volume out of the gate, no advertising, at $11 extra a car.

3) You can take the extraordinarily large leap and make a wholesale conversion to flexible service.

Hope this helps.

Bob...

I'm a bit perplexed by your "extraordinarily large leap" characterization of After-Care... for it's really not such a grandiose initiative. Rather, a natural progression towards the hands-on fundamentals of Flex-Serve... such as your "basic interior cleaning service".

I see you are in Michigan. I am in Chicago. Can't say for your area, but here volumes have declined over the last 3 years due to weather (even this year July 2011 was record rainfall since they have been keeping records.) So, if your volume has been constant then, you may actualy be improving.

Earl we have fought the weather just like you have in Chicago the good thing was we were up 39% in June and 27% in July but the last 2 weeks of July where dead and the first 2 weeks of August we are down 27%. I don't need to tell you about spring that was just horrific. I get the weather that comes across you a couple of hours later, pretty much the same weather traffic pattern here.

The more I look at it I may be better off with the same price structure I am currently using with more daily specials (i.e."Ladies Day","Rush Hour Special") and add more after care services. We have the equipment and supplies since we are a full detail shop also just have to rearrange some space.

How about the following:
Auto - detailing takes between 25 minutes to 2.5 hours depending on the service. The prices range from $25 to $200+ We are priced for BEST VALUE. We are not the low man and we are not the top man; some services are more than conveyor system, while other services are lower than hand wash detailer (mobile or stationary)

Truck - detailing takes 2+ hours depending on service and size of truck. Price range from $50 to $250+. Priced for BEST VALUE.

Boat - detailing takes 3+ hours depending on boat footage. Price range from $10-$15 per foot. We are moderately priced.

Motorcycle - detailing takes 1-3 hours depending on condition of motorcycle. Price starts at $49.

Generally, it takes one experienced person and one helper 2.5 hours. One experienced person, can perform Presidential Detail in 3 hours. For an inexperienced person, it could take 4 hours or more. The key to a quality, consistent service is: #1 an eye for detail #2 being properly trained and lastly A SYSTEM - the way one does what he / she does.

Hi!
Come to Russia. I installed here 20 tunnels and don't know anybody who wash for less then $8. Usually for SUV they charge $10.
Total price for whole project (land, utility connections, building, car wash equipment) about 1,5 - 2,5 million $ - not far from what you have in US.
But good tunnel could charge $10-$18 easy only for tunnel wash without any inside work.
Really. I'll help.

Can you teach me to speak Russian? :)