What is the Right Price?
CarWash College™ Tip of the Month
I know this has been talked about a lot over the years and I have even written articles on the topic. So why do I feel the need to bring it up again? I keep hearing people talk about it – no not just the new guys – even the thirty year veterans. So what is it? Price!!! My goal in this article is not to solve the never ending pricing problem, but to provide you with some ideas to help you navigate these tricky waters.
Let's start with the first question that is always on people minds. What should my base price be? This is a question that requires a lot of research into your specific market and knowing what your competitors are doing. You don't need to the lowest in the area, but you do want to provide the best wash for the price. People are always going to seek out the best value and not just the lowest price, within reason. One piece of advice I can offer is to try and avoid charging your customers in half dollar increments. A wash near me just raised prices by fifty cents and the biggest compliant they got was not the price increase, rather the amount of fifty cents. The manager told me people were saying 'why not just charge me six dollars'?
Then next step in building your pricing comes in the form of what your packages offer. You need to show incremental value in the packages to coincide with the incremental pricing. When building the packages there are many ways the menu can be laid out. The key is to make it quick and easy for the customer to see the difference and value between packages. One menu pricing trend is being driven by all the new online services being offered. One of the people who pioneered that trend, and has many washes upselling the customer on these types of services is Zeev Josman (firstname.lastname@example.org). He has found that the menu that provides the best average is one that shows value and has a fairly large gap between the base wash price and the next package. An example of this type of menu can be seen at the end of this article.
Some people think that the idea behind this type of menu leaves your top customers paying for the shortfalls of your base customers. I can tell you that when talking to people who have paid for a exterior wash with prices as high as $20 they are happy, as long as the car comes out looking like it has been waxed. They feel it's a great deal compared to the $40-$50 dollars for a hand wax.
I think the most important thing to remember is to first and foremost offer your customers a good wash. Then do your homework, offer upgraded packages and avoid the common price pitfalls.
Robert Andre is the President of CarWash College. Robert can be reached at RAndre@sonnysdirect.com. For more information about CarWash College certification programs, visit www.carwashcollege.com or call the registrar's office at 1-866-492-7422.