Need Advice: getting whipped by Competitor's SS....

[soonermajic]

Owner I bought from, told me collaborated w/ other owner in yown to switch to $1.50. After a short time of ownership, I decided to check out competition (I know A$$ backwards). We'll other guy STAYED @ $1, & a yr later I'm getting whipped. I'm at $1.50- 4 minutes, he's @ $1 for 3 minutes. Utili yu es are very cheap here. Should I
A: go to $1 for 3 minutes also
B: .75 for 2:30

I buy all SS from K-R, & save all shipping by picking it up. So SS soaps / chems work pretty good & are cheap.

 

[washnshine]

Owner I bought from, told me collaborated w/ other owner in yown to switch to $1.50. After a short time of ownership, I decided to check out competition (I know A$$ backwards). We'll other guy STAYED @ $1, & a yr later I'm getting whipped. I'm at $1.50- 4 minutes, he's @ $1 for 3 minutes. Utili yu es are very cheap here. Should I
A: go to $1 for 3 minutes also
B: .75 for 2:30

I buy all SS from K-R, & save all shipping by picking it up. So SS soaps / chems work pretty good & are cheap.

Why don't you try $1.25 and stay at 4 minutes? Who can get anything done in three anyway? This forces your competitor to either equal your fee and time by adding 1 whole minute for the extra .25 once the original time expires, or if he only adds half a minute for the quarter, his four minute cycle would end up being 1.50 compared to your 1.25. Most people will need more than 3 minutes unless they are literally just rinsing their car off.

 

[MEP001]

How does he run his wash? Good chemicals, kept clean, things work? IMO run the best wash you can and charge appropriately for it and they'll come to you over the cheap guy.

 

[chaz]

What...$1.50 for four minutes and you want to lower your price. I'm likely the highest in town at $3.00 for four minutes. Yep some people likely drive by my wash, but that's OK? I can wash 1/2 as many cars as you and make the same money. Plus I'm saving on wear and tear chemicals etc...plus my bays and lot stay cleaner. Can you make any money just charging a buck?

 

[PaulLovesJamie]

Are you sure it is the difference in startup price that is hurting you? I had customers gripe about my price when I raised it, "Hey do you work here? Its only a buck over at xxx!" Then they washed their car.
Anyhow:
$1.50 for 4 minutes is 37 cents per minute.
$1.00 for 3 minutes is 33 cents per minute.
$0.75 for 2.5 minutes is 30 cents per minute.
If it is truly the startup price that is the problem, lower it to a buck, thats only a 10% drop which you would make up in volume. If you go to 75 cents, make it 2 minutes to keep your 37c/min.

btw, do you post how much time the customer gets?

 

[slash007]

I'm at $2 for 3:30, but going to $3 for 5 minutes as soon as my remodel is complete. I've been raising prices when I feel like it and could care less what others charge as I take care of the place and make sure it's always clean and everything works.

 

[soonermajic]

Here's the whole scenario : town only has 2900, down from about 6000 , 15 yrs ago. Many businesses have closed, & many folks with the means have moved. Competitor's wash is much newere, nicer looking, & Larger. Mine does have the better location, as I'm in middle of the town, & he's on the outskirts. I hear so many folks go out there because he's a $1 & I'm $1.50. Too much explaining to do, to show them how our prices are the same, & mine is less because of 40 secs/qrtr vs. 30 secs/qrtr. Both of our washes are clean & everything works.
Has anyone tried to lower prices to compete, & if so, how'd it go? Kinda nervous, but feel like I need to do something.

 

[rph9168]

What other marketing have you done?

 

[loewem]

Been at this for about 2.5 years now and have had an experience somewhat similar to yours. The differences are that my town has 30k people and there are three other ss washes within four miles of mine. My wash had been shut down for over a year when i bought it and when I opened my business was awful. Over time I realized that I was not only dealing with the competition, but also a bad reputation from the wash having gone down hill prior to it closing. I mention this because I think it is important to try and determine if there are other reasons that customers are going elsewhere. I find it hard to believe that price is the only reason that customers are going to your competitor. I'm not saying that your wash isn't good or anything like that. I'm just saying to consider every possibility.

I agree with most every reply, but what MEP001 said has worked for me. I worked my butt off for the first year trying to get everything working right. I thought I had it licked and then I went to the Kleen Rite show. The night before the show I went to Kleen-Rite's wash and tried every option in several bays. Trying out the Kleen Rite wash made me realize how clueless I was at that time. I'm still not the coldest beer in the fridge, but I'm learning everyday and making my wash better every day. My mistake was basing how well my wash worked by comparing it to my competition. Since that night at Kleen-Rite I've visited over 50 ss car washes and I've tried them all. My goal is for my ss wash to work perfectly all the time. I just got back in town from visiting my parents. I tried two ss washes along the way. I didn't see anything that I need to improve upon. At one wash the tire cleaner took 27 seconds to show itself, it took 22 seconds to switch over to pre-soak, high pressure soap appeared quickly, the foam brush didn't foam, the high pressure rinse was soapy, the wax appeared quickly and the spot free was good.

I check every accessory in every bay at least once a week. I don't want the customer to wait more than a few seconds for low pressure chemicals to appear, I want soap and foam and rinse ASAP. I end up tweaking something once or twice a month.

In addition to everything working as good as it can work I think you need to distinguish yourself from your competitor:

- I talk to every customer that I can and ask them if everything is working well and if they are happy with the wash.
- The first time I talk to them I give them a couple of tokens for next time and thank them for their business.
- If they are unhappy and provide constructive feedback I give them their money back and an equivalent value in tokens.
- Happy or unhappy, if they provide constructive feedback I give them my business card and ask them to call or text me when they have an issue.
- I spray tire cleaner on cars before they enter my automatic and talk to the customer while they are waiting.
- I help customers out by washing mats while they vacuum or I dry their mats with an air hose if they vacuum after washing.

I hope this is helpful. Good luck.

 

[robert roman]

When you complete on the basis of low price, only the lowest cost producer can win.

Issue here though is sustainability of market.

“….town only has 2900, down from about 6000, 15 yrs ago. Many businesses have closed, & many folks with the means have moved. Competitor's wash is much newer, nicer looking, & larger.”

In other words, the market is depleted and the competitor is formidable.

You also have to consider character of competitor, willing to commit collusion (alleged price fixing with former owner).

Now he is sticking it to you by charging a dollar. How do you deal with a bottom dweller?

You can play same game if you have lowest unit variable cost and fixed cost. However, would it be worth it?

Assume total available DIY market is $100,000 and you have 50 percent market share or sales revenue $50,000 or gross net $30,000.

If competitor takes away 25 percent share or $25,000 revenue, how much is it worth to get it back.

For example, if you drop price, it’s not going to create any new business. Current customers will pay less as will those that come back.

In other words, the end result is net loss rather than net gain.

Alternative is non-price competition. This means competing on the basis of quality, speed, multiplicity of products and services, amenities, customer satisfaction and promotion.

This requires a marketing strategy.

 

[mjwalsh]

Are you sure it is the difference in startup price that is hurting you? I had customers gripe about my price when I raised it, "Hey do you work here? Its only a buck over at xxx!" Then they washed their car.

btw, do you post how much time the customer gets?

soonermagic,

I agree with Paul on the possibility that the startup perception could be a factor. Somehow you need to convey "value" in your specific market. Based on trustworthy feedback from successful coin op laundromat owners ... if you dispense mainly golden dollar coins from your bill changer(s) & your competitor does not ... most customers will appreciate the convenience of not having to futz with too many quarters. If your competitor takes credit cards ... that worthwhile plus would be somewhat lessened ... but merchant fee processing costs would come into the picture for him & not you. On both of our changers, we have coin mechs. If a customer wants to break down a dollar coin they can still easily do that by inserting them into the bill changer's coin mech. Do both you & the competition have in bay bill acceptors?

Having the best location ... should help immensely on your challenge to re-gain profitability!

mike

 

[soonermajic]

I have in-bay bill acceptors, & he doesn't. My location is a lil better, but his is only a mile down the road, & 1/2 mile outta town.

 

[mjwalsh]

I have in-bay bill acceptors, & he doesn't. My location is a lil better, but his is only a mile down the road, & 1/2 mile outta town.

This is not conclusive of overall potential effect but ... I honestly do have self serve car wash customers who ring our 2 way intercom door bell to ask for all dollar coins instead of the more fragile paper one dollar bills in exchange for their higher denomination paper money.

 

[MEP001]

People in Texas don't want dollar coins. They don't know what they are and don't want them in their pockets. Most of the banks here don't even carry them in bulk and charge for them wrapped.

Does your competition take credit cards? That would be the game-changer.

 

[Earl Weiss]

Ditto on CC

 

[Waxman]

Price your wash as high as you can. You need to install Cryptopay TODAY! Make it count UP.

If you give great value and great service to the customer they will frequent your wash. Smile, hand out tokens and vending items. Make your wash stand out by having the best selection of vending items. Have an air machine for customers to use, (charging 75 cents). If possible, offer a free towel dry station and / or bug prep if you have an in bay automatic.

My wash has the towel dry and prep bucket and that alone makes my wash far busier than my competitors, one of whom has a fully re-habbed wash with a brand new friction rollover and another that has a brand new touchless machine. I slay the competition.

 

[JMMUSTANG]

I wouldn't change your price at all.
How about offering 3 FREE MINUTES of BONUS TIME if your customer insert $3.
The difference to you is minimal.
Your customers seeing nice big signs saying 3 FREE minutes might make a difference of them choosing you over your competition if your competition doesn't offer Free Bonus Time.
This could help.

 

[mrfixit]

Sure you can invest and work toward showing your better image. Always a good idea.

He's at 45 sec and your at 40 per quarter right. 40x6/60=4

If costs are that low I would match his price to get business for a year or two then work on breaking their desire to go to his wash to save a quarter.

Option B is enticing but going back below a dollar, I don't think is a good idea. Ideally you wouldn't be at 3 minutes for a dollar more like around 2 1/2 or less, unless your cost are that much less than mine. But your area may dictate the price. Sometime they just don't realize and all they see is the startup cost.

Also maybe increase your chemical a little to make it show better than his so after they try it they come back.

 

[robert roman]

“If it is truly the startup price that is the problem, lower it to a buck, that’s only a 10% drop which you would make up in volume.”

If getting “…..whipped by Competitor's SS….” equates to less door swings, less sales and less profit how is a 10 percent drop in price going to bring in enough volume to make up the difference.

“If costs are that low I would match his price to get business for a year or two then work on breaking their desire to go to his wash to save a quarter.”

No offensive, but you can build a new wash in this amount of time.

It usually takes three to six months to design and implement a marketing plan for a small balance commercial property.

Waxman, Loewem offer perhaps the best advice.

Most importantly, they attempt to create “sustainable” competitive advantage by means of differentiation and niche strategy rather than trying to compete on basis of cost like trying to get consumers to see value in $0.25 price difference.

“My goal is….work perfectly all the time….check….every bay at least once a week….talk to every customer that I can….give them a couple of tokens…..thank them for….business….give them…..business card….spray tire cleaner on cars before they enter my automatic….help customers out by washing mats….dry their mats with an air hose if they vacuum….”

“I slay the competition. Smile, hand out tokens and vending items. Make your wash stand out….having the best selection of vending items. Have an air machine….free towel dry station….bug prep if you have an in bay automatic.”

Maybe you should hire one of these guys as consultant because they are marching in step.

Yesterday I needed to contact the owner of a carwash. I only got as far as speaking with the manager. The manager admitted to never having met the owner, what his name was and how best to reach him.

Apparently, getting a signed pay check is the extent of the owner/employee relationship.

How well run is that place? Coincidently, it is also getting whipped.

If you want to throw your arms up in the air instead of working at marketing and compete on the basis of price, then switch over to pay-one-price, wash all you want.

At least this way, you can make a little money. After all, getting whipped is usually a precursor to economic failure as in busting your balls.

 

[Earl Weiss]

Other low to no $ revenue Booster. - Superbay. Probably need a bigger pulley and adjust the regulator. Price for start and per minute should be about 20% higher than regular bay. Ditto on the Bonus time. I do it in $5.00 increments. One operator features "Splash and Dash in one bay . $1.00 to start but normal per minute cost.