Need opinions on pricing

[slash007]

I have a six by ss wash with no automatics and no nearby ss competition. Currently my pricing is $1.50 for 3:36 which is 36 seconds a quarter. When I purchased the wash a little over 5 years ago it was at $1/50 to start but gave 39 seconds a quarter, so I have just barely decreased the time over the years. This week I am adding bill acceptors and credit card acceptance and was thinking about increasing my prices and was looking for opinions. I am considering making the start up cost $2 and then lowering the time per quarter to maybe 33 seconds or maybe even 30, or another option would be to keep it at $1.50 and lowering the time to 30 seconds. I figured that with bill acceptors, $2 to start might make it easier and more people would just put in 2 bills. Another thing I need to decide is if I want to make the credit card start up price the same, or make it a minimum of $3.

Thoughts?

 

[I.B. Washincars]

I'm about 60 miles away and the going price here is $2/4 min,or 30 seconds per quarter if you are still using them. I have my CC set at $2, but seldom see a sale of that amt. I wouldn't struggle over that part too much, just set it the same as the cash start-up so it's simple. Also, if a customer wants to turn it off early they may be upset for getting gigged for an extra dollar, I know I wouldn't like it.

 

[chaz]

2.00 for first 4 minutes. I take c/c with a 2$ min and count up. Also take bills, quarters and dollar coins. Extra money can be added while timer running. Same pricing for 4.5 years. Considering raising c/c min charge to 3$ for 6 minutes. Still many customers do not know or want to pay with bills.

 

[cantbreak80]

Twenty years ago $1.50/4 minutes
Ten years ago $2.00/3:20 minutes
CC system was installed and programmed same as cash

My current pricing is:
$4.00 to start with credit cards…countdown and additional card swipe adds $1.00
$2.00 to start with cash
80 seconds per dollar (20 seconds per quarter for the customers who bring them)

 

[MudMoney]

I'm at $3.00 for 4 minutes using only $ coins and quarters.Bank foreclosed last week on 4 bay that was $ 1.50 at 4 minutes 1 mile away.

 

[slash007]

My other wash is at $2 for 4 minutes and has been that way since it was built in 04. I've had it for about a year and left it the same. I'll probably go with $2 for 4 minutes as I feel like it won't **** too many people off. I have a lot of regulars and don't want to make too drastic of a change. Hopefully seeing the new equipment will at least let them know that it was done for the sake of upgrading the wash on a continuous basis.

I need to put up new signs that clarify the pricing and options. Should I have one sign that explains the start up cost/time and also mentions how to use the cryptopay or would separate signs be better?

With bill acceptors, I can now offer bonus time. What do you guys think about giving bonus time to people that put in $5 or $10?

 

[MEP001]

I'm about 60 miles away and the going price here is $2/4 min,or 30 seconds per quarter if you are still using them. I have my CC set at $2, but seldom see a sale of that amt. I wouldn't struggle over that part too much, just set it the same as the cash start-up so it's simple. Also, if a customer wants to turn it off early they may be upset for getting gigged for an extra dollar, I know I wouldn't like it.

I worried about that at first too, so I set CC start-up for either 25 or 50¢ (I can't remember now). I watched the records closely and noticed that no one used less than $2 of time unless for whatever stupid reason they started the bay with their card and immediately canceled it, then started it again. I guess in hindsight I'm glad I did it that way to get customers used to things, but without the cancel button the way it is now it wouldn't have been a problem at all.

Another thing I need to decide is if I want to make the credit card start up price the same, or make it a minimum of $3.

I wouldn't worry about making the CC start-up price higher - you'll quickly find that the vast, vast majority of customers will spend significantly more than $1.50.

 

[MEP001]

With bill acceptors, I can now offer bonus time. What do you guys think about giving bonus time to people that put in $5 or $10?

I know someone who's done that and has had very good success with it, but he did put loops in the floor to cancel remaining time when the vehicle leaves the bay. He runs Dixmor timers and the total time doubles when they exceed $5 in a single wash.

 

[cantbreak80]

[Rant]
Just curious…
Have your energy and supply expenses remained constant over the past 5, 10, 15 years? How about insurance, water, sewer, property taxes? Gasoline? Groceries? Bank fees? Tires? Oil changes?

How can this industry expect to generate reasonable margins when nearly every increase in expenses is absorbed? Were we raking it in at $1.50/4 minutes? What are we feeling guilty about? Does your gasoline dealer absorb his price increases so the regulars won’t get p****d off at him? If your full-time job paid the same for the past 20 years you’d be crying the blues.

What other business/industry can we cite that has maintained pricing for the past decade? Anybody???

I did not go into this business for the Fellowship!
[/Rant]

 

[Ric]

I know someone who's done that and has had very good success with it, but he did put loops in the floor to cancel remaining time when the vehicle leaves the bay. He runs Dixmor timers and the total time doubles when they exceed $5 in a single wash.

Using Dixmor timers, we give bonus time after $5 has been inserted. The bonus is $1 worth of time. Its been successful for us...no need for loops in the floor to time it out.

 

[Whale of a Wash]

People are throwing $100 into their gas tank in our town-$4.09 a gallon
I am at $2 for 3 min. a pretty cheap place to go after filling gas.
CC's are starting at $2 for 3 min. Thinking of going to $3, but not sure of the
time for a wash--Maybe 3.5 min or 4 min?
reason for the higher gas prices is maint. in illinois??

 

[robert roman]

Contestibility of market is the notion that just the “possibility” of future competition would be enough to prevent an existing business from commanding monopoly prices.

However, if there is very little threat of future competition, not charging monopoly prices would not be consistent with profit maximization – the reason you are in business.

For example, in this case, I might charge $2.50 for five minutes and this should provide, on average, $5.00 a wash.

Another reason for this is the economic distance for motorists is a much greater consideration today.

Fellowship can be address through public relations (i.e. charity) whereas price is a distinctly different part of the profit engine of the business.

It is generally considered not wise to compromise one for the other.

 

[slash007]

Yesterday I changed the time per quarter to 30 seconds instead of 36, so officially the prices are increased. I did leave the start up time at $1.50 for now because my bill acceptors and cc are not up yet. Once those are up, what are your thoughts on start price? I'm sure most people spend more than $2 anyway, but at $1.5 the perception is that it is cheaper even though you get less time. A few years ago there was an old run down wash across the street that had a start of of 50 cents and I did hear people say that they went there "because it was only 50 cents". Most of what I heard came from people that went there for the bargain than came across the street to finish washing because things didn't work. I'm sure starting at $2 wouldn't be a big deal, but just like the tunnel washes advertise a $5 express rinse to get people in but then most customers spend more, I feel like a lower starting price might give people the sense of a cheaper wash and a great value though in reality they would be paying the same unless they really finish washing in 3 minutes.

Thoughts?

 

[MEP001]

A few years ago there was an old run down wash across the street that had a start of of 50 cents and I did hear people say that they went there "because it was only 50 cents". Most of what I heard came from people that went there for the bargain than came across the street to finish washing because things didn't work.

I've seen the same thing. There are two washes nearby run by the same guy, and when we opened at $1.25 I would routinely see someone pull into a bay, look at the price and leave. I haven't seen that happen in a long time (and we've been $1.50 for two years). The other washes I think are 75¢ and give less time per coin, so you can imagine how short the wash time is just on start-up.

If you run the best wash, charge the highest price. The undesirable element that comes in just to make a mess will choose the cheapest one. Once you get CC in, you'll have a whole new segment that doesn't even care what the start-up amount is.

I made a video of each function running at the competition's wash - I should do the same with the way I run things and upload a side-by-side comparison.

I'm sure starting at $2 wouldn't be a big deal, but just like the tunnel washes advertise a $5 express rinse to get people in but then most customers spend more, I feel like a lower starting price might give people the sense of a cheaper wash and a great value though in reality they would be paying the same unless they really finish washing in 3 minutes.

What I've always done before raising the start-up amount is to cut the time back a couple seconds a month over about six months, then when I increase the start-up amount I bring the time per coin back up at or higher than it was. My belief is that the regulars notice a significantly longer wash time for their extra money, and I can tell them honestly that they're getting more time per coin than before.

 

[Whale of a Wash]

Contestibility of market is the notion that just the “possibility” of future competition would be enough to prevent an existing business from commanding monopoly prices.

However, if there is very little threat of future competition, not charging monopoly prices would not be consistent with profit maximization
.

According to profit Maximization- you should charge $2 and I should go to $3
as i spend $$$on floor heat --$$ on garage doors $$ snow removal. The self serves are very costly in my climate. So we are working on different costs basis due to climates.

When you get everything completed go for $2 price for 30 days, and then re-evaluate it. Then you will keep it when you see the results.

 

[robert roman]

“…..old run down wash….start of 50 cents….people…..went there "because it was only 50 cents". …….people….went there for the bargain….(then they went)…across the street to finish….because things didn't work.”

Typically, people tend to get what they pay for.

“I'm sure….$2 wouldn't be a big deal, but….like…tunnel…a $5 express rinse to get people in but then most customers spend more….”

What people get for $5 express wash is much more than just a “rinse.” They get convenience of staying in car, hand-finished qualities, machine does work, 4-minute process, virtually no waiting, free use of vacuums plus the opportunity to “buy-up” to obtain more shine and greater protection without spending addition time on site.

“I feel like a lower starting price might give people the sense of a cheaper wash and a great value though”

Experience shows “cheap price” mostly attracts cheap customers.

If you view world in terms of quarters, put your carwash into perspective. Here, each “quarter” you obtain from customers might yield a “nickel” after expenses, property tax and debt service.

If SS washes 25,000 vehicles at 16 quarters per vehicle, pre-tax profit equals 25,000 * (16 * 0.05) or $20,000 or net profit per vehicle of $0.80.

According to POS experts, 25,000 vehicles may translate into a customer base of roughly 6,500 unique visitors.

$20,000 / 6,500 customers equal net profit per customer per annum of roughly $3.00.

If you price low (i.e. low price attracts more) and net profit drops to $1.50 per customer, you would need 13,000 customers instead of 6,500 to generate net profit of $20,000.

What do you believe is more achievable; doubling sales volume (car count) or increasing the amount that each existing customer spends per visit?

 

[slash007]

I completely meant to say "express wash" instead of "express rinse". I have no idea why I typed rinse.

I think all of the arguments towards starting at $2 are good and valid. Once my new equipment is up I will change the start price to $2. I am now just trying to decide on the extent/wording of the signs that I will put up and if I will offer bonus time for $5 and $10 bills. I'm thinking that I will start with no bonus time and then maybe add it later on depending on how many people use $5 and $10 bills without the bonus.

 

[HCW]

FYI: unitec cc will not work with some coin acceptors. " their engineers are working on a solution". It sends false pulse and shuts you're equipments and makes LOTS of customer mad. Let us know what cc system you have/will install and you're thoughts please.

 

[slash007]

FYI: unitec cc will not work with some coin acceptors. " their engineers are working on a solution". It sends false pulse and shuts you're equipments and makes LOTS of customer mad. Let us know what cc system you have/will install and you're thoughts please.

I am putting in cryptopay swipers. I have everything in, just need to drill my holes and hang the new boxes then wire them up. I will let you know my thoughts once the system is operational.

 

[Whale of a Wash]

Which boxes did you purchase to install the cryptopay on.
I need 5 new boxes, and can't decide?