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[Whale of a Wash]

After 18 yrs in this Business, I still can't understand if it is the customer that is so price sensitive, or is it us owners. Do you worry about a quarter or two when you go out to eat. Do I leave them a .50 or .75 tip, or is the tip more than one of your cycles at your car wash, or is your tip worth a double cycle $4. The $1 start-up is perfect for the bucket washers-pickup bed -sheetrockers-painters-hunters. We need to revalue ourselves as a green low cost alternative to tunnels or driveway washing, but not cheaper than (dirt).
Raise your price ,make some money- upgrade your wash. Lets make a list of the things we can buy , any where in your town for a $1 or $2. Do you do the minimum when you go out and eat, No coke , no fries, because you are so price sensitive. I think we need to set target minimums per customer of $5.
Lets get them for a couple of washes, a Vac, and lots of vending. The $1 customer is just taking up space, It cost him more to drive to your wash than you will make, and he won't get his car clean. Lets change our thinking about ourselves, if is worth the time and effort to drive to your wash then it is worth the money also.
John

 

[rph9168]

I agree that a $2 startup is the way to go. The $1 start up may not be the only reason that revenues are down but it certainly is not improving it.

 

[Andy]

After 18 yrs in this Business, I still can't understand if it is the customer that is so price sensitive, or is it us owners. Do you worry about a quarter or two when you go out to eat. Do I leave them a .50 or .75 tip, or is the tip more than one of your cycles at your car wash, or is your tip worth a double cycle $4. The $1 start-up is perfect for the bucket washers-pickup bed -sheetrockers-painters-hunters. We need to revalue ourselves as a green low cost alternative to tunnels or driveway washing, but not cheaper than (dirt).
Raise your price ,make some money- upgrade your wash. Lets make a list of the things we can buy , any where in your town for a $1 or $2. Do you do the minimum when you go out and eat, No coke , no fries, because you are so price sensitive. I think we need to set target minimums per customer of $5.
Lets get them for a couple of washes, a Vac, and lots of vending. The $1 customer is just taking up space, It cost him more to drive to your wash than you will make, and he won't get his car clean. Lets change our thinking about ourselves, if is worth the time and effort to drive to your wash then it is worth the money also.
John

Well said!!

 

[PaulLovesJamie]

Can you buy one M&M?

I participate in this venue out of the kindness of my heart

I must have rocks in my head for participating in the self-service forum.

I will never "darken" this segment of forum again

I'm sorry I wasted your valuable time.

+1 to rph9168's response ... Wow! Only I say it louder. Either Bob had a spectacularly bad monday, or the respect-o-meter just took a fatal nose dive, crashed & burned deep in the grand canyon.

I actually checked back in to this thread because it caught my interest, and to add my 2 cents. I am a little bit familiar with competitive strategies - not my area, just an interest so I'm by no means an expert. But I do know enough to want to know more, and pricing is rather important to us both individually and as an industry. Bob, if you think you have something of value to offer, then offer it and defend it. If not, then I'm sorry you wasted your valuable time, you didnt waste mine.



(continued...)

 

[PaulLovesJamie]

Can you buy one M&M?

Wow. I could respond to this thread for hours. But I'll limit it to a quickie for now:

I too am a consultant, in the software industry (thats my day job.) I have a saying that I share with my clients regularly: "specs don't have to execute." The translation: theory is important, but theory wont turn on the pumps. Operations do need to be based on theory - the key words being based on. Business theory has to be tempered and adapted to specific industries, markets and situations.

In this particular case, I think a $2 to $3 startup IS the lowest "avg per unit cost to operate the wash" (Bob's words), not 25 cents - so I think we are in fact operating within the theory. "Operating the wash" isnt my objective, serving my customers is. There is a minimum amount of product that every company sells in order to be profitable - I try to keep my minimum at the amount that is required to do a "basic wash" on a small size sedan. Anything less than that is not meaningful to the customers I target. As Duane pointed out, I do not want to "open up the business to the widest possible audience" as Bob phrased it. Based on my experience and observations as a SS operator, I do not want all customers. (You "older" guys may recall my posts from years past, I actually chase away undesirable customers.)

By way of comparison, do you buy M&M's one at a time? If you could, would anybody do so? Would Mars make money with such a strategy? More money or less? Better value? Happier customers?

And, now, if I had one, I'd post a picture of me patting myself on the back ... for not saying all the things I wanted to say.

 

[Greg Pack]

I am at 2.25/4 minutes and am re-thinking this myself. One of the highest grossing SS/IBA's I know of ( Dave Dugoff in Maryland) is a firm believer in the dollar startup. "It just feels good" he says. I've lately started visiting the dollar store looking for deals, and I think in this economic environment more will look for the best bang for their buck. Although I would dread the mess that a $1 truck bed washout could make and have to deal with hassling bucket washers again, dry bays don't make me any money.

 

[Sequoia]

Hmmm. If you are into "feel good" business aspects then maybe you could close a bay down and open a massage parlor there. Ha- just kidding.

I'd be curious of the successful venture you referred to is due to the dollar startup or if there are other factors at work there.

 

[MEP001]

By way of comparison, do you buy M&M's one at a time? If you could, would anybody do so? Would Mars make money with such a strategy? More money or less? Better value? Happier customers?

M&M's is a good example, in fact they offer a "King Size" bag in order to sell more. Of course the nutrition facts say it's two servings, but you know they expect one person to eat the whole thing alone.

I've lately started visiting the dollar store looking for deals, and I think in this economic environment more will look for the best bang for their buck.

A dollar store is another good comparison. What do you expect when you walk into a dollar store? Cheap crap. The stores are usually a mess, no variety of selections, employees unhelpful or downright rude. There are plenty of 50? car washes around here, and they're run the same way - basic functions, often no spot-free, poor soap, lukewarm water at best, never an attendant to be found when there's a problem.

 

[ted mcmeekin]

This past summer we rung our hands on whether to go from $1.5 /4 minutes to $1/ 2 minutes or $2 / 4 minutes. I was worried that this increase would upset our customers at $2 versus going to $1 for 2 minutes and letting them choose whether to start another cycle. The over whelming advice of this forum was go for $2. They were right! At first we were down some number of cycles ( but I could not tell if that was because of people being stretched in general or just upset at $2). Our SS revenue from the change was at first level and now increasing. But wait , some of that increase may be result of a little shift to SS over the autos but a tiny bit up overall.

Overall, as usual the prevailing wisdom of this forum was right.

From the dark side ,

Ted

 

[JMMUSTANG]

O.K I got the message. No one likes the $1.00 startup time.
The reason I did it was all the people that only put in $1-1.25 and then complained when nothing turned on. For that reason it has worked out great.
$2.00 for 4 minutes it will be. Thanks.

 

[I.B. Washincars]

Just as everyone else I HAD the same problem of customers not putting in enough money and then complaining that the bay didn't start. That is the product of the timer. I was using the older Dixmors with the 1in, 2in, 3in, or displaying the time even when the startup hadn't been reached. We all know that neither of those scenarios were customer friendly and are a source of frustration. When I jumped to $2 I replaced the timers with Dixmor LED-7s which will display the amount inserted and prompt for the balance if the start-up was not reached. In the 5 years since, I have not had a single instance of a customer complaint for not putting in enough money, zero, zip, zilch, nada, not the first one (four washes, 17 total bays). Those timers have been one of the best improvements that I have ever made.

 

[MEP001]

As I replace the Dixmors with D.A.N. timers I'm seeing less of the "misread" factor too. One guy continually argued that it "dropped down to four minutes" after he deposited five coins. Even after I explained that it said 05:IN and not 05:MIN, he wouldn't get it. I put a dollar bill in the bay and asked him what it said, and he says "four minutes." I asked him where it says minutes, and he pointed to the IN. I had to ask "How does I-N mean minutes?" He looked at the timer dumbly for a few seconds, then repeated "But it said five minutes!" The same guy later argued that he got less time for a token added and simply couldn't understand that the grace restart feature gives the same amount of time per value added. I'm almost glad the D.A.N. doesn't have the grace feature, as nice as it is.

 

[pitzerwm]

Some startup info from Tom Hoffman Jr.

http://forum.autocareforum.net/WynData.xls

This is from Wynantskill (4 bay) over the last few days. It is an audit trail by bay by customer. It shows the time and amount they start the transaction and the time and amount it ends.

* The "Finish Time and $" is the amount spent per customer

* The "Start Time and $" is what they started with.

* The "Extra Revenue" column is what extra we would have gotten from
the few customers that started with less than $3 and left.

* Only in the winter, when it is cold and windy, do we see the $1
customers rinse and leave. It is too cold to wash for long.

* Notice how the majority of the customers don't add more money after
the equipment starts. That is why promoting credit cards is important.

25% of the customers spent less than $3

* If the start price was $3 then it would have raised the revenue 7%
assuming all the customers were still visiting

 

[thoffmanjr]

Bill was kind enough to post the data for us and I thought I could add a few more details

* We store the ?Start Time & $? 30 seconds after the last coin or dollar is deposited

* We store the ?Finish Time & $? 30 after the timer stops.

* We sorted the data from most spent to least spent

* 4 years ago or so we raised our price from $2 for 4 minutes to $3 for 4 minutes

* I recall that we noticed our revenue wasn?t growing after raising our self service price and we were worried we may have raised the price too high.

* Our inbay automatic basic wash is only $5 and our exterior tunnels are $8. We know the inbays are contributing to the weak growth in the self service.

* We accept $1 coins and quarters and vend only $1 coins in our bill changers.

* We used PLC?s to allow a six second start delay because initially customers were angry that the equipment started while they were depositing coins or feeding bills in the acceptors.

* We decided to lower the start price to $1 and left the time per quarter alone at 20 seconds per quarter.

* We also installed equipment that allowed credit cards, bill acceptors and discounted pricing starting at $5, $8 and $10.

* We also have 13 functions and offer just about every type of function available.


* So, we think the start price could be affecting the revenue.

* We think we should offer credit card customers a bigger discount than cash customers. If more people use credit cards then more revenue will come from it.

* We will leave the $1 cash start price and see if promoting credit cards, with a $3 minimum, will do the trick.

Here is the data for credit cards in May and we use the ?count up? system:

We averaged $6.92 / car for credit cards compared to $4.48 / car for cash or coin. That is $2.44 higher or 54% higher than cash customers. There were 397 customers at this four bay that used their credit card to wash their car.

 

[TurboJet]

After 18 yrs in this Business, I still can't understand if it is the customer that is so price sensitive, or is it us owners. Do you worry about a quarter or two when you go out to eat. Do I leave them a .50 or .75 tip, or is the tip more than one of your cycles at your car wash, or is your tip worth a double cycle $4. The $1 start-up is perfect for the bucket washers-pickup bed -sheetrockers-painters-hunters. We need to revalue ourselves as a green low cost alternative to tunnels or driveway washing, but not cheaper than (dirt).
Raise your price ,make some money- upgrade your wash. Lets make a list of the things we can buy , any where in your town for a $1 or $2. Do you do the minimum when you go out and eat, No coke , no fries, because you are so price sensitive. I think we need to set target minimums per customer of $5.
Lets get them for a couple of washes, a Vac, and lots of vending. The $1 customer is just taking up space, It cost him more to drive to your wash than you will make, and he won't get his car clean. Lets change our thinking about ourselves, if is worth the time and effort to drive to your wash then it is worth the money also.
John

Well said. I think we're all beating ourselves in this business. Customers seem to think they are only getting water, but they'll pay $4 for a latte. The whole SS industry has to think $2 start ups as the norm.

 

[Rudy]

FWIW....I think it violates the Credit Card terms of usage to have different start up minimums for CC versus Cash. I've been told that if reported, not only will they drop you as a provider, but also "blacklist" your business industry wide. Is this not true?

 

[PaulLovesJamie]

FWIW....I think it violates the Credit Card terms of usage to have different start up minimums for CC versus Cash.

Virtually every small business I know has a "$10 minimum for credit" sign posted. Not to mention gas stations "discount for cash"...

If you find evidence of this though, by all means let us know

 

[rph9168]

Many gas stations and other retail businesses have different pricing for cash versus credit card purchases. I can't see where this would be any different

 

[Bubbles Galore]

Our bays are 1.50/4 min right now. We started a 'customer appreciation' day where on Tuesday we have the bays at 1.00/4 min. Revenue increased on Tuesday, BUT...we have ran into alot more customers that are washing out there trucks and basically just creating a mess in the bays. Thankfully we have 8 bays, so if one or two get destroyed, we don't lose customers to drive-offs.

I think adding more 'perceived value' options at your wash is the way to go rather than dropping your price. I am doing some upgrades this summer, and at that point I will be raising my price to 2.00/5 min. I want to encourage repeat customers that are coming to my wash to get a quality wash, not just make a mess and leave.

 

[pitzerwm]

The law says that you can't charge more to use a CC. You can "discount for cash" and have a minimum as long as the price per unit is the same.