price change? do you ever go back!

[washnut]

We have two washes about six miles apart in two neighboring towns ,a six and a four bay all ss.In one town the nearest competitor is $1.50 and the other town the other wash is $1.00. In January we changed our start up from the long standing one dollar to two dollars keeping the price per min effectively the same. both washes offer a bonus time if you reach 5 dollars and offer all the common products and we do our best to maintain a good wash.
We had great weather in January and all seemed well numbers up and no real complaints.From Feb on weather was a mess but has since cleared nicely but business is flat.
Now i know all are suffering our economic woes but locally we are at a published 17% unemployment and still rising and you all know ca problems.
My question is this, have any of you ever reverted back to an old price due to poor timing or otherwise. We thought the consumer would see that 2 dollars gave more time but they seem to see it that we doubled our price.
all feedback welcome.

 

[Randy]

Never!! The problem with the car wash industry is it’s got a imagine problem with the general public. Most car washes offer a good product but can only charge the low price because that’s what the public sees, a cheap place to wash your car. We just raised our prices to $5 for 10 minutes. No bonus time, $5 to start. The nearest car wash raised his prices to match ours about a month ago. The wash on the other side of town raised his prices on the first of June. So far it’s going over well for us. Don’t lower your price.

 

[Jeff_L]

I wouldn't go backwards either. We're all too cheap for the type of service we provide (building, water, soap, etc.). People pay a heck of a lot more for a cup of coffee these days and they don't even bat an eye. We all need to get to a price we all feel is reasonable for what we provide.

 

[madscientist]

Washnut,

I agree with the "never", but let me ask you this. Why do you think it's the price increase that is the cause of your slow business? From what you describe, it doesn't appear to be the issue. Unless you are absolutely, 100% certain that the price increase is the issue, you shouldn't even consider the idea of reverting. Put the "it's too expensive" idea out of your mind. With business being slow, imagine what your situation would be if you didn't raise your prices.

 

[sprocket]

I have tried to get the other operators to raise there price to 2.00 from a 1.00 and the one tells me that when I buy his I can raise the price all I want but untill then I am just screwed. I guess we are all waiting for someone to go broke or give up. Who ever it is I just hope it happens soon.

 

[MEP001]

I have tried to get the other operators to raise there price to 2.00 from a 1.00 and the one tells me that when I buy his I can raise the price all I want but untill then I am just screwed.

Run the best car wash and charge appropriately for it and you won't have to worry about what his price is.

 

[Fatboy769]

Run the best car wash and charge appropriately for it and you won't have to worry about what his price is.

This is so true! I am one of the highest price car wash in the area and one of the buisest. Give plenty of a good product, keep everything working like it should and people will pay a premium price for it.

 

[washnut]

Thanks for all the great comments.
I at this point don't have any absolute evidence of the price change being the sole problem. One wash has been affected far worse that the other. without getting into the politics of the economy it may help to know that the town has approximately a 50% business vacancy rate. I have two gas stations adjacent to me that have closed and within eye shot 4 other vacant storefronts of different sizes. traffic count has been cut substantially in the last 2 years after the new wm opened the next exit down the highway all in all not great business dynamics. i agree with the charge appropriate price philosophy, i just don't know if there are enough consumers left in our area to market that thought to.

 

[jfmoran]

Price is always the "default" reason that business owners use to make excuses why customers are not buying their goods or services. You need to look at your business as well as your overall business strategy with a more critical eye before you just use "price" as the cop out reason.

 

[Waxman]

I raised my prices and it has been one of the best decisions I have made in business.

Some told me not to raise them and that it was the wrong time (people hurting for $$).

Other friends said raise them. I did and have experienced an improvement in cash flow. I am attended, operate a full serve detail shop onsite and fix things soon after they break/test functions many x per day, etc. I am still quite new in the carwash biz but try to run a high quality wash.

My philosophy is that by going after a nice, high profit margin whenever possible in my chosen business, I am ensuring its existence will continue and it will be around to provide a valuable and necessary service to the customer.

How will your business sustain itself with a low price point while its other variable costs continue to rise?

If you have a passion for your business, raise prices to a point where the profit of the business allows for sustainability as well as your own satisfaction and enthusiasm for the business.

 

[Earl Weiss]

I have tried to get the other operators to raise there price to 2.00 from a 1.00 and the one tells me that when I buy his I can raise the price all I want but untill then I am just screwed. I guess we are all waiting for someone to go broke or give up. Who ever it is I just hope it happens soon.

I think you would be wise to cease any such discussions immediately.

 

[sprocket]

Why, I think it would benifit all partys if we could work together.

 

[madscientist]

....but it's somewhat illegal.

 

[I.B. Washincars]

Why, I think it would benifit all partys if we could work together.

I'll bet the customers wouldn't find much benefit in it. It's called price-fixing and you definitely shouldn't discuss it on a public forum.

 

[MEP001]

....but it's somewhat illegal.

Not just somewhat illegal, it's a felony as bad as corporate espionage.

 

[sprocket]

I hope no body from the oil companys reads this because they might think of raising gas prices or opec might get together and controling oil prices. It just won't happen, its illegal.

 

[madscientist]

The CEO's of the oil companies went in front of Congress and admitted that oil prices are artificially inflated but still managed to convince the lawmakers that the tax breaks and gov't assistance they get should remain intact. That's what a powerful lobby buys you. We don't have one of those.

 

[Earl Weiss]

Not just somewhat illegal, it's a felony as bad as corporate espionage.

Perhaps worse than corporate espionage.

I think corporate espionage is viewed as a crime against a company.

Price fixing is seen as eliminating market forces and harming the public.

Some years ago we were cautioned by the ICA and other industry associations to avoid discussing specifics of price at various functions.

 

[Greg Pack]

I do not know the answer. In the past I have raised prices. If you raise the price you can take a pretty good hit to volume and still maintain profitability.

It sure did seem like the wash was busier back in the old days when prices were cheaper though. Our current problem is with excessive competition from a low cost model. From a consumer's perspective an express wash at $5 with free vacs is a much better value than $2/4 minutes SS.