Rookies guide to price increases.

[lighthousecarwash]

I am contemplating my first real price increase across the board at the car wash since I have owned it. Here is my current pricing.

Self serve bays: $1.50/3 mins. Same as every wash in town.
Vacuums: $1.00/4 mins.
IBA: $7, $6, $5, $4.


I would like to increase my prices. The vacuum's will be easy, as I will just reduce the time on them and leave the $1 price point. I've been told that to raise the prices on the IBA, that I need to add new features. This winter I added new doors, which really affects my utilities, more than the customer's wash, and I added a triple pass on the front of the cars on the $7 and $6 wash. I would like to just raise every wash by $1. I think a basic wash should never be under $5 anyway.

The self serve bays are a bit trickier. I did add 2 air dryers last summer and have gotten a good response from them. I also have a half price happy hour on Wednesdays where the timers switch over to $.75/3 minutes for 3 hours. My credit cards have a $3.00 minimum also. Now with that in mind, would it be better to increase my bays to $2.00/3 mins 30 secs, so I can still do the half price happy hour, or change to $1.75/3 mins, and just scrap the half price happy hour and move to a $1 happy hour and just give a $.75 discount durning that time? I am getting a lot of repeat customer's that really like the half price happy hour, and it would require no changes in my signage or advertising if I go to the $2.00 price point. But I'm scared that the bigger jump in the start up price will scare some people away. The quater might not be noticed as much. I also am wandering if with the price increase, if I should raise my minimum on the credit cards. I know this has been discussed before, but just wanted to get your thoughts on my specific situation.

Thanks,
Lighthouse

 

[Earl Weiss]

IMO if you reduce vac time and people run out of time they will be PO'd.
I'd leave that alone and go to $2.00 in the SS as a start time. If you want to lessen the blow put in a sign that says "Now more time" or something like that.

BUT, I think the most important concern is where your competition is at.

 

[Whale of a Wash]

Raising the prices is toughest on the owner. To me vac pricing is the toughest as the customer needs at least 4 min to vacuum. While they are upside down inside the car and it quits --Not a good thing. Look at your car counts on Iba, my lowest wash gets less than half the usage of the top wash. Your top wash should be $2 higher than the next wash to make it stand out. My vacs are at .75 /4 but i only give out $1 tokens so if they use tokens it's 1/5.5 I get alot of vacuum traffic from cars that are clean and dripping still and i know they went to tunnel down the street. Not sure why i get them all as the tunnel is .5/4 on SS vac but 3 or 4 for full serve vacuum. Those same people also buy something from shurvend, so i'm really happy with those customers that don't wash.

 

[Waxman]

I raised SS pricing last month and am raising IBA. I raised detail prices too for 2011.

I left vacs alone.

There's othing wrong with raising prices as long as value is in line with price.

Don't sweat it too much but leave vacs at $1 for 4 min.

 

[Randy]

I think you should definitely raise your prices. I’d go to $2.00 for 3:30 minutes in the S/S bays, next year I’d lower it down to 3 minutes. I’d make the happy hour $1. $1.00 for 3 minutes on the vac’s, don’t worry about getting anyone PO’d we raised the price of our vac’s to that price years ago, no one complained. In the automatic I’d go $10, $8, $7 and $6. We are at $12, $10 and $8 in our automatics, we discontinued the lower wash package.

We just went to $5 to start for 10 minutes in all but one bay on the S/S. We left one bay at $3 for 4 minutes. I was rather surprised that the $5 start is working out so well, most customers seem to like it. One thing I’ve noticed over the years. When we raise our prices the other washes in town soon follow suit.

 

[Fatboy769]

There's nothing wrong with raising prices as long as value is in line with price.

.

Waxman, I agree totally! Raised all my automatic prices by a dollar last month, no complaints, just more money in my pocket.

 

[lighthousecarwash]

Thanks for all the opinions. Now the hard part.....actually doing it. I think I will leave the vacs alone and raise the self serve and automatic prices. Hopefully, I can also say that I didn't hear a single complaint.

Thanks,
Lighthouse.

 

[Waxman]

I'd rather hear a customer complain than my wife: "are you gonna be making any deposits in the next few days???" Seriously, we are in this to make some money, so raising prices to make a decent profit at this should be something we happily do.

 

[rph9168]

Good point Waxman. Some complaints are valid and other are either unjustified or irrelevant. There are a lot of other things to worry about than complaints about pricing.

 

[lighthousecarwash]

I took a deep breath and got out the remote today. Raised the self serve bays from $1.50/3 mins to $2.00/3 min 30 sec. I then increased the discount days from $.75 to $1.00 to keep a true half price happy hour. I did watch a few customer's pull in and use the wash without any funny looks or cussing! I am still pondering the price increase on the IBA as this will include a new sign and probably the ordering of new tokennotes from Hamilton. I keep waiting for the phone to ring and have some old man unload on me because he only brought a $1.50 in quarters to wash out his horse trailer!


Lighthouse.

 

[Rudy]

My vacs have been priced at $1 for 4 minutes for the last 12 years. In that time, the cost of electricity, trash removal etc. is up.

I raised the price to $1.50 last month.

NOT ONE COMPLAINT!

We have the cleanest and brightest wash anywhere. It's checked at least 2 if not 3 times a day. We return calls the same day. Bottom line....we operate it with excellence...and we charge top dollar. People vote with their pocketbooks and say, "It's worth the little extra".

IMHO, our fears over price increases are greatly overblown......

 

[wader]

Like most owners I was very worried about feedback I would get if I raised my prices. Aboout 6 months ago I raised my prices across the board. I have a car wash, gas staion, c-store. It was amazing, chips, pop, candy, magazines, car wash...everything was raised and I only received ONE complaint. I have a 13K customers a month....and only 1 compaint!

I now look at different catagories in my business on a regular basis so that I can make sure that I'm getting my maximum margin for those products. It was hard getting over that hurdle, but once I did it really opened my eyes so what a small increase can do to your bottom line.

 

[washme1]

In early April I lowered my time for $2 start-up in SS from 4 min, to 3min 36sec.
I attached a small engraved plastic sign below the timer;

$2 for 3 min 36 sec
$5 for 10 min (bonus time)

The following week I raised the IBA by $1 to 6,7,8,9.

Only one customer complained. He returned a week later and told me that I had the nicest wash in the area.

I am surprised that I have not seen migration to lower priced washes. I compared my % of top two washes to total and it is running about 72% which is about where it was prior to price increase.

The change was painless. I wish I had done it sooner.

 

[ScottV]

In the 7 short years that I've owned car washes I've learned that the only one that agonizes over price increases is ME! I recently raised my vacs from $1.00 / 4 Mins to $1.50 / 5 Mins and actually had some people thank me for adding more time. Seems 4 mins isnt quite enough for some, but 5 mins is just right. Go figure!!

 

[lighthousecarwash]

The price raise has gone well so far. I have had a couple people comment that I raised my prices. But, I let them know that I also raised the time, which is true, but there is a little price increase figured in there as well. I'm glad I finally did it. I feel that I have more at my wash and have updated several things over the last two years, so I can justify charging for those upgrades.


Thanks,
Lighthouse.