Strategy Against $3 Express Competition

[Douglas]

Hey everybody. So I have been in the business 15 years owning 4 carwashes during that time. I sold 3 and presently have 1 exterior wash in Wisconsin. I was told about this site and just joined.

As my post title indicates I have a $3 express wash coming near me.
To me, with the costs of things today, it's hard to understand how the 1970's pricing concept predicated on volume cash flows. Volume/frequency is down everywhere, but they are certainly rolling them out. Regardless, I think it hurts us all.

So my story is I have a quality exterior tunnel where we prep, wash, towel dry and touch up on the exit end. My pricing is $5.75/$7.75/$10. We offer a monthly wash program at $20 per month that is not overly popular . I have a 9 wash free punch program that works real well. We flush out wheel wells, apply bug treatment, cater to wheels, and hand apply tire shine. I have been in business at this location 4 years. I have slowly grown every year. I compete aagainst 2 full serves about 3 miles away and have my collection of gas station washes.

I don't think I can sit and wait for him to open. I am looking for some advice on how to counter. The options I am considering are;

1) Stay the course and through marketing, advertising come up with a slogan, and promote the extras that our employees do (see above) to distinguish ourselves.

2) Offer a $3 or $4 express as well. Problem with this is identifying who got what on exit end (who gets dried, who doesn't policing). I could add a monitor so towel dry guys know what guy got coming through tunnel. Or consider a marking, receipt system if you have any ideas.

3) Wash & towel Dry lower to $4. Seems like if EE can justify $3, I can have 3 1/2 employees on 200 car day and labor should be inline vs EE labor with a $3 wash. I would lower my mid package a $1, but raise my best package to $10.95 and include an air freshener & 5 day guarantee.

4) Wash & towel dry at $4.95 and include free customer vacuum, or dash wipe towelette.

I would also hope/expect that if I did the reduction in either 2,3,4 above that my volume could increase.

Is my thinking right? How should I proceed?

Any & all comments would be appreciated.

Douglas

 

[Mike]

I use to work in a tunnel when in High school, at this site the employees drove the cars onto the conveyor, if it was an express wash we turned on the emergency flashers of the car, this was the notice to the employees at the exit to not dry the car.

Regards
Mike

 

[Washmee]

Keep doing what you are doing right now, but add a wash for $3. No prep, no toweling, etc. Do it before the new guy opens and promote the heck out of it. Take away his advantage and watch him squirm while trying to pay off a big mortgage. When I remodeled my Full service 6 years ago, I decided to add a budget exterior for $5 dollars. That is 1/2 of what I charge for a deluxe exterior wash. I still get plenty of customers who buy my more expensive washes. What I gained, were customers who were only willing to pay a low price for a wash. It has been a plus for my wash. It sounds like you have high standards, which is good, but there is a segment of the market who doesn't care if the car wash is perfect.

We added a flashing light and a buzzer at the exit of the wash to differentiate the wash type for my finishing crew. Works great.

 

[robert roman]

In crowed markets, the more successful stores are usually those that entered when there were fewer competitors and higher demand. To stand a chance in this market, a new store must stick out by offering something better (higher quality) or unique (highly specialized).

Before this a retailer must determine how big of a market to target and who the real competitors are. If the objective is to be market leader, the new store better have something game changing.

In crowded markets, it usually is not the wisest decision to back off price because the time it takes to establish a comparative advantage will typically outweigh the value. In most cases, this time/value could have been better spent creating something else (opportunity cost) like a stronger value proposition.

 

[norton]

A new 3 million dollar express wash just opened close to me. I heard he was going to be a $3 wash but he ended up starting out a $6 for the low wash. I guess to pay the mortgage the price had to be higher. How do you know for sure what the new wash will be priced at?

 

[Earl Weiss]

I hear the train a comin' get ready for a flex serve promo.

 

[Earl Weiss]

Ask 5 vcar washers a question and get 10 opinions. I think you need to take a hard look at your market, potential market equipment etc.

You are structured to reach a certain market. A mid grade exterior market. Some gurus now say the middle market target is what gets clobbered. Top tier markets will gravitate toward top tier service. Mid level will gravittae down.

Like you, I am in the midwest. Took over 3 failing locatins in the past 15 years. All did some manual work. All was eliminated by making equipment function properly and adding equipment as needed. Some people were unhappy with the abscence of manual prep. We assured them they would be happy with the result with a free (immediate) rewash guaranty.
on Line packages range from $3.50 -$11.50. Manual After care service is available for an addittional charge.

For each of those who never came back due to the abscence of manual prep or finishing, 3 new customers came.

 

[rph9168]

I agree with Earl. I would probably work to distinguish what your wash does that the other does not in your marketing program. You prep and hand dry which is a good start. You might consider adding free vacs to your wash or offer free vac tokens as an incentive to begin with if you do not want free vacs.

You cannot assume they will be a $3 wash unless that is what they are promoting during construction. Even at that almost all the $3 expresses in our area have increased their pricing to $4 or $5 after starting at $3. I would not change your present pricing to compete. I think offering a $3 wash is not a good idea. I know several operators in our area tried that and created problems for themselves by decreasing revenues among their own customer base without increasing volume.

I think the main thing is to maintain high standards for your wash and promote your wash quality and extras not offered by your new competitor. You can be sure that many of your current customers will try the new wash. Your best defense to keep them is to set the bar high with the quality of your wash.

 

[1carwash1]

Rims rims, rims, It's all about the rims. My observation has been that the only practical difference between wash packages at the express is clean rims and tire shine. In my opinion, it seems like most express washes only include rim cleaning and tire shine on their top washes. From a customer standpoint, the benchmark of a clean car is the perception of clean wheels. So that being said, I would match the expresses base wash in terms of price and heavily advertise the fact that we include wheel cleaning. If their base price is high enough, I would also include tire shine in your express wash package, but you need to get on it fast and develop a loyal customer base. Now, when the competition opens and your loyal customer decides to try the competition, most likely they will be prompted by their auto-cashier to upgrade to a higher price wash that includes what you are offering at the base price. As a previous poster said, your top tier customer will most likely want full service so no harm done there. On the other hand, your all inclusive base price package renders the competition's top washes a poor value. The other important thing to consider is the name of your express wash package; by that, i mean, reflect the SERVICE you offer in the package name. For example, " Fast Wash with Rim Cleaning & Tire Shine. In terms of vacuums, if you have the space install a free central vacuum system. And don't cheap out by installing free standing self serv style vacuums. The aforementioned is just my opinion. good luck!

 

[Earl Weiss]

You can try what some local haircut places have done to combat the $5.00 haircut places. They have a sign that says "We fix $5.00 haircuts" You could have one that says "We fix $3.00 Car Washes"

 

[Earl Weiss]

if you have the space install a free central vacuum system. And don't cheap out by installing free standing self serv style vacuums. The aforementioned is just my opinion. good luck!

Is your opinion based upon appearnace of the central systems or something else?

Always wondered why people would want those 25HP centra vac motors running when only 1,2,3,or 4 people are vacuuming. Later Sonny's came out with something called the extreme rocket vac to address this very issue.

The central system also makes it very dificult for restricted frr vacs only for wash customers or package upgrade customers as well as making it difficult to use things like combo vacs where you could use a token form the Vac and customers could still pay for air freshener and shampoo.

 

[Earl Weiss]

Years ago a chain called "White Glocve took over a nicely situated location. Basicaly gutted the tunnel, made everything pretty, people running around in Spiffy Uniforms with clipboards. After about 5 years the Chain had issues and they sold out to another guy who put in a Full Serve.

I knew the landlord / operator who leased to White glove and the successor and at that time told him that the location was a nice geographic fit for us and if he ever needed another tenant he should consider us.

When the next guy failed we were able to take over making it an EE.

People asked me why I thought I could succeed if the two prior guys failed. I told them because I am not going to put a Nordstroms in a Wal Mart neighborhood.

 

[Douglas]

Hey guys thanks for all the feedback. Yes, like Earl side there are differing opinions.

To shed further light on my place, I don't have the room for flex serve so that is out. Yes, I have an array of vacuums to the side so i could offer free vacs.

The owner's 2 other washes are $3 express base price, so that is why I am assuming he will be the same. There are cost overruns on site prep that are high, so yeah maybe he could start at $4.

I am in a lower middle class area. I opened up at the same price ($5.75) as the 3 other competing washes that are gas station tunnels.

In introducing a lower price express only wash I need to plan with a light like someone mentioned or other method so towel dry guys no.

I would agree with most to keep producing promoting quaity. Messages on signs, print material, website will highlight our advantages.

I would also agree that instead of reducing my wash & towel dry packages, I will entertain adding more services, especially wheels like 1carwash1 replied.
Maybe also toss in the vac tokens, air freshener or other. And. to combat the 5 day guarantee on there top package I will offer the same, plus other item and I'm gonna raise it .50cents. Those customers who buy my most expensive package (27%) will still pony up.

Thanks,
Douglas