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Thinking of lower start-up price for summer only.

acbruno

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Currently I'm at $2 for 4 minutes, but I would like to keep business consistent and perhaps pull in some more customers during the slow summer season so I'm thinking of reducing my minimum start from $2 to $1.50. I've talked to some people in the business and they have said you don't know if it will work until you try it. I'm thinking of trying it for a month or two and see what happens. Good or bad idea? All other SS in the area are $2 for 4 minutes.
 

Jeff_L

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Couple of thoughts on this. Make sure you advertise it as a "Summer Time" special or something so you can go back to your original pricing after some time period. Something else you might think of is creating this special for normally low volume days.
 

Bubbles Galore

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I am sure some people might scoff at what you are doing, but you know your wash better than anyone. Why not give it a try, just make sure your customers understand it is a special.

Good Luck
 

Sequoia

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I would be leery of doing this for two reasons. First, where will you be if the other washes "follow you" on your choice to push prices downward? If one or more of them also reduce prices will you really raise them again at the end of the special period.

Next, I hear that your objective is to take a "slow season" and turn it into higher volume. My question is whether the reason for the "slow season" is the current pricing levels, or is it something else? In other words, if your customers actually don't care much whether the price is $1.50 or $2.00, or if they simply don't need to wash as often in a particular season, will a .50 cent price reduction *actually* increase revenues, and will .50 cents cause them to wash more frequently than they need to, or not?

You might consider trying to increase the revenue per car during both slow and busy seasons-- such as expanded vending, vacs, or maybe even bay services.
 

Jeff_L

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Sequoia, good points. While reading your response, I thought to myself "what would be the reason to do this?". My initial thought would be that a reason to do this should be to drive in new customers, ones who would not normally use your wash. Any other reason would have to have the positives and negatives weighed out. Certainly dropping your price will reduce your profit. If that's what you're willing to do as a "special" to drive in new customers, then it's a thought!
 
Etowah

acbruno

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I'm going to try it for two months and see what happens. I have a mix of timers so It's going to be a pain to set them all to $1.50. I wonder if I should keep the credit cards at $2.00 though.
 

CRHAMEL

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Mr. Bruno
I live a bout 2 miles from your car wash and you should make changes in your bay like the wand holders, move them away from you coin box, so you feet don't get sprayed. This happen in every bay, ps i use your car wash about once every 2 weeks, I only use yours and a conveyor on 90th the free vacs are hard to beat, have you thought about a pet wash, better in bay lighting, keep in mind this is a slow time for the omaha because of people washing in the drive way keep some q-pons in you truck/van and if u c someone washing their vehicle in the driveway go up to them and give them a discount q-pon, the wash gear card readers are great too give me a call 402-350-3402 please don't b offended just tring to help after all we are all in this togather!!!

WASH THE PLANET

CHRIS
 

Sequoia

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Lowering prices

I ran some number calculations for you just for fun. The calcs presume a monthly gross of $1,000, so if your gross is $2,000 then double the numbers, at $3,000 you would triple, etc.

I made the following assumptions about your existing situation:
1. Price is currently $2 for 4 minutes.
2. Half your revenue comes from folks who spend the minimum amount.
3. Half your revenue comes from folks who spend $4 per wash.

Based on your idea of lowering prices, I made the further assumptions of:

1. Half your customers who pay minimum startup only will continue to pay $2, and the other half of these folks will downgrade to pay $1.50 instead.
2. Half of your customers who currently pay $4 to wash will continue to do so, and the other half will start spending $3.50 instead.

Based on those presumptions, your $1,000 monthly gross will reduce to $907. This means you'll need to attract 10% more customers just to climb back up to your prior revenue levels. At $2,000 monthly gross it's that much worse.

If you think you can attract that much more business, say 20%-30% more customers, then you'll probably be on safe ground with your price reduction.

One thing is sure-- if you don't attract at least 10% or more customers your revenues will decline.

I'd really like to hear the results if you do make the change-- please keep us all informed!!
 

PaulLovesJamie

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Suppose you make this price change, and revenues go up. (or down.) How exactly will you determine what it was that caused revenues to change? I hope you wont simply assume it was the price change!

I do strongly agree with your objective - to gain more customers during slow times, I'm working on some ideas in that area as well. I'm very interested to hear what you do and how it works out, please keep us posted.
 

Keith Baker

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One other thing to remember when you try to calculate this, is that the variable costs in the midwest are probably about half in the summer as to what they are in the winter. The lights are on for about 10 hours per day in the summer compared to 18 in the winter months. My floor heat costs me over $600 per month through th coldest months and the cost of heating the wash water is higher when the air is colder too.
I started dispensing tokens about 2 years ago and I lower my prices in the summer by offering more time for the same start up price. ($2.00 for 5 minutes with tokens against $2.00 for 4 minutes with quarters) I get positive feedback from my customers who take advantage of this.
I agree that you should put up signs to let everyone know that this is a temporary price rollback. You might attract a few driveway washers this summer and keep them next winter as regular customers.

Good luck
 

JMMUSTANG

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Why not just price the wash at $1.00 for 2 minutes.
Same time per quarter as you have now but the customers might see it as a promotion.
 

Whale of a Wash

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Unless you combine it with advertising- the people that don't use your wash will never know you have a special. I think that the advertising you need to do is hand out flyers to the houses in a 2 mi radius or less, also target some businesses for big sales of tokens . I can't see myself getting over to someones wash for .50 or even a dollar. With 36 bays , my father washes in his driveway, I think they do that for some unknown reason. I have tried this before and it brings in alot of washers, some tigher than tight. Try a 2-4 day sale I myself go from $1.75 to .75 , but not sure if any tangible gains, it does produce decent sales for the days, but it may be just the core group washing for less, it is still good to keep your core group from wandering off in the summer.
 

Sequoia

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Why not just price the wash at $1.00 for 2 minutes.
Same time per quarter as you have now but the customers might see it as a promotion.
My concern on this approach would be that many customers would quickly figure out that they could insert $1, spray off the car, and get the foam brush working really well prior to time running out. Then they could brush, brush, brush with the meter not running. Then insert another $1 to rinse and wax and you've gotten the same wash that used to cost $4 but now costs only $2. And, as the business owner, you've incented all your smart customers to never pay more than $2 for a wash.

If all my customers who currently spend $4 instead started spending $2 my revenues would decline dramatically.
 

JMMUSTANG

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Sequoia I changed over to $1.00 for 2 minutes at one of my washes a year ago.
You are right that a few customers will do as you say but at my other wash, which I just raised from $1.50 for 4 minutes to $2 for 4 minutes 2 weeks ago, I also get customers that do that.
If there is a difference in the amount of customers doing that at either car wash I cannot tell the difference.
As I've stated before one reason I went down to the $1.00 for 2 minutes startup, from $1.50 for 4 minutes, was to help eliminate customer complaints when they did not put enough money into start. Which it has. At this wash I almost never get a call about the wash not starting. I also initiated a bonus time of 14 minutes for $5 at this wash (they get 4 free minutes).
I'm sure it happens but I never see a customer put in only $1.00.
I will keep this pricing schedule at both washes for 3-6 months and then decide which price structure is best for me.
I do think if you advertise in the wash bays a "summer special" of $1 for 2 minutes it might help bring in the customer that just wants to rinse down their car since it's not dirty just dusty.
 

blurdgman

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The credit card customers spend more money. Don't hurt them. I would try the opposite. Make the credit card customers start at a lower price than others so that everyone's enticed to use their credit card. Those that use credit cards seem to wash leisurely and spend more time without buzzers going off making them race along. Our average credit card wash is between $5.20 and $6.50. I doubt that the coin customers spend more than $4.
 

JMMUSTANG

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I agree that the credit card customers spend more. But...
When you start at a $1.00 everyone gets the benefit, cash or credit.
The object of the thread is a summer special and how to increase a slow summer business.
 

Kevin Reilly

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I bought my first self serve in 1970. It was 25 cents for 5 minutes and 10 cents for the vacuum. I owned and operated a full service wash and the SS came up for sale by a friend of mine. I bought it. Over the years I bought more until I had 8 locations. During one period of time I don't remember what year it was, but the economy was down and I finally decided to lower my price in the SS by a quarter. What happened? Absolutely nothing except my gross went down commensurate with the price drop.

We have been at $2.00 for 4 minutes for at least 10 years or more. This month I have raised my bay price to $3.00 for 5 minutes and $5.00 for 15 minutes. We had 2 locations at the $5.00 for 15 minutes but they were all $2.00 - 4 minute start.

Nobody has said: "you raised your price!" We are explaining to the customer that they ought to be putting in $5.00 so they don't have to rush.

At any rate we will stay at $3.00 start. It's too soon to see how it has affected the locations but time will tell.
 

Kevin James

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Why would you want to lower your price? The public doesn?t give a rip about saving a .50 on a wash or getting a little more time on the timer. If anything you should be thinking about cutting the time back or doing something at the wash to make it look more inviting, like what CRHAMEL said. If you cut your price you?re telling the public you?re getting desperate. We played with prices when we first got into this business. All we got were motor/engine washers and pickup bed washers.
 

rph9168

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It is interesting to note that the big marketers in retail like cereal manufacturers have kept their price the same while decreasing the size of their products. I also read that many restaurants, especially the chains, have cut down on sizes of the portions rather than increase prices. Seems to me that if you are reluctant to increase your prices it might be a better option to decrease the amount of time rather than discounting the price.
 

Randy

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On the first of June I raised my prices and lowered the time on both the vac?s and the bays. $2.00 for 3 minutes 20 seconds in the bays and 3 minutes for $1 on the vac?s. The only thing that has a happened is revenue is up. No complaints. The wash on the other end of town is at $1.75 for 5 minutes in the bays and .75 for 5 minutes for his vac?s, so I don?t think price matters as much we think.
 
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