Pricing can be one of the most powerful and challenging aspects of your car wash business. It’s been proven that if companies increased pricing by just one percent, and if demand remained constant, on average, profits would increase by eleven percent. In addition, most customers tend to put price pretty high up on the list when selecting products and services to purchase. These five pricing strategies can provide better options for customers, generate growth for your car wash, and reap higher profits for your business:
Don’t base price on percent cost markup.
While it’s easy to think you need a certain percentage margin, and mark up your car wash supplies and add in overhead costs, such as car wash pump maintenance, car wash vending supplies, and labor, this pricing model has no relation to the amount your customers are actually willing to pay. By neglecting to test your market, you could be leaving profits on the table.
Set prices to represent captured value.
Think like a customer. They evaluate a product and its alternatives, and decide if the extras make the premium price worth it, or if the discount option makes more sense. Your prices should represent the value of your products.
Write a value statement.
Make a list of reasons why customers should choose your products over competitors’. Be specific and clearly state reasons why your product has value. This statement will give your representatives confidence, enabling them to honestly tell customers that they should buy your product.
Get your employees in on your pricing plan.
Some employees have yet to learn that it’s fair to charge as much as customers will pay, to compensate not only for the overhead expenses, but also for the hard work and financial risks involved in delivering a product. Employees are often tempted to offer unnecessary discounts in the name of “fairness,” and they need to understand that pricing something according to demand and value is fair.
Remember that today’s discount doesn’t guarantee tomorrow’s premium purchase.
Offering discounts and promotions does serve price-sensitive customers, and also raises awareness for your car wash services. However, some segments of customers will only show up for the discount, never to return. Your repeat customers are usually going to be the people who purchase the mid-level or deluxe services on a regular basis, regardless of discounts.