Is now the right time to adjust your car wash prices? While each car wash operator’s circumstances and demographic may vary, the short answer is: YES, raise your price points! Also, consider eliminating your lower cost packages to keep your profit margins sound in today’s financial climate.
Supply Chain and Costs Increasing Affects Car Wash Prices
Between the boom in new car washes opening nationwide, disruption of supply chains, and employment woes, it may not seem prudent to increase the prices of services to preserve and/or increase your profits right now, but inflation can be a make-or-break issue for small businesses. Over the past year, taxes, water cost, and labor costs have increased – just to name a few. Each of those eats away at your bottom line. If you haven’t revisited pricing structure already, now is the time to minimize the damage and keep profit flowing.
Do Some Research First
Your first step is to do a little research. Take a deep look at your costs overall, and consider your target market and your current menu/service prices to analyze your margins. Make sure to know your most/least profitable items, what drives your customers, and learn where you stand versus your key competitors. The pinch of rising prices affects us all in some way. You may be struggling with the decision of bumping up your package prices, but… you’re running a business. You need to know your worth, and the worth of the packages you offer. A nudge in prices may mean your die-hard basic customers shy away, but it will likely also mean you begin to attract new customers that are prone to spend on elevated services.
Perceived Value of your Car Wash Options
Remember, you’re not sacrificing quality in this scenario. The key to successfully raising prices is to simply raise the perceived value of what they’re paying for. A reasonable price increase, coupled with the elimination of your most basic package leaves you with options that still provide great results for customers. Your new lowest tier now has more appeal, more bang for their buck, particularly for new customers rolling into your bays. Make the value of each offering obvious with bold and clear signage and advertising.
Competition is stiff, and your competitors are strategizing the same way you are. The logical way to defray the increase in overhead is to balance the burden using the services you provide, and quite honestly, your patrons likely won’t question why you need to. Convenience, speed and quality will keep them rolling through, and you’ll thank yourself for boosting the value of your enterprise. Consult our blog about setting prices for more detailed info on this topic.
Thanks to Kleen-Rites National Sales Manager, Gary Frey for providing his thoughts on this topic!
