I'm getting the calls again…………………"How in the hell can you raise the price of your soap!?""Your prices have become ridiculous; I'm going somewhere else!?""You ^&*(%$#>!, you're &*^%$ing me!"
Yes, we are in inflationary times again, …. Hello! … anyone remember 2008!It's been a long, long time but now we're here again.
I always ask the customers when I get these calls to name one thing that hasn't gone up in the last six months? ……. Crickets………, The last 12 months? …… Cicadas………. How about the last two years?Deafening silence.
I remind them that the last 12 years have been stable for most car wash products in the market. In fact, the only two major things that went up substantially in the last dozen or so years has been the price of water and electricity.
"Well, I don't know what I can do about it." Most of them say to me. My response – "Raise your prices too."
That's the dilemma, the conundrum, the proverbial Gordian Knot of the self-service owner but let's take a good look at this "self-imposed" dilemma.
According to legend, when a 30-year-old Alexander the Great was marching his troops eastward towards Persia about 325 B.C. he came across the Kingdom of Phrygia. There in the center of the town was an ancient, hitched wagon with "several Knots so tightly entangled that it was impossible to see how they were fastened". The Oracle had declared that "any man who could unravel its elaborate knots was destined to become ruler of all of Asia". Many of Alexander's Generals looked at the knot but were so overwhelmed by the perceived complexity and difficulty they didn't try to solve it ……. more on this later.
When I talk to car wash owners about raising their prices it seems like the Gordian Knot is sitting before them. They know it can be undone but they're in a quandary. I hear "If I raise my prices the customer will just go down the street to some one cheaper." Or "I don't know how to raise the price; my customers will just complain and leave."Or even "I don't know about raising prices, I'm afraid they'll just go somewhere else, and I'll lose money."
I always ask them "Are you giving the customer a product of Value?" For example, are all your systems working? Is your car wash well kept, clean and inviting all the time? Is there an attendant available to answer questions or concerns? Do your chemicals show well, smell good and leave the customer feeling they got their money's worth? If so, your customer should value your car wash and a price increase shouldn't affect them – they know prices are going up and the value you give them is worth the increase in cost. You can always add new features if your car wash is a dated – that shows the customer you are keeping up with the times.
In the photo you see a self-service car wash in Dallas Texas circa 1970 (50 years ago). Gas was 27 to 29 cents a gallon and you paid 25 cents and got 5 minutes at the self-service bay. Back then all they offered was soap and rinse.
Zoom in and look, there is no Foam Brush, no Triple foam, no spot free, or any other feature we offer today. If we just follow a linear price progression with gas today at about $2.75 a gallon that same 5 minutes should be 10x more or $2.50 for 5 minutes. Really it should be more because of the expense car wash owners have for the newer features they offer their customers.
The increase of your costs of doing business will never stop. Water, Electricity, oil, and gas prices drive all prices in the market – including what you should be charging for your car wash. If you are giving a quality and valuable service, you should have no fear of increasing your price.Look at your offerings to your clientele and value and price accordingly.
Now Back to Alexander and the Knot………………………. The Generals called Alexander and showed him the hitched wagon and the elaborate Knot.They explained to him the oracle's prophecy of the conquest and rule of Asia. Alexander examined the knot, pulled out his sword and with one swoop sliced the knot off the post. The rest is history.Alexander went on to conquer Egypt, destroyed and rule the Persians and went all the way to India before he was 33.
Here are a couple of way you can slice the "Gordian Knot" of raising prices.
About The Author
Lawrence Stovall is the President of AutoBrite Company and a contributing writer to the company blog. He is a witty engineer, owner of multiple businesses, a retired Officer and a graduate of the Naval Academy. Lawrence was born in San Antonio and traveled the world extensively, particularly Asia, with his military career. When not working (because working is fun) he spends time reading, hunting and enjoying his Texas Hill Country home with his family.