4 tips to help you set the right price points for your car wash

As a professional car wash business owner, it’s important to take advantage of opportunities to review your pricing at least once a year, and ensure you are competitive and offering the most updated services and products to your customers.

Setting the right pricing for your wash can be a difficult task, with so many diverse car wash businesses out there, and so many variables to consider, it can be tempting to delay or even avoid pricing adjustments.

Here are 4 tips to help you set the best and most competitive price points for your wash.

1.  Determine your cost per wash price

Setting the right price point for each wash package begins with knowing exactly what your cost per wash price is. When working out your cost per wash, keep in mind costs such as utilities (water/electricity), chemicals (standard chemicals and optional chemicals for higher packages) and labour. Also keep in mind that a tunnel or conveyor wash will have higher operating costs compared to an automatic.

2. Consumer Psychology

If you’re an established car wash owner looking at reviewing your pricing, it’s important to remember some basic psychology. Customers prefer even-priced washes – so, if you’re currently on odd price points, move your price points to a higher and even number – your customers will prefer it, and your revenue will increase.

Another thing to note is that $15 and $20 are considered “benchmark” price points on menu packages. So, pricing $1 below still means your customer will think of your pricing as the “rounded dollar”. In other words, a $14 top price point will be mentally similar to the consumer as $15.

3. Location

Your location can have a significant impact on your pricing. For example, if your wash is in a high-income area or in an area with lots of disposable spending – near grocery stores and shopping centres, your price points can potentially be set higher than if you were located in a low-income area or away from grocery stores and shopping centres. Do your homework, survey your location, and get a feel for what other washes in your area are charging and set your prices accordingly.

4. Gross Margins

Keep in mind your gross margins. As tempting as it may be to set low price points to get attention and generate volume, it’s important that you don’t undersell yourself out of business. Increasing your prices by only one dollar will multiply your profitability per car. If you have 2500 cars go through your wash every month, that extra dollar will increase your monthly car wash revenue by $2500.

If you’re concerned that increasing your pricing will have a negative impact on your business, many studies and surveys show that customer service matters more than price. Customers are willing to pay more for good customer service and experience. So, rather than avoiding price increases, look for ways to improve the experience of your customer.