Not Exactly Your Typical Pricing Question

[ShineTimeDetail]

So I have been thinking solid for about 2 weeks about dropping my prices around 20%. For my most popular detail the price is $200. People are paying this and I am staying pretty busy but I want more traffic.

See about 4 months ago my price was $175 then I raised it to $200. About 1 month later I moved into my new shop. About a week ago I stated on my website that there is now a $20 charge for the mobile service. So this is now $45 more than what was being charged 4-5 months ago.

Really I want to lower that price down to $160. See I don't get people calling me and asking me what my prices are and then saying I'm too high...If they are calling me most likely they have looked at the website and are ok with prices or they were referred and they don't care about the price. I do get a lot of people that will stop me if I'm and say I'm to high.

I wonder how many people look at my website and never call.

My prices are about the most in St. Louis. Now there are other guys that are priced the same and there are a some higher.

I want to be able to offer awesome service at a price that makes people pull the trigger and go with me. Basically I want to double my business to get a full time employee. I have been at the same spot for the past 2 years and can't get past it; the spot where I am so busy at times but not busy enough to have a part time employee all the time.

I figure If I lowered my prices and was bringing in twice the business I would still make more money even after paying an employee full time than I would now.

I think personally with lower prices I would drive in more people which in turn will get more people talking about me and referring me to their friends.

I will still have the $20 charge for the mobile fee. I am debating between $160 or $170

Also I was going to put this as my winter pricing to see how it goes.

What do you all think? Sorry its so long lol

[Andr3wilson]

Well I see your thoughts and I have often thought about this myself.

How many hours are you putting into the cars?

I base my prices off of $/hr, currently at $55 for me personally
My prices are:
Lvl 1: $200 - 4hrs - (wash-clay-wax)
Lvl 2: $440 - 8hrs - (1-step)
Lvl 3: $650 - 12hrs - (2-step)
Lvl 4: $990 - 18hrs - (multi step, plus everything)

Then interior at $200 - roughly 2hrs

Now you and I have completely different goals, overhead, and expenses.

But really I would base the costs of off time. This is where you have to go off of a personal basis. You don't want to rip people off, but you don't want to get taken advantage off. Thats why I use $/hr to choose a price, creates a pretty nice guidline.

I also really find you should have the entry level package low, then sell the next one up (which costs a lot more) when you do an estimate. If anything, you will get a high volume on the entry, with the occasional higher level.

Also you need to look at your clientele, I cater to people how love there cars and have passion for them, or too much money and want a badge, or want to add resale value (I find that is a great selling point). Who do you cater to? Who do you want?

Now I would give some discounts in the spring; I do. People usually get their cars done April-May where I live.

Be careful, sometimes lowering prices wont bring in the bacon. $10-20 drop may not bother many people, and may cut into your profits.

As far as web design, what does it look like? could you post a link? I find good marketing is by word of mouth. I offer a money back discount for people who bring me customers. Thats a huge motivator (usually $50 back to them when someone comes in, makes them come back). I also find I do a lot of marketing at the race track. Friday night street legals. Do up your car really nice, easy to make friends there, hand out some cards, good business.

Have you also looked at a retail aspect? I know a ton of detailers sell products with the cars. I am working out a deal with a high end/boutique tool supplier. I am also looking at getting into plasti dip. Maybe something you want to look into?

Hope this helps :)

[Andr3wilson]

PS i just saw your website.

take a look at Build a Website - Squarespace 6 (http://www.squarespace.com)

I use them, and I have a website that look modern and a million bucks, so simple too. Cost me $170 a year for the service.

Right now I and changing and doing maintenance, but I hope to have her going by this weekend. Ill post a link here when its back up!

[Bunky]

I would also recommended revamping your web site. It is can be hard to read.

With the black and red, your $20 adder is not easy to spot. It is in red but the font size is smaller than a lot of other less important information, I would not explain/justify something like the $5 adder for insurance. You do not need to give people any rationale for price increases.

You list this:

Basic Wash $24.99
Exterior Glass is cleaned
Wheels & Tires are cleaned & dressed
Car is washed and Towel dried (includes spray wax)
*Min of 8 cars

Why not price washing 1 car? Do people bring 8 cars?

You also say "**10% off for all customers paying with cash
All pricing is cash prices" but then you show the discounted price.

If I was a potential customer, I would want to see a price for each service and avoid all the fine print. For cash customers, I would just use even amounts (like $25 rather than $24.99).

Your pricing with cash/credit, minimum number of cars, mobile fee, etc. really makes it complicated.

[ShineTimeDetail]

I would also recommended revamping your web site. It is can be hard to read.

With the black and red, your $20 adder is not easy to spot. It is in red but the font size is smaller than a lot of other less important information, I would not explain/justify something like the $5 adder for insurance. You do not need to give people any rationale for price increases.

You list this:

Basic Wash $24.99
Exterior Glass is cleaned
Wheels & Tires are cleaned & dressed
Car is washed and Towel dried (includes spray wax)
*Min of 8 cars

Why not price washing 1 car? Do people bring 8 cars?

You also say "**10% off for all customers paying with cash
All pricing is cash prices" but then you show the discounted price.

If I was a potential customer, I would want to see a price for each service and avoid all the fine print. For cash customers, I would just use even amounts (like $25 rather than $24.99).

Your pricing with cash/credit, minimum number of cars, mobile fee, etc. really makes it complicated.

The website was created as being mobile so the whole 8 cars meant there must be 8 cars for me to come out. I will change some of that stuff around. I just became a sponsor on a car forum in StL and the guy that runs the site is going to work on my website.

[oldmodman]

Have your web designer install a hit counter for each page. That way you can see how many people click on your main page, and how many go to your pricing page.

[primo spaghetti]

wow to me, $200.00 seems cheap. while i havent vistied your website, what are you GIVING AWAY for 200 bucks?

[mwoolfso]

I would keep the prices as-is. However, start doing some promotions similar to the way AGO does their %-off sales. If ppl are watching your web site and bite, you are going to know where and why.

[SON1C]

I'd try running some winter special and see if its even worth the price drop vs new customers

[ShineTimeDetail]

I run specials a the time.

[cardaddy]

Tom,

I hear ya' on wanting things to change gears, but don't ever think that going cheap is the way to accomplish building your business to the point that you can afford to pay full time help. (even if it's full part time help) [Disclaimer; I am not a professional detailer, but have owned several successful business and was raised in a family that always owned their own business since before I was born.]

Your bigget cost, and biggest time factor is in labor. No matter what you do you'll not be able to pay for labor by lowering your income. Your overhead costs start from the moment your feet hit the floor. How much is your cell bill, business cards, monthly chemical bill, rag washing, shop rent, utilities, GAS to drive to and from your shop, brakes, tires, oil changes, even the clothes you wear. Add it all up and break it down into the amount of hours you work in a day. That'll tell you right away how much you need to make an hour just to break even.

I owned a flatbed only towing service for 18 years. I had guys all the time wanting me to do dealer transfers for $1.00 a mile (one-way only) on hi-line cars when they knew I had the cleanest trucks in town. I could stand at the dealership and point out trucks running down the road (usually a pickup pulling a trailer or a run down greasy filthy under insured junk hauler) that'd do work like that. I had it figured out that it cost me 42.8¢ per mile to even crank up my trucks at one time. So that was was 85.6¢ one-way and you wonder why I wouldn't tow cars for $1.00 a mile? Just no money in it, buuuuuuuttttt I had a 3 axle 41' trailer built so I could do 3 at a time and beat them at their own game. I lowered my prices to $1.25 per mile, 2 car minimum. Then had all I could stand some days. Carmax paid $35 per car between 2 of their lots here that were 37 miles apart and I'd been turning them down. Suddenly I was doing $105 for the trip up to the RECON center and another $105 down. That sure beat the other guys that were getting $35 to $70 each way with one car being towed and ALL MY CARS WERE OFF THE GROUND.

That was a bit long winded I know, but the point was/is offer your customers something that they are not getting elsewhere. Don't sell yourself short, EVER! Detailing is hard freaking work and it is a skill (for those that do it right). ;) For me... sure, it's a hobby but that doesn't mean I don't make a little money here and there. ;)

Good advice already on changing your site. It just doesn't say what I think you want it to. Don't get caught up in telling everyone that visits your site that you will do mobile, then feel like you have to justify cost/price/number of vehicles on site before you will show up.

Your site should focus on your shop and your services. It should be flashy, but not busy. Needs to be easy to navigate, and most importantly, the home page should fit on ONE page without excessive scrolling. Have your web designer work it out where the lowest common resolution used these days will fit on that page. Have photos of your work, positive customer comments, business associations (local civic memberships, BBB, Chamber of Commerce and the like).

The suggestion of cash for customer referrals is a good one too! Just make it clear to your customers that it's not *real* cash but a "cash credit" for services so the next time they come in for a $200 detail they get a "free" upgrade to the $250 service level. You can even let them 'piggy-back' them so if they send you three people, they get $150 credit. Remember, that "credit" is all 'up sale' stuff anyhow and 'up sale' stuff is where you really make more profit.

Take something like offering a boutique wax (over a generi tub of over the counter wax). That and say a small sample bottle of something as simple as ONRWW with a free microfiber rag is an easy $50 add-on that cost you pennies. (Especially if that boutique wax is something you found here on BOGO Fridays) :)

You already have the most important part; passion. Just work on applying that passion and making it work for you. Figure out what others in your area are doing and change up your program. Perhaps a different product line. Maybe specialize in coatings? Perhaps add paint chip service to your details? Family or office specials for those with more than 3 or more cars in one location. (Like your "8 minimum" thinking.) Don't forget bi-weekly or monthly maintainence specials. It's all about the 'repeat' business. The one time guy that's just hunting a cheap no-frills bargain is not somebody you'll likely see again anyhow.

While overall car dealers are the worst possible place to do business, there is one kind that I've seen which could be worth a look. We have one locally that only sells low mileage sports cars and hi-line vehicles. No junk, no cheap stuff, just clean late model cars. He doesn't want to be bothered with detailing his rides, but doesn't sell anything that isn't detailed. (quite unlike every other used car dealer)

I recently stopped by to look at a Vette and he had a STUNNINGLY beautiful 997 GT3 RS (97 model) in bright orange that was TOTALLY covered in Xpel ppf. Said the owner paid $15,000 for it, which was just part of the $230,000 he had in that sucker. That car btw was freaking spotless. Even the rollcage was waxed!:dblthumb2:


Funny story;
Christmas at the in-laws and my wifes brother came in from CA. His oldest in from Clemson was making money the last few years detailing so we got to talking 'shop'. I showed the kid my latest pad order and he was drooling like mad. The brother in law however said I was "stupid", "gullible" and a few other things. Keep in mind that this guy spends TONS golfing, sking, playing tennis, and buying cars every other year. (He's only lived in CA since January 2012.) To him, it's a waste to spend your time detailing your car, (at least doing it yourself). He was ranting and raving about how stupid I was for buying all that "crap" when I said, "So, just how much do you pay to have YOUR car(s) detailed? HUH? Because when I do mine just once, all those pads (about 60 in that order) just paid for themselves!" That of course, goes back to 'labor'. :)

[ruiemichelo]

while i havent vistied your website

[RhetoricMixes]

My I ask why you charge a 10% fee for credit card transactions? The two main apps I use are only 2.75% and I just factor that fee into my prices.

[cardaddy]

My I ask why you charge a 10% fee for credit card transactions? The two main apps I use are only 2.75% and I just factor that fee into my prices.

I had that same question. When I used to take cards my agreement with the processing company forbid any merchant surcharges that were passed on to the customer. I know that Visa/MC settled a class action last year that allows some fees starting Jan 27,2013 but even then they'll be limited.

Here is some text from before:

VISA states that "you may not impose any surcharges on VISA transactions. You may, however, offer a discount for cash or another form of payment (e.g., proprietary card or gift certificate) provided that the offer is clearly disclosed to customers and the cash price is presented as a discount from the standard price charged for all other forms of payment"1
MasterCard states that "A Merchant must not directly or indirectly require any Cardholder to pay a surcharge or any part of any Merchant discount or any contemporaneous finance charge in connection with a Transaction. A Merchant may provide a discount to its customers for cash payments."2
Discover states that "You may assess a surcharge on a Card Sale conducted using a Credit Card provided that (i) the amount of the surcharge may not exceed the Merchant Fee payable by you to us for the Card Sale, and (ii) you assess surcharges on card sales conducted using other credit cards accepted by you."3
American Express states that "You must not accept the Card for costs or fees over the normal price of your goods or services (plus applicable taxes) or Charges that Cardmembers have not specifically approved."4
Every originator except for Discover forbids surcharging credit card sales, however, as MasterCard so clearly states, "A Merchant may provide a discount to its customers for cash payments." This statement holds the secret to passing credit card processing fees on to customers. The trick isn't charging customers more for using a credit card; it's charging them less for using cash.

More from the VISA site:

What This Means for Consumers

Consumers will pay an additional fee when they use their credit card at retailers that decide to surcharge.
Consumers should be aware there are limits to the amount merchants can surcharge. *
Retailers are permitted to apply a surcharge to only credit card purchases and cannot impose a surcharge for purchases made using a debit or prepaid card.
If retailers intend to impose a surcharge on credit card purchases, they are required to notify customers before customers make an actual purchase at the store entrance and at the point of sale – or in an online environment, on the first page that references credit card brands.
Retailers must disclose surcharge fees on every receipt – both in store and online. Carefully review receipts where checkout fees should appear.
Note the key above is just put your higher "charge card" price up front then bring in customers by giving them a "discount" for cash. That way they don't feel like it's a penalty, it's just something everyone has to pay (unless they have cash.... which btw they can get at the ATM). ;)

I agree that as a merchant it's a necessary evil and whether or not you take a card at all during the month you still have to pay your monthly processing fee(s), but in the end (especially with AMEX) it tends to bring in more than it runs away.

[ShineTimeDetail]

I had that same question. When I used to take cards my agreement with the processing company forbid any merchant surcharges that were passed on to the customer. I know that Visa/MC settled a class action last year that allows some fees starting Jan 27,2013 but even then they'll be limited.

Here is some text from before:

VISA states that "you may not impose any surcharges on VISA transactions. You may, however, offer a discount for cash or another form of payment (e.g., proprietary card or gift certificate) provided that the offer is clearly disclosed to customers and the cash price is presented as a discount from the standard price charged for all other forms of payment"1
MasterCard states that "A Merchant must not directly or indirectly require any Cardholder to pay a surcharge or any part of any Merchant discount or any contemporaneous finance charge in connection with a Transaction. A Merchant may provide a discount to its customers for cash payments."2
Discover states that "You may assess a surcharge on a Card Sale conducted using a Credit Card provided that (i) the amount of the surcharge may not exceed the Merchant Fee payable by you to us for the Card Sale, and (ii) you assess surcharges on card sales conducted using other credit cards accepted by you."3
American Express states that "You must not accept the Card for costs or fees over the normal price of your goods or services (plus applicable taxes) or Charges that Cardmembers have not specifically approved."4
Every originator except for Discover forbids surcharging credit card sales, however, as MasterCard so clearly states, "A Merchant may provide a discount to its customers for cash payments." This statement holds the secret to passing credit card processing fees on to customers. The trick isn't charging customers more for using a credit card; it's charging them less for using cash.

More from the VISA site:

What This Means for Consumers

Consumers will pay an additional fee when they use their credit card at retailers that decide to surcharge.
Consumers should be aware there are limits to the amount merchants can surcharge. *
Retailers are permitted to apply a surcharge to only credit card purchases and cannot impose a surcharge for purchases made using a debit or prepaid card.
If retailers intend to impose a surcharge on credit card purchases, they are required to notify customers before customers make an actual purchase at the store entrance and at the point of sale – or in an online environment, on the first page that references credit card brands.
Retailers must disclose surcharge fees on every receipt – both in store and online. Carefully review receipts where checkout fees should appear.
Note the key above is just put your higher "charge card" price up front then bring in customers by giving them a "discount" for cash. That way they don't feel like it's a penalty, it's just something everyone has to pay (unless they have cash.... which btw they can get at the ATM). ;)

I agree that as a merchant it's a necessary evil and whether or not you take a card at all during the month you still have to pay your monthly processing fee(s), but in the end (especially with AMEX) it tends to bring in more than it runs away.

I do it because I like cash..