Confused on price per wash

[marty]

I'm in escrow to purchase an existing mat with monthly rev of 11k and NI of 5k. As part of my due diligence I drove around the area to scout the competition over the weekend. I found a mat (same size as mine) that seemed to be a little nicer (fresh paint, newer machines) that was only a half mile away (it's in a town of 170k people). The issue is that my competition charges $.25 less per wash. I went to another mat much bigger than mine about 2 miles away and they too charged $.25 less per wash. Once I close on it I will upgrade, fresh paint, tv's, etc. to bring it up to par with the competition however I'm confused as to what to do about my prices. I'm a first time mat owner and am worried that if I lower my price I will simply be giving discounts to my existing customers rather than attracting new ones. Should I simply keep my prices the same and see what happens?

Any help/advice from long-time owners that have faced a similar situation would be greatly appreciated.

[pete f]

There is no need to lower prices a quarter in the case you describe. First of all, the current customers are already paying what ever the mat charges and come back every week. Second, if you upgrade, paint, etc it will only improve the first time customers, the ones who must make a decision weather or not to come back the following week.
I am not big on TV's, I find a radio seems to keep people in a groove...sounds like you have the other things planned well. Keep it very clean, and everything working.

[Anonymous]

On the flip side I was .25 under my competition, and I just raised a few weeks ago to meet them.

result: no change in turns-per-day, telling me that probably nobody was going out of their way to come to my place to save a quarter.

I'd leave your prices alone. Remember too that our 'clientele' just might not be too financially savvy - to them it is 'just a quarter', even if it does add up over the loads and over time.

From what I understand the biggest thing that people look for in a mat is being closest to home, and clean.

[Outlaw]

Lowering your price to meet theirs is not going to bring in customers, why would it? Lowering to below their prices might bring in some customers but your net is going to take a big hit.
Leave things alone and when they raise prices (and they will), hold your steady for 6 months.

[Andy]

Once again I would agree with Petef. Don't lower your vend prices.

[tcoomer]

My partner and I disagree with the idea of raising the price of the coin side of our business. My belief, and it could be wrong, is that the coin business is what it is. People come there because it is clean, safe, and attended. Our competition is currently where we are on pricing, however one is not attended, the other is a part of town which is not always safe.

I believe I've convenced him to do. The investment to change slides on the top loaders and reprogram the front loaders seems low.

His concern is that some of our clients are on fixed incomes and may move to another mat if we raise the price. What has been your experiences when raising prices?

For reference, we're planning to increase the top loaders to $1.50 (up .25), 18lb front loaders to $2.25 (up .50) and 36 lb front loader to $3.00 (up .75)

TC

[Kitty]

TC

RAISE your prices and never think again another thought about it!!!!!!!!!

Have you noticed the last time Outback raised their price the last time last year? Probably 5-6 times if not more!! Have you seen milk prices? How bout the gas pump? Shown anyone your natural gas bill? As a business you must be concerned to competition if you have to raise your pricing but yet you have be priced at a profitable margin. With the utility rates climbing most operators charge too less in fear of the competitors vending pricing strategies.

I still on occasion talk to my former employer and after I left he raised two of the three store vend prices (after years of me trying to persuade him too) he finally raised all the machines. Not one complaint he said. Not one. Not one!! His combined sales are in excess of 500K so my point is, he has alot of customers that did not complain.

Do it.
Kitty

[tcoomer]

I sent my partner your note and told him to grow some nads!

Thanks for the post - we're jacking the prices up this week!

TC

[Anonymous]

On a *completely* unrelated note, I work at a company that makes a cellphone for a certain car manufacturer, and internally here it is called the NAD (for network access device).

Makes for some good jokes.

[PeterH]

If you feel your 'mat will be on par or a step above the competition, then your prices should be at least .25 more than them.

Besides, you didn't tell us what size machines and what each is charging. You may be .25 more than the competition, but they might be charging .75 for a top, or $2 for a triple.

[tcoomer]

If you feel your 'mat will be on par or a step above the competition, then your prices should be at least .25 more than them.

Besides, you didn't tell us what size machines and what each is charging. You may be .25 more than the competition, but they might be charging .75 for a top, or $2 for a triple.

Peter

Our top loaders were $1.25 (we're increasing them .25). The 18 lb front loaders were $1.75 (raising them to $2.25), and the 36 lb front loader was $2.25 (raising them to $3.00).

TC

[Kitty]

FYI...........

Raising prices is a great thing.....however you do not want to skyrocket them to the top too quickly it is very painful to both the operator and the customer when the price is so far out of whack and the increase is.75 or better. You may want to raise prices in .25 increments and do so in a 3 or 6 month in between period.

[tcoomer]

FYI...........

Raising prices is a great thing.....however you do not want to skyrocket them to the top too quickly it is very painful to both the operator and the customer when the price is so far out of whack and the increase is.75 or better. You may want to raise prices in .25 increments and do so in a 3 or 6 month in between period.

Based on my market, and the perceived value of a front loader, it seems to me that the previous owner just didn't have them priced correctly in the first place. We're planning to show the value of a front loader, regardless of size, to justify the increase.

For example, putting three loads into the triple loader at $3.00 saves us (less water) and the customer ($4.50 for 3 loads in the top loaders) money. Does this not makes sense?

[Kitty]

No doubt at all. You are absolutely correct. This is the problem in a lot of markets and this is a problem that you are going to face in adjusting the price. Not knowing your customer, nor your location etc, its hard for me to judge how your customers will react to the increase. I know, that in my market a 75 cent per washer increase would not be well received. A 25 cent increase would go over without a hitch and all would be well. My suggestion to you is to raise in 25 cent increments and raise the ones that need the most adjustments over a period of time. You'll be happy with this strategy.

[PeterH]

Kitty is so correct. Increasing more than .25 at a time will bring you much grief and bad karma. Easy does it...

[tcoomer]

After much debate and your valuable imput, we're increasing the prices .25 cents and reviewing it again within 6 months.

Thanks for all of your input.

TC

[pete f]

I would try the tops at 1.50, 18's $2.00 and 35's should be $3.25 or 3.50

I agree with kitty, and PH, however the 35's appear to be very low.
Still, a quarter now, another .25 for 35's in 6 months. What is the age of the 35's? If extremely old then higher prices may be tougher to get.