Pricing Issues

Jimmy Buffit · 12-29-04, 04:13

I've been planning to increase my pricing at the first of the year... well, guess what? Here we are! Time to get moving on this!

I have a fixed location, in a very affluent area. The shop location is two years old, and business has been quite good. Apart from the Yellow Pages, my Website, and a big white lettered van (parked on the highway), I really do not advertise. Word of mouth is apparently good, and growing.

We spend 6-8 manhours on a vehicle, and feel that our work is quite substantial. We essentially give the vehicle whatever it needs, for a fixed fee. PDR and Paint Touchup are about the only upchargesÃ¢â‚¬Â¦

We really don't offer packages, just simple Complete, Interior only or Exterior only. Up to this point, I've charged $175 for sedans, and $225 for SUVs. Now, what can I do to more realistically be compensated for our time and expenses?

Here's my current plan: I'd like to accomplish a $38 Shop Rate, but assuming 8 hours for an Excursion/Suburban, we're looking at $304! I'm not convinced that my market will bear thatÃ¢â‚¬Â¦

Additionally, we think Black cars (more than 40% of our volume) are more difficult, and require at least an additional hour of paint prep and polishing.

So, here is my contemplated new price list: (Courtesy Wash included for every car)

Complete Interior Only Exterior Only
Small Sedan $195 $115 $115
Full Size Sedan $225 $135 $135
Small SUV $225 $135 $135
Minivan/SUV $265 $150 $150
Large SUV $295 $165 $165
Black,Shop Rate $ 38 - $ 38

(I'm sorry that the pricing is difficult to read... I'm really quite the novice at HTML).
I welcome your criticisms, suggestions, advice and wisdom.

BTW, I realize that pricing is a localized issue. My shop is located in one of the (per capita) Top Ten Income Zip Codes in the US.

I look forward to your assistance.

Jim

scottabir · 12-29-04, 05:57

What is the max you think your area will pay out? the amounts you have listed?

My take is to have your $300 your price. Why? because of the area you are in, the amount of Professional time you put in on each vehicle. $38 p/hr is not that much for professional services.

ZaneO · 12-29-04, 06:03

Personally, considering your market, etc., I feel that your prices are fair. From what I have seen and heard, you are one of the top detailers on this board (or the country for that matter).

This is just one opinion.

Jimmy Buffit · 12-30-04, 02:23

My current thinking goes back to a basic demand/supply elasticity curve. Since my 'supply' is clearly limited, I think (hope) that demand will continue to be strong enough to keep us busy six days a week. I suspect that we will lose some volume, but that will result in fewer trashed minivans (and that's a GOOD thing Ã¯ÂÅ* ) Some would say that January in the Midwest is not the time to raise pricing, but, we'll seeÃ¢â‚¬Â¦

This will be an interesting experiment, as the local 'competition' prices their services much lowerÃ¢â‚¬Â¦and
I firmly believe that we offer substantial value and uncompromising quality.

I could use some help in better communicating our services (and level of quality) to consumers who are price shopping via telephone.

Jim

mirrorfinishman · 12-30-04, 03:06

Quote:

Originally posted by Jimmy Buffit
Some would say that January in the Midwest is not the time to raise pricing, but, we'll seeÃ¢â‚¬Â¦

Jim,

Personally, I have always thought that it is much better to raise your prices as you begin to go into your busy season. That way, you are already busy and you don't have time to wonder if your timing was wrong.

Just my view on the subject.

Jimmy Buffit · 12-30-04, 06:12

Frank, you've slowed me down!

Thanks, I think I'll wait till April...

Jim

ZaneO · 12-30-04, 07:47

Quote:

Originally posted by Jimmy Buffit
I firmly believe that we offer substantial value and uncompromising quality.

You just made your best marketing statement ever. That is the line that should be used in the phone book, business cards, and any other advertisements.

Then when someone calls, you can explain why your services are indeed superior and worth whatever price you choose.

mirrorfinishman · 12-30-04, 10:56

Zane,

Thanks for taking the time to post an excellent observation!

joburnet · 01-02-05, 02:16

Your prices look pretty good to me, I have similar prices and I put a similar amount of work into each vehicle.

What I did initially was put my prices up higher then I thought they needed to be and then offer some coupons.

For example:

I wanted to get about $200 for a complete detail so I set my price at $225 and gave out a $30 off coupon bringing the price down to $195 which was good for me. I also chage 20% more for SUV's and Vans.

Recently I've been offering a buy one get one 50% off coupon and people seem to love it. The total price for two cars is 337.50 which is about $169 per car so it's a good deal for them and great for me because it takes a lot less man hours per car to do two cars in the same place because I'm mobile. If they have an SUV then the price goes up to $382.50 and it doesn't take that much longer to do then two cars.

I hope my ideas are of some help.

mirrorfinishman · 01-02-05, 04:05

Quote:

Originally posted by joburnet
What I did initially was put my prices up higher then I thought they needed to be and then offer some coupons.

Sounds similar to the strategy; raise the price and put it on sale.

Anyone else using this type of pricing?

Scottwax · 01-02-05, 04:44

For your area and because of the added costs of a fixed location vs mobile, I think your prices are very fair. I do agree with Frank though, it might be best to hold off until just before your busy season. Winter weather is not always friendly anyway to the detailing industry.

I raised my prices last year and bumped them up slightly again for exterior details because I've stopped offering one step jobs. I'll do them for a couple of regulars and charge accordingly (an office I do this for requested this option and use it as employee incentive-the company pays for a one step, if the employee wants or needs additional work, they have to pay for it), but I don't want to let new customers know about such an option. I'd rather educate them on the importance of multiple step details and why they are worth the added cost. I'd rather not do one step jobs, make less and be unsatisfied because the vehicle didn't look as good as it could have. I also bumped my large SUV price up again too. All my prices are for 2 step exterior jobs, additional steps are priced higher.

I have the advantage down here that there really is no 'season'. We get very little winter weather and when the weather is dry, I am just as busy now as in the summer. The only problem is shorter days.