Car wash pricing – like the pricing in any business – can be a double-edged sword. Price too high and drive customers to cheaper competitors. Price too low and you make less money. Plus, a price that’s too low sends the wrong message about the quality of your wash.

That’s why you need a reliable car wash pricing strategy to set the right prices. 

6 Strategies for Offering Profitable and Competitive Pricing

The car wash industry is highly competitive, with many markets saturated. Gone are the days, in all likelihood, when you were the only wash in town. So pricing your wash service sharp is a must. Many factors, such as location and type of car wash, can affect car wash prices. Thus, there isn’t a set-in-stone pricing strategy that works for all car washes. However, whether you offer a self-serve car wash or provide automatic car washes, you can implement these six strategies to offer competitive pricing across the board. 

1. Know Your Car Wash Costs

Cost per car is a significant metric and one you must establish. It shows you how much it costs to wash one vehicle. To calculate your cost per car, divide total car wash costs (fixed and variable) by car count in the same time period as those costs are incurred.

Seek accounting help if you cannot accurately establish cost per car or doubt the accuracy of the number you get. It’s critical that this metric be known, because it’s one of the numbers that drives your profit margin.

Knowing your cost per car informs your pricing strategies. For instance, to boost your profits, you may find innovative ways to lower your cost per car instead of hiking prices. Perhaps there are some variable costs you can reduce by increasing operational efficiency. 

2. Conduct Market Research

The market rates for car wash prices will always influence your pricing strategies unless you own the only car wash in your vicinity. You must do extensive market research to determine the average price of a car wash in your target market before setting, raising or lowering prices. 

Car wash owners can access market research from a variety of sources, including industry-specific organizations, market research firms, online business data platforms and even the U.S. Census Bureau. Good old fashioned legwork (these days, more like driving work) can also be valuable. Visit local competitor locations and find out for yourself what carwashes are charging for each service or package.

Analyzing Customer Preferences

Market research helps you identify the most popular carwash package in your area, which may be a function of local economic conditions or average incomes. Historical sales data will tell you which wash packages local customers prefer. If most carwash volume is concentrated in one service level or tier, be extra careful when setting or changing that price.

Evaluating Competitor Pricing

Try to compare apples to apples where possible. Competitors will not always offer the same wash packages you do, or the same tiers, but you can get a ballpark idea of pricing.

Also seek to identify competitor pricing strategy. Do they cost less compared to other carwashes nearby? Do they cost more but offer a premium service? It’s possible the “basic” wash tier at your competitor also includes a service you don’t offer. That could justify a higher price for their basic tier than you should ask for yours.

3. Create Tiered Pricing Packages

Tiered pricing is an age-old pricing strategy which gives customers options that suit their needs and budget. This way, you can appeal to a wider market of potential consumers – the penny pincher or the luxury shopper – and try to upsell as many customers as possible.

When each tier is priced properly, this strategy also takes into account human emotions and behavior. How many times have you said to yourself: well, if I just spent “X” dollars more than basic, I can get all these other goodies (more value) in my purchase? Or said: no way I’m trading up to that top tier when it’s twice as expensive. It could be that the middle tier is the most profitable, and the right price ladder can “herd” your customers into that tier.

Psychology is involved in pricing in almost every industry. Many people associate product pricing with their personalities. Some people always want the best. Frugal people want the best price. Many choose the middle tier after making an only partially conscious calculation of price to value ratio.

Pricing may also be an function of brand. Are you a high-end brand or a value brand. Everything from graphics to site design, wash services and pricing should be in alignment for the greatest success in your business. If you plan to appeal

Basic vs Premium Wash Packages

Most car washes have basic and premium wash tiers. The basic wash package is your introductory package, so it should be cost-effective to attract as many customers as possible. But don’t price it too low, or you might turn a middle package customer into a value customer, costing you profit. Or you could sow doubt as to your carwash quality.  

Your premium wash packages should include basic wash services and additional ones like tire or wheel shine, mat cleaning services or special protective coatings. Obviously, each tier should offer more cleaning services and be priced accordingly. How high you can go will depend on the wealth in your local market, and the quality of your carwash.

4. Use a Dynamic Pricing Tool for Demand Fluctuation

Today, you can leverage digital menus and dynamic pricing tools to adjust car wash prices in real time according to demand fluctuations. These tools leverage AI to analyze market factors and automatically adjust prices. They employ an adaptive pricing strategy that helps you maximize revenue when demand peaks or ebbs. 

To use dynamic tools effectively, you must feed them accurate data customized to your car wash. For instance, if the weather doesn’t affect your car wash demand, you should delist weather from the factors the tool weighs when calculating prices. Until you customize a dynamic tool to reflect your wash’s conditions, you may want to use the suggested prices as a benchmark.

5. Offer Car Wash Membership Pricing

Unlimited wash clubs are one of the major revenue streams for carwashes. However, adjusting membership prices midway is more difficult, so you must set the right price the first time. Price your memberships to create the perception of better value. Also, a short-term price break can get members onboard who might otherwise not have joined. If they like the service, they might be willing to pay more when the original offer expires.

6. Monitor KPIs and Adjust Accordingly

Setting and monitoring car wash key performance indicators (KPIs) is important because it helps you track your business goals. By reviewing KPIs such as dollar per car, throughput, capture rate, profit per car and others, you glean critical information you can leverage in your pricing strategies. 

For instance, if one of your high-priced services has a consistently low uptake, you may decide to decrease prices and entice more customers. Also, if another service exceeds its KPIs consistently, you can decide to keep the prices as is or raise them slightly. 

Monitoring KPIs helps you establish what price adjustments will enhance your business goals best. 

Everything You Need To Provide Exceptional Car Wash Services

Even with the most customer-friendly car wash prices, a high quality wash experience and great service are what keeps customers loyal. Rely on NCS for everything you need to make that happen – from car wash equipment and chemistry, to parts, service and consulting. Contact us today for all your car wash needs.