Two sides of the same coin — price and value. To make sense of this, if you buy a wash at $20 and then buy that same wash at $10 during happy hour, the value is the same (it’s the same wash) but the price is now 50 percent off.
Here’s the catch: perceived value is different than absolute value. If my car is really dirty, it’s highly probable that the value of a car wash is higher than if my car just went through a wash five minutes ago. Even though the price is the same, the value of the wash (to me) is much more with a dirty car.
Here’s what we need to ask ourselves as owners: What do my customers value? And for those building a new location, what will customers value?
Cleaner, drier, shinier, faster isn’t the only value we sell. Can you imagine, I, and many like me, once thought professional car washing was a commodity. Deliver a clean car. Charge more than it costs. Charge less than the wash down the street. Dial in a quality service and then whittle away chemistry and labor costs to increase profits.
That Was Then
It’s hard to pinpoint when everything changes in a particular industry. For me, I remember the late ‘90s as the first general shift in customer expectations. Those were the years Starbucks stores started opening near my home.
It was new. I tried it. It was fine and all. Fast. Convenient. Tasty. But, who in their “Price is what you pay. Value is what you get.” — Warren Buffetright mind would pay three times more than the going rate for a cup of coffee? Fools. The gas station’s grimy Bunn-O-Matic sitting on a slab of Formica, wedged between some snack cakes and a couple of crusty canisters of sugar, was good enough for me!
And why? Because it was fast. Convenient. Good enough. And no nonsense. For years, it was fine. Until it wasn’t.
I think it’s only fair to share a quick blurb on Starbucks. In 1971, Starbucks had one store known as Seattle’s Pike Place Market. In 1984, Howard Schultz traveled to Italy and experienced an espresso bar. He came back to the United States and tested the concept. Schultz didn’t change the coffee; he enhanced the experience. This became the genesis of Starbucks. In 1985, Schultz acquired Starbucks; 1992 IPO; 1993 first two-for-one stock split; 1993 store count at 272. In year 2000, Starbucks grew to over 3,500 locations. Today, Starbucks has over 25,000 locations.
Some Things Are of Value Beyond the Product
Let’s be clear, I didn’t fall in love with the premium coffee shop experience. I simply noticed the inferiority of my gas station coffee experience.
A smiling barista. Real wood tables and counters. Free WiFi. Signage telling me how special their coffee is, that my coffee purchase was helping to save the world, at least some part of it, somewhere. I placed value in the experience, and I got a cup of coffee to go along with it.
Price is An Issue in the Absence of Value
Too little. Too late. The frantic actions business owners tend to take is to try to hold onto profit when competition comes to town. Lower the price? Decrease labor? Cut chemistry costs? Rarely do we think: increase the value, improve the experience.
The Inevitable Pivot
My gas station upgraded the coffee machine to a shiny, new machine.
A timer was incorporated to let me know when the last pot was brewed. Yellowing signs promised freshness. Poorly printed, fading graphics promoted exciting new flavors.
Now, whenever they happen to have the cheapest gas, I may get a cup of coffee. The gas station has since repurposed most of the coffee real-estate to peddle energy drinks and protein bars. Let’s learn from this.
After an Event, Even a Fool is Wise
In the 1980s when everyone installed triple foam, you added the applicator, a couple of signs, and proceeded to use as little chemistry as possible.
Then, in the 1990s when everyone installed a glass-beading treatment, you installed the arch, a couple of signs, and you tried to dial back chemical usage so you could beat the wash down the street by delivering the same commodity for less.
Enter today. We see express washes pricing their top wash at $25 and customers paying for it. How? Ceramics, signage, lights, foam, VIP lanes, long term benefits of better chemistry, guaranteed promotions that customers value.
As an example: if it rains today, come back and we’ll wash your car for free.
Sell Value not Price
A colleague recently asked me how successful I’ve been at reducing the quantity of ceramic coating I apply per car. Old habits die hard — for some and sometimes me. Butin this particular case, not so much.
I put out a spectacular car. I’d like to think my competition does too. My time is spent on delivering a better customer experience that’s better than my competitors’ in my market.
We’re updating our paystation menus, again, to make it easier to buy a wash. We’re adding additional LPR cameras to speed access for monthly members. We’re looking at replacing the lighting system in the tunnel, again, with a coordinated show that customers will remember. We’re changing uniforms, again, to look cleaner, more professional, and fun. And this one is my favorite: we’re printing decals of our mascots and asking customers to submit pictures of the sticker on their vehicle to win free washes. It’s no longer enough to connect with customers onsite, we’re winning their attention online.
The New Era
If your customers are saying “your price is too high” or you’re not selling enough of your top wash, consider this customer code for “show me the value.” I recommend you don’t immediately lower the price. It may be less costly, easier, and more profitable for you to curate a superior customer experience that customers are willing to pay for.
I’m lucky. Within a year of opening my wash, two phenomenal express exterior washes opened within a few miles of mine. I never had an opportunity to think about anything but winning my unfair share in an increasingly competitive market. Neither did they. We’re all thriving. The experience is different at each wash, but we’re providing experiences people value.
I’m just sayin’, think about this: if price is the only thing that matters and people want the lowest price, we’d all be $3 washes, everyone would drive the lowest-priced car, flying first class wouldn’t exist, Apple would still be a fruit, and I’d still be drinking coffee from a dirty coffee pot at my local gas station.
Good luck and good washing
Joining the company in 2000, Anthony Analetto serves as the president of Sonny’s CarWash Equipment Division. In this role, Anthony leads the innovation of new products to drive client success and oversees all operations, engineering, and supply chain management. Washing cars for over 30 years, Anthony was the director of operations for a 74-location national car wash chain prior to joining the company.