In this article, I will try to empower you to successfully find a price for the detailing and valeting services that you offer. Because that’s the main message of this blog post: you have to find a price for your services. Not your friends, not your family, not other detailers, not Facebook group members. You.
In that respect, let me start with the two most important messages I want to get across to you:
- Don’t ask other professional detailers publicly what the prices of your services should be. That also accounts for detailing-related Facebook groups. First, doing that doesn’t make any sense at all as no one knows about your specific context. And secondly, it makes you look unprofessional.
- The price of your detailing and valeting service should never be the deciding factor for customers. If you are in a position in which you feel pressured to constantly adjust your prices or are worried about the lower prices of competitors, or if you constantly hear potential customers “that’s too expensive”, then you’re doing something wrong – and that has nothing to do with your prices.
In the following, we will go through the theoretical background on pricing (from the marketing literature) as well as my tips to you on how to find your prices, but more importantly I will try to explain to you these two main messages.
1. Pricing is not the start of your journey
As I wrote in my extensive marketing guide for professional detailers and valeters, a lot of people don’t take marketing serious enough. More importantly, most people and i.e. new business owners as well as founders confuse marketing with just advertising. They set up a business based on the services they want to offer and then start to think about where to advertise them (on which channels).
For an in-depth explanation of this aspect, please read the above mentioned article. In short, a (successful) marketing strategy needs – or at least should – to be based on a very thorough and analytical approach that must always be based on the needs of your (potential) customers. A successful business is not based on what you want to offer, but what your potential customers want. If you want to do detailing just for the fun of it and are happy with it being a side hustle, then please go ahead and do the things you want. But if you want to make a living out of it and start a successful business, you need to start thinking about your potential customers’ needs: What do they want? Like really want? What are they looking for? What is it that keeps them up at night?
Once you identified the actual needs of your potential customers, you now need to come to the profound realisation that you simply can’t serve the whole market of potential customers and their needs. You need to focus your efforts and (marketing) activities. In doing so, the concept of STP helps you: segmentation, targeting, positioning.
Segmentation means that you group all potential customers into homogenous segments or groups based on reasonable segmentation criteria. My tip here: don’t be lazy and e.g. group people based on where they live. That’s extremely generic and won’t render any benefits to you. Be smarter and more creative than that and e.g. think about people’s needs in terms of their cars. By doing that, you can then target (hence, targeting) the groups which are most promising to you in terms of their (financial) potential or attractiveness.
And then, finally, and most importantly, you need to find a position in the market you are operating in that is unique and special – positioning yourself in a strategic niche. You need to find something that sufficiently differentiates you and your services compared to your actual and potential competitors. By finding such a “thing”, successfully differentiating and placing yourself in such a niche, you then don’t have to compete with all other detailers and valeters and their offers which are perceived as “the same”, you face a decreased competitive threat from potential new entries in the market or substitutes (like e.g. customers detailing their own cars, automated car washes, …), and most importantly, you don’t need to compete with others based on prices.
However, always keep in mind that your chose differentiation strategy needs to be relevant for your potential customers. It would be incredibly unique if you would be the only professional detailer in the world that would detail your customers’ cars in Borat’s mankini, but is that really relevant to your potential customers?
Only after you’ve worked on all that – finding customers’ needs, segment them into groups, target the ones you really want to serve, and then find a strong position in the market based on a relevant differentiation strategy – it is time to think about what it is you want or need to offer, how you want or have to offer it, where the services are conducted, where and how you promote them and what the price of those services should be.
And that’s why I said that neither the question of how and where you advertise your services nor the pricing of them is or should be the start of your marketing journey. Actually, they are aspects that come into play comparably late in the whole journey of finding a marketing strategy. In fact, and in my humble opinion, if you do a good enough job at following this marketing strategy approach, the pricing of your services really shouldn’t matter at all. And that’s what we will talk about now.
2. Why the price of your services should not be important
Why is it that Apple can charge so much more for its iPhone than any other manufacturer of smartphones, tables, laptops or smart watches? Why do we pay significantly more for a Red Bull than for any other energy drink? Why can Aston Martin, Lamborghini, McLaren or Ferrari charge so much more than Porsche?
None of the above examples and questions can be answered based on product performance. In fact, Porsche is notoriously known for offering cars that perform as good if not even better than the ones from Ferrari, Lamborghini, McLaren or Aston Martin for less money. And I think there exist enough expert reviews who would argue that Samsung’s smartphones are technically at least on par with any iPhone.
The answer is that all of those brands – and many more – are masters in differentiation. They were able to position themselves in a strategic niche based on offering their customers something truly unique. The way they are doing this is by focusing heavily on brand building for all of the above examples, emotional product features such as design and sound (for car brands and Apple), an unique infrastructure (with iTunes and App Store) and interlinkability of all devices in the case of Apple, or an unbeatable stronghold in extreme sports sponsorship in the case of Red Bull.
To be absolutely clear and blunt about it: those brands and companies don’t really have to think about their pricing as hard as others, they just set a price that they want. And the reason for that is that they have something that their competition doesn’t have.
As I already said above, that doesn’t mean that those brands want or are able to serve the whole potential market of car owners, smartphone users or soft drink drinkers. Quite the opposite, actually: all of those brands deliberately decided to only serve a more or less and comparably small fraction of the respectively whole market. And do you think that they suffer because of this decision?
This aspect is actually one of the single most common mistakes that founders and new business owners do: they try to serve the whole market based on a fear to miss out on business opportunities. In regards to car detailing and valeting, that’s the reason that you can observe so many businesses and business owners offering so incredibly overloaded price and service lists, do every job they can get their hands on, for any price. It’s based on a lack of focus in their business and marketing strategy. And that’s a mistake that you should try to avoid – unless you’re happy with such a position.
I know, I know. You will probably think that all of this sounds great, but how the hell are you supposed to find something that makes you unique in car detailing and valeting, right? Because after all, a car wash is a car wash. Well, for once, I gave you some ideas in my marketing guide for professional detailers and valeters.
On the other hand, you are absolutely right. In some industries and especially in service industries, it is very hard to follow a differentiation strategy. But just because something is hard doesn’t mean it’s not possible. And let’s once again face the alternative which is that everything you offer is exactly the same what the next guy offers. And if he offers it at a cheaper price, well, then you know who will get the customers. Even if you are better at detailing than the next guy and even if what you apply is an actual ceramic coating whereas the other guy uses a “ceramic” spray sealant and blatantly calls it a ceramic coating - that’s exactly the issue with services compared to products: consumers can’t judge the quality of your work before they buy. That’s why if they think that all the available options are the same (even if they really aren’t) they’ll normally go for the cheapest option.
Once again: the more uniquely you are able to differentiate yourself from others, the less important the prices of your services are. If you offer something that no one else does, if this something is actually relevant to potential customers, and if they are able to see or observe this something before they buy your services, then you don’t have to compete on prices.
And all of that is why I told you above that the prices of your services really shouldn’t be that relevant. If they are, then in my opinion, you are doing something wrong in your overall business and marketing strategy. You are not unique enough and you offer exactly the same as everyone else. So why should customers not go for the cheaper offer?
3. What makes pricing in car detailing so hard?
Now, no matter if you were actually able to find something that makes you and your services unique or you were not, at some point in time you will have to come up with a pricing structure for your services. And this is the point at which we have to talk about one of the central issues of pricing services in general, and detailing services in particular.
If a potential customer calls you and asks you what a detailing job costs that includes a wash, polish and application of some sort of protection costs, then realistically the only real answer to that question should be: it depends. It depends on the condition of the car, because a heavily soiled car will require a more thorough wash and decontamination process that takes more time and also more product – which results in more costs. If the paint of the car in question is heavily swirled, then you will need more time to polish it. And lastly, there’s a huge difference in time consumption and product costs between a simple spray & rinse sealant and a ceramic coating application.
In car detailing and valeting, setting standard prices for your services is almost impossible as the above mentioned variables will always have an influence on your cost structure. This often results in incredibly complicated and overloaded price lists as detailers and valeters try to solve this issue by trying to cover all possible cases. We will talk about how to design price lists and charts in a few minutes, but my tip on this boils down to this: less is more.
A second issue in regards to pricing in car detailing and valeting is called the “detailer’s dilemma” – and yes, even valeters can face this. You can watch the following video in this issue:
Basically, what Larry says in it is that detailing in its very nature is about chasing perfection. And that’s ok if you do it on your own car as it then doesn’t matter how long it takes you and how much product you use. However, if you do it for others and for money, it is very important that you communicate with your customer and agree on in advance on what you will do to his or her car, what you won’t do, and stick to that. The “detailer’s dilemma” kicks in if we as dedicated and passionate detailers want to do more than we agreed on because we want to chase perfection, even if we know that the customer doesn’t pay for it. And this also makes it very hard to define prices in advance.
Another factor that creates issues for a lot of professional detailers and valeters is the lack of standardization and supervision in the detailing industry. Pretty much every single detailer and valeter works on his own term and in a different context:
- Some work mobile and out of their cars / vans, some have a studio. Obviously, mobile guys need to consider the costs of their cars / vans as well as the mileage they do to reach a customer, whereas stationary detailers need to include the rent of their studio or garage into their price calculations.
- Some work with as cheap as possible bulk offerings, some work with ridiculously expensive premium brands. Obviously, based on the decision whether you use fairly priced products like the ones by Detail Freaks, stuff you can buy in your local stores in bulk, or try to benefit from spillover effects by using luxury premium brands like Swissvax will have a huge effect on your cost structure.
- There are huge differences in local price levels. Usually, average prices for detailing and valeting services will differ hugely whether if you live in the country vs. the city, it will definitely differ from region to region, but even more so from country to country.
These are just some simple and obvious examples. But even if we look at two businesses who are set up the same way in the same region and work with roughly the same products, there can still be huge differences in their prices. This can be based on comprehensible factors such as experience level, detailing accreditations, or the quality of the work. Or it can simply be based on the fact that those two want to charge different prices.
And that’s why we now have to talk about pricing strategies and how to come up with pricing in general in the following.
4. How to find prices for your services
Let’s directly jump into the 4 main factors that everyone has to take into account when he or she thinks about the pricing of his or her products or services – no matter if we talk about detailing or a Taco shop:
4a. Cost-based pricing
The single most important factor in pricing are the actual costs you face – no matter if we talk about the pricing of products and all the necessary raw materials that go into making them or if we talk about a service such as car detailing and valeting. In that respect, when you as a professional detailer or valeter think about the pricing of your services, the starting point of this journey should be a calculation of the actual costs that occur when you offer a service.
What’s extremely important in this regard is that you consider all the costs that occur as many people don’t think far enough. To provide a better understanding of cost-based pricing, let’s for example consider the costs that occur if you offer a simple “wash & wax” to a customer.
What most people would now do is calculate the costs of the wheel cleaner, snow foam / prewash, car soap, a glass cleaner, and chosen wax protection that you use to do such a job. But that really is just the start of you cost-calculation journey! Because what is about the water you use? What is about the electricity that you need to run your pressure washer?
And that’s exactly why so many professional detailers and valeters tend to underprice their services, as they simply forget to include all the actual costs that occur. Let me give some examples of costs that often are forgotten:
- For mobile detailers, the costs that occur during the journey to the customer (travel time, petrol, parts wear of your car…)
- For unit-based detailers, the rent of your place, the time needed to clean it after the job is done, parts wear and depreciation of scissor lifts and other equipment…
- Parts wear and depreciation of equipment such as wash mitts, drying towels, snow foam lances, pressure washers, extractors, vacs, leaf blowers / car dryers, machine polishers, polishing pads, foam applicators…
- Costs for personal and/or business insurance
So, my main message in this paragraph is that you need to include all the costs that occur during a service to come up with cost-based pricing. If you only consider the actual material that you use, you will not earn any money in the long run as you simply forget about costs that you as a service provider also have to pay.
And all of that is before we talk about your time – as your time is and should also be worth something. Because even if you consider every single cost factor there is in terms of materials and equipment, then you still forgot something, and that’s your time. In that respect, regular Joes who aren’t that deep into car care and detailing often are shocked if you tell them what it will cost them to do their cars. In the past, you probably have heard the following sentence (or a similar one): “But I can buy a bottle of CarPro ceramic coating for 50 bucks, how on earth do you charge 1’000 bucks for applying it? Will it be cheaper if I bring my own bottle?”
For a start, people who say things like these don’t quite understand the process that it takes to (properly) install a ceramic coating. That’s why it’s your job to educate them. At some point within this education process, you will probably tell them that it will take e proper decontamination process, at least a single stage machine polish, the proper application itself, the necessary equipment and unit in which the car can stay in during the curing process… and all of this does not only create material costs, but it also takes time. Your time. And the simplest answer you can give anyone who asks such a question as stated above is: “How much are 60h of your time worth?”
You see, the concept that your time is worth actual money is often forgotten by both sides, customers and service providers alike. The foundation for the fact that time actually is worth money are so-called “opportunity costs”. In short, this theoretical economical model states that based on all other alternative activities that you could do instead of doing someone else’s car, costs arise because you are cleaning a car and for example are not trading on the stock exchange, or going for a walk, or playing with your dog, or finding your true love in life – all of which could be worth more to you in money-terms than cleaning a car. And that’s why your time is and should be worth something and should always also be included in a cost-based pricing strategy.
The cost-based pricing is the most important of the 4 main factors in pricing. Why? Because I think it is fair to assume that no one on earth wants to run a business in which the costs of running it are higher than what he or she earns. So, without knowing what your costs of operation are, pricing simply isn’t possible. Heck, it’s outright dangerous and stupid. If you just blindly set a price based on gut feeling and you accidentally set it below of what your costs are, you are literally screwed. By yourself, for that matter.
So, you not only need to calculate the costs based on all materials and equipment you use, but you also need to include an hourly rate or wage that you want to earn. Of course, a fair hourly wage or rate will vastly differ based on your age, experience level, certifications, reputation or even location and it can be tricky if you have never done this before, but that’s something your parents, other family members, friends or even price lists of other detailers can help you with. But once again: you will have to decide and set a rate that you want to earn. It is your business, it is your life, and you should be and have to be able to decide how much you want to earn – not others!
You also find some useful tips in this video:
4b. Win margin
Funnily enough, a lot of people I talk about pricing think that with the hourly wage or rate that they charge, the win margin (or profit margin) is already covered. And that is not only a misconception, but actually a huge mistake!
You see, as I tried to explain above, your hourly wage or rate is the amount of money that you decided you want to earn as a “repairment” for the time that you spent detailing instead of something else that you (most likely) would much rather want to do with your time. So, an hourly wage or rate does only reflect the amount of money that you determined your time is and should be worth.
The best way to explain why your hourly wage or rate does not include your win margin is by imagining that you hire your first employee and asking yourself when and under which circumstances you would do so? For most, the answer will be that you would hire an employee if there is enough work so that you can’t do it all by yourself anymore and if the excess money you make off jobs is not only enough to pay the employee’s wage, but it helps you to earn even more money than before. So, by taking yourself as a business founder and owner out of the equation and thinking about employees instead, it immediately becomes obvious that it only makes sense to hire somebody if he helps you to earn more money than what he costs. But it should be exactly the same for yourself!
For those reasons, an hourly wage or rate can never include a win margin. You see, technically, a win margin is the amount of money that is left if you take what your customer pays you for a job and you then subtract all costs. And because you established above that your hourly wage or rate is actually a part of the costs, your hourly wage or rate cannot represent your win margin.
A win margin is something that businesses “charge” on top of the actual costs of a product (or its production) or a service for several reasons:
- To some extent, the win margin symbolizes the value of what you create. Because without a win margin, anyone could go ahead, invest the exact same amount of materials, money and time that you invested and just do it for his- or herself. So, in other words, the win margin is you saying that it should be worth something that you do it for your customers instead of them doing it themselves.
- The win margin makes sure that you are able to grow your business in the future by e.g. investing in marketing, in a (bigger) unit, new (and better) equipment, hire employees, etc. If you don’t charge a win margin on top of your costs, all you’ll ever do as a business is exist at the same level as right now.
- The win margin helps you to put money aside for unforeseeable happenings (that are not covered by insurances), such as a global pandemic and a severe decrease in customers, burning through the paint on a very, very expensive and rare car, you having to close the business down for a few weeks because of family issues…
So, the important message to take away from this paragraph is that you not only need to consider the costs of running a business when setting prices for your products and services, but also the amount of money that you want to earn on top of it – the so-called win margin.
Technically, the easiest way of doing this is by taking all costs of a provided detailing service, and then add a percentage number to it: 5%, 10%, 20%, 30%, 50% or even more... So, if all the costs of you providing a “wash & wax” e.g. accumulate to let’s say 90 (including your hourly rate), then a win margin of 10% would mean that you charge the customer 9 extra, resulting in a total price of 99.
I can’t really tell you how much of a win margin is fair or usual, as this will heavily differ from industry to industry. Me personally, if I were to open a detailing shop or business, would look at 50% or more. As stated above: it should be worth something that I do clean someone else’s car when there realistically is nothing that would prevent him or her from doing it themselves.
But once again, it really shouldn’t be me or anyone else who tells you how much you want to earn. It is your business, it is you that has to make a living out of it, so you should know and decide how much you want to earn.
After the cost-based pricing, considerations about the win margin are the second most important factors in a pricing strategy. Everything that we talk about in the following is important to consider, but it shall never lead you to price yourself under your actual costs or throw away the win margin that you set.
4c. Competitive pricing
This factor within a pricing strategy is the reason why I decided to write this article. In the detailing-related Facebook groups that I am a member of, questions by (more or less) professional detailers and valeters about pricing and how much they are supposed to charge for this and that occur on a daily basis. And in at least half the cases, these questions are motivated by business owners who saw that a competitor offers a similar service for much lower prices.
Let me be clear about it: no business operates in a complete pricing vacuum, meaning no company on earth can allow itself to charge ridiculously high amounts of money for something that can be had for much less. However, above I already gave you some examples of firms that were able to differentiate themselves enough from their competitors so that they actually can charge significantly higher prices. When Apple introduced its first iPhone, it cost a shitload of money more than a phone from Nokia or Sony in that time period. That was possible because the iPhone actually did offer a lot more than those offers, even if it technically still was a mobile phone.
And that’s exactly the mindset you should put yourself into when you think about the pricing of your offerings. Yes, it is good to know how much your competitors offer. But not because their prices then dictate your prices, but because you then know if you charge less, the same or more than them – and can then adapt your marketing and positioning strategy accordingly.
I want to repeat what I said above as I think that this really, really is something incredibly important and something that many tend to forget: yes, it is relevant what your competitors charge for similar services that you offer, as it will provide you with a “corridor” in which you then can set your own prices. However, and first, I already told you above that the price of your services should never be the deciding factor. If you compete with others solely based on prices, you are doing something wrong. And secondly, just because there are competitors which offer the same services as you are for much, much lower prices, this doesn’t mean that you have to compete with them for the same prices. Maybe they found a way to operate with much lower costs than you. Maybe they just value their own time less than you. Maybe they work with much cheaper (and lower quality) products than you. Or maybe they just simply didn’t calculate their actual costs. As I said above: the most important thing in a pricing strategy is knowing your costs and your win margin. Competitive observations in regards to pricing should never lead you to price your services below your costs or deteriorate from your set win margin!
All of this does not mean that competitive pricing is completely irrelevant. Nothing could be further from the truth. It is absolutely necessary to have a broad understanding for the pricing structures within your chose industry. However, I personally would say that observations about (potential and future) competitors and their prices are more important before you actually start a business than when you are already running it.
If you for example are currently thinking about opening up a (mobile) detailing and/or valeting business, then first go ahead and calculate your costs of doing a job. Then think about a suitable win margin for you. If you have done that, you already have established your basic pricing structure. Now go ahead and start checking prices of your closest and nearest competitors. If you realize that all of them offer their services at significantly lower prices that what you have come up with, you know several things:
- Your competitors are either able to operate at (much) lower costs than you, or have decided to work based on (much) lower win margins, or are too stupid to calculate their actual costs, or are entangled in a fierce price competition.
- You will either have to rethink your cost structure or accept the fact that you will enter the market with a premium offering and will have to make sure in your marketing efforts that potential customers understand that what you offer is better than what all the others offer.
- (Potential) customers are not willing to pay your prospective prices (see below).
It is perfectly possible that there is a severe conflict between cost-based / win margin pricing and competitive pricing. And if that leads you to the profound realization that it is probably not worth it to start a detailing business in the first place, then I actually think you have done something right and you have been far more intelligent about it than many, many others.
4d. Willingness to pay
In regards to the willingness of (potential) customers to pay for your services, exactly the same mechanisms apply as in regards to competitive pricing. However, it is actually much, much harder to find out about customers’ “true” willingness to pay.
Many think that the average price of all market participants is a good proxy for customers’ willingness to pay. And to some extent, this may hold true. If literally every “wash & wax” in your region or country costs between 50 and 100, then this most likely reflects customers’ willingness to pay rather good. However, once again, there’s an important limitation to this finding. I think that if you would have asked 100’000 owners of mobile phones by Nokia or Sony how much they would be willing to pay for one, the answers would have been severely different after the introduction of Apple’s first iPhone. So, the willingness to pay of customers can be a subject of change.
Plus, the willingness to pay is also extremely individual and personal. One person may consider 100 for a “wash & wax” perfectly fair, another person may think it’s nuts. Here in Switzerland, prices for such a “wash & wax” service differ hugely. You can have it for a low as 15 Swiss francs, but you can also have your car washed and waxes at the Swissvax HQ in Fällanden for 100 to 200 Swiss francs. And obviously, both works.
All in all, the willingness to pay of (potential) customers is something that is and should be an important consideration within your pricing structure, but it definitely shouldn’t be the end of it all. I personally think that it is much more important for you to know who your prospective customers are and will be and can then tailor your offerings to them and their actual needs than trying to understand and evaluate customers’ willingness to pay of the whole detailing market. And once again: if you find that customers generally are not willing to pay your prices that you based on your costs and your chosen win margin, then it may be worth thinking about the legitimacy of your business (idea).
5. Helpful (and sneaky) pricing methods
Two additional aspects regarding a pricing strategy that may help you and are actually quite handy are price discrimination and price psychology.
- Price discrimination describes that you create different prices for different customers or customer groups. If you decide to do this, it’s extremely important that such a price discrimination is not perceived as unfair by the different customer groups and that there isn’t a way for customers to circumvent it. You could for example think about a special “lady’s week” in which female customers get a special price for your detailing services including a nice add-on like a massage or pedicure by a specialist you partner up with while you detail their cars or a gift box by a (local) cosmetics company you can start working with. Or you could offer detailing cars in the evening or at night for an additional charge if customers only have time then.
- Price psychology e.g. comes into play when we look at large numbers and only really care about the first one. This means it is better to charge 499 instead of 500 because customers then somehow feel that the actual price is closer to 400 than 500. It’s the same effect when we split up large numbers into several rates – the whole concept of leasing is built on that effect. So instead of stating your service package with 500 over 499, you could also say it’s 100 or 99 per hour and then include that the service takes 5 hours. But remember: marketing is not about lying, so always be fair and don’t push the limits of what’s perceived as fair when it comes to those aspects.
6. The risks of underpricing and discounts
You will definitely have come across an offering of another detailer or valeter that made you think “what the fuck?”. I’m talking about offerings such as “full wash & wax for just 5 pounds” or “3 stage polish plus ceramic coating for just 99”.
It is far too easy to look at such offerings, to think “what an idiot”, and then move along. However, I want to spend some lines in this paragraph about the potential risks of underpricing – for you, everyone else, and the entire detailing industry.
You see, I completely understand that at first glance it sounds like a good idea if a teenager under 18 starts his own detailing “business” and does the cars of his parents, family members, and maybe neighbors. It’s sweet, it earns him some money for the new PlayStation 5, it looks cool on the Gram, and makes you as parents proud. And I totally hate to be “that guy”, but every time I see a posting in which people celebrate such “youngsters”, it costs me a lot of self-control to not post what I actually think about it and become everyone’s party brake.
For a start, I actually think that letting someone work on cars that he doesn’t own without insurance is just plain stupid and dangerous. I mean who will pay for paint damage that your son has inflicted and causes the need for a respray that will cost several hundred to several thousands of dollars? Secondly, there’s the legal aspect of it and the question whether kids or teenagers are actually allowed to work for money as well as some potential tax issues. Third, car care chemicals can be rather nasty stuff which I personally would not want my kids to “play” with when they are not (yet) capable of fully understanding the potential health risks.
Plus, from an industry perspective, youngsters who do such jobs for ridiculously low amounts of money can harm the entire industry as they create the (pubic) impression that this is what the service is actually worth – when in fact those kids just simply never calculated the true costs of doing it and also don’t count in the value of their time, as they probably do it just for fun.
So, if you are not a teenager anymore and opened up a serious detailing business with serious intents, and you are still aggressively underpricing your services, then please reconsider what you are doing. You are not only doing harm to yourself as you are seriously limiting your (potential) income and therefore also your potential for future growth based on what you earn, but you are actually doing harm to the whole industry and therefore others.
I get it, underpricing strategies may look attractive at first. Based on the fact that you offer services a t a (much) lower rate than anyone else, you (potentially) attract a lot of customers. But let me give you some thoughts about such a strategy:
- An underpricing strategy attracts customers who are (solely) interested in getting a service for the least amount of money. So even if you are actually the cheapest guy around, you will most likely still end up with customers who try to negotiate lower rates, complain about every little detail to get even ore out of you, bring you the dirtiest cars around, …
- Lowering your prices is easy: you just do. Customers who settled with your current prices will be happy about it as much as potential new ones. However, increasing prices is incredibly hard. You will have to explain to your customers why you increased prices so that they don’t get the feeling that you just turned greedy. And it will be harder to get new customers. By setting (very) low prices from the get go, you make it harder for yourself once you don’t feel like those low prices are fair anymore.
- If you started detailing in the hope that you one day will be able to work on those very expensive and nice cars, then choosing to start with an underpricing strategy is just idiotic. You see, with low prices comes a low amount of expectations. Put yourself in the shoes of a Ferrari owner who doesn’t really care about money, but the best possible results for his dream car. He now has the choice between a detailing shop that offers a ceramic coating package for 1’500 and you who offers the same for 100. Do you really think he will come to your place?
However, the by far biggest risk of underpricing strategies is that they are not sustainable in any way, shape or form. Let’s imagine you live in an area in which there are 9 other detailers and you all compete on the same level, with roughly the same offerings, for the same customers. Let’s now assume that all of you charge 100 for the same service. If one of you now goes ahead and suddenly charges 99, then of course he or she will be able to win more customers than the others – as you all offer the same. But what exactly hinders you or the other 8 to now offer your services for 98? Or 97? Or 89? Exactly – and as Leonardo Di Caprio would put it: absolutely fucking nothing.
A lot of these thoughts and arguments also account for discounts. They can be a great tool to attract customers, especially new ones, but they can also present great risks if not done properly. Let me give you a quick and easy example that’s based on a great tip from Alan Medcraf from AM Details on the Speed6 podcast: let’s say you win a new customer with a 10% discount on a simple “wash & wax” that regularly costs 100. You may think that’s “only” 10 you lose, but I gust gained a customer. But what happens if this customer later books a full polish and ceramic coating job which regularly costs 1’500 and now expects a 10% discount again? You see, now we suddenly talk about a discount of 150.
That’s why discounts can be dangerous from an income perspective: they create expectations. Plus, once again, they attract a price-sensitive crowd or, in other words, customers who may only care about the cheapest possible price. Do you really want that? If not, it may be worth thinking about free additional services that you can “throw in” instead of giving financial discounts, such as your own personal air freshener that you hang in customers’ cars or a quick spray and rinse type of protection in basic wash packages.
If you are depending your whole marketing strategy to win customers based on your prices, then all you will ever compete with are your prices. And this will inevitably lead into a downwards spiral in which no one can win. That’s exactly why I told you above that the prices of your service should never be your winning argument and should never be the thing that differentiates you from the others.
6. How to design price lists and charts
Next to the question of how much to charge for certain detailing services, I often see the question of how to design a price list for customers properly. And the most important message I want to give you in this respect: there’s no right or wrong in this respect.
If you’ve dealt long enough with customers in your professional capacity or for example with members in an online community, then you will have realized by now that there are a million opinions on a simple question like what the best food is. Opinions are like buttholes: everyone has one.
And that’s why there is no right or wrong when it comes to designing a price list for your services. Because no matter what you do, some people will like it, some people won’t, some will think it’s spot on, some won’t.
The one aspect I want to make you think about is this one: keep it simple. A pitfall which many people fall into when they design price lists, brochures, or websites is that they think that these media need to answer and address all potential questions and make customers somehow magically come to you. But the simple fact of the matter is that there are no shortcuts when it comes to sales and no matter how “good” your price list, brochure, or website is, you will still need to close a sale.
It is for this reason that I usually tell people that their initial price list designs are too clouded, too complicated, too overloaded. Keep it simple, give your potential customers a rough picture of your general price level, include your most popular, most basic, or your personal favorite packages. Nothing more, nothing less.
Once again, this goes back to what I said above and what I truly and strongly believe in based on my professional and educational marketing background: your prices should never be the deciding factor for your (potential) customers. If you honestly think that all your potential customers care about are your prices, then you should either start to think about your general marketing strategy and start finding something that makes you more unique, better, more attractive than your competitors, or you should start rethinking who you are marketing to and if those kinds of customers are really the ones you actually want to attract.
Don’t get me wrong, there’s nothing wrong with servicing price-sensitive customers and offering low price – or let’s better say fairly priced – detailing services. But it that really is what you do or want to do, then let me tell you this: it absolutely doesn’t matter how you design your price list. All that matters is that your prices are lower than the next guy’s.
So, next to “keep it simple”, here are some more tips on how to design a price list:
- Think about your favorite restaurants and how they design their menus. If you can think of one that you truly like because it makes it very easy for you to decide what to eat, then that is a good starting point.
- Look at webshops that you often buy from and which you like design-wise. Try to comprehend what the basic design elements and principles of that webshop are and then try to incorporate them into your own price list design.
- Make it as easy, quick and simple as possible for your potential customers to comprehend what you offer. In this respect, it most of the time doesn’t make sense to incorporate everything that you do in your price list as that would just simply overwhelm most potential customers.
- Make sure the content of your price list matches the knowledge level of your potential customers. If you mostly deal with customers who generally don’t have a clue about car detailing and valeting, it probably doesn’t really make sense to throw detailing-related buzzwords at them. On the other hand, if you mainly serve customers with high-end and expensive cars, then they most likely care about other things than Joe Average. Adapt your language and wording accordingly.
At the end of this paragraph, let me get your creative juices flow one more time. Because if we recall what I said above that your prices should never be the (only) differentiating factor between your competitors, and combine that with the also above described difficulty of pricing detailing services in advance in general, one could argue that a price list for detailing services is not a good idea per se. So, instead of endlessly thinking about and optimizing your price list, why don’t you skip it altogether and focus on designing a flyer, brochure or website that really shows what you are good at, what sets you apart, what you can achieve?
If a customer is convinced that what you do and what you offer is good or even superior to what others offer, he will suddenly be much, much less price sensitive. If a customer wants to work with you, then his willingness to accept your prices (no matter what they may be) will increase significantly. If a customer is convinced that your offering is exactly the same as the next guy’s, then all he will care for are your prices.
So, once again, my tip to you is to stop worrying too much about your prices and therefore also about your price lists and start focusing on things that set you apart.
7. The fine art of packaging
Packaging is, in general, a good idea. But it has its limitations. You see, packaging was introduced and therefore makes sense in the light of complexity as packaging helps to reduce this complexity for customers. You typically see this with automotive manufacturers who offer packages that group certain optional extras into more or less sensible packages so that customers don’t necessarily have to go through all the options lists and can spec a car quicker.
And that’s the most important aspect about packaging: it only makes sense when facing complexity. And in this respect, I want to challenge you with the following thought: if you are really thinking about packaging your offerings, why don’t you first ask yourself why you feel the need to do so, why your service offerings have become so complex and if they really need to be?
Packaging is not only and purely beneficial. When facing packaged services, customers often expect a discount compared to buying singular stuff. Discounts mean less earnings, less money, less profit for you. Packaging also holds the risk of further complexity, as in today’s highly individualized society, people normally don’t want standardized options. They much rather want something that they feel is tailormade for them. That’s why people will start to pick your packages apart and ask you if they can swap out this for that, therefore destroying all your good intents of packages.
All of that doesn’t mean that packages don’t make any sense at all. Especially in regards to car detailing services, I think they make a lot of sense. But once again and reminding you of what I said above about price lists: don’t spend too much time thinking about packaging. Keep it simple and offer only the most demanded packages and the ones you really want to sell. Don’t overcomplicate things, as the aim of packaging is to reduce complexity, not increase it!
In that respect, my personal tip to you is to think about the whole detailing routine and process and break it down into useful packages based on steps that you think are absolutely complementary, like for example:
- The “wash package” in which you combine the prewash and wash stage – for paint and wheels. Most customers who are not as deep into car care as you and me won’t know about the differences between a prewash and a main (contact) wash – and they really, really don’t care about it. They just want their car “washed”. That’s why it makes absolutely sense to combine these two stages into a “wash package” and maybe list what’s included in it in the fine print or even better in pictures.
- The “deep clean package” in which you combine all decon steps like iron fallout removal, tar and tree sap removal, claying, or tyre cleaning. Once again, most customers won’t comprehend or care for what you do and what we call “decontamination”. Only the “initiated” like us will know and understand how important it is. However, customers will understand the term “deep clean” because they can comprehend that it goes beyond a regular wash. And when you then explain to them that their car’s paint will come back to live and feel really, really slick, it gets even better.
Let your imagination run for a while and I’m sure you’ll come up with more ideas to package your services.
8. The simplicity dilemma
I honestly don’t know it this really is a thing or if someone else already introduced a concept named the “simplicity dilemma”. I’m only aware that it is a thing in software design. What I mean by the “simplicity dilemma” in regards to professional car detailing and valeting services is what I already and roughly described in the last two paragraphs above.
You see, complexity in service and/or product offerings often is a result of working and doing business without a clear focus or strategy. Business owners and especially founders often suffer from a fear of losing out and are therefore constantly tweaking their offerings, creating an incredibly extensive and complicated list of services. That’s why a lot of them constantly feel the need to think about how to design price lists (as they suddenly have to include so many different things on it) or try to introduce packages.
The thing is: business owners don’t do this with bad intent. They mostly do it because they actually lost a customer or two to competitors who have different (or cheaper) offerings. If this happens, business owners who do not yet have a huge customer base face anger or fear, which often results in them introducing an additional offering because they think: “This will never happen to me again, I can offer that shit, too!” By doing that, they hope that they will have an offering for every possible scenario, every prospective customer. As I said, they do that out of good intent. They do it because they imagine that next time a customer walks in, they just have the perfect offering ready for him and that his or her decision will be easier.
But here’s the thing: What most business owners don’t realize is that by constantly increasing their service portfolio, they actually make the decision process for potential customers harder. You see, most of the times, customers don’t actually know what they want or need – especially not in car care and if they are not into detailing. So, by giving them a price or service list that contains 50 different packages or services, you just completely overwhelm them. Once again, think about restaurants. Think about a restaurant with a huge and extensive menu and then recall how hard it was for you to decide what to eat at that place. And then think of a street food place with just one single thing to eat – but that thing is actually really, really good.
And that’s what I mean by the simplicity dilemma: you may think that simplicity in your offerings is a bad thing as it means that you miss out on opportunities, when in fact simplicity is – or at the very least can be – a good thing because it drastically simplifies, speeds up and enlightens a potential customer’s decision-making process. They don’t have to think what to get from you if there is only one thing, or at least only a handful of clearly differentiated things.
So, when you design your price list and think about packaging your service offerings, always remember the “simplicity dilemma”. Don’t offer 5 or more different packages as that will inevitably overwhelm customers, making their decision-making process worse. Offer less but clearly distinguishable services which make it quick, easy and enjoyable for customers to make decisions.
9. Why you shouldn’t publicly ask others about pricing
I think and hope that by now, I should have given you enough reasons why I said in the beginning of this article that you shouldn’t publicly ask others about your pricing of detailing services. Here’s a quick summary of why I think that it’s not a good idea to ask about how much to charge for this or that in a detailing-related Facebook group:
- It makes you look lazy in the sense that you are not willing or able to invest in some hours of basic research on pricing theory or a simple competitive analysis in your area – and laziness is also something I think you don’t want to be associated with in a detailing business.
- It makes you look unprofessional and unexperienced, all of which you don’t want potential customers think about you. Business owners and founders should be able to come up with prices for their services on their own!
- It makes you look unsure. By asking how much you should charge for things, you give the impression that you are not necessarily asking such questions because you don’t have no clue at all what to charge, but because you are just simply not sure why you can’t close or lose customers and are now thinking of possible factors like your pricing. By looking unsure about your pricing, you could look unsure about everything else you do. And do you really think someone else will trust you with their pride and joy if they feel you are unsure about what you do?
- It is completely useless as nobody knows about your specific situation in which you are in. There are so many different factors that influence prices: your actual costs, your hourly rate, your win margin, being mobile or unit-based, the products you use, your experience level, … No one can and more importantly no one should tell you what the prices for your services are.
In some business areas and aspects, it is completely fine to get outside help and council: accounting, insurance, or IT. But there are some things in business life that you have to take responsibility for yourself. And pricing definitely is one of those things!
10. Final conclusion
Regarding all of the tips in this article, you can of course decide to not follow them all, pick and choose the ones that work for you, or you can also choose to ignore them all. You may say that based on my scientific university education in marketing I live in an ivory tower that has nothing to do with the real world. You can tell me that I am not a professional detailer and that I have no idea how it is out there. And you can come to the conclusion that I don’t have to make a living out of detailing and that it is therefore far easier for me to just say all those things when I don’t actually have to follow through on my own tips.
All of that is true. All of which I just told you about is rather “extreme” in the way that it is a theoretical ideal. However, there are more than enough examples in the business world that what I just told you actually can work. More importantly: if it works out, it works out big time.
Think about all the very successful professional detailers that you know of: Larry from AMMO NYC, Jim from White Details, Jason from Chicago Auto Pros, Micha who works with Sonax… what all of them have in common is that they were able to position their businesses based on positioning themselves as a person as knowledgeable and capable professionals. None of them positioned themselves based on what they actually do to the cars they work on, the products they work with, or based on the prices they charge. They found and worked really hard on something (e.g. a YouTube channel) to make themselves special and unique.
So, if you still want to compete with others based on the prices of your services, then please go ahead and do so. I won’t stop you. At the end of the day, there overall is probably still enough demand for car care, detailing and valeting services so that you actually can do that for a long time. But I highly doubt that you will ever be truly successful if all that differentiates you from the next guy is a cheaper price.
And that’s all I wanted to say with this article.