Detail Pricing Menus - Good or Bad?

DETAILING SOLUTIONS - Pricing Menu's, Good or bad?

If your detailing operation includes performing customer, or retail detailing, there are some important points to consider regarding pricing. Pricing out a detail is very subjective. The color combination (paint color and interior color), the age of the vehicle, the way the vehicle has been kept, and how spectacular the customer wants it to look are some key factors regarding pricing of detailing services. Information regarding these variables must be known in order to correctly price a detail to ensure profitability on each and every car. So, why do many shops use a pricing menu that does not allow for consideration of these variables?

Profit of goods vs. services
If goods or products are being sold such as a television, a car, tools, equipment, etc., there is a set price. The profit is based on the percentage over the cost that product is sold. The labor to sell that product remains virtually the same; therefore the profit on each sale is based solely on mark up. However, when a service is sold, such as detailing, there is labor time involved that varies from one job to the next. To realize a profit, the labor must be accurately calculated so that the service is completed in the allotted time. Exceeding the allotted time reduces profit.

Service departments often have a pricing menu for services such as oil changes, wheel alignments, brake jobs, tire rotations, and other services for which there is a fairly universal labor time from vehicle to vehicle, regardless of age or model. Menu pricing can work in these instances, but in detailing it is more difficult because of the many variables mentioned earlier. All vehicles will vary in what they need to look their absolute best. Some cars need 3 hours of labor, while some cars may need 5 or 6 hours of labor, or more. If your menu pricing is based on an average of 4 hours of labor, you will win some and you will lose some. Unfortunately, you may lose more than you think because some vehicles will need more labor intense operations, such as wet sanding or paint refinishing to repair a deep scratch. Many customers think that basic detailing services will fix all cosmetic problems including these. If problems are not addressed with the customer before the vehicle is brought in and priced out, this is a recipe for a dissatisfied customer and lower profits.

Evaluate every single car! Every vehicle should be evaluated before a price is given. There should be signs in the dealership that inform the customer that expert detailing is available. At no time however, should a price be given until a skilled member of the detail staff has viewed the vehicle. A 3-month-old silver coupe will generally not need the same service as a 3-year old black SUV that transports children every day. If menu pricing is used in this instance, the price may be too expensive for the owner of the 3-month-old silver coupe and the customer may simply decline because of the expense. The menu price may be too low for the work required to detail the 3 year old black SUV. In both scenarios the dealer has lost a profit opportunity. Win Win situation Most cars will fall into a range of labor time that the dealer deems as profitable. However, there must be fairness in pricing to allow the customer with a fairly clean vehicle to buy the service at an attractive price. This creates a scenario in which more people are buying the service, where they may not have if the service were only menu priced. The outcome should be win-win for everyone. When a customer inquires about detailing, the service writer can direct the customer to the detail department, or call the detail manager for an estimate. This is extremely important in a number of ways.

1. This gives the skilled detail technician a chance to introduce himself to the customer and let the customer feel confident that his car will be well taken care of.
2. The detail technician can ask the customer what type of "customized" service he wants or expects. For example, the customer may not want an engine cleaning or interior shampoo, but he may want the paint to look like a mirror finish.
3. The detail technician can look over the entire car (with the customer) to evaluate exactly what should be done to the vehicle. Many customers think a simple "wax job" will make their car look showroom new. Often, that is not the case.
4. The chances of miscommunication and a dissatisfied customer are eliminated because the detailer will point out things that cannot be repaired through standard detailing. He then has a chance to upsell the customer on such things as scratches that need wet sanding, heavy stain removal, odor elimination, and paint repairs.

Many detail shops have problems with customer satisfaction because the vehicles are not properly evaluated before work begins. Some people have been unhappy with what otherwise was a flawless detail, because a scratch was not removed. It turns out that the "scratch" was more of a "gouge" that needed refinishing. That could have been upsold as a paint repair. The shop would have grossed considerably more money, and the customer's expectations would have been met.

The best, and in my opinion, only way to price detailing services is to look at and carefully examine each and every car prior to booking the job. It is important to ask the customer what he wants, but is it equally important to tell him what the car needs to look its best. If your detail manager is a skilled estimator, he can quickly figure out labor time to make sure there is adequate profit in the job. On the other hand, if everything is based on a pricing menu, there will be many instances in which the labor (not the price) time must be increased to ensure a good job, thus reducing profit.

The best strategy in running a profitable retail detailing operation is to eliminate a standard pricing menu and determine the price for each job on an individual basis. This will ensure customer satisfaction and higher profits on each and every vehicle that is worked on.