How can we still make money in this economy?

I am sure we have all had a bit of trouble booking appointments and staying as busy as possible so far this year. With all the depressing stories about the economy, the housing and mortgage crisis, and the astronomical gas prices, many people as well as businesses are struggling. Let's face it, car washing and detailing is more of a luxury item for most consumers. Some customers may have tried doing these services themselves, while some have cut back, and others have just not done it at all. But can we still make money, and GOOD money in this economy???

Are you making every car perfect?
I know we all have egos and we all want to make every car look its very best. Some of us are very anal about perfection and strive to give every car a "show car" like look on every job. But we must realize that every customer is not asking for that kind of perfection. We get bogged down in "the relentless pursuit of perfection" (to steal a line from the Lexus Corporation), but we forget the fact the customer may not want, need, or be willing to pay for perfection...

I constantly tell students of mine that you will need your "A" game every once in a while for very demanding and discerning customers. They will ask for, and demand perfection. These jobs are where all your skill, knowledge, and equipment will be needed to accomplish that feat for that type of customer. However, the vast majorities of people are unwilling to pay for that type of perfection, or sadly, won't be able to fully notice perfection. So we kill ourselves on some cars and take way too much time to produce a vehicle that a customer will never truly appreciate. Sometimes the perfection that YOU want, and the price that you charge is not what the customer really wanted. They may have paid top dollar in the past, but now they may not be willing to pay that kind of money.

Or, on the flip side, how many times have we overworked on a car and did not get paid for what we put into it? Admit it; this happens to all of us sometimes. It didn't hurt so much when the phone rings off the hook and everybody was willing to pay a higher price for a near perfect detail. Maybe you took a little more time on some vehicles, but in the long run, you still made money. But now, it seems the phone isn't ringing as often and people may not be willing to pay a huge price for detailing services. Perfection is what a customer should get when they are willing to pay for it. We should never just give it to them. This is especially true now because costs keep going up to stay in business.

Economics 101
The cost of running a business never goes down. But it seems what we provide is the same regardless of the price being charged, and sometimes detailers never increase the price. Not raising prices in this economy is fine, but we must take a closer look at what we are providing for the price being charged.

In a tough economy, people are looking for bargains. They may ask you to "discount" the price if they feel the cost of the detail is too expensive. This is where the entire industry gets itself in trouble. We can't just discount prices because people ask for a discount. We all know this is a labor based business. If you were selling a product, maybe discounts can be an option, but you never want to discount labor. If you discount labor, you are still required to do the job to perfection and take the same amount of time doing it, but accept less money. Nobody likes to do that. This cheapens the service and believe it or not, makes you look less professional. Remember, costs have not gone DOWN and if people are asking you to take LESS money to do the same amount of work, you don't have to be Donald Trump, or Jim Cramer to figure out you will lose on these deals. It's a bad business decision in most cases.

So what can we do? How can we still satisfy and keep customers, cultivate more customers, and still make money in a bad economy?

Adapt and change
We need to change our philosophy a little bit. Some people that were willing to pay $250 or more for a detail, may no longer be willing to pay that much. Sure, there are some well-to-do people who will still pay a premium for a perfect car and we may still have some of those customers. However, many people may not have the money or may not want to spend that kind of money. You can still satisfy these customers. EASILY!!

You can give them just a little less perfection for a little less money. Maybe the vehicle really doesn't need a 4 step buff, or the engine does not need to be detailed, or the interior need not be dressed. If you skip a few minor and un-necessary steps, you can save a bunch of time and charge a little less money. The car will no doubt still look great, and the customer will save some money making this a win-win situation for BOTH parties. Of course you should explain to the customer these options and educate them that certain steps are not needed, which in turn will be saving him money.

This should not be about "discounting" the same service. There needs to be a compromise. When you can properly explain that most engines do not need to be cleaned and the interior will not need to be shined or dressed, and the paint will still look great with one less buffing step, you will save time and you can pass your time savings to him in the form of a cheaper price. But notice, you did not discount the same service.

Giving the customer some options as to how they can save some money will put them at ease and show them that you are willing to work with them. However, you are just not arbitrarily giving them a discount for the same labor. This can, and WILL work!

What's your labor rate?
Do you have a labor rate? Do you truly know how much money you are making on every car? A labor rate is essential in every business. There are certain costs involved in running a business and then you need to make money on top of the costs. This is truly the only way to determine a price and ensure you will still make money. What do you pay employees? What is the rent of your building? What are your utility charges? What are the gas prices currently? How far are you traveling to get to the jobsite? What type of equipment and products are you using to complete the job? What are your insurance costs? What are your vehicle payments? Are you leasing the equipment you are using? You must figure out your costs of doing business and then figure in how much money you need to charge per hour to cover expenses and still be profitable.

Give people what they want
As detailers we are a pretty stubborn bunch. We know what perfection looks like and we try to push that on customers regardless of what their expectations are. We try to sell a detail job for $300 which will turn the car into a near show piece because "we" want the car to look like that. But maybe the customer does not. Maybe he just wants a clean shiny car.

Ask your customers what THEY want. Ask what their concerns are. You can tell a lot from what you ask a customer and how he wants the car to look when it's completed. I have seen customers walk around their cars and tell me they thought the outside looked OK, but they were concerned about a spot on the seat. Meanwhile, there were scratches all over the car which they did not point out to me. Did they not care or did they not even notice them? I knew I could get them all out, but when they said they did not want to pay a ton of money for the detail, I let this go. I gave them a price for what they wanted, making sure I was still going to make money. When these cars were completed, I knew they were not perfect but the customers were still more than satisfied. That's the bottom line. Why should we give them perfection when they are not paying for it, or they just don't care that much!

We can still make money pricing vehicles this way. I do it all the time. If I know it will take me 3 hours or less to get a car to really good, but maybe not perfect, I charge accordingly and still make great money. Yes, I could get the car to look better, but they are not paying for that and it doesn't bother me...anymore! I used to try to make every car look spectacular, but I quickly figured out you will lose money that way and people wont appreciate perfection if they are not paying for it. If you are still making the same money per hour, and the customer is happy with a slightly lesser service, just give it to him and let everyone walk away happy.

This brings me to a topic that is always a hot subject. The Express detail!

What is an express detail?
Many people over the years have talked about express detailing (we don't even have to call it that). Many detailers and especially carwashes perform variations of express detailing and are extremely successful doing it. The terminology can be whatever you and your customer agree to. Nothing has to be set in stone. What does the customer want? Can a minimal service make the car look good? That the key question. If you know that a service done quickly with minimal time spent on the vehicle can still make it look good, then go for it. This is still a great way to make money and for customers to save some cash.

But we have to get over the fact that the vehicle may not be perfect when the job is done. Who cares? If the customer likes it, that's all that matters. It's something that all detailers can provide very easily. It can be a great maintenance service in between full service details. With the economy being as it is, many of your customers will not be doing as many full service details. But having a service that is more maintenance oriented and cheaper, will keep them coming in and it will keep you profitable.

What services to provide in an "express"?
Car washes have been doing express detailing for a long time. Many are hugely successful at it. I talk to many car wash owners who only do express detailing and do not even get involved in full service details. They get these express types of details done quickly and within a certain time frame to make sure money is being made and they are not just staying "busy". Customers are satisfied and they keep coming back. When you look at the price charged, compared to the time spent on the car, the hourly labor rate can be, and should be, as high as a full service detail if done correctly.

But what can be provided, and more importantly, not provided, in an express detail? The term "express" actually bugs me a little bit. Its means super fast which sometimes is not a reality, and it infers "cheap" which we do not want to be. Now to combine the word "express" and the word "detail" as a terminology, its just does not seems to work for me. I would vote and push for a different terminology for this type of service, especially for detailers. Full serve car washes may be able to get away with this term a little easier, as they have the advantage of a tunnel wash and the labor force to provide all the other services of a full serve car wash.

Obviously you need to be quick and that will mean the vehicle most likely will not be perfect. But perfection is not what we are looking for. Will the interior be perfect? Probably not. You will most likely not be scrubbing it and shampooing everything. The exterior will get maybe a light orbital one-step buff. Maybe you can quickly clay it, maybe not. Perhaps the wheels can't be perfectly cleaned, but most of the brake dust will be gone. Most likely there will be still be imperfections in the paint, but it will still be clean and shiny. You can get a car to look "clean" but maybe not "detailed" in a short amount of time, but still make a customer happy. And...still make money!

There can be so many ways of performing this service, that I will leave it at that and let you decide what to provide and how much time it should take. There really is no right or wrong answer as to what to provide. It's just what the customer will accept for the money you will charge.

Looking at this from the standpoint of a carwash, they already have the advantage because the car is being washed in the tunnel with minimal labor and time. From a detailer standpoint, it's a bit more challenging. The wash will still have to be quick. This means not as much time spent on wheels, tar, bugs, etc. Clean, not perfect is the goal. Then you need to figure out how to buff or wax the car, what to do on the inside and how to make it look really good in a short amount of time

Now for a mobile detailer to be profitable on this type of service, you will have to inform a customer that you can't travel to do just one vehicle. That will lose you money after all the expenses and travel time. So make it a policy to do at least 2 or 3 vehicles on location for that type of service.

The bottom line is that detailing can still be profitable even if you are not performing show car details on every single car. We can, and must adapt. Discounts will get you in trouble and lose you money. Adapting and finding new ways to provide innovative services to satisfy customers and still make money will keep you in business and profitable in the long run.

With that, I would like to invite you guys to participate and help bandy about different terms and services that can be provides for these so called "express" types of details. They do have a place and it can be win-win for everybody.