Good Operators Won't Just Surrender to Cost Increases

Courtesy of Coin Laundry News

 

Whether a coin or card operated laundry is -making money or not, its costs continue to rise. Natural gas is going up and water is rising along with the -electrical power to run things. When did you last hear of -supplies or the cost for insurance or rents -going down? Every expense seems to be going up and up even in this troubled economy.

Laundry operators have limited choices in the face of rising expenses. They can look at -raising vend prices, examine cutting expenses, or look for effective ways of bringing in more -business.

Of course, there are always small -cost s-avings that can be made, but it doesn’t look as though that can be much. One can cut back on the temperature of the water coming from the heaters and cut back also on the wash and drying times in some equipment, but in the final analysis, more business, or higher vend prices will be a better answer.

Many laundry owners are reluctant to raise their vend prices because doing so might anger and alienate their clientele. In other words, they’re afraid customers will leave their laundry and go elsewhere.

Let’s say an operator doing taxes discovers that his laundry’s income for last year fell $1,500. But, the cash flow was the same. He may consider raising vend prices up to re-adjust income. In this case, the operator needs to bring vend price up by less than five -dollars a day. Does that mean raising all prices? If so, how far can he raise vend charges without -alienating his laundry’s clientele?

With ten front load washers doing five turns per day, if they are each raised a quarter, it brings a coin laundry nearly $4,500 per year, more than enough to make up for the loss. There is far less -resistance to a front load washer increase of a quarter than there is to rasing top loaders by a quarter. By the way, that reluctance to accept higher washer and dryer vend prices is more imagined than real.

Now let’s assume an operator raises everything by a quarter, plus shortens drying time. In this imagined laundry of twenty tops and ten fronts, an increase of a quarter per machine will amount to more than $12,000 each year. That’s enough to cover the rising costs, at least for this period of time.

Every other type of business gets price increases as they need them, why not a coin or card operated laundry?

The best way to increase the cash flow of a laundry is bringing in more business and examining increases in vending prices to go along with various advertising and -promotional events.

There may be as many ways to improve overall volume as there are laundries that need to improve, and there are variables on each method or system. The laundry owner’s imagination appears to be the only limit.

There are all kinds of promotions and -gimmicks that have worked, but the staff of the News is only going to recommend those ideas with which we have some experience and know work. We’ve seen them and have used many of these techniques and systems in the past ourselves and are able to assure our readers of their viability.

Each of the following promotions works in a coin laundry and has served to increase overall dollar volume. They appear to give the laundry customer something for nothing, but actually are giving them advantage for being a long term, steady customer.

Anxious to increase business in his unattended laundry, a new owner decided to set up a promotion system giving his customers chances to draw for prizes. Each month they’d enter their name in a box. He spent about $100 per month for prizes. He broke even the first month then noticed that business volume was climbing. He kept the laundry clean and kept equipment in apple pie order. It all helped.

Because his clientele became interested more and more as the weeks went by, they came in more often and brought their friends who were doing business elsewhere. In less than 6 months the laundry’s income was up by over a thousand a month.

To encourage customers to switch from top loads to front load washers, one operator re-invented the Wash Club. In this club, laundry users get single credit for top loads, double credit for double loads and triple credit for the triple load washers. Since they could see that they saved money going up the line in size, it got them thinking about the bargain offered by the front loads. That part of the program saved the owner on utilities as his front loads use far less water and electricity.

In a wash club they received the value for one regular wash for each wash done. It takes ten washes to win that free wash. By the way there were no cash prizes. The attendants started the washer for customers who won.

There were also drawing prizes quarterly for the club members. The customers felt they were getting something for FREE!

This program took more than six months to really develop, and the owner used the club for six years. When they quit the club it was with the announcement that the club was stopped to avoid having to raise prices. Over the six year run of the wash club, the laundry’s volume had increased more than double. They had raised prices once and were seriously -debating about doing it again.

A Wash Club program is simple for l-aundry customers to grasp. They get excited about it, and it’s cheap to run. The expense is giving out a free wash every tenth wash and paying to print the cards. It really works well in a coin laundry that has attendants. One owner, operator of a full service coin laundry that had drop off cleaning and fluff & fold tried an interesting variation of Wash Club. His idea was to build up the fluff & fold and the dry cleaning by using the prize drawings to introduce those services to his clientele.

His attendants paid the wash for those who won, but he offered many more prizes.  These included discounts on cleaning, and free wash & dry for the winners as well. His “gimmick” was: the size of the free fluff and fold was smaller than typical orders his attendants took in. This was to encourage the customers who normally used regular (self service) laundry machines to instead use the laundry’s services to get their wash done.

When they tried it they liked having it done for them, and he converted quite a few to continue to bring in fluff & fold orders. The discounts on cleaning were low enough that the business still made money, and it made his -regular customers aware of dry cleaning being available at the laundry. A surprising number were taking cleaning elsewhere.-

There are many ways to increase -dollar -volume in laundries and the addition of fluff and fold may be the most effective way of all. It gives a laundry an employee there who can watch over the safety of the business. Attendants being there brings increases in laundry volume, plus they earn salary by doing the customer’s bundles. It usually takes a few months to build up that part of the -business, but once going, it’s very profitable.