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Be More Than Just a Launderer

Howard Scott |

In many cities and towns across America, especially along the East Coast, CVS is a dominant store. There are more than 7,000 locations. What is the secret of its success?The company services so many needs that it’s impossible not to become a customer. Need milk, go to CVS. Need a greeting card, go to CVS. If you’re out of hot pepper spice, it’s CVS. If you need a gift, CVS has something. If a photo needs to be enlarged, CVS will do it. From its roots as a pharmacy in 1968, it has repackaged its position in the marketplace as an all-purpose provider.The connection between CVS’ success and your Laundromat is this: You must stop thinking of yourself as just a launderer. Rather, you are a full-purpose, clothes-maintenance provider. In so doing, you’ll become invaluable to your customer base.Do wash, dry and fold for those customers with time constraints. Offer drycleaning for those who don’t want to make two stops. Offer a specialized stain-removal service. Provide shoe repair because there is no other shoe-repair operation in the area. Do alterations by having a seamstress come in for one afternoon and one evening a week. By providing these services, you are taking care of all your customers’ clothes-maintenance needs.CRUNCHING NUMBERSWhy don’t more Laundromats position themselves as clothes-maintenance providers? Last week, on a business trip to Florida, I visited five stores and only one offered basic drycleaning service, let alone the other offerings. I asked people from the other stores why they didn’t offer, at bare minimum, this basic service. Basically, their collective answer was it is too much trouble. It wasn’t worth it. One operator said, “The problem is, the Laundromat customer will only bring in one garment at a time to be drycleaned, and there’s not enough money in it.” These operators don’t consider themselves to be clothes-maintenance providers.Let’s take a closer look at the numbers. Maybe a sweater costing $5.50 and netting the Laundromat $2.50 doesn’t look too impressive. However, when the family, during the course of a year, brings in nine garments to be drycleaned, has two shoes repaired, does three alteration jobs, and has one stain removed from a favorite dress, as well as bringing in every-other-week laundry, the store brings in 20 percent more than it would have if only laundry were offered.Moreover, the customer grows to depend on you for all of his/her clothes-maintenance needs. The path from the customer’s residence to your door becomes well worn. And because they rely on you so much, your name will be stamped on their brain. Whenever someone mentions clothes-maintenance problems, they will blurt out: “Did you ever go to the Acme Laundromat on Cummings Avenue? I couldn’t do without them.” Not a bad testimonial.TAKING IT A STEP FURTHERYou might even want to go beyond dealing with clothes maintenance. How about setting up two computers and offering Internet service? Install a machine and offer fax/copy service. Offer knife-sharpening service. Is there a need for some other type of service in your neighborhood? How about passport photos?Most of these additional services require little or minimal space, entail small investment, involve no additional staffing, and necessitate minimal training. For example, if you were to offer shoe repair, you would only have to put up a sign and train your staffers to take orders. If you were to offer Internet access, you might need to buy two computers, two chairs and two tables — which might be a $2,500 outlay. If you set a reasonable usage charge, you should have no trouble recovering your investment in a short period of time.Of course, some of these services are market-sensitive. If there is an Internet cafe next door, forget computers. But if there is no Internet availability in the area, and the library has limited hours, you might invest. Have some of your customers asked for this service? It’s important to know the marketplace. Even in lower-income areas, Internet use might be needed.MAKING IT WORKThe key to profitability in all extra services is to offer the service initially at a modest price, iron out the kinks, then figure out a way to make it more profitable. For example, establish a relationship with a nearby drycleaner. For every $3 order, you make $1 (33 percent). That’s fine for a short period of time, but this arrangement can be improved upon. Offer to deliver the orders to the drycleaner, rather than having them picked up. Improve your margin to 40 percent. Pay in advance every month an approximation of monthly business, and up the margin to 43 percent. Agree to do an established volume (once your service has taken off) and raise the margin to 47 percent. Agree to bring each week’s load during the drycleaner’s slowest time and you might be able to boost that percentage again. Demanding a kickback on annual business could get you a better cut. Never stop trying to increase profit. Just like the pricing of supplies, there is no bottom; so, with the margin of profit, there is no upper limit.Of course, you must still sell these services to your customers. As a starter, speak with them (they’re captive in your laundry), asking how they handle each need. Assess the demand. Figure out a way to wrest their business away from their current provider.Some might be influenced by convenience. But to the family who uses a drycleaner regularly, you might have to offer better prices. You might do this by offering high-use customers a 20% discount off monthly drycleaning. To push your alteration service, provide a 50%-off coupon for the first job. To introduce pillow cleaning and fluffing, have an in-house demonstration. Cross-market by offering bargains for two or three services in a month. Keep working at these plans.Perception is reality. If you think of yourself as a clothes-maintenance provider, rather than a launderer, the world of opportunity opens up. Become the CVS of the clothes-maintenance world. 

About the author

Howard Scott

H&R Block

Industry Writer, Drycleaning Consultant, and H&R Block Tax Preparer

Howard Scott is a longtime industry writer and drycleaning consultant, and an H&R Block tax preparer specializing in small businesses. He welcomes questions and comments, and can be reached by writing Howard Scott, Dancing Hill, Pembroke, MA 02359.

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