A Fair Price for Good Service (Part I)

Paul Partyka |

CHICAGO — If you want to get a spirited debate going among coin laundry operators, there are always a few “hot-topic” buttons to push. Pricing is one of those buttons.We talked with a group of operators from across the country about their pricing philosophies. Most seemed to believe that pricing isn’t a crucial factor when it comes to attracting and retaining customers.HIGHER PRICES NOT A CONCERN“My intention was to have the highest prices and go up until the customer said ‘no,’” says Todd Fener, The Wash House, Ft. Lauderdale, Fla. “I knew that I was offering such a good value that I still had room to go higher with my pricing.”When Fener took over the four-year-old laundry, he immediately raised the prices of the busiest machines.“Price is not very significant to me or my customers. It’s like buying a soda for 75 cents or $1. The customer is not going to take a walk for that difference.”Fener says his laundry prices are 40 percent higher than some of his competition. “Some of them charge $3.50 for a 50-pound machine and 50 cents for a top loader. When I raised my prices, I saw an increase in revenue and no decrease in customers.”He raised prices this year, and plans one more hike this year.“We don’t compete on price. Everyone thinks we do. We compete on service and cleanliness. People would pay double the price for coin laundry services if the services were good enough. If we, the operators in this industry, can get past the idea of price being key, we would all be better off.”Fener says it’s not unusual for him to “fight” with operators about pricing practices. “I tell them every day that they should be raising prices. I say, ‘Tell me the last time you stopped going somewhere because someone raised their price?’”Price hikes are not publicized. “We don’t discuss price at all, but I let my staff know how to deal with people reacting to price hikes. If the customer brings [the hike] up, we remind them of all the things we offer, such as security, a 5,000-square-foot store and cold air conditioning.“If you put up a sign about new prices, you are putting the idea in their mind that you are expensive. That becomes the truth to them. It’s better, when needed, to remind them why they are in your laundry in the first place.”He strongly believes that any industry pricing problems are of the owners’ making, and adds that price should only be a concern to those who don’t offer value to customers.Fener hasn’t adjusted his drying prices lately, although he’s thought about a flat rate for drying. “There’s no reason you shouldn’t do this. You could get $1.25 or $1.50 for a dry.” His dryer prices are seven minutes, with a three-minute cool down, for 25 cents.He offers this bit of advice for fellow operators: “This isn’t a price-sensitive industry; the operators just perceive this to be true. I find that the typical owner has the wrong opinion of his market; the idea that the market is price conscious. Consumers want value, not price.”KEEP YOUR CUSTOMERS UPDATEDPricing is important to customers, says Veronica Sheckleton, Laundry Time Laundromat, Billings, Mon. “Comfort and safety are above pricing, but pricing is still important; here it’s maybe an ‘8’ on a scale of 1-10.”Sheckleton took over the store in 2006 and hasn’t raised prices. “We redid the floor, changed some things, but haven’t passed on the costs. We love our customers and want to show that to them. We think they show this back to us by patronizing us and passing the word about us to others. If we need to raise prices, we will, although we aren’t anticipating doing this.” If electricity goes up, this could lead to a price hike, she admits.At her store, top loaders are $1.50, 27-pound machines are $2.75 and 35-pound machines are $3.50. The dryers are two cycles, 25 cents for eight minutes or 10 minutes for a quarter. “These prices were set and we decided to stay with them. Things have been fine.”Sheckleton says her prices are comparable to nearby stores, although her store may be a quarter higher on some washers. “Overall, the pricing in this area may be a little below the industry average based on what I read in industry publications. I don’t know how some of the others are getting away with higher prices, unless it’s the fact that they are in bigger cities.”She believes in keeping the customers informed. “We let them know everything that we are doing. They are your regulars, your bread and butter. When we did the floors, we let them know far in advance so they could do their laundry earlier.”If prices did go up, she believes the customers would stick with them.She also realizes that there would be more commotion with a dryer price increase. “If anything happens to dryers, you hear about it right away. Do you want to take a bunch of wet clothes home? If your dryers aren’t efficient, you hear about it.”Since this is her first store, she doesn’t have a lot of experience dealing with pricing theories. “Part of the [pricing issue] might have to do with the fact that going to a laundry is somewhat personal. It’s almost like inviting someone into your home in a sense. [Customers] have a certain expectation of getting the laundry done, and that it shouldn’t cost much to do such a basic task. It’s their clothing, why should they be charged so much?”Will pricing practices change? “I think it depends on the environment you are in. We didn’t buy the store to become millionaires. I wouldn’t feel guilty about raising prices if we had to, but we would offer customers something extra just to let them know that we care.”To read Part II of this article, click here

About the author

Paul Partyka

American Coin-Op

Paul Partyka was editor of American Coin-Op from 1997 through May 2011.


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