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It's All in the Cards

Paul Partyka |

MACON, Ga. — Austin Sapp has worn many business hats. However, it was his short-term stint as a “detective” nine years ago that introduced him to the coin laundry industry. “I have owned C-stores, operated car washes and mini-storage facilities, and was a car wash distributor,” says Sapp. “The change hoppers at one of my car washes were always empty. I tried to figure out why, so I sat around to watch the people get change. I followed some of these people and they were going to the laundry down the road. The store was poorly run.“Two or three days later, I found the owner and asked him to sell it to me. I had decided that I was going to build a new laundry and wanted to eliminate the competition. We couldn’t agree on a sale price, and he told me, ‘there ain’t enough room for the two of us in town.’ I tried three more times to buy, but he finally told me ‘no.’ Two days later, I was digging a foundation; six months after that I opened the laundry; he closed his store. We later became friends.”GOING BIGSapp operates two stores in Georgia. The first store, a 1,600-square-foot, mom-and-pop operation, opened about nine years ago. His new store, Splash & Dash, a 6,000-square-foot card store, opened in Macon last September. Sapp learned a lot from his first store.“I saw how four or five customers could take all the machines. I wanted to improve on volume.”Sapp began an extensive research project. He went to several states to look at coin laundries and realized that “large” was the way to go. “I spent about a year researching, studying the market. The original plan was to have about a 4,000-square-foot store. I added a playroom, and adding this made me go bigger. I never thought it would be 6,000 square feet. But I have no regrets.”The store is in a high-rental, low-income area with a traffic count of about 67,000 cars (three-mile radius), he says.Creating a layout was difficult. “We had about 15 different floor plans and changed them week to week. We moved things six to eight inches at a time. My distributor was very patient.” Sapp’s distributor is Richard Davis of Star Distributing, based in Atlanta.Highlights of the new card-operated laundry include plenty of large front loaders (five 80-pound machines, six 60-pound machines and eight 40-pound machines), a 300-square-foot playroom, a game room, extra services (wash, dry, and fold and drycleaning) and exquisite landscaping.“The only regret that I have about the whole thing is that I should have made the playroom larger.” He plans on correcting this “regret” with future stores.CARD-PROMOTION CONNECTIONDuring his research he spent a great deal of time talking to the end-users: the customers. “Before I started my research, I thought people wouldn’t adapt to a card store. I had a phobia about it. Now every store I build will have cards. I asked people, ‘Do you mind if you leave money on the card?’ Nine out of 10 say ‘no.’ I was surprised. I asked, ‘How friendly are cards? They said it was easy, and the process was easier than putting in quarters.’”Sapp uses debit cards at Splash & Dash. The “float” (the money left unspent on the cards) helped convince Sapp that cards were the way to go.There have been no problems with the cards, Sapp says, and the “technology” plays an integral role with his promotions.“When I opened, I went with free dry. I wanted ‘shock and awe,’ people saying, ‘this idiot is giving free dry.’ The people were knocking the door down. I used it for about two months.”The best advertising, he says, was renting a billboard for six months on his main competitor’s property. The billboard highlighted his promotions, and was updated when the promotions changed.After free drying, it was the Wash to Win program. Every time a customer uses a washer they accumulate points. When they get 200 points, they get money back on the card; generally a 10 percent payback. The next time the customer uses a machine, it uses the Wash to Win money first. The Wash to Win promotion is ongoing.“When I dropped free dry, I went with Double your Cash. If you put $10 on your card, I match it. If you put on $40, I match it. I did this for three months — first three times a week, then twice a week and then once a week. I did it because I wanted to dry up the market. This created a tremendous amount of money on people’s cards and you can only spend it at my store. People were putting $50 or $75 on their cards and getting it matched. Do you know how long it takes to spend that kind of money? It creates loyalty.”Sapp says this promotion even forced two of his competitors into asking him to buy their stores. “It’s impossible to battle against a store like mine. It’s hard to promote with mechanical equipment and do things such as price changes.”The cards help in another manner. “What I also do is register all customers. All the cards have numbers; I don’t want a customer to just be a number. There is a form they fill out when they get a new card. We’ll even help them fill it out. They list their name, address, phone number, e-mail, etc. I even ask what their favorite radio and television stations are and what laundry they attended before they came here. I will call on those radio and TV stations when I start promoting more. Every bit of information is logged into the database, helping me to formulate a management strategy.”Using cards also helps Sapp track what time the equipment was used and how much money was spent.“I believe, even though they are used in different ways, that cards are still in the infant stage. I am more pumped up about cards now than when I was building the store. Card stores will dominate in the future.“Smart cards are expensive; I use the magnetic stripe card because it costs less. My card costs 80 cents and I charge $1. No complaints. With the cards, I know everything about my customers.”RIPE FOR THE TAKING?Sapp says his decisions reflect somewhat on the fact that the coin laundry industry is lacking in many ways.“I like to promote. The industry doesn’t do this. It doesn’t give people anything. My philosophy is ‘What will make me stand out like a sore thumb to the entire industry?’ The answer: Build a Taj Mahal and give people something back. Every month there will be two major promotions. The Wash to Win is ongoing and is usually tied in with another major promotion.”However, while having an attractive store is good, he stresses that proper management is still the No. 1 key to success.Getting heavily involved in the laundry industry was more than just following the people who were emptying his changers.“I’m 45 now and a year and a half ago was thinking of semi-retirement. I leased my other businesses and spent some time with the wife and kids in Florida, did a lot of fishing and got bored. I felt guilty doing this at 43, at the top of my business game. I wanted to put some more on my kids’ plate. That’s the truth.”Sapp focused on the laundry industry because he believes it doesn’t have enough serious players.“In general, in the Southeast a majority of the owners are mom-and-pop owners with leased facilities that get run down. This was a wide-open market. My car wash competitors won’t enter the laundry business. They told me that they don’t want to stick a million bucks into the ‘hood.’ That’s what I wanted to hear!”LOOKING FOR IMPROVEMENT“In the first three months of a business, I live in that business and cater to that store like I do to my children. All of my employees know that I will sweep and clean bathrooms. That sets the tone, that’s exactly what I want.“I was shocked at how appreciative people are about my store. I’ve received many phone calls from moms and dads about the playroom. I’ve even gotten calls about the landscaping.”Sapp plans on building 10 or 15 more laundries. He sees an evolving industry.“I think there are still a lot of people skeptical about cards. But there will be a point when people won’t have a choice because a competitor will force your hand. You can’t fight technology. It’s here to stay. Get on the bandwagon or go home.”In the next five years or so, Sapp believes there will be fewer, but larger, laundries.Finding good employees will continue to be a challenge, he adds, and he expects more “serious” players to find their way to the world of washing and drying.Sapp certainly doesn’t intend to stand pat. “We’ll do something different with the future stores. We’ll upsize the play areas and utilize new technology. There’s always room for improvement no matter how good something is.“This business needs major improvement. People need to be convinced that you should build a nice mousetrap and give them a store that you would want your mom and dad to go into.”If the industry does see some “new players,” Sapp plans to be ready. “Someone will buck you for No. 1. If you are going to be No. 1, you better get up first every morning and go to bed last every night and have eyes in the back of your head.” 

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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