GLENDALE, Ariz. — Correctly pricing your laundromat’s washers and dryers can have big implications for your success.
If you price them too low, you’ll have lower margins with too much volume, causing your equipment wear out faster. If you price too high, you may not get enough volume to support your mat. So what’s the best strategy?
I began offering some pricing pointers in Part 1. Let’s continue:
SOME PRICING POINTERS (CONTINUED)
Shift to Dollar Coins or Tokens — Inflation has worn down the value of a quarter to less than what a nickel was worth only a few decades ago. Do you really want customers inserting nearly a roll of quarters in your big washers? If your smallest washers are still only $3, you can raise the price to $4. Some people may gripe but most will accept it.
If you fear this, then try converting your big machines to take dollar coins, and leave the quarters for your small ones. But a “dollar coin only” strategy is simpler and easier overall.
Or you can offset the increase by providing an extra minute on your dryers. A few months later, you can bring the dryer time back down.
What’s interesting about dollar coins is that customers feel like they are spending less money because they are inserting one-quarter the number of coins.
The same is true for tokens, and a token dispenser can accept credit cards if needed.
The Cold Water Special — Much of the cost of a wash cycle involves heating the water. Not everyone needs or wants to use hot/warm water. Assuming you have washers that can be programmed, you could advertise your smallest washers for a “lead in price” for cold water. You don’t have to lowball your bigger machines because a nice, low price to get them in the door is the goal and the best way to do that is with your smallest machines.
Advertise Those Specials! — Once you offer a great deal to reel in business, shout it from the treetops and multiply the effect! Put up a nice, big window sign, or hang a banner outside, along with an interior sign or two. Again, don’t forget the internet.
‘Push’ the Back of the Store — See if you can promote the machines found in the rear of your mat. If you’re not sure which group of washers to promote (aside from the ones with the fewest turns per day), choose the ones in the back.
Big retailers do this. For example, just about every major drug store chain puts its pharmacies in the rear, knowing that anyone with a prescription will have to pass all the other aisles and other things being sold.
So if your promo machines are in the rear, customers will have to pass the more profitable machines on their way, and some will stop to use them.
Full-Cycle Drying — This is charging a price for, say, a half-hour of drying. At cycle’s end, the laundry should be ready. A pro is the customer pays and leaves the dryer until the end, preventing a lot of energy-wasting door openings. But there are cons: When a dryer is overloaded, the laundry may not dry in time; if it’s underloaded, this may cause other customers to wait unnecessarily.
WHEN FACING NEW COMPETITION
There are basically two strategies when a new competitor opens up nearby, and I tried both.
Some believe you should do nothing and just maintain your pricing. I don’t like this method because I saw my sales steadily drop over a period of months and eventually reach an unacceptable level. It’s especially true if the new mat is undercutting you in price, which many do.
If you have an established mat, you do have strong points. If your customers are happy with your mat, they are less likely to want to change their habits. This is why it’s so important to keep your mat clean and up to date.
The other strategy is to drop your prices, either with sales on certain group of machines, sales on your entire inventory, or the dreaded “free dry.”
Free Dry — This often triggers a domino effect for your other competitors to match it, causing an ugly price war won by no one. Entire laundromat markets have been screwed up by free dry, so I’m basically against it. And once you offer free dry, if you take it away, customers will not like it.
But I am in favor of free dry in only two circumstances:
- As a temporary grand-opening status for a month or six weeks just to attract attention and get customers in the door. Your competitors will hate your free-dry offer but may not engage in matching you if they understand your position is only temporary.
- If you operate a card store that allows the customer to build dryer credits on their card when they purchase washer cycles. Customers are not stupid, however, and they quickly figure out they’re spending the same amount of money overall as in non-free-dry mats.
Check back Thursday for the conclusion!
Miss Part 1? You can read it HERE.
Have a question or comment? E-mail our editor Bruce Beggs at [email protected].