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When a Competing Store Closes, Be Aggressive

Howard Scott |

A competitor is going out of business next week. Its downfall started six months ago when the owner started having trouble with the water heater and decided not to replace it. The owner of a nearby laundry recently heard about the closing through the grapevine.“Those customers will come to me because they have been using both of us all along,” he says.What’s wrong with this scenario?PUT IN THE EFFORTThe owner isn’t aggressively going after the business. He should have found out about the closing several months ago and evolved strategies to win the lion’s share of displaced volume. Plus, it’s nonsensical to think the competitor’s customers are his customers. Most likely, the patrons of the closing laundry don’t know where another laundry is. The day they discover the old place closed, they will have to find a new laundry.So what can you do when a competitor is going out of business or sells to another owner? First, be out there. Drive around, speak to people, and make calls.It might have been wise if the owner had cultivated friends in the neighboring areas who would call him when something was going on in the local economy. If he had learned that the competitor was having trouble with the water heater, he could have visited the premises and observed that not all of the washers were up and running. That would have told him that the competitor was headed out of business. This would be the call to action.Now that the store is about to close, it is almost too late. Yes, the laundry will pick up some business. But if there are four laundries in the area, each will probably get a portion of the business.PLAN OF ACTIONWhen the owner found out about the water heater, he should have taken out a series of three newspaper ads in local newspapers. The ads would appear for three consecutive weeks. Each ad would say, “Wash your clothes with both hot and cold water.” The body of the text would include three brief bullets of why hot water is key to the wash process. In the background, would be a photo of one of your best washers. The point of these ads is to let people know that the local laundry isn’t doing the job effectively.Tough, bold ads that focus on the competitor’s weakness would win some business and put the competitor on notice that he is being watched. Possibly, the business would have closed sooner if the ads led to a decline in volume.When the competitor closes, the owner should remove himself from his business for two weeks and devote his full energy to winning new accounts. Start off with another series of three local newspaper ads. These ads announce that you are the only high-quality laundry in the area. Give three or four reasons in brief, bullet format such as:• All machines less than five years old• Convenient early and late hours• Fully attended at all timesThis is the perfect time for some type of free drop-off service offer. You could designate two days, perhaps Tuesday and Thursday. Customers bring in their clothing, you process the order, and you might even consider dropping their clothes off at their homes and apartments. They might be required to have a check ready, or even better, you could set up some type of monthly account. The only tricky issue is agreeing on a safe place to leave the order. Maybe you could be given a key to leave the  order inside the foyer, or maybe a stay-at-home neighbor would accept delivery. One way or another, you will come up with a solution.Most likely, it will be your job to do the delivering. But what better way to spend your time than to win 30, 40, or more, steady customers from a market where you did not have access. Driving around, you may even spot new marketing opportunities.In the same style of your ads, print up 2,000 or 3,000 circulars. Post them onto every bulletin board around town, including the bank, the food co-op, and the town hall. Hang them in apartment building foyers. When possible, slip them under doors. Hand them out to downtown passers-by, asking if they ever use a Laundromat.You can even take it a bit further. Make calls from the phone book. Using your knowledge of apartment complexes in town and matching them up to addresses will qualify most prospects. Yes, the do-not-call law is in effect, but you are not selling anything. You are simply providing information that might be helpful to the listener. Sample this call: “Did you know that the Wilson Laundromat is closed, and that we, Acme, in the next town, provide free drop-off service deliveries?  Simply drop off your laundry and your clothes will be returned all clean in two or three days. No hassle. No paperwork. No waiting. No extra fees. No on-the-spot payment. No problems.”Make 30 calls daily for a month. If you get an answering machine, deliver the above information, but be brief. Consider using something like this: “Acme Laundromat here. Since your area Laundromat has closed, we are offering free delivery for all drop-off service work. Visit our friendly laundry on Trebble Street in Bunkersville and ask us about our service.”Three sentences, that’s it. No long harangue. Remember, you’re not selling something, you’re conveying information. If you have good luck for a month, continue your phone calling.Do what’s mentioned in this column and you will win your share of new business. Expect the business to simply roll in, and more than likely, you’ll be disappointed. 

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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