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May 15, 2012
Appreciating Your Customers: How to Have a Successful Grand Reopening

OMAHA, Neb. — Great opportunity for unveiling fresh look at your store

OMAHA, Neb. — Have you recently upgraded your washers or dryers, changed your services or finished a retool? If the answer is yes, a grand reopening should be in your future.

A grand reopening is a great opportunity for your current and new customers to get a fresh look at your store. Although a small financial investment is required, the return can be significant for both you and your customers.

Timing

The event should be held to celebrate new machines in your store. If you’ve recently replaced all of your washers, for example, an event to highlight this shows customers your commitment to both the store and their business.

To really show off your store, make sure everything is in place. When hosting a grand reopening, you should take the time to paint the walls, wax the floor, replace stained ceiling tiles, and add new signage. Although not all of those fixes may be necessary, an event is a great time to evaluate the condition of the store. Customers assume you have functioning equipment, but the difference between your store and the one down the street lies in the details.

Now that you know what qualifies as an appropriate time to have a grand reopening, when should you actually host the event?

Although weekends are most likely your busiest period of the week, they still provide the best time for your event. More people can attend then than during the week, and it shows that you, as an owner, want to thank them for their business during a convenient time.

Market the Event

To draw the most traffic to your event, a little marketing is needed. Direct-mail pieces, flyers, or door hangers are always good options.

Also, consider community newspapers and local radio stations as a means to reach clientele.

Social media sites are another place to publicize your event. If your store currently has Facebook, Twitter or other social media accounts, make sure to promote the event through these channels. You can also offer an incentive to customers who check in to your event on Facebook Places or Foursquare.

Word-of-mouth advertising is the most flattering form of marketing. Make sure to tell current customers about the event and its highlights. They can tell their friends and family, who could wind up using your store’s services.

Activities and Promotions

If you had a grand opening, many of the events that happen during the grand reopening will be similar. When it comes to the activities offered, make sure you’re aware of your demographics.

An idea that I’ve seen work extremely well in the past is reaching out to a local radio station that resonates with your target consumer. If you have a significant Hispanic population, for example, the Hispanic radio station may be willing to broadcast from your store. The presence of the radio station will attract your primary target audience.

It’s important to plan family events as those customers bring in the biggest loads. For example, project a movie on the side of the building and create a drive-in atmosphere. This shows that you’re in tune with their needs.

Offering food at your event is essential. It can be something as simple as having a barbecue with hot dogs and hamburgers, which shows your customers that you appreciate their business—building loyalty in the process.

Promotions going on during your event draw new customers into the store. They should coincide with the machines you just replaced. For example, if you just had all new dryers installed, you may want to offer free dry time. If you’ve replaced washers, offer half off certain wash cycles. Either way, provide an incentive for customers to use the machines and become familiar with them.

You may also want to offer some sort of giveaway—especially if it ties into your new machines. For example, if you recently replaced your top loaders with front loaders, you may offer your customers a sample of high-efficiency soap. This will help them become familiar with your product, keeping them coming back regularly.

Making the Impact Last

During your event, it’s important to connect with your attendees and build a relationship that makes them become repeat customers.

In order to make a new customer a regular, you should make sure to promote your weekly specials at the event. If you offer dollar-off washes on Tuesdays and Thursdays, let your attendees know that through handouts and by word of mouth. Make sure to print materials in both English and the language spoken by most of your customers. This ensures that customers will not only understand your message, but it will help them feel welcomed at your store.

Store owners should aim for a 25-30% increase in customers following the event. Have a sign-up sheet for promotions at your event to help keep customers coming back. This can be hard to measure, but it’s not impossible.

Tapping Your Distributor for Help

If having an event at your store seems overwhelming, or if you just would like extra guidance, contact your distributor. They have been a part of events like this in the past and can offer best practices that they have found to be successful in your area.

On-Going Customer Marketing

Even after the grand reopening, you must continue to attract new customers and retain the ones you have. Try to connect with your customers every month by offering a promotion to show that you value their business.

With proper planning and execution, a grand reopening is the perfect opportunity to show how your laundry fits into the community and can help you grow your business in the process.

April 17, 2012
Expanding Your Business: How to Become a Multi-Store Owner

PITTSBURGH — Look at everything from location to equipment mix and store naming

PITTSBURGH — Congratulations, you’re a successful laundry owner. You have a great location, a solid customer base and well-maintained machines—but now what? It may be time to look at expanding your business and opening a second store.

By now, you know the basics of running a laundry business. Unfortunately, a complete replication of your first store may not make for a successful second store. It is important to go back to the basics and look at everything from location to equipment mix and store naming.

LOCATION

Here’s a challenge for you: don’t just find a location as good as your first one, find one better. Understand that this is no easy task and will require lots of time and research.

The first thing you should consider when looking for a location is how far away from your original store your second one should be. Carve out an area of no more than an eight-mile radius from your original store and use that as your market. Having your stores in close proximity—no more than 45 minutes from each other—allows you to easily move between stores. Also, if your stores are all close together, it can be a great way to corner the market from your competition.

Now it’s time to talk with your distributor. Since you already have a successful store, you most likely are already working with an experienced distributor. Make sure to continue to cultivate that relationship, as it can be a great benefit when looking to purchase an existing store or build a new store.

Distributors typically have information on existing Laundromats coming up for sale and will approach you to judge your interest. The distributor can easily identify whether this laundry is a potential good investment, knowing the performance and location of the store.

Rehabbing a store has its pros and cons, but can make a great second store if proper due diligence is done. A benefit to choosing a store to rehab is that utility company charges and codes are more likely to be grandfathered in, meaning you will not have to deal with the hassle of obtaining multiple permits from the city and retooling plumbing or electricity to meet building codes. This varies between municipalities, so make sure to ask your distributor before assuming this is the case.

If there are no stores for sale in your target area, it’s time to start scouting other possible locations. Get in your car. Learn about your surrounding neighborhood. Look for areas where there are many apartments or maybe even a college campus. Once you’ve identified an area, it’s time to consult with your distributor. Your distributor will be able to pull detailed demographic reports that will be able to provide you with an idea of the surrounding population near the proposed location. If the demographics look favorable, it may be time to buy the land or storefront and start your second store.

ADVANCED CONTROL OPTIONS

Whether rehabbing a store or building one from the ground up, it’s time to rely on what you’ve learned from your first store. You already know what works—now it’s time to make it even better. Look at the machines your distributor has to offer; there are probably new advancements since you last purchased equipment. It may also be time to look at investing in advanced controls if your previous store doesn’t have them. Advanced controls can be a great resource for multi-store owners.

Certain manufacturers produce controls that allow an operator to program a machine right from their PDA. With the control, you can alter the time-of-day pricing and retrieve audit data right from the palm of your hand. Reports pulled can detail how each machine performed throughout the day. If a machine is taking too long to drain or is not filling with water to the appropriate level, the report will show this. Without these reports, it may take days or weeks to catch problems like these. In conclusion, these reports help prevent wasted energy and water.

Specific controls can give owners the option of choosing from up to 30 water levels, which can save thousands of dollars a year in water and energy savings when compared to older machines without advanced controls. Customers can benefit from having up to 24 cycle selections with these controls, keeping them happy and in turn giving your store a good reputation for being technologically advanced.

THE INVESTMENT

Although the rewards and return on investment can be great from owning multiple stores, the initial investment for a second store is not inexpensive. It’s important to work with your distributor and commercial laundry machine manufacturer to develop a financing plan that is suitable to your needs. Some commercial laundry manufacturers will allow you to finance directly through them, which streamlines the financial process.

Financing through a laundry manufacturer is far better than using a bank. Manufacturers not only understand the industry better than anyone else, but can also tailor a financial solution that meets an individual laundry owner’s and/or facility manager’s needs.

Choosing a financial service provider that is unfamiliar with the commercial laundry industry can lead to unnecessary risks and costs, including overpaying for services, hidden fees, slower response to time-sensitive opportunities, and limitations on the long-term success of the business.

Another financial area to consider is the cost of employees in your new store. Many stores in the Pittsburgh area are unattended, for example, but the trend is moving toward attended stores. Customers want to be able to interact with someone when they have a problem. This is a great benefit for customers who want face-to-face interaction and for you, having the peace of mind of someone always being on-site to deal with any issues that may arise. If you do choose to open an attended store, you will need to factor in this additional cost.

If looking at an attended store, I would suggest a credit/debit card store. Although the upfront investment of a card system is more than a traditional coin system, the ROI down the line may be higher. Along with that, card systems save busy multi-store owners time since they do not have to empty coin boxes regularly, or make multiple trips to the bank on a weekly basis.

FINISHING TOUCHES

After you have all your logistics figured out, it’s time to name your store. I suggest that multi-store owners keep the same type of name for each store. Customers will make the connection between your stores; if you’re already known for running one successful business, why waste time rebuilding your reputation?

Throughout the whole process of becoming a multi-store owner, it is important to have confidence in your distributor and your equipment manufacturer. They will be your go-to source during this transition and before you know it, you could be opening your third, fourth or fifth store!

December 22, 2011
Store Creation: Build New or Rehab? (Part 2 of 2)

CHICAGO — You’ve come to a point where you’re considering opening a new coin laundry. But should you build it from the ground up, or should you look at rehabilitating an existing store? What are the pros and cons of each?

“There are great arguments for both sides, but there are some catches that you want to look at, whether you’re buying a new store or retooling a store,” says J.D. Dixon, owner and president of National Laundry Equipment, a Huebsch distributor based in Nashville, Tenn. “Both can be great investments.”

Robert Renteria, president of Midwest Laundries, Chicago, and a regular contributor to AmericanCoinOp.com, says he’s seen more “born-again” laundries than ever before in the past year. “The key now is to find laundry locations that are in operating condition but in need of a facelift, or that are closed but have an up side when the competition and demographics are taken into account.”

Setting the laundry apart from its competition has to be at the heart of the decision-making process, advises Carl Graham, vice president of coin sales for Scott Equipment, a Dexter distributor based in Houston, Texas. “Unless you build a bigger, better burger, they’re not going to come.”

Location

Choosing to rehab a store means you’re locked into that location, Dixon says, while building new gives the prospective owner the flexibility to select the best site for his/her business needs.

Whether new or rehab, Graham asks his clients if they’re comfortable with the location. “You’re the one who has to go there all the time, so it needs to be in an area you don’t mind going to.”

Risk and Regulation

Building a new store means taking on more financial risk than you would if rehabbing, plus it’s generally more expensive, Dixon says. “Like starting any new business, you have more pre-revenue time. You have a lot more time before you bring in dollar one.”

When choosing to rehab, Renteria favors fixing any machines that still have useful life, then looking to buy rebuilt or refurbished machines. “This will cut your expenditures about 50% and make for a much better ROI at the end of the year.”

Buying and rehabbing an existing laundry often means the new owner can avoid some expenses and some bureaucracy.

“A lot of times, you can avoid impact fees and code restrictions, which are huge,” Dixon says.

For example, Davidson County, Tenn., where Nashville is located, charges an impact fee of upwards of $3,000 per washer, Dixon says. The impact fee charged in Houston is $1,500 to $1,700 per washer, Graham adds.

“If you buy existing, you’re grandfathered, so those fees are paid,” Graham says. “That’s a pro for refurbishing an existing store. And you don’t have to go through as much red tape either, unless you do a complete rehab of a place.”

“If you buy [an existing store], someone has already gone through that process,” Dixon says. “You still have to pull permits, but it’s a whole lot easier to pull a permit to put in new equipment or upgrade electrical or do something like that than to build a new store.”

Building Customer Base

One potential benefit for choosing to rehab an existing laundry is that it already has a customer base. You have the opportunity to speak to the store’s customers and get ideas for how you can develop the business and attract more people.

With a new store, you must build that customer base from zero, Dixon says.

“You’ve got to be thinking about how to get your message to the people in your area,” he says. “You want to think very hard about within a 1-2 mile area, but you also want to think about miles three to five away from your store. How do I reach the people one to two miles from me in an urban setting? In a rural setting, it could be 15 miles.”

Which is Easier?

“It depends on what part of rehab you have to do,” Douglas says. “I prefer new, because you go by all the new codes. And you can build it the way you want to built it, the most efficient way.”

“It’s a case by case basis. A lot of times, in a retool situation, you get into working with the current business owner and negotiating and all that rigamarole that you have to go through to actually buy the business in the first place. Once you own the business, the retool would be easier, because there are (fewer) levers to pull, (fewer) variables to think about.

“But there are things about building a business that are easier as well, because you can build from that blank canvas.”

Click here for Part 1.

December 21, 2011
Store Creation: Build New or Rehab? (Part 1 of 2)

CHICAGO — You’ve come to a point where you’re considering opening a new coin laundry. But should you build it from the ground up, or should you look at rehabilitating an existing store? What are the pros and cons of each?

“There are great arguments for both sides, but there are some catches that you want to look at, whether you’re buying a new store or retooling a store,” says J.D. Dixon, owner and president of National Laundry Equipment, a Huebsch distributor based in Nashville, Tenn. “Both can be great investments.”

Robert Renteria, president of Midwest Laundries, Chicago, and a regular contributor to AmericanCoinOp.com, says he’s seen more “born-again” laundries than ever before in the past year. “The key now is to find laundry locations that are in operating condition but in need of a facelift, or that are closed but have an up side when the competition and demographics are taken into account.”

Setting the laundry apart from its competition has to be at the heart of the decision-making process, advises Carl Graham, vice president of coin sales for Scott Equipment, a Dexter distributor based in Houston, Texas. “Unless you build a bigger, better burger, they’re not going to come.”

Infrastructure

When building new, you can start from the ground up to create a clean, modern infrastructure so it can handle the laundry equipment you plan to install, Dixon says.

“A lot of times, the problem we run into with retools is the owner wants to put in a whole new bunch of equipment and you walk in and find out, ‘Wow, we’ve got some serious infrastructure issues.’”

You may discover that the electric, water or gas service is insufficient for your project’s needs, or may even be substandard because “unlicensed electricians and gas people” have done the work in the past.

“You find wires and lines and plumbing going in all different directions,” Dixon says. “You wonder why the equipment acts like it has a ghost in it, and it’s really not the equipment. It’s really your infrastructure. You’re bleeding amps, or something weird is happening.

“That happens more often than not in a retool. It’s pretty amazing when you walk into these places and you see how things have been set up. And it seems like the older the laundry, the worse it is.”

But that isn’t always the case, according to Graham. “Rehabbing has its definite advantages, because you have most of your infrastructure in place. You just have to modify stuff.”

You can eliminate any concerns about infrastructure issues with new construction, according to Dixon.

“You don’t have any of those problems with a new store,” he says. “You get to put it in the way it’s supposed to be, and you know that you’re not going to have any odd issues with your equipment.”

Design

From the outset, building a new store provides the owner with what amounts to a blank canvas. There will be some constraints based on the space available, but the opportunity exists to design a store that is highly efficient and thus equipped to get customers in and out in the shortest time possible.

“You can tailor the space exactly to the demographics of your area,” Dixon says. “You can tailor the ergonomics of the space. You can tailor even the way the building is lit and colored, location, painted, and floored, everything, based on the folks that are living around there.”

What works in one store may not work in another. For example, you might choose a color scheme for a Miami store that you wouldn’t for a store in Lexington, Ky.

Rehabbing an existing store presents limitations, Dixon says, and Graham adds that a project could turn out to be more expensive than buying new if extensive work is necessary.

“You’re limited on your space and your setup,” Dixon says. “A lot of times, when you’re retooling a store, it’s going to be hard to change the ergonomics. Unless you want to get into tearing up the floor and rerunning drain lines, things like that, you’re basically going to put equipment where equipment already stood.”

“You might have to gut the whole place out and sometimes it costs more to rehab a place than to build new,” Graham says.

Advances in laundry equipment, particularly a shift from top loaders to front loaders, can enable a new owner to fit more capacity into the same space, Graham says.

“I’ve got two 7,000-square-foot stores that I’m revamping right now,” he says. “We’re reducing the stores by a third but we’re increasing the volume of capacity they can have and reducing their electrical and water usage.”

Building new means a much more extensive project than a rehab. “There’s going to be a whole lot of construction on this that you’re hoping to miss on the retool,” Dixon says.

Tomorrow: Location, risk, regulation and which is easier...

September 7, 2011
Cashless Systems: Q&A (Part 4 of 4: Web Exclusive)

CHICAGO — Making the decision to shift your store’s payment system from coin to cashless, or to a hybrid, can require a great deal of research and planning. There are implementation issues from the outset, and you need to be prepared to market your operation’s changes and educate your customers about the system’s benefits and how they can best use it.

American Coin-Op invites several manufacturers of payment systems to answer some questions that the average self-service laundry owner might have:

ACO: How are technological advances impacting the cashless store? How many different payment options are available?

Steve Marcionetti, product manager, Card Concepts:

Technology advancements are helping solution providers to develop more options for storeowners. The two most popular cashless options are loyalty-based debit-card systems or credit-card-on-machine systems.

Both solutions have their place and can provide owners with the right payment options to help their stores be successful. Often we see loyalty-based debit-card systems as the most popular choice with new stores; this option has the strongest ROI and really sets the store up for success.

The credit card on machine is often popular with existing locations that have many large machines for which their coin boxes fill quickly. These machines, along with a credit card reader, give the customer an option for payment and generally require less hardware to install. This option is perfect for owners who want to upgrade their payment options without fully committing to a loyalty system.

Ryan Carlson, director of marketing, WashCard Systems:

As far as impacting the cashless store, wireless technology is now to the point where it’s made it to the laundry industry. … Wireless is now like a third- or fourth-tier technology; it’s no longer cutting edge. It’s mainstream enough where the cost is down. You just can’t convert to an all-cashless system if it’s a wired solution, because you’ve got bulkheads, you’ve got suspended ceilings, you’ve got to put in cable troughs, it’s a nightmare.

Another is credit card acceptance. It’s mainstream enough, and it’s cost-effective enough. … The Internet is the third, huge technological advance that has hit our industry and the cash side of things. It allows us to do remote machine activations.

Amy Gitlin, president, ESD:

Advances in technology certainly do have an impact on store operation. Technology incorporated into the payment system provides the storeowner with a whole host of benefits.

These benefits range from customized marketing at the machine level to creating wash loyalty programs. In addition, because of advancement in technology, the owner is now able to get timely, detailed reporting of machine activity, inactivity and money collection. These types of reports are available via PC-based software as well as online tools. The use of technology is instrumental in making every facet of your store operate effectively and efficiently.

Technology is also opening up the opportunity to provide cashless payment system options. Today, the typical cashless store operates on the tried and true smart card or magnetic card platform. However, there is an increasing trend in today’s cashless store to accept credit/debit cards.

Michael Schantz, president, Setomatic Systems:

There have been many technological advances in laundry payments over the last few years, as was evident at this year’s Clean Show in Las Vegas. Hybrid systems that accept coin and credit cards along with prepaid cashless cards right on the washer and dryer have really taken hold in our industry.

RFID credit cards (tap cards) are becoming more popular and with Google’s announcement in May that it will be rolling out “Google Wallet” in the next few months, mobile payments will be a driving force in this industry. Our system is compatible with all these new payment methods.

In addition, wireless technology has taken away the burden of complicated and often unreliable RS485 wired networks.

ACO: What level of after-sale support should a laundry owner expect from the cashless system vendor they choose?

Hietpas: Like other types of store ownership maintenance and upkeep, the more self-sufficient a laundry owner is, they are generally happier and more profitable. Owners should plan to get familiar with their system. We do long-term service and maintenance training on our system at distributor local service schools. This way, owners can learn to get the most out of their system while they are learning to get the most out of their equipment.

Gitlin: When operating your cashless payment system, a laundry owner should expect that their distributor work with them in successfully implementing the system. This starts with training. Also, are the distributor and manufacturer of the payment system available for technical support and service not only during normal business hours but after hours, or on holidays as well?

Schantz: The storeowner needs to make sure he is dealing with a vendor who has vast experience in the laundry field. You need to make sure that when you call, you get somebody on the phone who can answer your calls. You shouldn’t find yourself going through endless voice prompts while seeking help.

Marcionetti: Vendors should understand that Laundromats are not a Monday through Friday, 9-to-5 business, and make technical support available when the storeowner needs it. (CCI has always provided technical support 24/7 365 days a year.) Most systems are sold through local distributors, so storeowners should choose wisely and make sure that the company they buy from is committed to providing localized support.

Carlson: There should be ongoing training. There had better be ongoing updates to maintain PCI compliance if they’re doing credit card acceptance of any kind. It is now a requirement of VISA and MasterCard that you’ve got a compliant system. … Unfortunately, most of the products in our market research in the laundry industry, updates aren’t a big thing that’s pushed out, and if they are, they’re paid updates.

Click here for Part 1.
Click here for Part 2.
Click here for Part 3.

To learn more about payment systems:

Card Concepts — laundrycard.com
Dexter Laundry — dexter.com/laundry/products/management/
ESD — esdcard.com
Setomatic Systems — setomatic.com
WashCard — washcard.com

September 6, 2011
Cashless Systems: Q&A (Part 3 of 4)

CHICAGO — Making the decision to shift your store’s payment system from coin to cashless, or to a hybrid, can require a great deal of research and planning. There are implementation issues from the outset, and you need to be prepared to market your operation’s changes and educate your customers about the system’s benefits and how they can best use it.

American Coin-Op invites several manufacturers of payment systems to answer some questions that the average self-service laundry owner might have:

ACO: What are the top two or three reasons why laundry owners may be hesitant to go cashless?

Michael Schantz, president, Setomatic Systems:

Totally cashless systems can be expensive since they require the owner to convert every machine in the Laundromat. They must also purchase at least two “Add Value Stations” for customers to reload or purchase their card.

The owner will continue to purchase several hundred cards a month for the life of the store. With a hybrid system, you do not have to convert the entire store or buy “Add Value Stations” or cards. The cost of entry is much more reasonable.

Many customers simply will not purchase a prepaid card. These consumers include tourists, seasonal washers (blankets, spring cleaning, etc.), the elderly, and the impoverished who can’t afford to leave anything on their card. In this industry, we can’t afford to lose even one customer to our competition.

Steve Marcionetti, product manager, Card Concepts:

Owners that are hesitant either believe that their customer base will not understand or adapt to the technology, or they believe that the systems are too expensive.

The best way to overcome the fears of customer acceptance is to either visit stores in similar demographics that have a system and talk to the customers, or talk to the storeowners and ask them about customer acceptance and if it affected their business.

As both a solution provider and a storeowner, I have found that the fear of customer acceptance is not warranted and that 99% of the consumers that use Laundromats have already accepted card-based technologies in other aspects of their lives.

For owners who believe that the systems are too expensive, we have easily been able to show strong return-on-investment formulas that make the investment easier to tolerate.

Ryan Carlson, director of marketing, WashCard Systems:

People are worried that all their business is going to get sucked up in fees. If they do the homework and can run through a number of scenarios, they’ll see that, at worse, they’re breaking even.

Kevin Hietpas, director of sales and marketing, Dexter Laundry:

Since there are now systems available to go cashless at a wide range of costs, the two main reasons we see are a customer’s concern that patrons won’t adjust to the new system and the store will see a loss of business, or they are apprehensive about the higher level of technological complexity they are adding to their store.

Amy Gitlin, president, ESD:

First are IRS guidelines. New changes require all merchant statements to be filed along with tax returns.

Second, owners think consumers who use their laundry do not have credit or debit cards because they are not affluent. The simple fact is that 85% of U.S. consumers have a credit and/or debit card. The other 15% use prepaid debit cards. Therefore, you can bet that customers of Laundromats also have credit and debit cards.

Finally, most laundry owners do not agree with the time and cost that can be saved by not dealing with coins and cannot make the cost of installing a payment system of any kind make sense.

“It only takes a few hours a week to collect my store” is the line we hear often. Most people report that coin collection totals about 10 hours a week. But when examining this statement more closely, you will find this activity to be costly and time-consuming. If an owner’s time is worth $40 an hour, that’s $20,000 per year and many hours consumed.

ACO: What are the hallmarks of a successful cashless payment system?

Marcionetti: Like anything, commitment is the most important thing to ensure a successful implementation of any system. Most systems are easy to use, but storeowners should commit to understanding the system and its capabilities so that they can properly train their attendants. When the attendants are well versed on how to use the system, the store’s customers really adapt easily and enjoy using the system.

Carlson: The devil is in the details. How user-friendly is it? Does it automate the heavy lifting for various tasks? Does it give operators control over their ongoing costs or their strict lock-in? Is there flexibility to be used on different pieces of equipment?

Hietpas: Ultimately, the owner determines the success of any payment system. If the owner is pleased with the performance and reliability of the system, it’s a success.

Gitlin: Quite simply, the hallmarks of a successful cashless-payment system implementation are reliability, customer friendliness, efficiency, marketing, and support from the manufacturer and distributor.

Schantz: Setomatic believes the hallmark of a successful payment system is its flexibility to give the laundry customer the choice to pay with any method they desire. That is what will keep new customers coming and drive added revenue. You need a payment system that will not be obsolete in a few years.

Web Exclusive Tomorrow: How are technological advances impacting the cashless store? What level of after-sale support should be expected?

Click here for Part 1.
Click here for Part 2.

To learn more about payment systems:

Card Concepts — laundrycard.com
Dexter Laundry — dexter.com/laundry/products/management/
ESD — esdcard.com
Setomatic Systems — setomatic.com
WashCard — washcard.com

August 31, 2011
Cashless Systems: Q&A (Part 2 of 4)

CHICAGO — Making the decision to shift your store’s payment system from coin to cashless, or to a hybrid, can require a great deal of research and planning. There are implementation issues from the outset, and you need to be prepared to market your operation’s changes and educate your customers about the system’s benefits and how they can best use it.

American Coin-Op invites several manufacturers of payment systems to answer some questions that the average self-service laundry owner might have:

ACO: What are some basic questions a laundry owner should ask when considering a cashless store?

Amy Gitlin, president, ESD:

  • How long has the manufacturer been manufacturing payment systems for the laundry industry?
  • How many card-operated Laundromats are using their payment systems?
  • Does their payment solution meet the current PCI DSS (Payment Card Industry Security Standard) requirements?
  • How long have they been in business?
  • Does their payment solution allow for another type of card acceptance? (For example, using a laundry-only card managed by the storeowner offering rewards/benefits may be more attractive to the consumer than using their own credit or debit card.)
  • When PCI DSS requirements dictate a change in your payment systems, how will they accomplish this task?
  • Are online instant upgrades available?
  • What are the transaction fees over and above Interchange, Processing, Authorization, Chargeback, Minimums, etc.?
  • If Internet service goes down, will the store still be operational?
  • What is the system warranty?
  • What type of technical support is available?

Michael Schantz, president, Setomatic Systems:

  • Is the expense of a totally cashless store worth the added cost?
  • Am I better off buying a hybrid coin/credit card system?
  • Will my Laundromat payment system be able to handle all the future payment methods that will become mainstream in the next several months, like RFID credit cards and mobile payments?
  • Is the system PC-based or web-based?

Steve Marcionetti, product manager, Card Concepts:

  • How long has the vendor been in the Laundromat business?
  • Are Laundromats their main focus?
  • Does the vendor offer 24/7 technical support?
  • In how many Laundromat locations has the vendor installed their solution?
  • Most importantly, they should ask for references and speak to other owners who have used the product (real-world experience).

Ryan Carlson, director of marketing, WashCard Systems:

How much? The second question I would ask is what is the cost of diminishing returns? How much equipment do I need to buy to be successful? What can I get away with?

We’ve found that anyone that’s telling you to do more than 30% of your store in a hybrid situation is ... going to oversell you. If you’re doing more than a third of your equipment, you’re going to be paying debt service on equipment that’s just not getting used as much as it should or needs to be to justify its existence.

Another question would be what does my upgrade path look like? How expandable is it? How well does it scale to customer demand?

If you're looking at a hybrid store that offers credit cards, here is the No. 1 question I would ask: What kind of control do I have over the ongoing fees?

Kevin Hietpas, director of sales and marketing, Dexter Laundry:

Understand exactly what you’re buying, and make sure you and your supplier are ready to fully support your new system. An owner is essentially choosing the IT infrastructure of their laundry. If a storeowner isn’t fully familiar with installation, upkeep and troubleshooting of such systems, they need to be comfortable that their local supplier is capable of providing that support.

Owners should keep in mind that different systems can provide a cashless option, but they also operate differently and provide varying levels of machine control and remote management capabilities. I suggest they do a self-assessment, outlining what they really want the system to do and focus on those most important features when comparing systems.

Tomorrow: What are the top two or three reasons why laundry owners may be hesitant to go cashless?

Click here for Part 1.

To learn more about payment systems:

Card Concepts — laundrycard.com
Dexter Laundry — dexter.com/laundry/products/management/
ESD — esdcard.com
Setomatic Systems — setomatic.com
WashCard — washcard.com

August 30, 2011
Cashless Systems: Q&A (Part 1 of 4)

CHICAGO — Making the decision to shift your store’s payment system from coin to cashless, or to a hybrid, can require a great deal of research and planning. There are implementation issues from the outset, and you need to be prepared to market your operation’s changes and educate your customers about the system’s benefits and how they can best use it.

American Coin-Op invites several manufacturers of payment systems to answer some questions that the average self-service laundry owner might have:

ACO: What are the immediate benefits to the laundry owner who decides to go cashless? What are the long-term benefits?

Kevin Hietpas, director of sales and marketing, Dexter Laundry:

By going cashless, a storeowner is trading one set of operational challenges for another. One item that many owners have reported as a major immediate benefit is that their collection time in the store is significantly reduced. With only one unit to collect and no change to handle, owners free up time to devote to other management and operational duties.

At the time of opening the laundry, or transitioning to a cashless system, owners should plan on devoting time to educating attendants and customers on use of the system. Some customers might be resistant to (use) the new system, and making the transition as smooth as possible with friendly help and support will make sure that the laundry doesn’t experience a loss of customers.

Amy Gitlin, president, ESD:

Cashless to some might mean not accepting coins, only smart cards, in your Laundromat, while cashless to another would mean eliminating coin and bills from the Laundromat (and) using credit/debit cards as a means of conducting store transactions. Either way, a self-service laundry owner would reap a number of immediate benefits.

By removing coins or other currency, one eliminates the temptation for theft or vandalism—this also includes employee theft. Another benefit is the reduction or elimination of collecting coins and bills. In addition, the laundry’s customers would benefit from the convenience of not needing to find and carry heavy coins. Instead, they would simply carry their smart card or credit cards to complete their transactions.

By going cashless, your customers are apt to utilize more machines, especially your large machines with higher vend pricing. Your customers will continue to benefit using their bankcard (either credit or debit) by earning more loyalty rewards/benefits associated with their card of choice.

The long-term benefits are easier accounting practices for laundry owners and continued customer convenience.

Michael Schantz, president, Setomatic Systems:

We believe that going totally cashless is no longer in the best interest of the laundry owner. We have been developing these types of systems since 1995, and over the last few years it has become evident to us that a hybrid system is more advantageous to the storeowner than a totally cashless system.

The average Laundromat user does not want to purchase a card that can only be used in your store. Offering the Laundromat customer the convenience to pay with any method they choose is what drives more customers to the laundry.

Our credit card system allows customers to pay for their wash by using coin or their own credit or debit card. No unhappy customers walk out the door because they don’t want to buy a card.

It is true that the storeowner has the convenience of never collecting coins in a totally cashless system, but he or she should be looking to maximize revenue. To do this, you need to give your customers the added benefit of paying by credit card or coin.

The consumer has been conditioned to pay by credit/debit card for even small purchases like a cup of coffee today, so why should they not have that convenience in a Laundromat?

Steve Marcionetti, product manager, Card Concepts:

The obvious immediate benefit is the time savings and the safety of having central collection. What many people don’t think about is what you can do with the time that was once dedicated to pulling quarters from machine.

For many operators, collecting is the primary reason for visiting the store. With collection reduced to only a few minutes, this time can now be used to pay closer attention to the details that make their store attractive to their customers. This is a great opportunity to take some time to speak to the customers in the store and find out what they like or don’t like about it. Taking this extra time to focus on “marketing” the store rather than just collecting has both short- and long-term benefits.

The more obvious long-term benefits come from two important factors: penny incremental pricing and float.

Having the ability to properly price your equipment and maintain a fair profit margin regardless of the increases in utility costs will ensure consistency. Too many coin operators resist increasing vend prices because they lack the flexibility of penny incremental pricing and ultimately lose profit when their utility costs rise. Only when the costs have risen above what they can tolerate do they consider increasing vend prices, and often it’s too late.

Float is the unspent value that is residing on customers’ cards. For example, most customers will add $20 to their card but only spend $16, taking the remainder home to use on their next visit. Two huge benefits here: First, the storeowner gets to hold that money in their account until the customer returns; second, this unused balance is a “loyalty” factor that will encourage customers to return to the store rather than visit a competing store.

As the owner of four Laundromats myself, I can personally attest to the validity of these two benefits. They have made all the difference in the success of my stores.

Ryan Carlson, director of marketing, WashCard Systems:

There are two reasons to go completely cashless; neither of them benefits the consumer. We have to be clear about why an operator wants to go cashless. The first is security. We’ve got clients who want to eliminate all cash collections from machines because they can’t carry a big enough gun at their store to feel safe. They want to centralize all the money collections into a locked, secure, separate room.

The second one is for an off-site operator, someone who is a “serial” entrepreneur who owns lots of different businesses and the Laundromat is where they’re planning on not spending any time. They hire employees as attendants, and all the attendant does is clean (the store) and educate people on how to use the card technology. You cannot have an unattended store and be 100% cashless; it does not work, period. You use the cashless system for accountability, to eliminate any opportunity for employees to handle money.

Tomorrow: What are some basic questions a laundry owner should ask when considering a cashless store?

To learn more about payment systems:

Card Concepts — laundrycard.com
Dexter Laundry — dexter.com/laundry/products/management/
ESD — esdcard.com
Setomatic Systems — setomatic.com
WashCard — washcard.com