Content about Electronic commerce

March 26, 2013

Taking Advantage of Opportunities to Upsell

ADDISON, Ill. — Distributor highlights opportunities to upsell without putting pressure on your customers

ADDISON, Ill. — Super-size it. Would you like peppers? Would you like to add cheese?

This is a common concept adopted by restaurants nationwide. Although the phrasing may differ, “upselling” is a familiar concept to American consumers. Most restaurants offer a good product without the extras, but eateries and other businesses have found that consumers like being given the option to make their own choices about the type of product or service they want. This in no way means the original product or service is inadequate without the add-ons.

What does this mean for our industry? Let’s take a look.

Although there have been many Laundromat innovations in recent years, the two most valuable, in my opinion, were:

The ability to offer additional service options on vended washers and dryers.
The ability to offer an alternative payment method such as card systems and its effect on the industry.

I would like to focus on these and explain how they tie together.

UPSELLING IN THE LAUNDROMAT

Several years ago, washer manufacturers introduced the ability to offer additional services to customers for additional vend price. Long before that, they offered the ability to sell hot and cold washes for a different cost. Competitors that did not have these sophisticated machines kept their prices low, ultimately reversing customers’ perceptions of the new pricing structure. Today, we have the ability to offer a quality wash, and customers who feel they will benefit from an extra wash or extra rinse will pay more for what they perceive is a superior wash result. This is upselling with no pressure on the customer to pay more money unless he or she chooses to add services.

This is a powerful tool to increase volume. For many years, we in the industry have been trying to figure out how to increase our revenue by giving customers choices they want, which increases revenue without the perception of increased pricing. I will show what this means in dollars and cents when we talk about the card systems.

Most manufacturers have an ability to offer these options, but each does it in a slightly different way. Additional service options have to be made easy to understand and easy to use, but this doesn’t mean you provide less service and make it up in add-ons. We have to learn from industries that are successful in marketing upselling options. We need to offer good results at a fair price, plus the ability to let our customers decide if they want to spend more. It’s their choice.

CYCLE OPTIONS + CARD SYSTEMS = MORE REVENUE

Another way to add choices into the Laundromat is by utilizing a card system. These systems, which began as an alternative to accepting coins, have been available for many years. They have come a long way. Card systems are used today by owners who want to operate their businesses with all the advantages that most retail businesses offer. I’m going to touch on a few of these advantages, but this is really just a small representation of the benefits of managing a card-operated laundry.

First, card systems build loyalty. Once a customer uses a card and leaves a balance on it, they will more often than not come back to your Laundromat. The ability to accept credit cards and to use penny incremental pricing helps keep your vend prices in line with your utility costs. There are a variety of marketing programs available to help increase your volume. Coupon programs give laundry owners the ability to offer rewards directly to the customer without an attendant and without fear of coupon fraud.

Card systems can also provide the ability to account for revenue and employee hours. Reports are available that reflect business revenue totals, individual usage, customer information, income by the hour, equipment usage, and average money spent per visit. This is just a small sample of the information that is available.

I have been able to gather reporting to solidify the value of the extra-wash and extra-rinse options. My family owns and operates three laundries with equipment that has these add-ons available. The stores are located in different geographic areas and have differing ethnic demographics. A report from one of our stores shows equipment usage over a five-month period.

The numbers focus on extra-wash/extra-rinse usage and what it means in terms of additional revenue.

The 80-pound washers processed 4,112 loads, of which 1,498—or about 36% of the total number of loads—used an “extra” button. At a 50-cent upcharge per load, an additional $749 was collected from the six machines.
The 30-pound washers processed 13,180 loads, of which 2,908—or about 22% of the total number of loads—used an “extra” button. At a 35-cent upcharge per load, an additional $1,017 was collected from the 16 washers.
The 40-pound washers processed 10,999 loads, of which 2,859—or about 25% of the total number of loads—used an “extra” button. At a 40-cent upcharge per load, an additional $1,143 was collected from the 14 machines.
The 20-pound washers processed 11,877 loads, of which 2,662—or about 22% of the total number of loads—used an “extra” button. At a 30-cent upcharge per load, an additional $798 was collected from the 12 washers.

That adds up to $3,707 in additional revenue for this store in five months. Extrapolate that to a year and the added revenue comes to $8,899. The numbers speak for themselves, and that’s on top of the normal vend prices! Keep in mind that these were customer choices; they made them of their own free will. That’s upselling.

In my experience, that kind of additional revenue (80%) goes to the bottom line. Without a card system, our stores would not have the tools to properly evaluate those numbers and help make any future equipment purchases.

Talk to your distributor about the options that are available. Evaluate this information to see if these innovations will work within your budget. In today’s business climate, any advantage that will help a business grow must be seriously considered.

I have heard many excuses for not moving forward with new innovations. The list would be so long, it would take another article to cover them all. The reality is, without these advantages, your business may struggle. Your choice.

January 22, 2013

The Elements of Being Customer-Friendly (Part 5)

CHICAGO — There are many levels of customer service, and thus customer friendliness

CHICAGO — How would your customers describe your coin laundry? Would they say it’s dependable? Clean? Secure? Comfortable? How about customer-friendly?

It stands to reason that customer-friendly stores—those that are welcoming, bright and offer a sense of security, for example—have a better chance of drawing business than the store down the block that’s dark, dirty and run-down.

But there are many levels of customer service, and thus customer friendliness. American Coin-Op reached out to some store owners, manufacturers and distributors this month and asked them for their analysis of the elements of being customer-friendly.

Q: PLEASE DESCRIBE HOW A STORE CAN BE MADE CUSTOMER-FRIENDLY BY ADDRESSING THE FOLLOWING:

Seating

Craig Kirchner, vice president of sales, marketing and customer service for Dexter Laundry: Your Laundromat customers are going to be spending plenty of time in your store and you’ll want to keep them comfortable so they’ll consider coming back. It’s important to have ample enough seating for your busiest times.

Dave Phillips, national sales manager, IPSO: It is important to provide just enough seating for the customers to be comfortable. But, it is about revenue per square foot — seating does not make owners money.

Dan Bowe, national sales manager, Speed Queen: Be sure to provide ample seating for customers. Most customers spend at least an hour in a Laundromat, so offering space where they can sit comfortably and conduct other business, like checking e-mails or reading, will be greatly appreciated.

Jose Fernandez, owner, Mily’s Place Laundromat, Coral Gables, Fla.: Seating should be in close proximity to the front of the store so customers can keep an eye on their car in the parking lot if so desired. If TVs are part of the customer experience, seating should be in close enough that programs are easily seen and heard throughout the store.

Children’s Area

Ken Hebert, Deep South Laundry Systems: A children’s area will be welcomed and appreciated by your customers, and it will likely reduce unnecessary wear on your equipment.

Bowe: Some newer stores offer a children’s play area that is equipped with televisions, books, arcade games and computers. While this isn’t necessary, it may give you an edge over the competition for those customers with small children.

Kirchner: While it might not work for all store layouts or customer demographics, a children’s play area can make your store more inviting to mothers and families. It can also help keep children occupied while their parents do laundry.

Dawn Nagle, marketing director and VP of creative services, Laundrylux: Parents need help when doing laundry. If you have an area where their children can watch movies or play, this goes a long way in showing how much you care about your customers. Parents will come back to a laundry where their children are occupied and that they can get their laundry done without being pestered.

Phillips: Dedicated children’s areas are nice if the store is large enough to provide them. Areas dedicated to children need to be situated toward the back of the store for safety and security reasons (assuming there is no rear ingress and egress), and it is important that the parents have good visibility of the areas.

Availability of Extra Services

Bowe: If you have an attended store, you have the ability to offer “Fluff and Fold” services. Customers will greatly appreciate this service, especially if they have extremely busy work or school schedules. It allows them to drop their laundry off, get it cleaned and pick up at a later time. In addition to being a customer-friendly component, it’s also a revenue enhancer.

David Cabral, vice president, New England Coin Laundry: Depending on the market demographics, additional services can enhance the overall business – but it is very important to look at the specific demographics of the area before offering any additional service. Examples include alterations, check cashing, receipt of utility payments, tanning, nail salon, café, cell phone sales, etc.

Fernandez: We do have drop-off service, which accounts for a substantial portion of the store’s revenue. We are currently working out the details to provide drop-off dry cleaning service and in-store ironing to increase revenues and attract new customers.

September 6, 2012

Commercial Accounts: How to Market Yourself and Grow Your Business

OMAHA, Neb. — Items of preparation: equipment mix, times of peak activity, handling of workload

OMAHA, Neb. — Every business requires a steady stream of revenue in order to be successful. In the vended laundry industry, guaranteeing a set amount of cash flow can be difficult, but adding commercial accounts can make a baseline easier to establish.

With proper preparation and marketing to neighborhood businesses, store owners can either start or grow their pickup and drop-off accounts to add revenue, providing their store with stability for the long run.

PREPARATION

Before adding commercial accounts, it’s important for store owners to look at their equipment mix. The last thing you want is to have a commercial account take up too many machines and force self-service customers to wait to do their wash.

Another precautionary measure that a business owner should take is tracking the store activity and identifying peak times. If the store is consistently busy and there is not ample time during the day to process linen from commercial accounts, owners may want to consider adding a shift.

Another option is to add larger machines strictly for use in serving commercial accounts to a specific section of the store. This way, the commercial accounts will not affect self-service business.

After surveying what equipment you have available to dedicate to these accounts, it’s time to determine who will handle the workload.

When choosing attendants to work for your store, you want to make sure they perform their tasks to your standards. Proper training will help ensure optimal client satisfaction. For example, your attendants will need to know how to properly fold linens and how to interact with customers.

It is also a good idea to have written directions that employees can follow, especially if certain accounts have special laundering requirements.

If you plan on laundering specialty items, reach out to your local chemical supply agent. This representative will be able to ensure you have the right chemicals for specific industries, such as fire or healthcare. As with any decision, ask for a few different opinions so you can make sure to deliver your customers what they deserve.

SOLICITING BUSINESS

Once the preparations are in place to handle commercial accounts, it’s time to grow the business. One of the best ways you can go about this is by finding a niche market to serve in your surrounding community. For example, positioning yourself as the laundry specialist to service spas or providing quick turnarounds for entertainers in town is a great way to build your reputation.

An important aspect to any successful business is having and maintaining an informative website. Make sure your website is up to date and emphasizes your commercial-accounts expertise. It should be easy for potential customers to find information about your services and how to contact you. To see if your website comes up in search results, run a few searches as if you were a potential customer. If your competitors appear before you in these searches, you may need to look at optimizing your website content.

As a business owner, you must always sell your store to others. Make sure everyone you meet knows what business you offer. You never know who could become your next customer.

It’s also important to reach out to businesses within your community. For example, as an owner of five stores, I contacted human resources departments at various companies and offered pick-up and delivery services for their employees. One client uses this as a benefit to employees, and we gain an extra customer. Additionally, some of those companies may have other laundry needs, which can turn into more business for you.

Along with networking with those you come in contact with, it’s a good idea to get involved with community groups. Look for opportunities to join committees within your town’s chamber of commerce or Rotary Club; they provide great ways to meet other business owners. Remember, it all comes back to selling yourself and your business.

COMPETITION

If your community has a large population, you are bound to run into some competition. Linen services may offer customers a lower price than you, but here’s where your service and industry niche come into play. When discussing new business opportunities, it’s important to highlight what you can offer the potential customer. Many linen services do not deliver on weekends, but if you have the capacity to do this, use this as a selling technique. This is important when working with hotels that cater to weddings and large events during weekends.

SERVICE

No amount of marketing can make up for bad service. Service should be the cornerstone upon which your business is built, and this is something your employees should embody. The best referral will always come from a satisfied customer.

To accomplish great service and grow your commercial account business, make sure you have the equipment, employees and time necessary to provide superior results. These accounts can provide your store with a significant amount of dependable business and help you become more profitable.

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 14, 2011

Nine Things You Need to Know About Business Credit (Part 2 of 2)

CHICAGO — Recent developments in our troubled economy have served to dramatize how credit can be a valuable friend or a dreadful foe. Used sensibly, credit can be a powerful asset in your business life. Use it carelessly and it can become your worst enemy.

You may not need to use credit every day, but when you need it, you can’t afford to have the door closed in your face. Here are nine ways to put credit to work for you and your laundry and not against you:

Consolidating Card Balances Is Not a Cure

You’ve seen the advertisements: “Consolidate all your credit cards debts into one low-payment loan and we’ll negotiate with your creditors to reduce your debt.” Don’t believe it.

Once you allow yourself to get into unmanageable debt, there’s no easy way out. Debt consolidation may sound like an easy cure, but many professionals and business owners have discovered that so-called debt consolidation led them down the road to an even more burdensome debt load.

“Consolidating debts may be only digging yourself into a deeper hole,” says certified financial planner Brent A. Neisner. “Before you take that step, you should ask yourself how you got into debt trouble. Overspending almost always involves emotional and psychological issues that aren’t going to go away by treating the symptoms.”

Eliminate Receipt of Pre-approved Offers

Those pre-approved credit offers that find their way into your mailbox represent a temptation for identity thieves who might try to open new credit accounts in your name or the name of your business.

You can opt-out by visiting the official Credit Reporting Industry website or by calling 888-567-8688.

Be Aware of Differences Between Debit and Credit

While there are many similarities between debit and credit cards, the differences can significantly affect the cash flow in your business.

It’s easier to qualify for a debit card than a credit card, because there’s no credit involved. When you use a debit card, you must already have the money in your business account at the bank. Your purchase is debited to your account electronically as soon as you make your purchase.

Using a debit card is almost like using cash. Unlike writing a check, using a debit card saves you from having to show identification when you conduct a transaction. Having a debit card not only frees you from carrying cash, it will be more readily accepted than checks where you aren’t known.

However, debit cards carry their own set of disadvantages that you need to know about. Unlike credit cards, debit cards give you no grace period for paying your bill. The money is deducted from your account immediately each time you use it.

Keeping your account in balance can be a problem. It’s easy to misplace a receipt and forget to notate the transaction in your check register. That can result in overdrawn accounts and financial penalties.

While you get protection from liability due to fraud on both credit card and debit card purchases, debit cards do not offer the same protection as credit cards in the case of defective or unsatisfactory merchandise. With credit cards, you may dispute errors or unauthorized charges and withhold payment until the matter is resolved. With a debit card, your money is irrevocably spent the moment you complete the transaction.

If you pay off your credit card balances in full each month, the last thing you need is a debit card. You’re now enjoying up to 30 days of free use of someone else’s money. This is “using the float,” the period between the purchase date and when the money is actually withdrawn from your account. In this case, you should congratulate yourself on your financial acumen and hang on to those credit cards.

Never Co-mingle Business and Personal Funds

Not only is mixing your business and personal finances an open invitation to problems with the Internal Revenue Service, it complicates your recordkeeping and cash flow management. You should maintain separate business bank accounts and make all of your business credit purchases on a separate business credit card.

Some experts compare unwise use of credit to use of drugs: It can offer short-term pleasure in exchange for long-term pain. Once the “credit monster” gets his hooks in you, it can be painfully difficult—and sometimes impossible—to free yourself.

However, credit in itself is not harmful. Used skillfully, it can be a profitable tool for managing your business affairs. Use these tips to help make credit one of your business assets, not one of your liabilities.

Click here for Part 1.

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)

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)

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

June 6, 2011

Wireless credit card payment systems...

May 2, 2011

Convenience Can Mean Profitability

August 18, 2010

Location, Location, Location (Part 2)

July 7, 2010

Success is in the Cards