Content about Kevin Hietpas

FRANKFURT, Germany — Every four years, Frankfurt hosts the Texcare International trade show. Also known as the World Market for Modern Textile Care, much of the show’s focus is on industrial laundry and dry cleaning.

But during the five-day event in early May, there were opportunities to see coin laundry equipment amidst the tunnel washers, rail systems and finishing equipment. A handful of U.S.-based exhibitors displayed or promoted coin equipment to an international trade audience.

Alliance Laundry Systems presented a sizable booth featuring a wide variety of equipment. One of its brands, IPSO, showcased a fully operational vended laundry. Visitors to the booth were able to see how the machines process clothing and linens and how advanced controls help owners increase energy efficiencies.

The display included eight of IPSO’s new HD softmount washer-extractors and three DR tumblers. The washers operated using the Cygnus standard control and were connected to a central pay system. The tumblers featured the DX4 control.

“At IPSO, we know our products work hard to get the job done and it’s important for customers to see that, too,” says John Balman, senior director of sales—Europe for Alliance Laundry Systems. “Having a fully operational coin store at Texcare gives us the opportunity to not only describe how a Laundromat works, but to actually allow our visitors to experience it.”

Another Alliance brand, Speed Queen, promoted its relaunch to the international market. Its various segments, including vended, multi-housing, on-premises and home, have been united under a single brand identity that includes a new look, feel and message platform focused on Speed Queen’s key attributes.

Maytag Commercial Laundry successfully launched a new stack washer-dryer combo for the international export market. “So far, it’s been very popular for both distributors as well as end-users,” says Craig Kirchner, director of global commercial laundry for Maytag. “We’re getting both in the booth to talk about it.”

There was a lot of interest from dealers and potential customers from Eastern Europe and the Middle East. “They’re interested in taking it on because there aren’t a lot of options out there, specifically in this smaller (8-10 kg) equipment. … I’ve talked to a lot of guys in Europe that are going to be put those in coin laundry stores … because they don’t have as much space like the big Laundromats in the United States. These are perfect for that type of venue.”

Dexter Laundry is seeking to open up new international markets and used Texcare International to introduce or, for a number of attendees, reintroduce its brand of coin and OPL laundry equipment, says Kevin Hietpas, Dexter’s vice president of sales and marketing.

“We’re very happy that customers seem to recognize us,” he says. ”They’ll comment, ‘Hey, we’ve heard of you. We’ve never seen you before.’ By reputation, they’re interested in hearing more.”

Dexter is active in Italy and is looking to become more active elsewhere, he says. “We’ll follow up with a lot of potential opportunities from here. Some will turn into customers immediately, others may turn into customers down the road. We’re trying to approach the show from a very long-term perspective.”

To be successful in international markets, it’s vital that a manufacturer have a reputable, reliable distributor network. “Developing a distributor is a long-term process,” says Lee Wilson, director of international sales for Dexter. “It’s a partnership. It’s not something where we’re going to come in here and we’re just going to sign up a distributor. We’ve got to get to know them, they’ve got to get to know us.”

LG Electronics, which launched its family of card, coin and on-premise laundry equipment at last year’s Clean Show, exhibited at Texcare for the first time.

Other Texcare exhibitors that were listed as offering coin laundry equipment included Fagor Industrial (Spain), Krebe-Tippo (Slovenia), Miele (Germany) and Renzacci (Italy). American Dryer Corp. and Pellerin Milnor Corp., which offer coin laundry equipment among their product lines, exhibited but were not listed in the Texcare guide under that category.

John Riddle, Riddle & Associates, and David Cotter, CEO of the Textile Care Allied Trades Association, manned a booth promoting next year’s Clean Show in New Orleans. “For us, we made a decision many years ago that the Clean Show was an integral part of the world community of laundry and dry cleaning,” says Riddle, whose firm has managed the Clean Show for nearly two decades. “The way you show that support is you come and participate in these types of events.

“We wanted to show support, we have a lot of American manufacturers here and we wanted them to know that we’re here. … Plus, it exposed the attendee, the operator, the dry cleaner, the coin wash dealer, in all these countries … to what the Clean Show really was.”

Texcare International registered a 3% increase in attendance from the previous show in 2008. Altogether, 15,800 trade visitors from 100 countries attended the trade fair. More than half of all visitors (52%) came from outside Germany.

There were 264 exhibitors hailing from 26 nations in Hall 8 and the adjoining Galleria. Top exhibitor nations after Germany were Italy, the United States, Belgium, the Netherlands and Great Britain.

CHICAGO — Phil Arvin and his two partners opened their first Maytag-equipped coin laundry in Memphis, Tenn., last March. The 5,000-square-foot attended store is equipped with new energy-efficient 60- and 80-pound washers that are much larger than those in competing stores and thus could command a higher vend price, Arvin says.

But the group followed the suggestions of distributor Justin Laundry and established prices that are comparable to the laundries nearby, Arvin says. “Even though we’re offering a much higher quality product, we didn’t want to be perceived as the higher priced place.”

This is just one example of how the market can influence a laundry’s pricing strategy. But other factors are at work, too, and there are some basic premises that the self-service laundry operator should keep in mind when establishing or changing vend prices.

Should You Announce a Price Change?

How should a laundry owner approach the topic of pricing with his customers? Should he alert them prior to implementing a price change?

Kevin Hietpas, vice president of sales and marketing for Dexter, says he’s seen many owners have good luck increasing prices when they are up front with their customers. For example, if you’re planning to raise prices due to higher utility rates being charged by your municipality, post a couple of articles from the local newspaper about that topic. “Customers, as much as they may not like it, understand that kind of stuff,” he says.

“As consumers, we routinely respond to price increases with little or no advance notice from the stores or makers of the products we buy,” says Gary Gauthier, national sales manager, vended laundries, Milnor Laundry Systems. “Consumers in vended laundries are no different. Store owners and their staffs should be ready to carefully respond to customer questions about the higher costs. But the vast majority of the store owners that I’ve spoken to hear very little feedback when a modest price increase is enacted.”

He recommends raising prices on different types of machines at different times, instead of implementing a sweeping, storewide increase all at once. “This puts the owner in the position of continually assessing vend levels while customers aren’t shocked when costs go up.”

“The most important thing to address regarding a change in price is why,” says Kent Walters, national sales manager for Maytag/Whirlpool Commercial Laundry. “Customers need to understand why prices are fluctuating. Typically, price increases can be attributed to the cost of utilities. Store owners have to stay ahead of the cost of doing business, especially in the laundry industry that depends heavily on the use of utilities.”

“The owner ends up explaining it one way or another,” Hietpas says. “That’s why I think it’s better to address it on the front end with as many facts as possible rather than feel like they’re playing catch up by explaining it on the back end.”

Shifting Prices Too Frequently?

Vending technology has enabled owners to change prices on equipment easily—during slow hours or days, for example—but care should be taken to not change prices too often. This can turn off customers, Walters says.

“Yes, altering vend prices often is not a good practice for owners looking to be successful and grow their customer base,” he says. “If customers are unsure what price to expect on a regular basis, they will look for a store that’s more consistent.”

Consistent pricing makes things easier on your customers, Hietpas says.

“A lot of customers are very good at doing the basic math in comparing between (machine) sizes,” he says. “If (one machine is) twice the size of a machine, it should be roughly twice the vend price. A lot of owners like to have rational multiples between machines to make it easier for customers to make decisions about which machine they might want to use.”

Customers are more sensitive to how long it took and how much it cost to dry than they are to small changes in wash prices, Hietpas says. “It’s the last piece they interact with, so it just seems to stick in their memory a little more.”

Tomorrow: Your competitor has undercut you – now what?
Click here for Part 1.

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

FAIRFIELD, Iowa — Dexter Laundry has debuted an expanded equipment warranty, including a three-year limited parts warranty on all components for Dexter washers, dryers and Easy Card™ systems; five-year coverage on the dryer trunion, bearings and bearing housing; and 10-year coverage on the washer frame, tub, cylinder, shaft, seals, bearings, and bearing housing.

“Customers should know that not all 10-year warranties are created equal,” says Kevin Hietpas, director of sales and marketing. “All Dexter washer designs have passed our 1,000-hour durability test. So while some manufacturers offer coverage for just the bearings and seals, our warranty covers the entire internal mechanical structure of our washers – frame, tub, cylinder, shaft, seals, bearings and bearing housing for 10 years, and there is no limitation based on the number of machine cycles.”