Content about Marketing

CHICAGO — How do you think your self-service business compared to others in the industry last year? Did you have a good year or a bad year in 2011? How does your pricing compare with others?

American Coin-Op’s annual State of the Industry survey offers you the opportunity to compare your operation to others in the industry. It focuses on 2011/2012 business conditions, pricing, equipment, common problems, turns per day, and utilities cost.

In instances where respondents were asked about 2011 business results, they were given the opportunity to state that their results were up, down or unchanged. This is a slight departure from previous surveys that asked only if their business results were up or down. Keep this in mind as you are making comparisons to previous years’ polls.

The survey is an unscientific electronic poll of American Coin-Op readers who operate stores. Some percentages may not equal 100% due to rounding.

2011 BUSINESS VS. 2010 BUSINESS

In 2011, nearly 45% of respondents saw their overall coin laundry business increase from 2010.

More specifically, 44.8% of operators reported an increase in business (gross dollar volume) in 2011 compared to 2010. In last year’s survey, 42% reported an increase in business, and two years ago, 40.2% reported a bump in business.

The average 2011 business increase is 11.5%, up from 10.8% in 2010. Other past increases were 7.9% (2009), 14% (2008) and 12.2% (2007).

Here’s a closer look at the 2011 business increases (these figures relate to those reporting an increase, not all the respondents):

• Operators with a business increase of less than 10%: 40.4%
• Operators with a business increase of 10-14%: 38.5%
• Operators with a business increase of 15% or greater: 21.2%

The largest single increase in 2011 was reported to be 50%.

Approximately 35% of respondents saw their business decrease (in gross dollar volume) last year. In our survey of 2010 business, 58% saw a drop in business. The percentage was 59.8% in 2009.

The average 2011 business decrease is 10.2%, down a bit from last year’s figure (11.2%). Previous averages were 13.7% in 2009, 14.3% in 2008 and 13.2% in 2007.

Were the losses consistent last year or did they vary? Here’s a closer look at the 2011 business decreases:

• Operators experiencing a business reduction of less than 10%: 56.1%
• Operators experiencing a business reduction of 10 to 14 %: 17.1%
• Operators experiencing a business reduction of 15 % or greater: 26.8%

The largest reported decrease in 2011 was 50%.

Approximately 20% of operators reported their 2011 business was unchanged compared to their 2010 results.

Overall, these results continue to reflect year-to-year improvement on average. The number of operators reporting an increase in business was up slightly from last year, as was the average business increase.

The average business decrease (10.2%) was a percentage point lower than the prior year. In addition, the number of operators suffering a large business reduction (15% or greater) shrunk from 31.7% in 2010 to 26.8% in 2011.

DROP-OFF-SERVICE BUSINESS

In a culture built on saving time and intent on finding ways to free up that precious commodity, drop-off service would look to be a popular choice for self-service laundry customers. But do the numbers bear that out?

Did drop-off service improve in 2011 or do customers still consider it a bit of a luxury?

Approximately 32% of respondents reported drop-off-service business (gross dollar volume) increased in 2011. For 2010, approximately 47% reported business increases.

The average drop-off-service business increase is 17.3%, four points higher than 2010’s increase of 13.3%. It should be noted that a handful of respondents reported an increase of more than 20%.

Roughly 24% saw a decrease in drop-off-service business. That is much lower than in 2010 (53%), but that could be attributed at least in part to survey-takers’ ability to list their drop-off service business as being unchanged.

The average decrease is 18.1%, down a bit from 2010’s figure (18.8%). In 2009, the average drop-off-service decrease was 24.2%.

Nearly 45% of respondents said their drop-off service business was unchanged from 2010.

Two-thirds of respondents offer some type of drycleaning service. Only 17.5% reported a business increase. The average business increase is 10.4%. The average business decrease is 15.1%.

VENDING RESULTS

Roughly 35% of the respondents had an increase in vending sales in 2011, slightly lower than 2010’s reported one-third. Approximately 31% saw their vending sales decrease in 2011, and 34.2% saw vending sales remain unchanged.

The average vending gain is 11.2%, up a bit from 2010’s figure (9.2%).

The average decrease in vending business is 11.0%, compared to 12% in 2010.

Check back on Monday for Part 2: Washer, Dryer and Drop-Off Service Pricing

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 — Al Lautenslager is a Certified Guerrilla Marketing Coach who believes the No. 1 reason that customers leave a business is because the business in question doesn’t pay them enough attention.

Making efforts to reach customers and prospects was at the heart of his message at a Drycleaning & Laundry Institute-sponsored educational session during the last Clean Show.

Based on Lautenslager’s theory, you’re not just a self-service laundry owner, store manager or store attendant. “You’re all marketers of the business you’re associated with,” he says.

And so it is that he offered a series of suggestions from his book, what he called “a step-by-step blueprint for how to put one foot in front of the other, from a marketing standpoint.”

Develop a Guerrilla Marketing Mindset

“Every single day, whether I’m traveling on the road or working in my office, I think about this question: How am I building the awareness of my prospects and clients through the marketing that I’m doing?”

Before he goes about the work of each day, Lautenslager spends time doing three to five marketing-related things. It might be handwriting a thank-you note to a customer, brainstorming a tagline, or coming up with an idea for a new direct-mail campaign.

“You do that for three weeks and it becomes a habit, and a marketing habit is a great mindset to have in your business.”

Define Purpose for Marketing and Your Goals

“What specific activity do you want customers to take as a result of your marketing? Do you want them to call you on the telephone, visit your website, come into your place of business, enter a contest?”

Marketers define these as “calls to action.”

“Every single brochure, website, sign, sales pitch, on-hold message ought to have a call of action associated with it,” Lautenslager says. “Prospects need to be told what to do. Do not leave it to chance that they’ll know what to do as a result of your marketing.”

Identify Your Target Market

“Targeting is pretty much what you think it is. Who buys what? Where do they buy it? Why do they buy it?”

Whatever specifications you put around that target market, there exists a list for those specifications, and your list is your market, Lautenslager says. “Maybe you’re targeting a certain income level, a certain family size and a certain subdivision. There’s a list that exists for those specifications.”

Do a web search for “list broker” in your city to find companies that provide that kind of service.

Your best prospect to target is a current customer, and second best is a previous customer, Lautenslager advises.

Position Your Business

This refers to creating a “position” for your business in a customer’s mind. According to Lautenslager, Positioning authors Al Ries and Jack Trout say, “Positioning is not something you do with a product or service, it’s what you do in the mind of a prospect.”

“We want people to think of us if and when they need our products or service,” Lautenslager says.

In the Chicago area where Lautenslager lives, the freezing and breaking of water pipes during winter, especially in the middle of the night, is a real possibility. So how does Expert Plumbing position itself? By promoting the fact that “We never close.”

And don’t be afraid to promote your expertise in providing laundry and/or dry cleaning services.

“Everybody in this room is an expert in something. It’s OK to say that. Customers like to buy from experts. They trust experts. They have confidence in experts’ work. Go ahead and say that.”

Point Out Your Competitive Advantages and Benefits

Customers and prospects don’t care about you, Lautenslager says, they care about themselves and how your service will benefit them.

“So, you’d better be talking to them,” he advises. “That mean you’ve got to talk about benefits, not features. Write this down: features tell, benefits sell.”

They’re looking for benefits like convenience, time savings, organization, ease of access, immediacy, reduction of resources required, and reliability.

“At some point in time, make a list of the benefits you offer your customers and prospects. And then I suggest that you make a list of the benefits that your competition offers. If those two lists are identical, neither one of you have a competitive advantage.”

And if you don’t know what your benefits are, ask your customers. They’ll tell you.

Do Some Business Networking

“Everybody in this room, believe it or not, knows between 150 and 250 people each,” Lautenslager says.

On his website is a free report explaining how to instantly add 50 people to your network. These people include neighbors, your banker, your favorite bartender, your travel agent, etc. Lautenslager’s favorite on the list: the parents of your child’s sports teammates.

Plan for the networking events you will attend and set some goals (meet X number of people, receive X number of business cards, etc.).

“Arrive early and leave late,” Lautenslager says. “Some of the best networking happens before the meeting and after the event.”

Take Advantage of PR Opportunities

Editors love news but hate promotion, Lautenslager says, so connect your business with current events to increase relevancy.

“I suggest you do a press release every other month,” he says. “Establishing a relationship with an editor is just like establishing a relationship with a customer.

“Anytime you have a new product or service, win an award, have a new employee, new strategy, new location, editors deem that as news.”

In the end, whatever type of marketing you choose to pursue, launch what is comfortable for you and your business.

“When I say comfortable, I don’t mean just comfortable financially, I mean comfortable emotionally. You can’t do everything that I’ve talked about today. I can’t do everything I’ve talked about today. But you can pick one, two or three things you’re comfortable with and implement them.”

Click here for Part 1.

CHICAGO — Nearly half of the laundry operators who responded to January’s AmericanCoinOp.com Wire survey say they raised their washer or dryer prices in 2011.

Roughly 46% raised washer or dryer prices (raised vend price or reduced the cycle time) last year, while 53.6% did not.

Based on what laundries in their area (including their own) are charging, 42% of respondents believe that vend prices are too low. Approximately 28% believe that operators are charging a fair price.

Some 17% aren’t sure if the pricing is too high or low, and 10.1% say pricing in their area varies too much to make a general statement about it. Just 2.9% say that vend prices are too high.

How important is pricing to customers? Nearly 48% of respondents say it’s among the two or three most important factors, while 37.7% believe customers think it’s no more important than things such as cleanliness, comfort and equipment mix.

About 9% believe it’s only really important when competitors are low-balling prices, and 2.9% say that pricing is the No. 1 factor to a customer when choosing a laundry. The remaining 2.9% aren’t sure of the importance of pricing to customers.

When the operators who were polled raise vend prices in their stores, 74.6% say they explain the move to their customers.

Thirty-two percent of respondents anticipate having to increase vend prices if utility bills are what they expect this winter, while 39.1% say they don’t. The remaining 29% are unsure.

The Wire survey presents a snapshot of readers’ viewpoints at a particular moment, but it should not be considered scientific.

Subscribers to Wire e-mails—distributed twice weekly—are invited to take a brief industry survey anonymously online each month. All self-service laundry owners and operators are encouraged to participate, as a greater number of responses will help to better define operator opinions and industry trends.

To sign up for the Wire, click the “Subscriptions” button at the top right-hand corner of this page and follow the instructions.

RIPON, Wis. — Alliance Laundry Systems has promoted William Bittner to vice president of Customer One, the company’s global initiative focused on customer service and satisfaction, and selected Dan Bowe to replace Bittner as national sales manager of Speed Queen’s commercial division.

“Bill has been a valuable asset to this organization for many years and his experience with sales and customer relations made him an ideal candidate for this role,” says Mike Schoeb, president and CEO of Alliance Laundry Systems. “I am confident that Bill will be a positive driving force leading Customer One on a global scale.”

Customer One is the cornerstone of Alliance’s customer service strategy, demonstrating a commitment to maintaining a customer-focused culture by consistently meeting customers’ demands for superior product quality and reliability while providing comprehensive and responsive service. The program ensures best practices in manufacturing, provides essential services and offers continuous training.

Bittner has been with the company for more than 13 years, holding various senior positions. He was instrumental in reclaiming Speed Queen’s position as the premium brand in the vended laundry space, Alliance says.

“I look forward to leading one of Alliance’s most highly regarded programs,” says Bittner. “Putting the customer first is more than a slogan; it is the way we do business.”

Bowe will oversee regional sales managers, develop policies and procedures, cultivate distributor partnerships, and participate in the development of new Speed Queen products and services.

Since joining Alliance in 1996, he has held a variety of senior sales and marketing positions. He has particular expertise in manufacturing, distribution services and advancements in card technologies, according to Alliance.

“We welcome Dan’s broad experience and in-depth industry knowledge and look forward to having him at the helm of the Speed Queen brand,” says Jeff Brothers, senior vice president of North American sales.

CHICAGO — On Aug. 1, American Coin-Op began delivering its online advertisements through Google’s DoubleClick for Publishers (DFP) ad server. This move comes with a built-in, trusted third-party auditor of our ad impressions, and represents our next step in improving our service to our audience and advertising clients.

Our ad reporting complies with industry standards as set forth by the Interactive Audience Measurement and Advertising Campaign Reporting and Audit Guidelines. This document establishes a detailed definition for ad impressions—a critical component of Internet measurement—and provides certain guidelines for Internet advertising sellers and ad serving organizations for establishing consistent and accurate measurements.

The American Association of Advertising Agencies (AAAA) and other members of the ad buying community asked for consistent counting methods and definitions and better counting accuracy, and this project was the result.

In adopting these standards, American Trade Magazines LLC, publisher of American Coin-Op, stands alongside other leading media companies that participated in the project such as AOL, Walt Disney Internet Group, Forbes.net, MSN, New York Times Digital, Yahoo! and Google. Our partnership with Google means that we can provide our clients and potential clients with better targeting, independently verifiable ad tracking, and broader creative options. To our audience, it means more relevant content and a richer, more personalized interactive experience.

For more information on the IAB guidelines, visit http://www.iab.net/iab_products_and_industry_services/1421/1443/campaign_measurement_audit.

ARMONK, N.Y. — My previous articles showed that from 1997 to 2010, the average washer vend prices stayed ahead of inflation, but fell behind the cost of natural gas.

Our overhead costs should be used to set our base vend price, but any adjustments to vend price should be made with utility costs in mind.