Putting Prices Up - Tips?

[aussie_mick]

I have done a bit of investigation and discovered I am the last laundry in my area to raise prices. Most have only recently made the changes, which add about 15-20% to prices. Its the first price rise in the 2 years ive been there and for 2 years before that. I intend to raise prices across the board for all our services and products.

I have mentioned it to a few regular customers to gauge reaction and they invariably seem to be accepting - I think the spiralling fuel costs have desensitised them to a large degree. They almost expect prices to go up.

Just wondering if there are any tips on how to best communicate and bed in the rises in a way that the customers almost feel they have done well out of it? Maybe asking for too much.

At the moment im planning on putting some notices up about a week before and trying to make the rise seem miniscule (ie its only a dollar or two more!).

Anyone got any suggestions or actual documentation theyve used that i can plagiarise?

thanks

[keepitclean]

Maybe a simple notice that forwarns them of the pending increase. Post it 15 days before and you should be good. But, I personally don't think you need to explain why prices are going up finally after 2 years. I don't understand the thought process from owners who feel a need to explain their pricing strategy to their customers.

I am probably in the minority on this so you will probably hear something positive and supportive from others. Good luck

[Senior_Sudsy]

I have never seen any of the businesses I frequent post notifications of price increases, I do not see why our industry should. I raise my prices 3-4% every year just like every other business in the world. If we would all raise prices regularly we would all be making more money.

[aussie_mick]

Thanks for the feedback. Appreciate any other views.

I understand the frustration that other businesses dont feel obliged to advise price rises in advance - but i know in my part of the world (and probably yours too) the price of new washing machines is falling and the decision whether to stop paying money each week/fortnight at the local laundrette is a distinct possibility. Most people have a "figure' which will trigger the decision to stop "renting" my machines and buy new. I just need to work out what it is and stay under it.

[Spin_City]

I raised my prices when gas prices nearly doubled last winter. I posted a few notices which included a chart showing that the natural gas price had doubled since the summer. I also went system of varying prices for cold, warm and hot water at the same time, and lowered the cold water price a bit - explaining on the notice that we were raising some prices and lowering others to better reflect energy usage. We had virtually no complaints about the price increase. Business dropped off very slightly for about 2 months, and then came back to the previous level.

We left the notices up for about 1 week, and then took them down (no need to remind customers about the increase). Gas prices are down to last summer's level, but we are not cutting our price. No one has mentioned that this is inconsistent with the message of our price increase notice.

[Laundry_Mike]

No notice. No other business gives you notice of a price increase. You can explain why you had to do what you needed to do to the customers that are even interested. It's really that simple. Most just say that it's like everyplace else they go that prices have increased.

[petefritz]

No notice is needed, people expect prices to rise. If you really feel obligated, post a note saying rents, taxes, insurance, utility, etc has risen so you need to raise also. I normaly do not, but after the hurricanes last year and double gas prices I did post a note saying high gas has forced high dryer prices, sorry.

[kbc747]

I will tell my customers of price increases when Walmart tells thier customers of increases. Never and when was the last time anyone told you, now go raise your prices before the others lower thiers again.

[njk5298]

did exxon tell you when they raised prices? Did chase bank tell you when they raised there fees? No just raise your prices.

[rogergood]

I agree with everyone. Who advertises a price increase? Why are we so nervous about increases? Here is an isea. what do you think about it. With nat Gas down, increase washer prices and give another minute per quarter. That way people will think that last years increase on dryer prices was legit. If nat gas goes back up to 10/mbtu, dryer prices go up again.
thoughts?

[DuboisLaundry]

If you increase dryer time to "prove" that previous price changes were legitimate, how do you justify increasing the washer price at the same time?
don't answer, just change your prices for whatever inflationary pressures you face, and do it without notice.

I can only think of very few businesses which announce price increases in advance. Residential Rents and Adjustable Rate Mortgages come to mind, and as far as I know they only do it because they are forced to by law.

The Laundromat is quite similar to the gas station, the mall, and the grocery store and not at all like residential rents or adjustable rate mortgages.

[Derbunk]

I really cannot understand why people get so bent out of shape over prices at the mat, people are not paying anywhere near the prices on anything that is used on a daily basis: groceries, homes, rents, cars, appliances, and the list goes on, why is it that we have barely raised our prices in this industry over that last decade or so we went from 60c to $2.00 in a period of around 15 to 20 years, yet our expensise have skyrocketed, some of us pay huge impact fees, outrageous gas prices, and we have not passed it on to the comsumer...WHY? yet even at the prices we charge we still get called crooks and gougers, this from people who pay $1.25 for a bottle of water, when we offer them 25 to 30 gallons for $2

[Monarch]

I disagree about no notice. Yes, no other business that I know if does this, BUT you are generally dealing with people of restricted resouces. It ticks them off to walk in thinking they can get their laundry for their usual and suddenly find they unexpectedly need another two or three or more dollars. The signs put up ahead of time take the sting out of if for them. The other comments are correct, peope are resigned to seeing increases. But just because other business do not do this does not mean that YOU should not take a little time and effort to be sensitive to your customer's situation. How about taking the higher ground and doing something that others DON"T do?

And just to return the favor, I can tell you that materials cost are killing manufactures, Brass has tripled since December, Stainless is up 200% and regular steel is up 189%. The die cast components in our product have or will be going up about a $1.00 each. and locks will be going up 15-20% (they are die cast and brass after all) I know some of the equipment makers have already increased prices. If you are think of getting anything for your facility, I would see how long any price quoted will be good for!!


Norman

[Spin_City]

I agree with Norman from Monarch. And by the way, in answer to a question posed by several others, I DO know of some other buinesses who give notice before raising prices; my natural gas company, my electric company, and my water company. I think that most customers realize that we are slaves to the utilities, so why not "officialy" blame the big, bad utility company for your price increase via a notice?

As mentioned above, I raised my price when gas prices were very high in the winter, and put up notices blaming the gas company for the price increase. I included a chart showing that gas had increased 95% since August, and showed how many quarters it took to pay my January gas bill (12,800 quarters for 1 month! I think that gave the customers something to think about while dropping quarters in to the dryers).

I felt that the notices would reduce my customers' negative feelings regarding the increase, and that my notices could communicate my message better than some of my staff members (at $7 per hour you can't hire the Country's best communicators).

[Duane]

I made a price adjustment January first and had posted a notice of why the prices were being adjusted (a list of each utility price hike for the past two years) one month prior to the adjustment.

I had pointed out the notice to many, many customers to get their opinion of the price adjustment, and they all understood why I needed to adjust prices. Several actually game me suggestions on what to charge.

Now here is the kicker..... With the feedback I received from my customers I actually raised my prices HIGHER then I had first planned. With five months into the price adjustment my TPD has still increased so I haven't lost any customers.

We certainly don't need to advertise our price adjustments, but it definitely does help.

Duane.

www.LMARIES.com (http://www.LMARIES.com)