New 5000 square foot mat 1/2 off promotion

[epic02]

A new competitor opened up and was doing a 1/2 off promotion there 80 LB wash was at $2.75 now it's $5.25 Yes $5.25 thats Los Angeles for you. Oh and dollar toploaders.
It's been 4 weeks and they ended there half off promotion.
there gas usage for the 4 weeks was 4514 therms and the water usage was 1649 units or HCF. In a month from now I will go back and see the usage without the promotion. I wonder how much of a difference it will be? I wonder how many customers will return to there old mats.

[Adamski]

Kenny,

I estimate it grossed between $20,000 and $25,000 that month. The net, if there was one, must have been tiny.

[otaat]

Kenny

I know that mat developer and you probably do as well. It is their motus operandi to offer 1/2 price promos for first 30 - 60 days, Hope this does not hurt your business too much.. They usually target larger markets that have lots of smaller mats and try to take their market share away.. Good Luck and see you in sept!

[otaat]

there gas usage for the 4 weeks was 4514 therms and the water usage was 1649 units or HCF. In a month from now I will go back and see the usage without the promotion. I wonder how much of a difference it will be? I wonder how many customers will return to there old mats.

Kenny, forgot to ask how do you know what their gas usage was?

[epic02]

I check there gas and water at the meter, and see what was registered.

[epic02]

OK guys it's been a month without the half price promotion maybe some of you guys can give me some insight to what you think.

Gas:
Previous usage doing half price promotion 4514
current usage without half price promotion 4537 gas usage went up 23 therms
Total cost of gas for 1 month = $3175.90 at .70 cents a therm total cost.

Water:
Previous 1649 Hcf
current 1492 Hcf water went down 157 Hcf 117,436.00 gallons.
Total cost of water for 1 month = $10,757.32 at $7.21 per Hcf(748Gallons) total cost of water with sewer.

No acess to electrc meter:

He used over 4 times the amount of water I used. Im about 2 miles from him and have a different water service provider I pay $3.20 per Hcf with sewer. A friend with a Laundromat that has the same service as him showed me his water bill so I can figure out the cost he's paying for water. If he was paying the same rate I'm paying his water bill would be about
$4774.40 That's a nice advantage I have along with not having to pay rent. Why am I the high price leader in my area?? Im getting so tempted to lower my prices or do a half off promotion myself or put them in a situation where if they follow my prices they'd probably end up selling, or they can start to lead the way with higher prices.

Because this place is new I might find myself having to compete if it was a unattended broken down Charity mat I would care less.

[Adamski]

Kenny,

Since his prices are lower than your's, you have to decide if you want to follow him down. I suspect he's still feeling his way and trying to grow his customer base.

At a penny per gallon, water certainly is not cheap over there. No doubt he's paying some pretty hefty rent too considering the size of the building.

[bodman]

holy mackeral bat man I just looked up one of my mats the water/sewer bill I used 110,000 gallons and my bill was only 762.00 I sure am happy I do not live in ca. I will take hurricanes over earthquakes and mud slides any day of the week.

[thinkclean]

OK guys it's been a month without the half price promotion maybe some of you guys can give me some insight to what you think.

Gas:
Previous usage doing half price promotion 4514
current usage without half price promotion 4537 gas usage went up 23 therms
Total cost of gas for 1 month = $3175.90 at .70 cents a therm total cost.

Water:
Previous 1649 Hcf
current 1492 Hcf water went down 157 Hcf 117,436.00 gallons.
Total cost of water for 1 month = $10,757.32 at $7.21 per Hcf(748Gallons) total cost of water with sewer.



very interesting... so this stat tells me once you get the customers in you're likely to keep them because they don't expect 50% off to last forever and they pay attention to whether the place is clean, how the machines perform and if it's convenient for them to get to.

[BCW]

Kenny, Maybe what is needed here is a little more time and patience. A war of attrition, if you will. They know what your prices are and can't wait for you to break and lower yours. If you do break, then they will have you right where they want you. You lower, they lower. Now what? So you lower again, they do to. Follow? Hold fast on pricing, and try to think of something else other than lowering your prices.

I know that your place is clean and modern, with all of the best equipment. No worries there. I would seriously just gut it out with current prices and pay extra attention to YOUR customers in the mean time. You are an old veteran in the coin laundry business. Just keep on doing it the Kenny way with a little more customer attention. Good luck, hold fast.

Tom

[thinkclean]

Kenny, Maybe what is needed here is a little more time and patience. A war of attrition, if you will. They know what your prices are and can't wait for you to break and lower yours. If you do break, then they will have you right where they want you. You lower, they lower. Now what? So you lower again, they do to. Follow? Hold fast on pricing, and try to think of something else other than lowering your prices.

I know that your place is clean and modern, with all of the best equipment. No worries there. I would seriously just gut it out with current prices and pay extra attention to YOUR customers in the mean time. You are an old veteran in the coin laundry business. Just keep on doing it the Kenny way with a little more customer attention. Good luck, hold fast.

Tom

Kenny,

Can you tell us more about your machine brand, vintage and mix versus this new 5,000SF competitor? I'm new to the biz having just rehabbed a store so I'm trying to soak as much as possible from the veterans.

Thanks

[epic02]

Thanks for the advice guys I appreciate it. Just so many options keep going thru my head. Some days I want to hurt them and other days I tell myself there just hurting themselves. Then I think this is this guys second low price laundry he most be doing something right. Then again maybe not because one of his place has no pre wash on all his machines and the new place does and both places have the same price 1.00 tops to $5.25 80 pounders.
I wonder when he's going to realize this is a bad move?
I know I can weather the storm, when Business slows so does my operating expenses.

Bodman, If I used a $110,000 gallons of water, which I do in a week My bill would come to
$474.40 compared to your $762.00 So maybe you should move to California. The competitor that IM talking about would pay $1069.87 for that amount of water He's using a different water supplier then me.

[epic02]

Ben, I have a mix of equipment ranging in age.

Maytag toploaders (flexible pricing)
Uni mac front loaders 35 lb
Speed queen front loaders 35/40/80lb (Flexible pricing on the 80 lb)
Dexter front loaders 45lb (no pre Wash)
Speed Queen stack dryers
Maytag stack dryers

His mat is a coin store using all older style Wascomat Machines (not the compass control for flexible pricing) one price for all water temps and pre wash.

[bodman]

epic so you go thru 440,000 gallons of water a month you must be grossing not counting wdf $41,000 dollars that is huge good for you.

[epic02]

Bodman,
Not quite, I dont have wdf. If your multiplying your gross amount times 4 to come to that amount
theres other factors you have to take into consideration. Does your store have a pre wash on the machines? Even though I go thru that much water, Los Angeles has the lowest vend prices Like top loads for $1.00 dryers at 10 min to 13 min per a quarter. If i can get away with 6 min of drying time per quarter $2.00 top loads and $5.00 40 lb front loads $8.00 to $9.00 80 pound washers with the tpd I have I would hit well above that mark. If I had those prices I wouldn't have very many customers, but I have to stay competitive. That's why not very many people make money in the laundry business in Los Angeles there just working for the land lord. Mats are always being sold here. They change ownership more then I change the tires on my car. We need more price leaders not followers. A new owner will come in and thinking he's going to make his business grow put is washers at half price .50 cent top loads and as soon as he raises his price he looses most of his customers the he sells. Then the next guy comes in thinking he can do better an does the same thing It's a never ending story here.

[epic02]

Okay Guys IM about to make a huge statement to my competitors. IM doing a grand promotion 1/2 off all front loaders for a month maybe longer depending on how things go. The fliers should be ready tomorrow. I think word of mouth will spread faster.
I've had it with them trying to beat my prices thinking they can push me around. I have advantages over them, and now it's time to take advantage of that. For a long time I was letting them get stronger and now thats about to stop. One low price leader is already on his second mat. Now it's my turn.

[STOUT]

You have a great fighting spirit. I hope you knock the socks (clean laundry :D) off them!
Best wishes.

[thinkclean]

Okay Guys IM about to make a huge statement to my competitors. IM doing a grand promotion 1/2 off all front loaders for a month maybe longer depending on how things go. The fliers should be ready tomorrow. I think word of mouth will spread faster.
I've had it with them trying to beat my prices thinking they can push me around. I have advantages over them, and now it's time to take advantage of that. For a long time I was letting them get stronger and now thats about to stop. One low price leader is already on his second mat. Now it's my turn.

Good luck Kenny. I started my $1 wash promotion on 20 pounders last Thursday right before Labor Day weekend. It's my first price incentive since re-opening in mid July.

www.thinkcleanlaundry.com

[Adamski]

... I'm doing a grand promotion 1/2 off all front loaders for a month maybe longer depending on how things go...

Kenny,

How is your new promotion going? Have your turns increased? What are your customers saying about it? I know you don't want to tip your hand to your competitors who may be reading here but just tell us what they already know. I appreciate any feedback.

[thinkclean]

So what happened after your re-position?

[YoungJedi]

The suspense is killing me.

Jason

[Laundry_Mike]

There are no winners in a price war. There should be a competancy test administered, and criteria met before any American citizen is allowed to own a business or have a child.

[epic02]

Without going into much detail incase my competitors are reading this all I can say is my business is doing a little better then last year. The promotion brought alot of my customers back and some new ones. When it finished Im sure alot of customers went back to there old habits but I got my regular customers to come back and stay. If they want to try another stunt with 50% off promotion for a month, I will do it for two months. IM not going to just sit back and let a new competitor come in and steal my customers.

[Adamski]

Kenny,

I fully understand where you're coming from on this issue. It is extremely difficult to just sit back and watch some new laundromat entice away your customers with their Charity vend pricing. I like the fact that you've put them on notice here that any more cut-throat promotions on their part will be followed by a similiar promotion on your part but for twice as long. As a well-established operator, you can afford these extended promotions a lot better then the new guy can with his high start up costs.

I sent you a PM a few days ago. Did you get it? My computer was running slow when I sent it and I'm not sure it went through.

[epic02]

Yeah Larry, I got it. I just didn't have time to respond to it yesterday. My Internet is temporally down at the mat.