Wash with Wally: Taking on the Competition

By Wally Makowsky | Feb 14, 2011

I own a 4,700-square-foot laundry with 125 washers and dryers, and I’m located next to a larger supermarket. However, a couple of months ago, a competitor opened up a brand new, 3,000-square-foot store with 88 washers and dryers, a card system and three 52-inch LCD televisions. The store is only a half-block away from me in a small strip mall, and there are signs promoting this new laundromat all over the place.
 
The owner is giving away free turkeys every week, and he holds a monthly raffle with the winner getting $90 worth of free laundry on his or her laundry card.
 
I have already lost about 40 percent of my business. What are the most cost-effective ways you can suggest to help me retain my customer base and not lose any more business? What would you do?
 
First of all, I would check out his location thoroughly and find out if he has more large machines, as well as what his vend prices are, because those two factors may play roles in why you lost as much business as you did.

Also, see how his parking situation compares to yours. Your parking should be satisfactory; however, his may be slightly better because he’s in a smaller mall, which may allow customers to park closer to his store.

Next, put in any of the major amenities he’s got that you don’t have. For instance, if you don’t have any LCD TVs, that would be the first thing I would install.

You have the larger store. You have more equipment to satisfy the customer base. But you have to be sure that you’re operating at the same level as he is.

That said, most new laundries typically take away a big chunk of business early in the game. However, if the other stores are run properly and offer the same service, the customers often gravitate back to where they’ve always done their laundry.

One clear advantage your competitor has is his card system, which enables him to change vend prices and run promotions whenever he wants to. With a coin-operated store, you’re somewhat limited as far as what you can do to compete. But there are a couple of very effective ways to promote your store.

My first recommendation is to establish a punch card system, where customers receive a certain number of “punches” on their cards, based on the number of loads they do or the types of equipment they use. After they fill their cards, they receive $50 worth of washing at your store.

Once you start punching their cards, these customers will keep returning to your store until the cards are filled. That’s one way of competing with the other store’s $90 laundry card raffle; he’s satisfying only one customer per month, while you’ll be satisfying all of yours.

Another option is to send out flyers with four coupons on the bottom. Each coupon should be for a different month, and each monthly offer should provide a special discount on certain washers or dryers. This way you get four months of promotions with only one mailing.

Again, card-operated stores are very flexible, and they can be difficult to compete against because they can change their promotions at any time. But I wouldn’t worry too much. If you run your store properly, you’ll get a lot of that original business back.