Growing Your Market

By Bob Nieman | Apr 27, 2009

For today’s homeowner or renter – and potential self-service laundry customer – the numbers don’t lie:

The average American woman spends seven to nine hours a week on laundry, according to statistics provided by Proctor & Gamble.

By contrast, the average coin laundry customer spends only one-and-a-half to two hours per week on the same chore, based on Coin Laundry Association research.

In addition, while a typical home washer can handle up to 12 pounds of laundry, a 25-pound, commercial-grade machine can wash twice that amount, slashing the time to do that chore in half.

And who are these potential customers that should be taking advantage of today’s modern laundries? It’s likely the husband and wife with three kids. Perhaps they both work outside the home and, on Saturday, they have this huge pile of laundry with one washer and one dryer in the basement.

Basically, they’re looking at an entire day’s job, especially considering that a home dryer can take 60 minutes or more just to dry a load of towels.

This family will come to a laundromat – if it’s clean and relatively convenient – and fill anywhere from five to 10 washers. And they’ll do the whole weeks’ worth of laundry in about two hours.

“There are two major reasons why they come here,” said Art Jaeger, who owns laundries in southern California. “One is time. I constantly get customers telling me that they would be doing laundry all day or all week, in some cases – load after load after load. But by coming here, they can use X amount of washers and Y amount of dryers, and get everything done and get out of here.”

“Upper-middle-class people seem to be so involved with their kids and all kinds of sports and activities that they just cannot get the laundry done at home,” agreed Bob Meuschke, who operates two laundries in Kansas City, Mo.

The second reason a homeowner would patronize a coin laundry is because the larger commercial washers and equally large dryers available at today’s quality stores that can effectively handle comforters, bedding, cushions, sleeping bags and so on.

“A lot of homeowners buy very nice comforters that are going to last,” Meuschke said. “They’ve got a lot of fill. They’ve got a high thread count, which makes them ultra-heavy. I have customers come in every day saying they can’t wash their blankets at home because they tear up their washers.”

“We have a 20-pound frontloader in our house,” said Fred Collins, who owns four laundries in northern California. “But it wouldn’t take our comforters. We have to bring them to the 50-pounder at the store because of the size.”

Jaeger estimated that about 80 percent of his customers have access to laundry equipment elsewhere – yet they choose his laundromat. The majority of those customers are either apartment dwellers with access to laundry rooms or in-unit washers and dryers, or homeowners with machines at home.

“Most home washers and dryers – even though they advertise that they can wash large things, like comforters – really are not made to wash large items like sleeping bags and things like that,” said Duane King, who owns LMARIES, a self-service laundry located next to the Bowling Green University campus in Ohio. “This is where the coin laundry comes in, with the large equipment and the large dryers. I’ve got people walking from the dorms, which have the same washers I do, but the dryers aren’t as big. Plus, it’s the convenience of having a nicer place to go to. They’re dealing with other college students there. Here, they don’t have to worry about their clothes being thrown on the floor.”

In addition, because the university and the local apartment owners are not in business to make money off of their laundry services, they don’t maintain the equipment as well as a laundry owner will, according to King. As a result, washer and dryer performance decreases, along with wash quality.

“I am never scared by laundry rooms in apartment buildings and condos,” Jaeger added. “A laundry room does not meet the standards of the needs of the people in there. They’re typically not maintained. The equipment mix often includes toploaders with inefficient dryers. They’re boring, dirty, crowded, cold and damp. I am not scared by that.

“The homeowner segment is different. The homeowners will not come to you if they perceive you are not a first-class operation or that it’s beneath their status to be in your coin laundry. So you have to show them why your place is a place that deserves their business.”

But before you can show them anything, you need to get them to visit your store.

Getting the Word Out

It has been proven time and again that every five to six years, the equivalent of your entire marketplace will have moved from the area. Those business owners who claim that they have been at the same location for 20 years and, therefore, don’t need to advertise because everyone knows about them are either naïve, lazy or both.

Some laundry owners utilize only in-store advertising. Unfortunately, to attract any business from homeowners, you have to let the people outside of your store know what you have on the inside. After all, many homeowners sort of remember the laundromat they used in college as a dark and dirty place, so they don’t even consider laundromats as an alternative.

“Word of mouth is always the best advertising,” King said. “A happy customer will spread the word like wildfire.”

However, King quickly added that he works with the local newspapers, including the university’s paper, on regular advertising campaigns, along with sending out flyers. In addition, he takes advantage of the opportunity to sponsor area baseball and softball teams.

“A lot of my advertising is seasonal,” King said. “I do most of my heavy advertising in the fall, to get all of the new students coming back to school. Our customers are creatures of habit, so once they go someplace, they’ll keep going back. So I try to capture their eye – and their money – right when they come back.

“When springtime comes around, I do a lot more advertising in the local newspaper, because that’s when people are thinking about spring cleaning, camping gear and so on. That’s where the larger washers and dryers come into effect.”

“We try to market that time is money,” explained Harvey Kantor, who owns a laundry in Pennsylvania. “If you’ve got eight loads, you’re going to spend a lot of time doing it. Of course, you’re doing other things when you’ve got kids. At a laundromat, eight loads become three loads in the larger washers – and you’re done in two hours, not six or seven. Even with the new frontloaders that I have at home, the wash cycle is 50 minutes. At the laundry, it’s 30 minutes. Just one load cuts the time almost in half.”

Kantor has had good success advertising on the backs of cash register tapes from the local supermarket, as well as through the local retail association, of which he is a member. However, he also suggested a targeted mailing aimed at higher-income individuals in the marketplace.

“I subscribe to Sales Genie for my finance business,” he explained. “But we also use it in the laundry to reach people who have moved into the area within the last 30 days. We send them a postcard with a coupon for a free wash or discount on our wash-dry-fold services. After all, since they’re new, these people are not breaking a habit.”

Meuschke, like Kantor, plans to target a dollar-range class of potential customers and advertise to them with a direct mail piece, emphasizing the time- and cost-savings involved with using a coin laundry.

“People have no time,” he said. “We are just maxed out to the nth degree. Our whole society is just gung ho, pedal to the metal. I’d like to put a value to their time and show them what it’s taking to do their laundry at home. Even if they’re watching a TV show while they’re doing laundry, they’re still tied to that washer and dryer for X amount of time, depending on how many loads they’re behind.”

In addition, Meuschke is investigating the effectiveness of radio spots aimed at homeowners.

“It seems that middle- and upper-middle-class people listen to a lot of talk radio,” he explained. “I’d also like to get my Web site complete, because then I can advertise the site over the radio. You can’t show people anything on the radio, so you have to do it with an aggressive, 30-second attention-getter sending them to my site.”

Jaeger recently began advertising on the tops of deliver pizza boxes.

“I’m on Papa John’s pizza delivery box toppers,” he explained. “Everybody who orders a pizza from the local Papa John’s within an eight-mile radius, and just up the block from my store, will get one of my coupons on top of the box.

“My thinking is that anybody who will order in means they have a time problem and they use outside services, so those could be the kind of people I want to get to into my laundry. We tout the large equipment we have available. We’re selling new, clean, friendly, attended, coin-less. Of course, we also include coupons for our comforter service or our drop-off service.”

“We know a lot of families, friends of ours, their kids go to school with our kids,” King added. “They have washers and dryers at home, but I’ll see them here once a month just to get caught up. After all, you probably need to do a load of laundry a night. But, if you get busy and miss a couple of nights, then you’ve got a whole day of doing laundry.”

Consistency and repetition are the keys to successful advertising, as well as backing up your grandiose, advertised claims. Walk the walk. Word-of-mouth advertising will be positive only if you deliver what you have promised. For example, if you advertise "The Biggest Washers in Town!” make sure that you have plenty of your biggest frontloaders in service and available for when those homeowner or apartment-dweller clients show up with a week’s worth of wash.

When you ask potential customers to try your coin laundry, you are asking them to change the way they’ve always handled their laundering – be it at home by themselves or through another store’s wash-dry-fold service. To break such an ingrained habit, you have to give them a good reason to do so.

Coupons are always effective, as well as advertising a special feature of your store or a particular service. Direct-mail pieces, flyers and local newspaper inserts are all relatively cost-effective vehicles to get the word out about your coin laundry.

Of course, don’t forget your store’s exterior signage when evaluating your advertising strategy, especially when trying to lure homeowners through your doors.

“You’ve got to have a good sign in front of your store so that when people decide on their own that they need a laundromat, they’re thinking about you,” said Larry Adamski, who owns a laundry in Muskegon, Mich. “The reason they think about you may very well be because they saw your sign: ‘Oh, I know there’s a laundromat down the street.’ You start with that. I try to have a good sign and keep the place nice. And I get a lot of word of mouth.”

Accommodating the Homeowner

Once you’ve attracted these homeowner customers, you’ve got to give them what they want. Is your self-service laundry equipped to handle customers who are looking for something a notch above their home washers and dryers – or whatever is available to them in the apartment complex laundry room? Certainly, more than anything else, they’re looking for large machines to get the job done as efficiently as possible.

“You have to have equipment of all sizes, but particularly large equipment, that they do not otherwise have available to them,” Jaeger said.

Meuschke offers his customers seven different sizes of washers. “And they’ll wait in line for the 35s, 50s and 75s,” he said. “They’re looking for bigger equipment. They’re looking for cleanliness. They’re looking for safety. They’re looking for professionalism. That’s what’s going to capture that segment. And, frankly, we should be doing those things anyway.”

“I’ve got five sizes of washers here now,” Adamski said. “It’s almost always the larger equipment that gets used – from a triple loader, or 30-pounder, on up.”

Kantor agreed that larger commercial-grade machines are needed, but it’s not necessary to go to extremes.

“The normal 18-, 20-, 25-, 35- and 50-pound machines are fine for attracting this segment,” he said. “If you have larger machines, that’s great – but you don’t need anything bigger than a 50-pounder in most cases. As for dryers, most stores only have 30-pounders. If you have 45s, 50s or 70s, that’s all the better.”

Above all, it’s important to remember that homeowners have choices. They can do some, most or all of their laundry at home. So, at the bare minimum, your store must be clean, with all of its washers and dryers operable, and preferably attended.

You need to give these potential customers a facility that they’re not embarrassed or afraid to go into.

They’re looking for a clean store. That’s one of the things people are skeptical about. They concern themselves about a facility that’s used by a lot of people. They’re concerned about the cleanliness. Not being regular coin laundry users, sometimes they can feel a little nervous that other people are using the machines – not that there is a valid reason for those types of thoughts, but it’s a very real perception, and you must remain aware of it.

Where Are All the Customers?

So, what’s keeping homeowners from patronizing their local laundromats in droves – getting that pesky laundry chore knocked out in just hours, saving big money and having more time for their families?

“Right now, gasoline prices are a huge hurdle,” King explained. “People would rather sit at home. They’re not going out as much. They can’t afford to go out and eat, so they have more time to spend at home doing their laundry. Of course, that’s just affecting the people who have the option to use a laundromat or not. The people who don’t have that option are still going to be here.”

Another hurdle rests squarely with many of today’s store owners.

“One of the major obstacles is that we’re scared to spend advertising money,” Meuschke explained. “We’re going to have to increase our advertising a little bit percentage-wise to try to place a greater focus on what we can do and how we can save people money.

“But we have to do our own leg work if we want to use our advertising dollars to their best value. We have to do the running. There’s no company out there that’s going to do that for us, without charging us an arm and a leg.”

However, Kantor warned that perhaps laundry operators shouldn’t be so quick to spend a bundle going after this potential market.

“It’s an expensive customer to obtain because they’re going to come into the store infrequently and marketing to them costs the same as marketing to a potential regular customer,” Kantor added. “You’ve got to contact 100 people to get two. At maybe $1 a postcard to get a customer that may not spend $50 with you in a year? It may not be a real good market to invest a lot of advertising dollars into.

For some, another roadblock may be the vend pricing at laundry rooms in apartment complexes and condominiums.

“Perhaps the biggest obstacle is the fact that apartment laundries are generally under-priced, because the owner of the complex is providing the utilities for those washers and dryers,” Adamski said. “And they don’t have a feel for how much utilities on those machines are costing them. Their utility bills are combined with the cost of running parking lot lights and all kinds of other things around the complex.

“Plus, the other thing is that some of them have the attitude that they’re just offering laundry facilities as a convenience for their customers; it helps them to rent out their apartments quicker so that they have a lower vacancy rate. Many of them don’t even care if they break even on their laundry business. They just want to reduce their vacancy rates. Laundry is not their livelihood.”

“The obstacles to reaching this market are all of our own making,” Jaeger philosophized. “It’s working against things that you might not ordinarily have done. It’s making the decision to have the attendants, have a clean modern store, have larger equipment and advertise – all of the things that we, as laundry owners, typically haven’t done. But these people are reachable.”

A Bigger Slice of a Bigger Pie

Is it time to redirect the focus toward making that "pie" bigger for everyone? As an industry, it’s essential to begin growing the market for coin laundries, rather than obsessing over the cannibalization of existing business from one another.

Billions of dollars go through apartment laundry rooms alone, which provide basically the same service your laundromat offers. And what about homeowners? All of these individuals, despite access to their own washers and dryers, remain potential targets for your laundry business.

If the industry could capture just a small percentage of those households currently doing their wash at home or using apartment laundry rooms, the increase in sales volume would be in the hundreds of millions of dollars annually.

“All segments of our customer base are extremely important,” Adamski said. “I question how much business we’re going to be able to get from that particular segment going forward. Everybody is looking for comfort and conveniences, and hopefully, laundromats can keep pulling in customers from their market areas, even though some of those customers are going to have alternative laundry facilities much closer to them – and maybe even lower prices as well.”

“Personally, I try to grow that market,” King said. “Hopefully, if I get somebody to come in once a year, if they have a problem with their home washer or dryer, I’ve got them as a customer. It’s not so much to get them in right now, as in the future. It’s a future investment.”

“It’s great when they come in,” agreed Tom Rhodes, who owns a number of self-service laundries in Florida. “They always need a little extra help because they don’t know what the machines are like or where the changer is. They demand a little more attention and hand-holding. But we love when they come in, because, hopefully, when they need us again, they’ll remember us.”

Bob Meuschke’s stance is a bit more aggressive.

“History shows that we could just sit back and customers would slowly come in,” Meuschke said. “But our costs are increasing faster than we can increase our prices. That cuts our profit margin. The only way we can fight that off is to find new customers or a new area that we have not focused on.

“We need to focus on that middle-class customer who is trying to do everything in the world, plus trying to do their own laundry. We need to show them how much money they can actually save in wear and tear on their own laundry equipment, on utilities and, most of all, on their time. If we want to maximize our profits today as coin laundry owners, we have to focus on all segments of the business.”

Art Jaeger agrees.

“It’s crucial,” he explained. “If you’re only going to try to serve the lowest income segment of our population, how are you going to add higher value services? How are you going to lift your vend prices to where they’re supposed to be? It keeps you in a rut, where you’re then susceptible to the worst-run laundry in your neighborhood.

“The worst-run laundry in your neighborhood is the guy who’s charging 75 cents for a toploader and 25 cents for a 15-minute dry. All of a sudden, you think he’s your competition.

“I never, for one second, thought that kind of store was my competition. Anybody who’s interested in washing over there – I’m not interested in having over here. They can be my guest. My intention is not to take his customers. The whole idea of this store is that I believe there is a huge populace in this area that wants to use the services that we provide but would never go into the stores that are currently there. I go in with a total belief that I will be expanding the market.”