Weaving His ‘Web’

By PlanetLaundry staff | May 28, 2010

How important is a Web presence to the 3,600-square-foot Sel Dale Laundromat in St. Paul, Minn.?

That’s just one example of the importance that Gardner places on marketing his store. Gardner, 47, recently took some time to share his other experiences as a self-service laundry owner.

How did you get involved in the coin laundry industry?

I’ve been in the industry for nine years. I have one store now, but there was a two-year period when I owned two stores. I worked for the PGA Tour for three years in on-site marketing. Then my best friend and I started a business that turned bakery waste into animal feed. He was an agricultural commodities broker, and nobody was doing that type of recycling in Minnesota.

We had a plant here and sold it, then bought a plant in Chicago and did well there. At the peak, we had a fleet of 15 tractors and 100 trailers. We sold that plant also.

What is bakery waste used for?

It’s turned primarily into poultry feed, but also cattle and swine. There are a lot of Omega-3 fatty acids in it. We worked with 50 bakeries in Chicago. The real premium products were the three cookie plants there. They generated a ton of waste. Our attitude was that they weren’t in business to generate garbage, so let’s see what we can do to take care of the products that they mess up. We developed scaling systems that made plant production managers accountable for what they lost. Our motivation was to get more consistent loads of waste out of the plant. We used it as a sales tool deliver waste.

After selling the bakery waste recycling plant in Chicago, the logical next step was the coin laundry business, right?

First, I bought some real estate in St. Paul. But, yes, I had always thought the coin laundry industry would be interesting. I had this grandiose idea that I could go in and collect quarters. We sold the plant in early 2000, and by the beginning of 2001, I was fully engaged in the coin laundry business.

What attracted you to this business?

Originally, for the same reason why a lot of people get into it, because it’s a business that doesn’t have a lot of employees. I didn’t like the idea of having a lot of employees. It’s a business that was originally, in my mind, easy to run and one that was not going to take a lot of time. I wouldn’t have to deal with accounts receivable. You don’t have to deal with chasing people down for money. In my mind, it was easier. But that’s not the case anymore. It’s got its idiosyncrasies.

I was fooling myself that I could do something that’s really not in my character to do. I can’t not work.

What are the keys to a successful self-service laundry business?

Having enough equipment in the right location that is presented in a manner that is appealing to the consumer. One of the failures in our industry is that we, as a whole – more than 50 percent of the people in the business – don’t value our customers. There are a large percentage of us who have been in business for 10 to 15 years who realize that this is a retail business and that we have to care for our customers.

Never the let customers know that you own the place. My business is solely dependent on word-of-mouth marketing. The fact that my customers love me and I love giving them a product that they want makes people want to talk about the place to their friends and neighbors.

What are some of the hot-button issues for laundry operators in your area?

I travel around the country, and I know a lot of great, innovative operators that have successful coin laundry businesses. But, overall, I have seen a lot of the “next big things” start right here in Minnesota.

Full-cycle vending of dryers started in Minnesota. The idea that customers would embrace large-capacity washers came from Minnesota. In Minneapolis-St. Paul, we have a total of close to 20 120-pound washers in operation. Some of them have been in operation for more than five years. I really think the 120-pound washer is something that we’re going to see in every marketplace in the next five years. You’ve got to get the customers this large-capacity stuff so that they can get the job done quickly.

Our trade association members are always talking and sharing ideas on how to better serve and develop customers for our stores. Collectively, I think that the Minnesotans have got it down. I’ve been president of the Minnesota affiliate for six years, and I’m grateful that my job is as easy as it is. We have great storeowners who are ready to do anything when needed.

We have our own little group that loves going to visit new stores and talk to new storeowners. We want to get them engaged. We want quality operators in our marketplace. We don’t want somebody who’s going to be collecting quarters and turning their heads on the customer.

Another innovative thing we’ve done is to form a co-op advertising group among the storeowners. We collectively do a large-placement ad in the Dex and Yellowbook printed directories with the 24 CLA-member stores in the metro area. We also have a co-op Web site to promote the stores, and that gives our site more search engine optimization.

Right now we’re working on a charitable event for Minnesota storeowners that will act as a PR event for the industry.

What major trends are you noticing in this industry, particularly in your marketplace?

The large-capacity equipment is a trend. And it’s a trend we’re going to see more of. One area where we’re really starting to dig in is “green.” I like to say the coin laundry industry was green before green was green. We were forced to deliver products that were more energy efficient to the marketplace. The high-efficiency frontload washers had been in commercial laundries for 10 years before they were available to consumers. Water heaters in the last 20 years have come tenfold in their efficiency, with solar and alternative fuel applications.

In the next couple of years, we’ll finally see the better operators promoting themselves more effectively by being in tune with the green trend. We’ve been part of the trend, but the trend is we’ll see ourselves beginning to promote ourselves as being green.

What is the biggest concern you hear from the customers in your area?

I know all of my customers, no matter what economic group they come from, are feeling the pressure of the slowing economy. I don’t know that I hear complaints, but I see trends where their patterns change in the use of the laundry. I see trends in my customers’ usage.

Maybe it’s my ego, but I talk to a lot of my customers, and people are happy when they’re at my laundromat.

What’s the greatest technological advancement you’ve seen since you’ve been in business?

It’s hard to put my finger on any one thing, but I’m really excited about the real-time multiple vending capability on equipment – being able to take coins, cards, credit cards, loyalty cards, dollars and quarters. It really speaks to the change in the industry.

And the size of the capacity of the equipment has been a great advancement. We need to be able to vend that stuff easier for customers.

Also, inverter drives on washing machines have made a huge impact in efficiency. It completely changes the electrical profile of a store. Water heating technology also is right up there with the best use of technology.

To open a store and be able to take advantage of the reduced cost it takes a run a store has really impressed me.

Do you have a business philosophy?

Absolutely. The business philosophy I have is to take care of the customer. I used to use a coin laundry. Back when I was in the bakery waste business, I didn’t want to wash my clothes in my home laundry, so I’d take them to a self-service laundry because I knew the commercial equipment wasn’t going to have a problem getting the stuff off my clothes.

I had a lot of experiences myself in laundromats that I thought were inadequate. So the thing that leads me in my decisions is: What is going to be the best possible experience for my customers? Do I need to change the color of the store inside? Do I need change how the store appears? Have I set up my equipment to dispense the best possible quality of wash? I want them to have the best possible experience in my business.

What type of commercial accounts do you attract?

A lot in the health-related industry – aestheticians, massage therapists, acupuncturists. It’s a niche segment. If they convert to a large commercial laundry, they’re usually going to get charged more than we have to charge to make a nice profit.

Specific to your market and region of the country, what are your thoughts on vend pricing?

Minnesota is pretty progressive in vend pricing. There are some pockets of the country that really exceed us, but for the most part, we’ve been successful in being a trendsetter in high vend prices. One of our members here, John Craig, whenever he finds out that someone matches his price, he raises his. He wants to be the price leader, and he’s got two of the finest stores in the state.

Being progressive in vend pricing creates less fear for us individually to break that barrier. Raising prices is always a challenge for storeowners because they’re afraid they’re going to lose their customers.

And we have some low-price leaders, and they have their market and get some business.

I’m always impressed that the high-price leaders are delivering the better product – making sure the customer’s experience is more than what they might have expected – and they’re not afraid to get paid for it.

How are utility costs in your market?

We’re pretty blessed with normal to lower-end utility rates. Everybody I know is waiting for those rates to drop, which I’m sure will happen. Right now, my personal feeling is that there’s no end in the trend of seeing higher utility costs. If I were giving advice, I’d say take the money you’re making now and invest it in your store. When the utilities come back up, you want to be able to raise prices. If you don’t have a nice store to attract customers, you might not be able to raise prices as much when the utility prices go up.

How do you feel about attendants and their training?

My business is a little different than a lot of coin laundry businesses in that a growing area of our business is full-service, or wash-dry-fold. Over the last five years, the CLA has said the commercial and wash-dry-fold segments are the largest-growing segments of the industry.

The commercial laundries have gone out and gouged the small businesses. We can step in and provide a great service, better than they were getting from the commercial laundries. My store has had significant growth in that area in the last two years.

I look at the ability to offer full-service products as a reason for me to provide and pay more for training. The more training you give your attendants, the more quality employees you have. The more quality you have, the better salesperson they become, and the more business they bring to your bottom line.

I also look at training as a way to retain good employees. With full-service products, it gives you a reason to train them. It gives me the ability to pay them more, which gives me higher quality employees, and it gives them reason to stay.

Training is an element in my business model that creates many benefits in conjunction with the products that I offer.

One of the things that I was enthusiastic about as a member of the CLA was the attendant training DVD for wash-dry-fold. All of the content in the video is from my program. A lot of owners use it as a base training program. It’s a great tool for introducing people to the concept.

I use both CLA attendant training programs. I have five attendants. People don’t retain everything they see or hear. The first week that an attendant works for me, they see each DVD two times. A month later they watch them again. I ask my employees questions every time so that I know they’re getting more out of it every time they see it.

You’re a big believer in marketing, correct?

I think the most successful people in our industry that I have met are all marketing people. All of the people who are failing or aren’t growing their business – they think that marketing means advertising. And they should all get a CD that [Continental Girbau President] Mike Floyd produced on marketing for the CLA. If every storeowner would listen to it, I believe our industry would grow by tenfold overnight. Mike has been very willing to share his knowledge of marketing with our industry. I think everybody should listen to that. Anytime Mike Floyd speaks, I’m buying a ticket to go hear him, along with about 20 of my friends who have all heard him before. And all of those guys have businesses that are growing through this recession.

How important is the Internet to marketing your business?

I think our failure as an industry is that we haven’t grasped the wealth of free advertising available to us on the Internet. Those of us who have are feeling the benefits.

I have done everything possible to take advantage of the uses of the Internet by potential customers. If you search for laundromats in the city of St. Paul, I have made sure that my store pops up very high on the Google list. It’s a simple thing to do, and it doesn’t cost a thing. We as storeowners have missed the boat on that for the last 10 years – that boat and about a dozen other boats have emerged from this online world that we’re living in, and they are great, free ways to make the public aware of our product.

Another example is GPS systems in vehicles. You can ask these devices where the nearest laundry in your neighborhood is, and it will give you the directions. How do we ensure that our laundromats are on those devices? There’s a way to do that.

The cyber world is an area in marketing that we as an industry need to embrace if we want to be successful in the future. When customers come in and ask where the change machine is, you have to interact with them. They’ve never been in the store. Provide them with your customer loyalty program information, and ask how they found your store. More than 50 percent of the customers that are new to me over the last two years pretty consistently have found me via an online tool.

I attribute the fact that my business is up – not level or down – to my presence on the Internet.

Why does having a Web presence mean growth for you?

Because 50 percent of my new business over the past two years has been generated from a Web presence. Even with business up 30 percent in commercial and 10 percent to 15 percent in self-service, I would be breaking even on growth if it weren’t for my Web presence. It’s actually worse than that, when you figure that I would not have had the 50 percent of customers that contributed to the growth without the Internet presence. I would be experiencing negative growth on the self-service side.

What do you do to market your Web presence? In other words, you can’t just build a Web site and expect people to visit it. What are some of the things that you do to get people first to your site, and then to your store?

I brand everything with my Web address. I use Facebook. A fair amount of my customers use Facebook. Anybody who is a friend of the laundry and all of their friends see anything that I blog. So that’s a way of viral marketing.

I use an e-mail newsletter with coupons on it. It can be forwarded to other people, and I do get a small percentage of business from that.

I’m constantly changing the content of the Web site to help with search engine optimization. I also use Google ads and do a fair amount of linking.

With your pickup and delivery service, combined with your Web presence, do you have customers who never set foot in your store?

I do have customers who have never set foot in my store. Ideally, I will have commercial customers that will never even know that I’m a laundromat.

In your experience, when a coin laundry fails, what is the most common reason?

They didn’t join the CLA. The most common reason, if it’s a new store, is they didn’t do the due diligence like they should have. That more than likely comes from not joining the trade association and getting a non-biased opinion on their investment.

Where else are you going to get the opportunity to be put directly in contact with someone who has been successful in the business, who is willing to share ideas or look at your business or concept and punch holes in it to help you? You do that by joining the CLA and having them put you in touch with someone outside your market.

Another good coin laundry is better for the coin laundry industry. A lot of the more successful owners feel the same way. We’d rather see better operators than bad operators, who continue to feed the perception of “who would use a laundromat?”

The good operators see large families that have washers and dryers but don’t want to spend the nine hours a week that a family of four invests in doing their own laundry each week at home in between running kids around to hockey practice.

I have a group at my store – “The Saturday Morning Laundry Ladies.” They don’t need to come in. They have washers and dryers at home. But by offering a laundromat that’s friendly, time-saving and convenient – a place that people feel comfortable in – you can cater to people who don’t have to come to your store, but want to.

The coin laundry industry represents 2 percent of the laundry loads done in America today. That’s a very small percentage of the actual loads. If we could alter that by 1 percent or 2 percent, it would change the scope of the business.

Personally, what’s the biggest mistake you’ve ever made in this business?

Not joining the CLA before I built my first store. That store would not have been designed the way it was or built where it was if I had known the things I learned from the CLA. Saying that, my entire business plan has changed. It’s still a successful operation in Minneapolis. More than 50 percent of the revenue there is from wash-dry-fold and commercial laundry.

From a business standpoint, what goals are you looking to accomplish in 2010?

Maintaining a 30 percent growth pattern in the commercial and wash-dry-fold segments and 10 percent to 15 percent growth patterns on the self-service side.

Secondarily, develop with my friends in the industry a next-generation of employee training tools for coin laundry attendants.

What advice would you give a new storeowner just getting into this business?

Get involved with the trade association. Get to know as many storeowners as you can. Network, whether it’s in your marketplace or in other marketplaces. Learn from the folks who have made the mistakes. There are a lot of great resources out there.

As hard a time as it is now to open a business, don’t go in cocky like you think you know all about the business. Believe me, I didn’t.

In your market, is the coin laundry business still a good business to get into?

Absolutely. In the last couple of years, a couple of new stores have been built, and both of them that I know about are very successful. I know of others being built, and my guess is, from their location, that they will be successful, too.

There’s still a lot of opportunity in the rural upper Midwest that’s untapped. Regionally, yeah, there’s definitely opportunity.