One of the hardest decisions to make when running a laundry business is how to price machines. Charging too much or too little can put you out of business if you’re not careful. Therefore, knowing how to create a laundromat pricing strategy will keep your business running smoothly.
Perform a Market Analysis
A market analysis is part of business 101. It’s something you should do when you’re looking to open a business, but it’s also important for keeping the business profitable. At regular points in your schedule of management duties, you should review the following information about your market:
- Competitor pricing strategy
- Effects of location on business
- Customer demographics
- Industry trends
- Market size and growth
Review Business Statistics
In addition to understanding the context of your business, you need to look at your numbers before you can create a laundromat pricing strategy. What does it cost to run your business? You’ll need to look at factors such as employee wages, utilities, property fees or rent, machine upkeep, Wi-Fi, and any other relevant costs. Then, compare these numbers to the revenue power of your machines.
Once you get to the point of assigning prices, there are a few things to keep in mind. Remember, laundromat pricing doesn’t follow the rules that apply to other types of businesses.
Offer Your Customers Options
Having different options at your laundromat can help customers feel like they are in control of the money they’re spending. If customers think some of your prices are too high, they can find ways to spend less money by choosing different options.
One way to set up this type of pricing scheme is to vary your prices based on the sizes of your machines; charge different prices for 30-pound, 60-pound, and 80-pound machines. You can also add in bonuses, like a super wash for three extra minutes.
Keep It Simple
At the laundromat, it’s important for your customers to be able to add up prices quickly. While the pricing logic at a retail store says to charge $4.99 instead of $5.00, you should try to avoid that at a laundry business. Keep the prices whole and easy to understand. If your machines only take cash, this ensures customers only need to bring bills or quarters, not loads of pennies.
Make It Adjustable
As time goes on, there will come a need to change your pricing scheme. We recommend making your pricing scheme adjustable so you always know what your rates are.
For example, some owners set their prices based on a percentage of the local minimum wage. As wages change, they’ll adjust their prices to reflect the buying power of their target demographic.
Follow These Pricing Tips and Tricks
It may seem fairly simple to run a laundromat, but many new businesses end up making mistakes. We’ve gathered some of the best industry advice to help you avoid the same problems.
Remember That Price Isn’t Everything
One of the most important pieces of advice in the laundry industry is to avoid making all of your business decisions about price. One compelling reason to avoid this mindset is that customers don’t choose laundromats based on cost alone. In fact, it’s usually the last thing they consider.
Instead, customers care more about the quality of service at a particular location. Consider this list of what customers care the most about:
- Store safety
- Availability of working machines
- Fast customer service
- Cleanliness of store
- Avoiding overcrowding
- Amenities such as snacks, beverages, Wi-Fi, etc.
If your customers believe they’re getting a good deal for their money, they won’t care as much about the price. Therefore, if your store is already going above and beyond for your customers, chances are you can afford to raise your prices.
Maximize Discounts and Sales
Sales and discounts are a great way to bring more people into your store, but they can lead to decreased profits if not used appropriately. One trick to try is offering a discounted wash rate during off-hours when your business doesn’t get much traffic. This will encourage some people to switch days or times, freeing up space during peak hours. Meanwhile, you’ll get more business on days when things would normally be slow.
You can also offer a free wash day near major holidays. Acts of generosity deepen customer loyalty and encourage more people to visit your business. Only you will know it doesn’t actually cost that much to keep the store open for one day of free washing.
Educate Your Customers
Even those who’ve been doing laundry for years often get things wrong. For example, some people always overstuff their machines even though doing so makes the machines less effective. Loads will come out of the wash still dirty because water couldn’t circulate, or clothes won’t be dry because the heat couldn’t penetrate properly. A person who overstuffs will end up paying for more loads.
By educating your customers, you’ll save them money and reduce the wear and tear on your machines. One of the most effective ways of doing this is to offer full-cycle dryers only, instead of the kind you can run in 15-minute bursts. People don’t usually realize that opening the dryer lets heat out and makes the process take longer, so they end up paying more for multiple cycles.
Know That Lowest Prices Are Rarely the Answer
Many get into the laundry business assuming that having the lowest price in town will attract the most business. Unfortunately for those people, having the lowest prices usually means having the dirtiest store and the lowest profits. Instead, endeavor to be at the front of the pricing pack; you’ll charge more for your machines, but people will appreciate the quality of service you provide in return.
Increase Store Quality With App Payments
Since quality of service is the most important aspect for your customers, you should consider implementing the right technology into your business model. Laundromat payment systems, like ShinePay’s laundry app, bring your business into the twenty-first century with faster payments and easier management tools.
With ShinePay, your customers can choose between an app and old-fashioned payment methods, like coins. All you have to do is install the ShinePay Bluetooth devices in your machines and sit back to monitor your income from our intuitive management suite. We track all of your payments in one place so you don’t need multiple systems. Plus, you can handle customer refund requests with the touch of a button. Contact us today to make your business more efficient.