Should you tell your customers ahead of time that you are about to raise your prices for wash and fold? How do you get the word out? Learn how to minimize customer attrition and how to get commercial accounts to pay more. With wages and fuel costs going up, are you charging the right price?
[Transcript]
Welcome to state of the laundry industry with Laundry ‘Matt’ episode 19, how to raise wash and fold prices. Today, we’re gonna be talking about raising prices, which I know is everybody’s favorite topic, because that ultimately makes you more money. It’s something that most laundry owned are scared to do, because we don’t like to face rejection. If we lose that one customer, it’s easy to lose sight of the bigger picture. The bigger picture is this. We have never raised our prices and made less money. Let me phrase that another way. Every single time we’ve raised our prices, we’ve made more money. So let’s focus on that. And then we’ll talk about how to kind of capture. If you do lose some customers, how to get them back into the mix. One thing is I often see laundry owners, miss pricing , wash , and fold . And the reason is this. A lot of times they get into wash and fold and they already have the tenant in place. So from their point of view, they’re not paying for the attendant because the attendant is already there. And this is one great way of misconstruing your prices and setting up a bad precedent. The reason being is if you’re doing wash and fold , right, and you have a strong web presence and hopefully good software, you know, low plug for curbside LA, if you’re doing things right, and you’re growing your business, you will need to hire another attendant. You need to factor in the cost of labor, into your wash and fold pricing. I mean, that sounds obvious, but I’ll tell you there’s some hobbyists or people just getting into the business who don’t realize that you need to factor in the cost of labor or into wash and fold . Otherwise, it just doesn’t make sense. You need your business to , to scale. And if you Ms. Price wash and fold and you’re charging too little, well , winds up happening is some of those customers who joined you while you were real cheap, may not stick around. So were they really good customers or not? Are they really willing to pay market price , price or not? I’d rather you focus and create your business around real customers who are willing to pay what it costs and more. We’re raising our prices by about 9 cents per pound, which is gonna help us make thousands and thousands of dollars more per month. So one little price increase makes a big difference on the revenue. How do you raise your prices? Do you announce the rule that you’re raising your prices? I oftentimes see laundry owners kind of going back and forth on Facebook. Do you announce your price increase or not? And the answer is yes and no. For most of your customers, you should not mention your price increase. You . You don’t announce it. For example, when you go to the grocery store and they’re always raising their prices, there cost of milk is going up. The cost of gas is going up. When you buy gas, do they say, Hey, it’s now five bucks a gallon, but if you would’ve bought it a week ago, it would’ve been $4 a gallon. No last week’s prices is completely irrelevant because last week is done. We’re not there anymore. If you want gas, this is the price. If you want a gallon of milk, this is the price we do not need to be the only industry that says, Hey, guess what? The price is now this, but it used to be that next time they place an order. They’ll see for themselves, Hey, it’s a dollar 89 or per pound. They’ll see a , the price. And it’s up to them to remember, wait, did the price go up? It’s not our job to make a big spectacle of the whole thing. The customers who you do mention the price increase to are your reoccurring customers, because your reoccurring customers are scheduled for every week or every other week. And they’re not going to the PLA to the counter or to your website or to their app and placing the order. It’s automatic because there’s no time for them to be notified. There’s a price increase. It’s the right thing to do to let them know, Hey, guess what? Starting on this date a week or two from now, the price, the new price is gonna be X, Y, and Z E per pound. Okay. So you just let them know the new price. You don’t have to go over the old price again. That’s yesterday’s news or another way of saying it is the price is going up 10 cents per pound. That way they could decide, do I continue going forward? It’s gonna cost an extra 10 cents, but you don’t need to do a whole math equation. Say the old price was this it’s going up 10 cents. The new price is so I’d either tell them it’s gonna go up by 10 cents a pound or whatever you’d choose, or just tell them the , the new price. Secondly, we did get a little bit of uptick and cancellations on our reoccurring customers. We have 300 reoccurring customers who schedule weekly or every other week pickups out of those 300. We got five cancellations after we announced the price increase. All right ? And these are big spenders. Uh, these guys spend thousands of dollars per year. Now outta those five. So five outta 300, we’re looking at about almost 2%. We’re gonna reach out to those people, find out what, why they canceled. And you should be doing that for all of your reoccurring customers. You should be watching to see if any of them canceled. So we’ve got a real handed report in our software that lets you know, who has canceled or reoccurring when they last ordered. This is great information because as you could see, these guys spend thousands of dollars per year. So if somebody who spends thousands of dollars per year with you cancels, wouldn’t you like to have a chance at bat to get at them back. And if it is about price, guess what? You know, over 9 cents a pound, we’ll just honor the old price, but don’t tell anyone another thing that’s easy to forget about are your commercial accounts. A lot of times our commercial accounts, there’s paying a special rate. So when you increase your price across the board, it’s really easy to or forget about those special deals you gave to people, which is another reason why you may not wanna do special deals because it’s more maintenance down the line. Don’t forget to increase the price of your commercial accounts. For example, we have a dry cleaning partner who does all of our dry cleaning for us. We just drop off the dry cleaning garments with them and they bring it back. Our dry cleaning partner every year, he increases the price on us and, and we just come to expect it. So we get the new, this is the new rate and we just kind of factor that in. So you should probably do something like that with your commercial accounts review of them, make sure the price is up to date. The final thing I want to cover is don’t give away the farm. I’ve seen it so often with commercial clients that people just give them such a great deal and remember labor doesn’t scale, like other things do we typically try and just offer regular rate 10 cents off sometimes 20 cents off, but we’re not giving them a huge percentage off. We are not census . We’re not some huge organization that just, you know, we’re with these huge machines and it scales like that. It doesn’t. So you need to charge a fair market rate even for your commercial accounts. One great way of having the confidence to what you should be charging is to make sure you keep getting leads. We got a , a whole podcast just about that. As a result of the website we made for one of our clients, he gets a lot of commercial leads. So as long as you’re getting more, as long as there’s a next guy to talk to that could give you the confidence to do a better job charging what you should charge for commercial accounts. We had a commercial account, it was a ship coming into port and they called us while they’re still at sea. And they had thousands and thousands and thousands of pounds, huge amount, probably more than what many laundromats do in an entire month. The tendency would be to give them the best possible price, right? But they needed the close back right away because their washing machine. And they’re gonna go back out to sea in just a few days. And so rather than giving them a better price, we told them we’re going to have to pay overtime. We’re gonna have to have our people working around the clock to get this done in time. You’re actually gonna have to pay 10 cents more per pound. And they said, no problem. We just need to get it done. That was a aha moment. But because it’s like all this time, we’ve been charging less. We should be charging maybe in some situations more, keep in mind. What are the things at your laundromat that the customer is paying for beyond price is that you do a great job. You’ll be able to accommodate them. You’ll be able to wash it the way they want to. You have ozone. So you, you sanitize the , the laundry you need to know right off the bat. What makes you special? And maybe that should be a whole podcast episode right there. Cuz if you focus on what makes you special, you don’t have to focus on price. And when you don’t focus on price, you could charge more. I hope you take a look at your pricing, make sure you’re charging what you should be. You charging gas is going up. Labor’s going up and you need to make sure that your prices are anyways. Have a great day and make a lot of money. Thank you for tuning in to state of the laundry industry. Don’t forget to click like or subscribe and to learn more about the curbside laundries wash and fold solution for in store and pick up and delivery. Go to curbsidelaundries.com . See you next time.
