Price Wars

[Anonymous]

Someone on this board mentioned about people running specials or gimmicks to attract new business during price wars.

Anytime you give something away for free there will be people lined up out there door with their hand out. Chances are you will never see most of those people again.

It also reminds me of a story. The drummer for the world famous band Blink 182 started up his own clothing line and opened up a store for it. For the grand opening he had his band play a free secret show in the parking lot that day.Word got out about the free secret show and next thing you know there is a couple thousand people in the parking lot. So the band played for like 3 hours and then stayed outside for hours signing autographs and doing pictures and what not. So at the end of the day when it is time to close the store the drummer walks in and asked how much money did the store make off sales that day. The store did not sell one thing!

It is a story i still laugh about to this day!

[Rondo]

You must be BETTER than your competition no cheaper. People will pay more for better service.

[JSVLaundry]

I tried a bunch of things. Free soap, discounted drying & merchandise, etc. None really worked and I lost money.

As you will read on this board MANY MANY times, the best advertisement it word of mouth. Treat your customers with respect, do the best that you can to please them (you have to remember though, you cannot please everyone), keep the store clean and updated, well lit and the WORD will get around

If you want to get a gimmick, set up things that keep the customers coming. Like an 11th wash free card, a raffle to get their names and addresses, and here is the biggest one that works for me, a smile and a hello.

Vinny

[Anonymous]

A couple of months ago I instituted a policy of one double wash for free after every 15 washes of any size. I have a card system so I had a couple of motives for this. First, I wanted to reduce the number of cards people were using, as they cost me about 25 cents each. To collect their free wash the card system automatically monitors usage, so there is no human involvement and all usage MUST be on the same card - thus it drops card usage. It was also implemented to increase loyalty, and they feel they are getting something for free.

At the same time I did this I raised the price of the doubles by $0.11 cents a load. When I factor in the price increase and the decrease in card costs it is just about revenue neutral. The result is that I have found overall gross has increased by about $200 a week.

[Anonymous]

I know duane runs a card system and has special low prices from late at night to early morning. Does anyone else does this?
How much does running these specials help boost revenue?

[Anonymous]

I have the ability to do this, but think it is a mistake for most locations. In my mind, the only case this makes sense is where you do not have enough capacity for peak periods, and thus have people leave because of capacity constraints. Otherwise, what you are doing is converting full paying customers to partial paying customers which means you generate less revenue from those existing customers. Unless you are somehow able to attract additional customers to make up for this it is a loosing situation.

I know one person that has a 24 hour mat with a card system, and he is the only one open from 11pm to 5am. What he does is raise the prices to make people pay a premium for those hours where he is the only game in town - that makes sense, price based on the added value.

[Duane]

I have found that running sale prices during the off hours has greatly increased my revenue for several reasons.

- Pulls customers in that would go to my cheaper competitors. These people don't care anything but price, therefore I would rather give them a discount than not get their business at all.

- Spreads out my peak days. Some customers come in during the week for the specials, this allows for more full paying customers that would other wise not stick around waiting for a washer.

- Extra income from vending. I also use the card system to change prices on the game tables. It is more expensive to play a game of pool during the night than during the weekend. So those who come in for the sale on washers also pay more for vending.


Kirby, why don't you add 10 cents to your weekend price and then say you have a "sale" price during the week. So then, will you then be converting full paying customers to sale price customers if they decide to come in during the week?

Don't think of it as charging less for the off peak hours, think of it as charging more during peak hours. That is what I do and it works.

[Anonymous]

Duanne, I charge peak all the time - I am the highest in the area. There is another mat that cuts price on Tues-Weds-Thurs, he gets lots of the low-end sleaze customers who abuse the equipment and then complain that he is ripping them off. He can keep them, none of my customers go there and I don't want the ones that are that price sensistive.

You can call it what you want, the point I was trying to make is that there are too many people that want to discount to get business, and unless you are trying to ration scarce equipment it generally does not make sense to discount in this business. Its not like Walmart where people will buy more if you have a sale - they are not going to wash their clothing twice because you have a sale. If it works for you great, but in most locations it does not make economic sense.