Dryer vend strategy -- smart or dumb?

[Maywood2]

Hi! I was at a competitor's store last week, and he is charging $1.50 for a 45-minute cycle on his stack dryers. That works out to 7.5 minutes per quarter, which is fine, but it got me thinking about his strategy -- making people buy 45 minutes (when many loads might require less time than that to dry), versus letting the customers choose how many quarters they want to put in based on their load.

When people give him $1.50 and then stop the load if their T-shirts are dry after 1/2 hour, as long as no one jumps on their remaining time, it'll just click down to zero, and he's made $1.50 for 30 minutes (25 cents per 5 minutes, rather than 7.5 minutes).

(I couldn't figure out how a customer who needed just a little more than 45 minutes of time would do it -- I couldn't get the machine to run without the full $1.50 in it...)

I can't decide -- Is he dumb for forcing his customers into buying blocks of time that might be different than they need, or is he very smart?? Your thoughts?

Thanks!
John

(And if he ever wanted to raise his prices, he'd go to $1.75 for 45 minutes, a 16% increase (6.4 minutes per quarter, instead of 7.5 minutes), and no one would make a fuss over the # of minutes per quarter -- they'd just see a 25 cent increase, and probably get over it quickly.)

[Mungo Spike]

Dumb ... and GREEDY ... and dumb.

This guy's repeat business will drop to nothing in no time. His customers are not as dumb as he is.

I had a similar experience in Hilton Head, South Carolina a couple of years ago. Most of the laundromats there were pretty trashy then, but we found a clean, new laundromat that used ESD cards. The place was unattended, so you had to buy an unrefundable card (as a vacationer, I didn't want to keep the card), and then you could only add money in increments of $5. You might only want to add a buck to finish drying, but you had to add $5 ... and no way to get your leftover money back. What a complete rip-off!

We gave our card to the next customer coming into the store so he didn't have to buy a card.

Mungo

[pete f]

I think it will come back to bite him. When we opened the last store, I put dryers at 14 mins for 45 cents, thinking a customer would add 2 cycles and be done, making it less "work" to use. They revolted, and we changed to 10 min for 30 cents within a week. Laundry customers know what they want to spend to dry.

[Kitty]

Pete ~ What do you mean by laundry customers know what they want to spend to dry? Do you mean what they'd like to spend?

I know what I want to spend on a tank of gas and it exceeds that dollar amount that I used to go by. I know what I want to spend on groceries each week too but the items in the basket fluctuate from week to week and the dollars spent on my grocery budget will fluctuate as well. Budgetting some things these days with costs increasing have gotten tougher and tougher for consumers.

Customers somehow should be trained that there is no exact science to the dry times. Dry times will vary greatly with what the customer has put into the dryer and it will have a lot to do with the effficiency of the washer they used as well. Customers may think it should take 30 minutes for a load of jeans to dry but in reality that is not the case.

30 minutes for 1.00-1.25 is not bad vending pricing for dryers. While marketing other dryers as per cylce dryers, per minute/per quarter so you meet all your customer needs. You could decide from usuage which concept was more widley used.

Some of you are considering 5 minutes per quarter, even to cover costs. Its the marketing of the dryers that seems to be the difficult thing customers can't seem to swallow. But, it is what is. Costs are rising and you have to pass it to your customers.

Think about how to market the drying time differently to your customers. Its time to think outside the box. Event though you are going to have to increase your prices to your customers it may be better for efficiency sake to have your dryers run at a "load" starting at 1.00-1.25 before starting?

Dryer companies should come up with system similiar to when you use the wand at the car wash, start for 1.00 and then you can add quarters if necessary to finish the job?

[Maywood2]

I don't think this is a new pricing thing for him... I suspect he's been doing it like that for a while.
He is (will be) my main competitor (based on surveys of my residential tenants -- they mostly seem to go to his place). When asked how much it costs them to do their laundry, some said "$1.75 to wash, $1.50 to dry", as if it were the "base rate".

[Anonymous]

I don't think we should call this person dumb. Maybe this system of pricing works at this mat....it all depends on competition. I personally like this method of pricing and it is exactly like the pricing used at car washes.....and we all seem to be OK with that......like washing your car.....some loads of laundry take more time and some take less. So, the customer can add more quarters if they need more time.....no big deal.

The part I don't agree with is 45 minutes? Who needs 45 minutes? I only need 45 minutes for large loads of towels or a full load of jeans. Others take less than 25 minutes.....some a little as 10 - 15 minutes.

I also think this reduces many stop - starts on the machines from those cheap customers who don't want to send an extra quarter. Let's not knock this mat for their pricing strategy.

[Kitty]

I too think this marketing strategy is ok with the exception of the 45 minutes. I think average dry times (at least the customers expectation of average dry time) is approximate 30 minutes. If you are a coin store it is difficult to increase your revenue on dryers other than decreasing the time for your quarter. Customers that see their time diminish for that quarter only sees the negative side in the cost of using the dryer or at least their perception of the value in the cost of the dryer decreases when prices are raised. As we know, customers seem to be much more sensitive to dryer pricing than washer costs.

A marketing concept may be to change the customers perception of the actual expense/time to the customer? Bundling the time into a "per load cycle" may be perceived as a better bang for the buck?

Reducing the minutes per quarter for a per cycle dry time to a higher $ rate versus the per load may be a way to help market the conversion to doing business this way?

If there is a way to add time to the "per load dryers" by increments after the 1st 1.00 this type of program would be a very marketable one, wouldn't you agree?

[Maywood2]

As I mentioned, if he ever wanted to raise his prices, he'd go to $1.75 for 45 minutes, getting a 16% increase (6.4 minutes per quarter, instead of 7.5 minutes), and no one would make a fuss over the # of minutes per quarter (because they're not calculating that) -- they'd just see a 25 cent increase, and probably get over it pretty quickly. That sounds like a great deal (for him)...

I don't know if people tend to check their load after 1/2 hour to see how dry it is, but if they do and they take it out, he's not hurt by offering 45 minutes, if they only use 30 minutes of it.
How much lower could he go than 7.5 minutes per quarter, anyway? (Without revolt.)

Seems almost like an incentive to use a lower-BTU dryer, for a longer flat-rate period (if people would accept 45 minutes to dry their clothes).

[pete f]

Kitty, I mean customers know what they want to spend drying. That was to included time as well as price, but mostly time. I had so many complaints at 14 mins for 45 cent, dryers don't heat, don't work, etc, yet when I changed the price to a 30 cent/10 min cycle ( and *slightly* lowered it) I never heard another word. I don't think it was becuase of the very slight decrease, it was becuase if some one wants to buy 10 mins they can, not forced into 14 that they may not need. Now they spend MORE money. Before they would leave with clothes not completey dry becuase they did not want to spend the 45 cent to get another 14 mins of which they may only need 8 mins of. THAT really bothered me, people leaving with wet clothes. Sorry, it is not all about us and our gas bills and how easy we want to deal with dryer pricing. IT is about what the customers want and need. As to the thread here about "new" pricing, it is slighlty more than my #4 store, and about the same as #3, and less than #2, and much less than #1, so what does that prove?? how is this new pricing stratagy so good?


I think forcing 45 mins on someone to dry is crazy. And a fire hazard, using real comercial dryers. It is common for a apartments using home style dryers.

[Kitty]

I am all about the customer.

This is where educating customers in how to get the cleanest clothes possible would help. Why would someone want to take a load of semi-dry/wet clothes home for .50 cents a week of inconvenience. I think I could easily market why NOT to bother to take this type of headache home with an in store poster!

Educate customers on how to launder correctly and how to choose the right machine ~by using the right washer/per lb machine every one "saves" with drying time.

Its tough changing how customers react to certain decisions, but learn from your own customers. Listen to them. If you don't give them what they want someone else will.

[laundryboy]

This is interesting. I thought that the idea was to get the customer used to several quarters for a base dry time, then let them add minutes per additional quarter. Most dryers, with electronic controls, can be set for the number of quarters to start and amount of inital time. Then, amount of time to add per additional quarter. Then you can get into a senerio where, as an example:

.50 to start for 11 minutes
add .25 gets additional 7 minutes

I have 75# dryers set the following:
.50 to start for 6 minutes
.25 to add 4 minutes

I definitely need to study the dryer issue. Store #1 went to 6 min/ .25 last week - so far no customer revolt (we'll see after the first weekend of month, though). Store #2 already at 7min/.25 has newer, more effecient units. Store #3 is at 8 min/ .25 and going to 7 min/.25 this week with some washers increasing.

I think there will be real complaints at the 5 min/ .25 level !

This is after being at 10 min/.25 less than a year ago.

[pete f]

I am all about the customer.

This is where educating customers in how to get the cleanest clothes possible would help. Why would someone want to take a load of semi-dry/wet clothes home for .50 cents a week of inconvenience. I think I could easily market why NOT to bother to take this type of headache home with an in store poster!

Educate customers on how to launder correctly and how to choose the right machine ~by using the right washer/per lb machine every one "saves" with drying time.

Its tough changing how customers react to certain decisions, but learn from your own customers. Listen to them. If you don't give them what they want someone else will.

>>>Why would someone want to take a load of semi-dry/wet clothes home for .50 cents a week of inconvenience. <<<
read my last post.
The customer is always right. The customer knows everything. And one more step, "educating them" means trying to change thier habits. So educating makes any sense to me at all. Educating becomes what we want. That does not matter to most customers, as they know what THEY want.

[Kitty]

Yes indeed customers know what they want, but your customer wants and needs do periodically change and many, many customers are fickle.

Educating and marketing to your customers needs can and will have an effect on their spending habits as well as your bottom line if you learn how to market to your clientlelle effectively . You can have an excellent effect on how and what your customer spends in your place of business.

Changing their habits is exactly what your objective is.

Kitty

[Mungo Spike]

"...The marketing strategy is okay ... with the exception of the 45 minutes."

Please explain what marketing strategy this is? I see no new marketing strategy here; the 45 minutes is the only point of contention. Charging customers for 45 minutes of drying when most loads only need 30 is ripping off the customers, not advancing a new marketing strategy or providing education. And ripping off the customers is dumb, not educating.

Comparing this scenario to a car wash is not legitimate either - car washes have a base price based on the amount of time it takes for a basic wash/rinse, and laundromats have a base time for dryers - but they're not equivalent base times. You can't compare the 45 minute base time on a laundromat's dryer to a car wash's base time; dirty cars and dirty clothes are apples and oranges.

What is the real reason for charging customers for 45 minutes instead of letting them pay for just the 20-30 minutes that they really need? Greed.

I wish this laundromat was one of my competitors.

Just one guys's opinion ... Mungo

[Kitty]

45 minutes is overkill

[Maywood2]

Well Mungo, I don't know the BTU's or temps on his dryers, so it could be possible that his dryers normally take 40-45 minutes to dry many loads.

I was intrigued (as a newcomer) and wondered if perhaps his customers happen to view dryer cost as "$1.50 per load", instead of how laundry-people seem to think (minutes per quarter)...

45 minutes seems like it would be a bottleneck compared to his washer run times -- BUT he has 18 30# dryer pockets and 2 75# dryers. All that for 12 washers!! (And biggest washer is 35-lb -- just one of them; not sure why he even has the 2 huge dryers in there.)

Maybe his customers think they're getting a good deal -- a whopping 45 minutes for their money (even if they do take some loads out after 30 minutes). And at 7.5 minutes per quarter, even if they leave it running for the whole time, he still OK. Like an all-you-can-eat salad bar -- you think you're getting a good deal because you're not restricted, but most people don't eat everything in sight, so the restaurant is still making money.

He maybe is getting away pretty good AND pleasing his customers... but I truly don't know.

The part I envied was maybe being able to reduce minutes per quarter without causing an uproar. If he increased his price by a quarter (still giving 45 minutes), his customers are likely to think "oh, it's just a quarter" and get over the increase quickly. (Like what seems to happen with washer price increases.)

And with this week's utility price spikes, some sort of increase seems inevitable...

[Kitty]

Maywood I agree with you on the thought process with the exception of the 45 minutes, however, the problem lies in the fact that most customers will not need 2 full (30 minute) "per load" cycles to dry their clothes but sometimes they may require a little extra. If, and this is the IF, you could give the customer extra incremental time at the end of that "per load" cycle in the event their clothing wasn't completely finished this would be a good marketing concept for the times. It is possible to maybe group your dryers to have a bank of per cycle and per load for those that will require by the load or by the cycle drying times to accomodate each set of customer types?

I think customers would perceive 1.oo-1.25 or 1.25-1.50 to be of better value when paying for drying versus .25 cents for 5-6 minute of drying time.

Kitty