Pricing Question - let your customers know?

[amartlock]

This Q is to all of you experienced mat owners. I've seen posts where owners simply raise wash/dry prices with no specific explanation to customers and often times the customers do not comment about the increased prices. I've also seen owners that post a sign with an explanation as to the price increase. Which method, in your opinion, is best and why?

[pete f]

I have done both. When NG spiked a few years ago I posted a chart of the gas increase as I raised prices. Yesterday and today I raised prices at 2 of of my lower priced mats with no notice or explanation. I almost feel like posting a gas hike increase just rubs it in more. Yesterday I went up a nickel on dryers and washers at one mat, ( the benefit of card now looks better) another coin down 1/2 min from 7.5 to 7. I expect to drop that to 6.5 before the end of the year and up a few larger washers. Don't gouge, but don't sit still either.

[Ken]

I did both way,no difference.Everybody hate price increase,everybody look for a better deal.
Customers know why price go up but they still don't like it.
I won't post anything next price increase.

[DaveLevenson]

Here in NJ, the Division of Weights & Measures requires that the price and time be posted for regulated timing devices like dryers (but not the temperature). Washer prices are not required to be posted, but customers would probably be confused if they were not.

[Anonymous]

Weights and measures is a total joke, because as you mention it does not include temperature. When they check a gas station they assure you that you are getting the volume you pay for. When they check a supermarket they assure you get the weight you pay for. But when they check a laundromat they only check one-half of the equation. Sure they assure that a customer gets a set time, but they don't assure that the energy is what they think they are paying for.

[pete f]

Here in NJ, the Division of Weights & Measures requires that the price and time be posted for regulated timing devices like dryers (but not the temperature). Washer prices are not required to be posted, but customers would probably be confused if they were not.


I thought that was a federal law. I always have posted the dryer time and price. My washers have signange over them also or a price sticker on them

[Kitty]

We never posted a sign stating an increase is coming or there has been an increase. If and when we increased the washers we always did it when there were few patrons around and the few times we raised prices we never heard a word about it.

However, dryers, were a different story. Customers do complain about dropping the time on the dryers, but it is inevitable or charge above rate for your washers you cannot absorb the cost of the gas prices. During times like this, this is where a card store has the competitive advantage as they can vend at a reasonable fair rate per machine versus the coin store must vend at quarter increments.

We never had a sign out for dryer times until I made them up and posted them on the dryers including notices of checking the dryers prior to putting anything in them and check temperatures etc.

[David]

I generally don't notify. However, I do have a sign showing cost/time of dryers, and why the time is reduced.

Everyone is right. No one like increases.

[amartlock]

Thanks everyone! I increased washers $.25 Friday night. Never heard a peep from anyone about it over the weekend & holiday. Next is to drop dryer time in a couple of months which as I've read will certainly cause the customers to complain a little bit but hey, gotta pay the bills.

[Kitty]

Why wait a couple of months?

[David]

Kitty's right, why wait? Increase all at once and get the belly aching over all at once, too.

[TLR]

My gas rate has gone up over 50% since this time last year. 30% of that increase is since Katrina. Lowered dry time to 6 minutes yesterday from 8. Posted a sign on multiple dryers with an explanation. Was quoted 1.26 a therm yesterday as a locked in rate for 1 year. Decided to ride it out with a variable rate for now. What are others doing? locking in or variable?

TLR

[pete f]

My gas rate has gone up over 50% since this time last year. 30% of that increase is since Katrina. Lowered dry time to 6 minutes yesterday from 8. Posted a sign on multiple dryers with an explanation. Was quoted 1.26 a therm yesterday as a locked in rate for 1 year. Decided to ride it out with a variable rate for now. What are others doing? locking in or variable?

TLR

I think a gambler would float right now

[ajay]

locked it.

[amartlock]

My partner and I decided to take the next step and be the price increase leader in our market. We have an older mat with older equipment. Still runs well and the customers like it since they are used to it. Our competitors (more than a dozen in the immediate are) vary from brand new mat just down the street to ones that have been in the area for 10-20 years (We've been here for 30 years). Our market is steadfast in the $.25 for 10 mins dry time. We're hoping to put an end to that. We'll be dropping to 9 mins this weekend and hopefully competitors will follow suit and we'll then drop to 8 mins later in the year. We feel dropping immediately to 8 mins might be too much for our customers to handle while everyone else is still at 10 mins.

Additionally, we're raising our tops from $1.50 to $1.75 while competition is still at a quarter. We're banking on our customers loyalty to keep them coming.

Of course we're doing this as a stealth operation in the dead of the night. Don't want to be there Sunday morning when the first customers walks in. Keeping our fingers crossed.

[troy]

Californian Laundromats seem to have lowest price for wash and drying, despite high cost in real estate. Never been there anyway!

Do you still make profit?

[Kitty]

Prices seem to still be increasing, I thing Mark told me NG went up another 4% last week? Are you guys raising your prices??? Stores in my area still no increases.... 30lbers to 9 minutes and 50lbers 8 minutes matter a fact they are brand new and they went from 7.5 minutes...no increase in washer pricing to compensate...

Are you guys rasing your prices? Raising prices is necessary in the wake of utlity crisis. Like with what we have been seeing lately, raising prices is necessary to overcome the burden in the expense to cover the loss margins. Store owners need to understand the concepts of their expenses and how to analyze their costs so they understand that volume does not make up the loss in their revenue producers.

Outback raises their prices 5-6 prices a year they sell beef, chicken they have pay freight, employees, yada yada, cover the expenses....

Gas alone raise weely...daily...
Have you seen the TURKEY market?? Fresh breast meat 3.05lb???
Fresh thigh meat .96lb PRICES ARE sky high on commodities!!!

YOU ARE SELLING a commodity What keeps you from taking the price up?
Have you raised your price and by how much?

[MichaelCa]

THis thread has really meandered around from its original topic... & i'm not gonna help :)

Anyways....following up on others Gas contracts comments:

An experienced professional Natural Gas/Energy Trader here who provides very large (his smallest accounts are 15,000/mo.) commercial accounts with future Gas prices,etc., told me last week to *NOT* lock in any prices now, and to keep my powder dry til end of November or December -

He said that currently the Gas Market is being knocked around by ridiculous rumors & temporary shortage spikes that are not actually warranted & that this will settle out to normal pricing. He said that some traders in the industry have been taking advantage of scared customers.

I mentioned that every Feb. or so, prices seem to normally come down & should I wait til then to lock anything in - his reply: "even better, if you can wait that long".

-------------
Tops raised to 1.75
NO notice to cust.
Still assessing the new usage relationship to my $2.00 18lber's

[pete f]

THis thread has really meandered around from its original topic... & i'm not gonna help :)

Anyways....following up on others Gas contracts comments:

An experienced professional Natural Gas/Energy Trader here who provides very large (his smallest accounts are 15,000/mo.) commercial accounts with future Gas prices,etc., told me last week to *NOT* lock in any prices now, and to keep my powder dry til end of November or December -

He said that currently the Gas Market is being knocked around by ridiculous rumors & temporary shortage spikes that are not actually warranted & that this will settle out to normal pricing. He said that some traders in the industry have been taking advantage of scared customers.

I mentioned that every Feb. or so, prices seem to normally come down & should I wait til then to lock anything in - his reply: "even better, if you can wait that long".

-------------
Tops raised to 1.75
NO notice to cust.
Still assessing the new usage relationship to my $2.00 18lber's

I agree Michael, look at the weekly gas storage reports, there is no shortage. There was plenty producers taken off line, but they will be back on soon. Look at NG futures, you see prices lower as the months get further away, meaning traders are betting this price now won't last. This is part of my reasonong for not trying to get all the cost back in my vend pricing right away, I am trying to average it all out, like most big companies do.

[MichaelCa]

When you say:
not trying to get all the cost back in my vend pricing right away, I am trying to average it all out

did you mean that you want to spread out SEVERAL price increases (across the next few months) ?

OR - that whatever increase you've already done is it - & it doesn't have to reflect the temporary spike we're now seeing?


I can see where both have their merit - but I lean towards the First one (several increases spread out).
Customers are simple creatures, & prefer their lumps in small pieces ;)

[Kitty]

My personal opinion on this is a perfect opportunity for this industry to hike prices but yet the dozens of mats I continue to walk into have not raised their prices and I hear you guys continue to say "I can't raise my prices". I do not understand it.

Prices of commodities and regular pricing are rising. Consumers are well aware of this fact and no store owner should have any issues with raising vend pricing at this time.

[pete f]

When you say:


did you mean that you want to spread out SEVERAL price increases (across the next few months) ?

OR - that whatever increase you've already done is it - & it doesn't have to reflect the temporary spike we're now seeing?


I can see where both have their merit - but I lean towards the First one (several increases spread out).
Customers are simple creatures, & prefer their lumps in small pieces ;)

From past experiance it ends up being a combination of both. These spikes you can never hike your price to keep the same margins, but you can hike pricing some. The spikes have aways smooothed out, so by then you may be able to notch again and then you are averaged out. The prices may fall enough so you do not need to hike again. By raising the price to cover 1/2 the extra gas costs, if gas drops down to 11$ or so I am back to my margins. If gas goes to $8 or $9 I am doing well, but by then some other force has to be reckoned with, ie, water/sewer/rent etc, yet I can still mainatain.

[kbc747]

It's funny how we feel guilty about raisng our prices, but what other business would let you know in advance, can't seem to recall my grocer ever warning me about the price of bread going up .10 cents. It's great we feel this obligation to our customer, but we do have to remember that not only are utilities going up but that equipment they are abusing is going cost big bucks to replace. I never tell and have never been asked to explain, but I always look at all prices hard when I do any renovations or add new machines.

[Gatorlenny]

Yes, we posted a notice to our customers about the price increase. Even gave them a weeks notice. It is recommended to let your customers know what you doing and why. Like a lawyer it is all in the wording. You just can't say we are raising the price in order to cover increase costs. Everyone knows that. Soften your wording. First let your customers know what you are doing for them, things they can notice for them selves. Clean, new paint, new eqp, etc. Then follow that up with the price increase and why. We have not had one complaint, and it has been a month now.

[Kari]

We increased our tops from 1.25 to 1.75 and 25#ers went from 3 to 3.25 and our 60#ers went from 5 to 5.50. We also dropped our dryer minutes from 7 to 6 minutes. We did it all at the same time. We posted a note on our board (the day of the increase) stating that the increase in washers was due to the latest increase in the water rates (a 265% increase). We had a lot of complaining until I posted our September and October water bills on the board as well. The complaining stopped and was replaced by "WOW you pay that much! That is a huge increase! I don't blame you for increasing the costs." Our cempetitor down the street is still at 1.25 and my customers are still coming back. Found out a few days ago that the price had been 1.25 for at least 15 years. A customer said her daughter is 15 and she did her baby clothes there and it was 1.25 back then. No telling how long it had been that price for.

[Kitty]

Went into one of the old stomping grounds today and spoke to BD, he actually raised some prices. Said, he hasn't heard a word at one location, a few grumbles at another but he definatley did not give the heads up. But this price increase was only a .25 increments for wash price only dryers are still out of whack IMHO, well maybe not so humble...:)

[Khach]

Last night I increased my 40 washers by 25 cents and dropped my dryers from 7 minutes/1 cool to 6 minutes/2 cool down. It was good that I did it when parents took their kids out for trick or treat.

I bought some candies just in case but none of the kids stop by my laundromat:)

[MichaelCa]

..dropped my dryers from 7 minutes/1 cool to 6 minutes/2 cool down.

Khach, its not clear if you meant you're still at 8 mins, but just changed your cooldown time, or dropped from 7 to 6 ?

What part of Calif ?

I've always been @ 2 mins cooldown. (7min total) Not one complaint.

[Khach]

I dropped from 7 to 6 min total (4 min dry + 2 min cooldown). I feel much better with people that just come for the dryers now.
btw: I am in Western of WA