Research Indicates Retooling Your Store Can Attract More Customers and Help Maximize Profits
[This is the first of a five-part series of articles expanding on the “equipment equation” for laundromats. In this first installment, we focus on the direct positive relationship between equipment replacement and a laundromat business’ topline revenue. Increased revenues are just one advantage of a laundromat retool and just one factor in the equipment equation. We will reveal additional elements of this equation throughout the year.]
Many factors – such as shifting demographics, economic conditions, marketing effectiveness and others – can impact the amount of revenue generated by a laundromat. However, perhaps no element is as critical as the quality and condition of a store’s equipment.
After all, at its core, a laundromat is its washers and dryers.
In addition to choosing equipment that best serves their business and their customers, the most profitable laundromats are the ones that are also continually updating their equipment to maintain customer satisfaction, attract new customers, maximize profit potential and keep competitors at bay.
Retaining and Acquiring Customers
Replacing equipment is more than an operational necessity. It also plays into the psychology of customers. For most people, a visit to a typical laundromat has all the allure of spending time at an airport. Worse yet, a store with machines that are chipped or rusty, or which offer only the most basic features, does little to dispel that negative perception – or to reassure customers that they’re getting the best bang for the buck.
New washers and dryers, on the other hand, not only work better, but also look better. Machines that offer better functionality and a more attractive appearance result in more satisfied customers, and draw in new trade and revenue. That’s why smart operators know that retooling is one of the best ways not only to retain existing clientele, but to acquire new customers. A new customer who enters a store equipped with new, feature-rich machines is more inclined to return.
According to results of a CLA Insights Report on equipment replacement, the end-users of laundromats are drawn to new equipment. In fact, when asked about the main benefits of replacing washers and dryers in their laundromats, the overwhelming majority (85 percent) either “Agreed” or “Strongly Agreed” that customer satisfaction and retention were key benefits. Also, 81 percent surveyed were in agreement that new machines attract more new customers.
Boosting Vend Prices
Customers are often willing to pay more for the latest, up-to-date washers and dryers, so shiny new equipment also provides owners with the opportunity to increase vend prices.
In fact, most laundromat owners can reasonably expect to raise prices 10 percent to 20 percent when they replace machines with new equipment of like capacity. New equipment also provides greater control flexibility that allows owners to maximize vend pricing by adjusting it for specific times of the day, days of the week or weeks of the month, to conform to the load levels and usage patterns of customers.
Moreover, if the laundromat’s user demographic calls for the addition of higher-capacity machines, replacing some of the store’s existing equipment with larger machines will not only satisfy that demand, but also command higher vend prices.
Leveraging Cycle Modifiers
New machines also may feature cycle modifiers that provide a laundromat with the ability to upsell customers by offering them the means to upgrade to higher-cost, premium wash cycles that are more closely keyed to the items they are washing, and which more closely match customers’ own individual wash preferences. By simply giving customers greater control of their wash, a laundromat can significantly increase average vend spending.
Today’s best machines offer a number of revenue-generating controls that allow for a customized setup – including hotter water temperatures or additional rinses, which can be priced individually for maximum revenue potential.
Beating the Competition
For an operator who faces a high level of competition, investing in machines that are newer and more feature-rich than those of competitors also can reset the laundromat’s competitive advantage, and ensure that customers see their store as the best choice among available alternatives.
Of course, it’s always wise for owners to regularly visit other laundromats within their marketplace to see how their operation stacks up against the current competition.
By replacing its machines on a regular basis, a laundromat does more than ensure that it is state-of-the-art. The store also is taking preemptive action that will help discourage the emergence of any new competitors.
In summary, when it comes to boosting revenue, replacing equipment is a win on all fronts.
