Originally posted – Aug 02, 2013
Over the last decade, every major manufacturer has introduced the ability to offer multiple pricing levels on their washers.
For the most part, this technological development has been driven by the demand of self-service laundry owners to be able to charge a higher vend price for the more costly products they deliver – namely, hotter water.
At my store, I’ve adopted a tiered pricing schedule for my washers, and it has worked out great for my business. Originally, I switched over to a tiered model as a way to ease my customers into an increase in my vend prices. I knew that I wanted to raise my prices, but I wanted to be able to honestly explain to my walk-in customers why I was raising the price – and it had to be something that was fair to them.
Therefore, when I eventually made the switch, I maintained the current price for a cold-water wash, and only upped the vend prices for warm and hot water.
When customers inquired about the vend price increase, I was able to explain to them that my utility costs had gone up significantly, thus increasing the actual cost of my warm- and hot-water wash cycles. However, I quickly added that my cost to provide them a cold-water wash hadn’t changed much, so I was able to hold the line on my cold-water wash vend pricing.
Basically, I used it as an effective way to ease into a much-needed vend price increase, as well as an ongoing marketing tool to separate my laundry business from other stores that don’t offer the option of more flexible tiered pricing menu.
Multiple pricing levels really drive home the value of what the laundry owner is offering and what the laundry customer is gaining. And today’s newer washing machines give you the ability to offer many different types of cycles; in fact, some of the machines on the market today are almost akin to commercial OPL machines, with all of the different types of variations they provide.
Of course, the one argument against tiered pricing is that some of your customers may become overly confused by all of the pricing/washing options presented to them. And that’s a valid point – I’ve witnessed that in my store. Even with my fully attended laundromat, we answer a lot of questions about this.
However, this “negative” is more than offset by another fact: there are customers out there who really want those higher-tiered washes – and they are more than willing to pay a lot of extra money for what they perceive as (and for what truly is) extra value… especially when it comes to upgraded washes for very heavily soiled loads.
For example, when our customers select our upgraded wash cycle, we give them nearly a 35-minute wash.
Yes, that’s contrary to what a lot of self-service laundry owners want to do – they want to turn over those machines as quickly as possible. However, my personal belief is that, if a customer wants an upgraded experience – and we charge $1 extra and up for it – he or she should get it. Over time, I’ve discovered that those who choose to upgrade really know the value of hotter water and extra mechanical action. They want access to that type of “product,” and they’re not price-sensitive about it.
So, we’re happy to deliver it to them.
It keeps all of my customers satisfied; it sets my laundry business apart; and it more than pays for the extra utilities required to provide those higher-tiered washes. And the customers feel they’re getting true value for their money.
As a side note, another “product” we offer on a few of our washers is the option to have detergent and other laundry chemicals automatically injected into the wash cycle – again, for a higher vend price, of course. In essence, all customers have to do is show up at the store with their dirty clothes.
This is another way to increase your vend prices and vary your washing options. Like tiered pricing, I think it’s a great trend in our industry – and we’ll discuss it in further detail in a future column.
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