You are currently viewing e38: How NOT to Raise Wash and Fold Prices

e38: How NOT to Raise Wash and Fold Prices

You don’t know how to raise wash and fold prices, until you know how NOT to raise wash and fold prices. We examine real life pitfalls to avoid when raising prices and how to avoid them. Raising prices is essential as costs go up, but you have to go about it the right way.



Welcome to State of the Laundry Industry with Laundry matte , episode 38, how not to raise Washington Fold Prices. This episode is about how to raise prices on Washington fold or even in store for that matter. And so first I want to ask the question, how do you cook a frog? And the answer is you turn up the heat. What you don’t do is you throw it in boiling water cuz it’s gonna jump out. And the same thing is gonna happen to your clients if you drastically raise your prices. So one of our clients , uh, they came back from the clean show and they’re told over and over again, you need to be a price leader. And they got pumped up, you know, yeah, that’s what we need to do. And they raised their prices by 50 cents per pound on was , and fold both in-store and pickup and delivery. And as a result, his first month went great. His income went up, the people, people still placed their orders and he had a record September. But then after that he had a massive fallout and he called saying, Hey, the floor just fell underneath me. He business went down by almost 50%. It was just too much all at one time. See, the psychology behind pricing is you need to raise prices frequently, but do it in such a manner that the customer doesn’t say, doesn’t decide to stop using the service. If you raise prices drastically, people are going to be shell-shocked and walk away. Same thing for in-store, self-serve. Same thing for Washington and pick up and delivery. So one of the lessons here is you don’t just wanna wait and fall behind in raising your prices two years later and then suddenly jump things up by 50 cents all at one time. Typically wilburys prices by 5 cents or 10 cents, usually 10 cents at a time at our laundromat. Every single time the customer’s faced with a decision, when prices go up, one, do they notice the price went up? And two, if they notice, is it enough to change their behavior? So let’s take a look at what happened. They raise prices in September and their profit went up, their revenue went up. But then in October and November things went down drastically down. So these numbers include both the drop-off and delivery. Let’s just take a look at the delivery numbers. We could see the bump is not quite as big as their overall business. And the reason being is on pickup and delivery. The customers saw the prices go up by a lot. And the switching cost, that’s an important term, is switching cost. How easy is is it for the customer to go somewhere else? So in pickup and delivery, switching cost is actually pretty low. They could just go to a different website and place an order. So he didn’t get that massive bump by increasing his prices because a lot of the customers just went elsewhere. But then in October, November, people got the bill. They saw how much it cost and then they changed their behavior. Now if we take a look at the in-store after this drastic price increase, he had a huge bump in September. The reason being, if somebody brought their laundry all

The the way to the laundromat and they found out prices went up by a whole lot, then they’re not gonna just take their laundry somewhere else because the switching cost is higher. They have to drive somewhere else, they have to find another place. They have to research all that stuff. So they just dropped off their clothes, but you better believe they didn’t come back, or many of them did not come back. Come the following months , October, November. The number one lesson here is you need to frequently increase your prices because if you wait too long and you have to do a drastic price increase, it’s going to make people reconsider research and decide whether they want to continue using the service. So you’re better off doing a 10 cents at a time. And you’ll see on Facebook every single time somebody says, oh, you gotta raise prices. Everybody cheers ’em on because everybody wants everybody else to raise their prices. And then when the going is safe, then they’ll go ahead and raise their prices too. So I do agree with bringing a price leader, but only so much. You have to look at the landscape around you and you have to look at what the market will bear. So for this client, we’re gonna help make things right and get these customers back in the door. And the way we’re doing that is for their in-store washer board clients, we’re gonna send them a text message. We’re also gonna send a different text message to their pickup and delivery clients and letting them know we’re rolling back prices. But it’s still gonna be 20 cents more than it was before, but it’s not gonna be 50 cents more per pound. This business, it’s all about retention. And no matter how much new business there is out there, it’s always good to take care of the clients that you have. That’s really where the bread and butter is. So we’re gonna get these people back in the habit of doing wash and fold , but I just wanna let you know, avoid Jurassic price increases, but it also illustrates the importance of frequent five or 10 cent price increases so you don’t rock the boat. If you enjoyed the content, please click like or subscribe. It really helps the channel out. Also, I wanna thank the curbside laundries client for generously allowing us to use his revenue numbers, you know, to help illustrate the point so we could all learn together. And if you’d like to learn more about the curbside laundries pick up and delivery solution, please go to curbside See you next.