CHICAGO — There are many reasons some dry cleaners give for their reluctance to raise their prices, but the reality is that, with supply and labor costs sharping rising, those who keep their prices steady are jeopardizing their future.
In a three-part series, American Drycleaner is examining some of the myths that surround pricing in the drycleaning industry. For this section, we’re looking at our first myth: “I’ll Price Myself Out of My Market.” In Part 1, we asked industry experts why cleaners should reject this mindset, and here, we’ll look at the case of a cleaner who did just that.
Raising the Bar, Raising the Price
Larry Fish, owner of Pier Cleaners in Wakefield, Rhode Island, says that he, too, was once reluctant to raise prices. A few years ago, however, after speaking with dry cleaners he respected and considered successful, he found that they regularly raise their prices in April and October by 2-3%. He was hesitant but decided that it would be the right move for his company.
“When we first started to increase prices, we were worried we were going to lose business,” he says. The result? “We didn’t hear a peep from customers. Not a peep.”
That “light bulb” moment completely changed Fish’s point of view when it comes to pricing, he says. Pier Cleaners has raised prices twice a year ever since.
“I don’t care what my competitors are doing,” he says. “I have to do what’s in the best interest of Pier Cleaners right now. We have our costs, and they have theirs, and I need to make our profit. I need to make sure the margin is there to provide for that.”
His philosophy on pricing has now evolved to the point where he doesn’t even list prices on the slips provided to customers.
“The slip from our POS system lists all the items, but no prices,” he says. “We’ve taken price right out of it. We’re not competing on price. We don’t hide our prices — if someone wants, we can print out a ticket for them — but our philosophy, our culture, is that we compete on quality and service. We don’t compete on price.”
While most customers won’t care or notice, there will be the occasional price-conscious customer who objects. David Dawson, an industry veteran and principal of the Clean Expertise consulting group, says that preparing your staff can diffuse the situation before it becomes a problem.
“It’s important to develop a communication strategy,” he says. “Effective communication builds trust and loyalty. Train your front-line people to handle the communication and provide a script to head off objections. Your people really won’t like role-playing or rehearsing customer interactions but it’s far better to go through that discomfort during internal training sessions rather than fall on your face in front of a customer.”
And what to say to these customers? Kermit Engh, managing partner of the drycleaning consulting group Methods for Management and the owner of Fashion Cleaners in Omaha, Nebraska, recalls the quote a friend told him many years ago for this type of conversation.
“The quote is, ‘To ensure the quality that you have come to expect, we have had to slightly increase our price.’ That’s it. It doesn’t get into the weeds that hanger prices and poly prices are up, and we’re having to pay higher wages. It glosses over all of that. I have used that line for all these years, and I have never had somebody continue to press me about pricing.”
When this series returns next month, we’ll examine another myth: “I Don’t Need to Raise My Prices.” For Part 1 of Myth No. 1, click HERE