CHICAGO — Like many small- to mid-sized business owners, many dry cleaners are reluctant to upset the status quo when it comes to raising prices. The thought of angry customers leaving their store and giving business to lower-priced competitors is enough to convince them to keep their rates steady.
They hold them low even though their own supplies are costing more than ever before, especially in the aftermath of the continuing pandemic, with experts forecasting that the global supply chain will remain snarled for months to come.
They keep them low even though, in a tight labor market like the one we’re seeing, it costs more to employ good people.
They keep them low even though it might cost them their profitability and, ultimately, their business.
In this first part of a three-part series, American Drycleaner has asked some industry experts, along with some dry cleaners who have embraced a more aggressive pricing strategy, to dispel some of the myths that keep many cleaners from raising their rates. The first?
Myth No. 1: “I’ll Price Myself Out of My Market”
For dry cleaners reluctant to raise prices, this is the reason that keeps them up at night. However, when viewed objectively, some of this fear evaporates under the light of reason, says Kermit Engh, managing partner of the drycleaning consulting group Methods for Management and the owner of Fashion Cleaners in Omaha, Nebraska.
“If a cleaner is fearful that a competitor will take their customer away, they are not providing value to their customer,” he says. “They’re just selling price. If that’s all you have to sell, then you probably are not going to be around very long. The race to the bottom is won by nobody.”
Clients are often willing to spend more if they believe the value they’re getting is worth the cost. David Dawson, an industry veteran and principal of the Clean Expertise consulting group, has found that clear communication is one of the dry cleaner’s best tools.
“I would ask if you think you really should be competing on price, or should you be competing on perceived value?” he says. “If you provide a better set of features and benefits, then make sure customers know why you are worth more. Differentiate your product and communicate that well. Be a brand, not a commodity.”
Engh agrees that dry cleaners shouldn’t be afraid to let their customers know how much they do for them.
“It should be part of an overall marketing plan,” he says. “Let them know what services you are providing, because a lot of times customers really don’t know what you do for them. We have a tendency not to toot our own horn. For example, we pride ourselves in replacing broken shirt buttons, but if we don’t tell the customer that we did it, they just assume that it was magic. There’s no value put there because we’re not letting them know something was actually done.”
Come back Thursday for the conclusion of this part of the series, where we’ll look at what breaking out of this mindset did for Pier Cleaners in Wakefield, Rhode Island.