Close

Regaining Lost Dry Cleaning Business

Howard Scott |

PEMBROKE, Mass. — Dry cleaners lose customers all the time. There’s a fight and the cleaner knows the customer will never come back.

A wholesale account calls to complain about pricing and announces it will find somewhere else to do business.

A customer is so annoyed that the cleaner didn’t have the order ready as promised that she’ll never be seen again.

Most dry cleaners shrug, and say they’ll do better next time. They also feel they tried their best and nothing more could be done.

This is the wrong approach. The dry cleaner should resolve to make up the lost customer by replacing her with new business. In fact, this should become the dry cleaner’s mantra: I will not let business go without replacing it.

This tactic will stop you from accepting of whatever the market brings, and could propel you forward. It should. This practice could be called “determined progress.”

There are two parts: attitude and mechanics. The attitude is, “I will not lose a customer without replacing him. I will simply not let this happen. My business must go forward, and losing accounts is the wrong direction. Most dry cleaners lose 10% of their customer base every year, but if I don’t let this happen, I can only go forward.” Such determination never to go backward is the cornerstone of this policy.

To recover lost customers, pay attention. Continually look over customer order lists. Keep abreast of what’s happening at the front counter.  Even so, some customer names will slip your memory. That means you must periodically go over last year’s lists and compare it to this year’s. If you can set up your computer system to print out a list of customers not heard from in six months, do it. Go over these lists with a fine-toothed comb. If in doubt, call the customers on the list, and ask why they haven’t called in a while.

This is not a tough call to make. Simply say, “We haven’t heard from you lately. And I wonder, are you still doing business with us?” You’ll either get someone saying, “Oh, yes, we just haven’t needed to dry clean,” or the reason why they’ve switched. If the latter happens, you’ve learned something, and that can only be helpful. You’ll learn to prevent the situation from happening again or, at least, you’ll be aware of its possibility of occurring. Of course, you could discover that the customer has moved, which is also a nudge to action.

Keep a list of lost customers and the approximate amount of business they sent you. Actually use the names—Jim Hannon, the Shepherds, the Farleys—because a name reminds you of the individual(s) and provides motivation to recover the lost business. “The Shepherds gave us $1,000 a year, and by God, I’m going to replace them,” you say with conviction.

Then go about replacing them. Do whatever it takes. Seek out a wholesale account that could give you the equivalent profit. Let’s say a wholesale account offered $3,000 in volume (which, in profit, equals the Shepherd family’s volume) that you turned down three months ago because it was inconvenient. Maybe now is the time to call up the account to pitch for its business.

Call accounts that seem to be splitting their business and offer them a deal if they bring all their dry cleaning to you. Maybe they’ll bring their full business to you if you offer a 20% discount.

Offer a $100 prize to the route salesman if he brings in three new accounts the next week. The salesman will be extra motivated and will most likely bring in three new accounts that should offset what you lost from the Shepherds. Even after you pay off the bonus, you’ll come out ahead with the new accounts.

Obtain a list of new residents from the town offices. Make some calls and present your offer. Make it palatable. Could a 25% discount on all dry cleaning for six months be the perfect incentive to win a new account? Of course, mention why you’re the best cleaner in town. It never hurts to provide recommendations from a few of their neighbors you serve.

In your presentations, be aware that these individuals are busy—it won’t help your case if you babble on and on. Prepare what you will say in advance. Pare your sales pitch to four or five sentences at most. Brevity counts for a lot.

Scan the weekly newspaper and gather names of people in the news. Check if the individuals are white-collar workers, and therefore have the potential to be solid accounts for you. Send them a mailing with an attractive offer—25% off for the first six months. This will motivate most prospects to give you a try.

As a last resort, call people randomly out of the phone book. Establish the prospect’s potential. Make your pitch. It is best in all these phone calls if you, the boss, makes the call. Only you can respond to the prospect’s objections. Only you are fully committed to winning new accounts. On the other hand, if you have a general manager, he or she could make calls, but only if the person has good phone skills.

Keep track of these prospects. If you see these new names in customer lists, estimate how much business they might bring into the shop, and make a note on your “lost customer” sheet. When you reach the goal—recover the lost business—end the campaign. There is a beginning and an end to the program. When you win back the business that you lost, you can focus on other issues. Your job is done.

In this way, lost accounts will not drag your business down. It will, in effect, increase sales.

About the author

Howard Scott

H&R Block

Industry Writer, Drycleaning Consultant, and H&R Block Tax Preparer

Howard Scott is a longtime industry writer and drycleaning consultant, and an H&R Block tax preparer specializing in small businesses. He welcomes questions and comments, and can be reached by writing Howard Scott, Dancing Hill, Pembroke, MA 02359.

Comments

Good article, but ...

Howard, you wrote:  Obtain a list of new residents from the town offices. Make some calls and present your offer. Make it palatable. Could a 25% discount on all dry cleaning for six months be the perfect incentive to win a new account?

You can purchase a list of new residents, however there are no phone numbers. If you will send a postcards you'll find out that rate of return does not worth of investment, 0% return. 

When you are offering a flat discount for 6 month you will learn that majority of new customer will tell you that they will continue to use your services if you will give them constant discount or they will try to find somebody else.

We tried all that and it was working 3-4 years ago, not now.

Regards

Yury

 

Wholesale accounts?

Ever wonder why some dry cleaner / laundries are run down and look like a hole-in-the-wall?

It's because of "wholesale" accounts are not properly analyzed for their "profitability" as opposed to just a "sales number". Hence, these hole-in-the-walls never have enough "profit" to replace their machines or provide proper maintenance or adequate service to their customers.

 

Same for this "routes" fad.  There were quite a few groceries startup around 2000 that delivered groceries to the door and that totally flopped. YET, the local groceries, tried and still try this today in 2012, but, again, what's the profitability? Are you really going to make more "profit" as opposed to more "sales"?

Delivering to the door is not easy, nor is it that profitable as it first appears.

 

Advertisement

Digital Edition

Latest Classifieds

Industry Chatter