Recently I read an article quoting a dry cleaner complaining about other cleaners in his market place charging lower prices. This cleaner claimed lower priced competition was the reasons he could not charge more or raise his prices. I call Bull Crap!
Allowing another business to set your prices for you is an extremely dangerous mindset and practice as you can be lead into unprofitability. Competition is one thing, but being drawn into competition on price is entirely another.
Your prices are your prices, or at least they should be. Every cleaner has certain expenses in common; rent, staff, utilities, supplies. Depending on your negotiation skills and management, you might have some advantages paying lower rents and lower wages. But to throw up your hands and surrender saying “the other cleaner is undercutting me on pricing” seems to be an excuse, and a lame one at that.
Ownership of a dry cleaning plant requires more than just producing the work of cleaning and pressing, there is also the mental work of administering the business and figuring out how to out-smart your competitors. Blaming your competitor is a sign that you’ve given up; its admitting that you don’t have the mental where withal to go head to head (or dare I say, brain to brain) with the dry cleaners down the street. Conversely, being competitive is much more than undercutting everyone else on price. I’ll be direct; any idiot can simply knock a few nickels, dimes and dollars off prices – that doesn’t make you a competitive genius (it just makes you a price cutter).
It takes real work to build a business using your brains. It takes real administration skills, accounting skills, process management, salesmanship, marketing and management skills to build a team/business that can produce high quality work at a profitable price. It simply doesn’t happen by accident, it’s a deliberate process that takes a lot of time and effort. Sadly, today, it seems that such efforts are far beyond the majority of owners of dry cleaning shops. Everybody is simply looking for a short cut that will magically bring them riches.
Everybody loves a fairy tale and a happily ever after. But, I’ve been to three Disneylands, and had behind the scenes tours of two of them. I can tell you, there is a lot going on behind the scenes, and there was even more work that went into creating systems, processes that work in the parks in addition to just the physical parks themselves. What systems and processes have you developed in your plant that make you different and more in tune with your core market?
What really makes your shop different from all the others out there? Please don’t tell me that it’s ‘that you care more,’ or you ‘have better quality.’ I’ve never met a cleaner yet that didn’t care about his business, and ‘quality’ really isn’t defined anywhere by anyone unless they have defined it themselves as a differentiator.
What do I mean defining quality as a differentiator? Well, let me be very specific. When I had my stores, I would pull invoices from the orders picked up pile at random, and I would MAIL (yes, a good old, oldschool letter) to a customer asking them for feedback (I’ve since updated this program using text messages and email, but that’s an entirely different article for another time). I received replies defining quality which according to one of my more fussy customers was: ‘I took a look at my white wool pants under a microscope and I could still see remnants of the coffee with cream stain between the fibers of my white wool pants. Yes, she was using a microscope! WTH?! Yet, another customer defined quality in his survey response as: if my pants come back over a hanger and wrapped in plastic, two thumbs up! So, I guess quality lies somewhere between the two.
But, as I began to really dig into my plant and its operation, I noticed that one percent, or one but of hundred garments we processed, was returned by a customer with a complaint of a missed sport or stain, or a double crease, not properly pressed, or just didn’t meet their expectations of us. One out of a hundred doesn’t seem so bad, that’s 99 others that are just fine. But, being just fine wasn’t good enough for me, and maybe it was just good enough for my competitors, but it meant we could do better. So, I devised a system that would identify spots or stains at the front counter, and would convey that information to every employee that worked on the garment, plus would have a series of checks and double checks so as to reduce any chance of an imperfect job getting through to the final inspectors, the customer. How well did it work? I reduced my plant’s error rate from one in one hundred, to one in ten thousand! Yes, that is correct, one complaint out of ten thousand garments processed. And how does that compare to my competitor? Well, I just picked up my order of dry cleaning and laundry on Friday, and he could not remove a simple oil stain out of one my shirts that was pointed out to his staff (all he had to do was dry clean it before laundering – but apparently that is beyond his staff and plant’s capability). So, what’s your error rate? Do you know?
Even if you quantify, define and ultimately prove with action and quantifiable results; unless you are actively marketing (promoting) what makes you different (and better) than all the other choices out there, your efforts may be for naught. If you leave your customer with the only comparison to draw their purchasing decision upon is price, you are setting yourself up for failure. Certainly, price is a motivator and can steer a sale one way or the other, but features and benefits can transcend price. No missed spots or stains, perfectly pressed, ready to wear garments are worth more to a customer who values their time. Such people also value your time in meeting their expectations and typically are willing to pay the price asked to deliver such.
Selling your service is a skill. If you are not training your staff to meet and overcome objections, or cannot sell the features and benefits of your services, you really have no choice but to join the race to the bottom with respect to price. It’s called earning the business for a reason. Obviously, if you do more, you deserve more, and that not only includes you and your staff. Customers are not stupid, they will know if you are doing more, and they will certainly notice the difference when they stray to a competitor who does less and charges less.
So, who is the real competition? It certainly isn’t the price cutter who also cuts corners in the back room. There will always be those, and unfortunately they will also always be plentiful. The real competition is you and the work you must do to rise above, ask for and earn the respect, confidence and prices a leader in this industry deserves.