How Routes, Customer Service, and Dry Cleaning Lockers Will Improve Sales

Growing and servicing your route customers, locker customers and even counter service is the best investment you can make in your dry cleaning business. If you think they are NOT, you better get with it!

Now, when I talk about investing in your business, investing in getting new customers is more important than investing in your plant. Why would I say that? Well, if you had no customers, you wouldn’t need a plant. And you’d have no business. So it all starts with getting the customer.
The first thing we should talk about in getting new customers with your route and lockers is what a new customer is worth to you. And when we find out what a new customer is worth, we can figure out how much you are willing to pay or invest to get one.

How much would you pay for a new route customer… a new locker customer… a new counter customer?

Do you just SWAG (Sophisticated Wild Ass Guess) it?  Or is there a formula to figure out what a new customer is worth and what you’re willing to invest to get one?
Let’s figure out the Lifetime Value (LTV) of a route, counter and locker customer. Then we’ll know what we’d be willing to invest to get one.

My average route customer gives me $56 in dry cleaning every month. Over the last 18 years, my average customer stayed with me for 6.7 years. So according to my numbers, the LTV of a route customer is $4,502.40. (To get that number, I multiplied my monthly revenue ($56) times 12 months and then multiplied it by 6.7 years.) So when I sign up an average route customer this is what I can expect to get from him or her over their lifetime as a route customer.

Member David Sabo averages $83.61 per year for a counter customer. He keeps that counter customer an average of 2.99 years. So his LTV of a counter customer is $250.

One of member Stephen Moore's sites.

One of member Stephen Moore’s sites.

Another member, Stephen Moore in Atlanta, GA, right now averages $128 per month for each dry cleaning locker he has. And he averages one locker for every 4 customers. Dry Cleaning Lockers are so new that we don’t really know how long a customer will stay with you. Most of these lockers are in residential condo and apartment buildings. (The condo locker customers probably stay as long as the route customers. And the apartment building customers probably stay somewhere between a counter customer and a route customer because they do not own the apartment and will move sooner than an owner.)

Let’s be conservative. A dry cleaning locker customer stays for 3.5 years. And if there are 4 customers for every dry cleaning box, that works out to $32/month/customer or $384/year in revenue per customer. So over 3.5 years, the LTV of a dry cleaning locker customer is $1344. We are now in the dry cleaning locker business. Call 1-888-661-7992 to set up a time to talk about dry cleaning lockers for your town or city.

So we know the LTV’s of:

A Route customer is $4502.40

A Locker customer is $1344.00

A Counter customer is $250

Now it’s easy to figure out how much we are willing to invest in getting each type of customer.

If you’ve been marketing regularly for some time you know it’s harder to get a route customer, then a dry cleaning locker customer (if you use lockers). And it’s easiest to get a counter customer. Now we know why—the route customer generates the most revenue, therefore it’s hardest to get.

So how much would you spend (or invest) to get a route customer? A dry cleaning locker customer? A counter customer?

Well, we know that about half our revenue is gross profit, so we would invest half of the anticipated LTV revenue. I don’t recommend higher of course because there would be no profit.

What is your net profit margin? This is the money you make at the end of your day after you’ve paid everything. If you’re a small operation, your salary is part of the net. If you’re a large organization, your salary is not part of the net. I hope it’s at least 15%. Over 20% would be better. I would recommend that you spend less than your net percentage.

So, with these facts in mind, let’s say your net is 15%, so you’d spend $675 in acquiring a new route customer. (I would not pay $675 for a new route customer, but this gives you a guide of what a route customer is worth to you when you sign one up.)

What would I pay?

The most I’ve ever averaged over the course of a month on a route customer is around $100. (I could of gone up to $150 for one and then got a referral that only cost me $40 in FREE dry cleaning for the referral, $20 to the new route customer and $20 to the referring customer for recommending them.) So theoretically, I spent about $170 for two route customers ($150 + $20 cost of dry cleaning). So I averaged $85 per new route customer.

Now, that is the most I would pay. I recommend doing bag drops, PPC, having an effective website, mailers and an orchestrated referral program to get you route customers at a lot better rate than $100 per new route customer.

Taking that into consideration, I would pay up to $30 for a counter customer and $75 for a dry cleaning locker customer.

When you know what you’re willing to pay, instead of SWAG’ing it, you’re now in control of building your dry cleaning business with knowledge instead of at the whims of your advertising reps.

Let’s talk about Customer Service and how it’s a sound investment in your dry cleaning business. Now that you know what it costs to get a new customer; you can better gauge your customer service to fit it.

If you lose or damage someone’s garment, it’s much easier to give him or her a credit or a check to cover that garment. So writing a check for $100 for a route customer is no big deal because you know what that customer is worth to your business.

If you handle this situation right, you’ll not only keep this customer for life, you’ll get referred and this person will be a champion for your dry cleaning business. If you make your customer jump though a bunch of hoops to get a credit, you’re going to lose them.

As soon as you damage a garment, ask your customer what they’d like for the garment and write the check. Most people will be very conservative with what they’d want for their garment. The faster you take care of this, the better chance your customer will stay with you and become a champion for your business.

One of the best capital improvements you can make to your business is to get a sorting system. Brian Robertson of Comet Cleaners made an investment a couple of years ago with Quick Sort. He says, “It’s virtually impossible to make a mistake. We use barcoding instead using a human. Because of this, the mark-in process is more accurate and faster.” He goes on to say, “it’s saved me about 2 people and paid for itself in less a year or less.”

Quick Sort

Quick Sort

“Customers have more confidence in you as a dry cleaner. I tell my people all the time that we are like a bank. When they drop off their clothes, it’s like a deposit. When they come to pick-up their garments, they want a complete withdrawal, all of the money they deposited, they want back.” He goes on to say, “Too many cleaners lose garments or misplace them. This system virtually eliminates lost garments.”

If this system can pay for itself in a year or less, why would not you purchase it?

You are NOT in the dry cleaning business. You are in the marketing of your dry cleaning business. The successful dry cleaners have figured this out. They understand that if you don’t have a constant flow of new customers, you’ll eventually go out of business.

The top dry cleaners know that marketing and getting customers in the door, on their routes and in their lockers is their primary job function. Make it your primary job function. I encourage you to!

 

Call 888-661-1992 to set up a FREE 30-minute consult with me about Dry Cleaning Lockers, Routes and/or anything you’d like to talk about in your dry cleaning business.

 

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