Marketing, profits and pricing
Sergio Zyman is a marketing guru. Pepsi Cola, Proctor & Gamble, and Coca Cola previously employed Sergio. Currently he is self-employed.
I am providing this information because Sergio made the following statement, “The sole purpose of marketing is to sell more to more people, more often and at higher prices. There is no other reason to do it.”
I received a telephone call in April regarding the subject of marketing. The person who called inquired as to how I can help him grow his business.
I asked him, “What marketing tools do you have in your POS computer system?”
He said, “I do not know.” If I had hair on the top of my head, I think I would have pulled it out.
Do you know what marketing tools are in your computer? Do your counter sales representatives collect email and/or home addresses?
Do your counter sales representatives give you the excuse, “The customer did not want to give it to me.” Another common excuse from a CSR is, “The customer did not want to take the time to fill out the information.”
Would the new customer give you the information if your CSR told him or her that you were going to send gift certificates? You can bet your bottom dollar the new customer would provide the information.
The key word is “gift.” To 99 percent of our population the word “gift”, is equivalent to the word “free”. Would you turn down a gift? You would accept the gift, look at it and then decide whether to use it.
This takes me back to the inquiry about marketing. If you do not know what tools are available in your software, contact your POS software company today.
Learn how to use your database. Your database is the second most valuable asset your company owns. The questioner has been in the drycleaning industry over five years, but until now has not bothered to explore marketing. I am looking forward to my visit to the plant. I will keep you informed as to what the outcome was.
April must be marketing month or people are coming out of their winter hibernation. Another inquiry I received, “I was walking through Barnes & Noble and saw a book with the words “fusion marketing” in the title. What is fusion marketing?”
That is a great question because fusion marketing is what all of you should be doing.
Fusion marketing combines three kinds of media — traditional, social, and digital. There is a book titled “The Fusion Marketing Bible” by Lon Safko that goes into greater detail than the information I will provide you.
Look at your current marketing. Determine what works and then find ways to connect the three forms of marketing together. A good example would be a business card. You can add a QR code to it and now you have also made it digital marketing tool.
Do you market on Facebook or with Twitter? If you distribute coupons, do you include the social media information on the coupons? Your business cards, coupons and television commercials can all be connected to social media and digitally, so that you have fusion marketing.
There is a company named Sheetz. It is largely located on the Eastern seaboard. Sheetz was used in a documentary movie that was made by Morgan Spurlock. The film title is POM Wonderful Presents: The Greatest Movie Ever Sold.
Spurlock asked companies to sponsor the film in exchange for product placements. Sheetz was used in the movie as an example of making use of fusion marketing. Visit the Sheetz website. I did, and believe they did a nice job.
Finally, make a list of your current traditional marketing tools and then list your social media. Your homework is to find ways to combine them. If you cannot combine some of them, you are not trying hard enough!
Can’t raise prices?
The final April inquiry was another typical question. “My profits are dropping and I am afraid to raise my prices. What should I do?”
How is that for an open-ended question?
I asked the person how many employees he has and he told me fewer than ten. He said he has been in business for ten years but has not raised prices in four years due to the current economic conditions. He said he stopped marketing because of falling sales.
This is a lesson on how not to run your business. Never, ever, stop marketing. There are some of you who market only during busy times. Then there are the smart operators who have a marketing plan and contact current customers and reach out for new customers, month in and month out.
Are you a smart operator or do you feel your marketing dollars are discretionary expenditures?
When you market, you reinvest dollars into your business. About 20 percent of your clientele will move, die or change cleaners over the next year. Consistency in marketing is how you stay ahead of the game.
Send those new customers a “thank you” every week. Send “miss you” messages at least once per month. There are many ways to go after new customers. I will save that information for another article.
Increasing prices is always frightening for smaller cleaners and for some larger companies as well. Many times, they call their competition to see what the competitors charge.
You do not base your prices on what your competition charges. You base your prices on what your operating costs are. In this instance, the cleaner’s costs have gone up over the prior four years and he has not increased prices to cover those additional costs.
I asked him about up-charges. He said he had very few. This was a perfect way to raise prices without raising the customer’s eyebrows.
Because he knew how to modify the upcharges in his computer, it was easy for me to make a few suggestions that should bring a ten percent increase in gross volume, assuming the markers do their job properly.
He promised to check his marking statistics daily to see if the markers were adding at least ten percent in upcharges.
Are you adding that much? Do you run a report on what your markers are doing? If not you are missing a lot of necessary information that will put dollars into your pocket.
Harvey Gershenson operates Sterling Drycleaning Consulting and is a former owner of Sterling Dry Cleaners. A second-generation drycleaner, he has been in the industry since he was in high school. He has served as president of the Cleaners and Dyers Guild of Los Angeles and has served on the boards of directors of the Drycleaning and Laundry Institute and the California Cleaners Association. He is also a guest lecturer for the California Department of Corrections. He can be reached by e-mail at firstname.lastname@example.org or phone at (310) 261-2623. His web site is drycleanerconsulting.com.