National Clothesline

t was at a Tuchman management meeting that I first heard Sid Tuchman refer to drycleaning as a nickel and dime business. It’s true. For example, up-charges for whites, pleats, belts and silks can have a profound impact on your bottom line.

Each taken alone is rather insignificant. However, when combined, the results are dramatic. Here’s proof.

If you were to start earning one penny a day on New Year’s Day and you doubled your earnings every day thereafter, on January 31 (30 days later), you would have earned ten million, seven hundred-thirty seven thousand, four hundred-eighteen dollars (plus some loose change)!!

Doubt it? Get out your calculator and do the math on your own.

That’s the power of exponential growth. Rapid growth in any one area is not necessary. Instead, small incremental growth in a number of areas can have a profound effect on the health of your business. The key is to learn to leverage your assets for maximum efficiency and profits.

To leverage simply means to multiply the productivity of any resource you might have.

Take your present ad campaign, for example. Let’s say you make a slight change in the copy and get a 5 percent better response… that’s 5 percent more profit in your pocket without any additional

cost or effort. You’ve just leveraged your advertising.

Or what if you were to show your counter staff an easy way to get your customers to spend 10 percent more each time they visit the store and you did it without extra cost? You would be leveraging your sales personnel and increasing productivity and profits by 10 percent.

Here’s something you might want to try. I did this about 20 years ago in our package plants with astonishing success. We had red buttons made up for all the counter staff in our 23-store chain. The buttons said, Ask me about my button.

When a customer would ask, “What’s with the button?” the salesperson would say, “From now until the 15th of the month, we’re offering a 25 percent discount on all household items. That includes comforters, bedspreads, quilts, sleeping bags and draperies.”

We didn’t get an immediate flood of business. It came gradually. But within a week or two, we began to experience a noticeable increase in household items and the closer we got to the 15th of the month, the faster the orders came.

At the beginning of the next month we issued another set of buttons for the counter staff. These were brown and had a different message: Ask me why my button is brown.

When asked, the counter person would say, “It’s to remind you that we process our own suede and leather. We’re offering a 30 percent discount through the end of the month and because we do our own work, we can return your garment to you within two days.”

In short, we simply leveraged our counter staff. We forced them to suggestively sell and it worked. You could do something similar… maybe even with a button.

For example, you could promote the cleaning of casual wear such as Dockers and polo shirts. Believe it or not, this is a service many customers are unaware of. It’s a proven fact that if you tell more you’ll sell more but most people at the counter simply don’t remember to.

What other resources can you leverage in your business right now?

You could leverage your customer base by making a small increase… say 10 percent over the course of one year. If you have 3,000 customers now and they spend $300,000 a year, that means the average customer spends about $100 a year. A 10 percent increase in customers will bring annual sales to $330,000… an increase of $30,000.

Imagine that!

Why not leverage your price list with a small increase? Done on a regular basis, small incremental increases are generally accepted by your customers, many of whom are professionals and are well aware of the cost of doing business. A two and a half percent increase is certainly not unreasonable and can easily add an additional $7,500 in sales without any additional effort.

What else could you do?

Maybe you could get an extra order per customer every month. Or how about getting an extra item per order per customer? Look hard enough and you’ll find many ways to leverage your business.

Leveraging can have a profound effect on your bottom line. The object is to get as many elements working together as possible.

Think of the penny. The results are exponential!

Bill Bishop has been a consultant with the Golomb Group for the past 12 years, designing marketing and promotional programs for drycleaners. He can be reached at the Golomb Group at (800) 679-5856 or by e-mail at billbishop@golombgroup.com.