4 Success Lessons This Entrepreneur Learned While Cleaning Up in the Laundry Business Disruption is not just the fate of complacent industry giants, as one disgruntled customer proved by growing a multi-million dollar laundry business.
By Lewis Schiff Edited by Dan Bova
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I recently had the chance to sit down with Rick Rome, owner of Wash Club, the dynamic laundry services company in New York City that uses apps, geolocation, and sophisticated technology to provide easy laundry pickup and delivery services to busy New Yorkers throughout Manhattan and Brooklyn.
Rick was inspired to launch Wash Club in 2009 after his former dry cleaner refused to fix without charge some buttons on one of his shirts -- damage that the dry cleaner himself had caused. Despite Rick protesting that he was a loyal customer and deserved better treatment, the dry cleaner stuck to his guns. Rick was galvanized -- he went out and bought a 6000 square foot laundry facility. He soon realized that the $10 billion-a-year laundry and dry-cleaning industry in NYC is plagued by unclear communication, unclear product offerings and inconsistent service, with 90 percentof the industry made up of independent operators. Rick's goal was to offer NYC a laundry pickup and delivery service that is convenient and technologically savvy. Rick took about a year to develop and battle-test the software he needed for Wash Club. Within four years, Wash Club had gone from zero customers per year to over 12,000.
Rick shared with me a few of the strategies that helped him to grow Wash Club's incredible success:
1. Dominate your niche.
Rick's refinement of the delivery concept was based on his experiences with other services as well as his understanding of the people he aimed to serve. "At the end of the day, it's about convenience," Rick says. "In New York, we want everything yesterday. We want convenience in service – people will happily pay for service as long as it is convenient." Wash Club provides very flexible pickup and delivery windows, making it convenient for a broad range of people, unlike the standard eight-hour delivery windows offered by many other companies. Features like email notifications and driver tracking technology help customers stay on top of their service and narrow down delivery windows even further. Wash Club now offers windows of two hours and often manages to whittle them down even smaller – a truly impressive feat given the logistical challenges of NYC traffic, as anyone living in the city knows. "The last mile is the biggest challenge in logistics," Rick observes. "How do you get from the factory to the end user? Hence, Amazon writing the book about drones and what they can do. By being able to get that last mile effort under your belt, you're a major player." How did Rick manage to tackle that last mile? By reaching a critical mass of users, Wash Club has been able to expand its business – more orders equals more trucks, which leads to even faster and more convenient service, which leads to even more customers.
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2. Handle your business.
Wash Club controls the entire value chain from start to finish and doesn't outsource any part of their process. From when the customer visits their website or uses their app to when they receive their freshly laundered clothing, they're dealing with Wash Club employees. "We believe in controlling that value chain because otherwise there is too much disruption and too many moving pieces that allow for a mess-up," Rick says. If the pickup and washing process are done perfectly but the delivery guy winds up running late, then from a consumer's perspective that's bad business. By keeping all of their services under their control, Wash Club can minimize the kind of disruptions that would undercut their goal of providing convenient, high-quality service.
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3. Leverage your assets.
It may seem as though Wash Club's high level of service would translate to higher pricing for customers, but their pricing is actually around the middle of the pack when it comes to their industry. Why is that? For one thing, as an online business, they don't have to deal with maintaining expensive retail storefronts. But another major part of their business is that Wash Club also offers its software-as-a-service to other laundry and dry-cleaning businesses elsewhere around the country – they're now in 10 states and are close to international expansion.
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4. Keep your employees engaged.
Engaged workers who own their situation and their work offer better customer service. Wash Club is serious about incentivizing their workers. Their clerks get an hourly rate, plus a $2/hour bonus for showing initiative, solving problems, and not making any mistakes. "Every clerk can make up to an extra $80 per week in bonus for doing their job properly," Rick told me. "Washers get a bonus of an extra $1/hour." Washers, clerks, and drivers all earn shared built-in gratuity as well.
