Customer Loyalty and the Art of War

My father can’t stop thinking about business. It’s as if he believes that his business would collapse if he stopped crunching the numbers. To my father, there is no such thing as a part time entrepreneur. To my father, a casual relationship to his business doesn’t make sense to him. My father is the type of businessperson that likes to get his hands dirty, and wants to know every aspect of his business. His attention to detail and work ethic probably comes from his military background, which would also explain why he approaches business like war.

I remember one year, back when my father owned multiple laundromats simultaneously, he noticed a laundromat opening up across the street from his largest laundromat. War had been declared, and my father knew that he had to crush this store before it even opened. Like any military endeavor, my father started conducting reconnaissance on the competing laundromat. He casually walked over to them one day just take a peak. They weren’t due to open for a while.

Up to that point, my father had opened up so many laundromats that he had it down to a science. He did a quick count of the number of washers and dryers they had. From that he was able to calculate the maximum number of times the machines would be running per day, how much money the machines would bring in on their best day, and how much overhead. He also counted the ceiling tiles to get an estimate of the square footage of the property to calculate the rent and general overhead.

My father then assessed his competitor’s strengths and weaknesses, and developed a strategy. Given his years of experience in flipping laundromats, my dad knew precisely how profit they would need to make in order to stay afloat. Although their machines were newer, their space was slightly smaller, and they had fewer machines than his laundromat. And they both had the same prices. My father realized that the key to beating his competitor would be in retaining loyal customers, and word of mouth marketing.

My father decided to attack his competitors before they even had a chance to open. He had a print shop make some business-sized punch cards where he’d punch a hole in the card for every load of laundry. Double washers got double punches, and triple washer got triple punches. After paid for ten punches, the customer would get a wash for free. The punched cards were then entered into a raffle to win prizes like ten free washes, laundry detergents, and even a barbecue set. Soon, his customers started doubling up their loads just so they could get their free wash, and to be entered into the raffle. His customers started to tell their friends and neighbors about the free washes and raffles.

Within less than a year, the competing laundromat closed for business.

My father only has a GED. My father never went to business school. My father has never read a book on marketing. Yet, even my father knew that focusing on customer loyalty, and his customers do the marketing for him would be a lot cheaper and more effective than trying to get new customers by hanging fliers on cars and doors. He knew that customers would want to hold onto their punch cards, whereas fliers typically get tossed out. He crunched the numbers, and knew what needed to be done. That was not just a case of good business instincts. That was calculated science. That was a business war with math as his weapon of choice, and his loyal customers as his soldiers of marketing.