How much notice do you have to give when you raise rates for house cleaning? As a cleaning business, you have to raise your rates on a yearly basis. But how do you tell your clients that? And more importantly, when do you tell them? That’s what we will cover today.
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Hey there, I’m Angela Brown, and this is Ask a House Cleaner. This is a show where you get to ask a house cleaning question, and I get to help you find an answer. You can find this and 400 other answered questions in this series on our YouTube channel.
How Much Notice to Raise Rates?
How much advance notice do you need to give your clients before raising rates for cleaning? Somebody asked this question.
“Hi, Angela. All my clients pay me by the hour. Due to the increasing cost of gas and cleaning supplies, I need to raise my rate. How much advance notice is appropriate to give all my clients? Thank you very much.”
Now, when you go to buy gas at the gas station when you get there, there’s no bulletin that says, “Hey, price is going up in two weeks.” There’s no notice. You just get there and the bulletin has the new pricing. And for a minute, you have sticker shock.
You’re like, “Whoa, prices just went up.” And then, you try to remember what you used to pay and you’re like, “Well, I still need gas. I guess I’m going to go ahead and buy it here,” or you will go to another gas station in town looking for a cheaper price, right? There are apps on the phone that even allow you to do that.
Your Prices Will Go Up Year to Year
As your prices go up, and usually it’s about 2% or 3% per year. And so as you’re raising your rates, I always like to tell my customers at the beginning, when I do the walkthrough, “Our rates go up every year. I can guarantee your rate for this year if you pay for the year, and we’ll break it out and we’ll amortize it over the cost of the entire year so that your price is fixed for this year.
But at the end of the year, we’re going to do another walkthrough. We’re going to do a year-end review. We’re going to see if we’re still right for each other. We will renew our agreement, or we won’t and we’ll go our separate ways. At that time, your price will probably go up.”
Plant the Seeds With Your Customers so There are No Surprises
I like to always paint that, kind of plant those seeds, right at the very beginning so that when the prices do go up, there are no surprises. Now, how much advance notice do you need? The answer is one cleaning. When you go to the grocery store to buy eggs and milk and the price has gone up, you’re like, “Whoa, prices have gone up,” but you still need the eggs and milk.
And so, you either buy them at a higher price, or you decide you don’t need them and you’re not going to buy them because you’re not willing to spend the extra money. It’s usually one of those two things that happen.
Your Customer Might Not Want to Pay More
It’s the exact same thing with customers. The customers are going to go, “I’m not happy about it, but I still need my house cleaned.” “I liked this house cleaner, therefore, I’m going to pay the higher price.” Or, they’re going to say, “Wow, I’ve got two weeks before they come back again at the higher price. I need to find a new cleaning company that can do as great a job in the next two weeks for a lesser price,” and then they might start price shopping.
So, my recommendation to you is that you print out a great big yellow or orange paper that you leave with your worksheet that says, hey, notice, our prices are going up. This is our annual price increase.
Make Sure They Know It’s Annual
I like to use the word “annual“, so that if you haven’t raised prices on them yet, they’re going to go, “Oh, this is annual. This is going to happen every year.” Again, you’re planting seeds. Leave it there on the front of their counter. “Our prices are going up for all the obvious reasons that inflation goes up. It’s going up on this certain day by 2% or 3%. Your new price will be...”
And then, you list the new price there on the page for them. “If you have any questions, feel free to give me a call. I’m available until 6:00 PM tonight.” And I like to put a cap on it because I don’t want them calling me at 11 o’clock at night after they’ve had a couple of drinks.
I want them to call me during business hours when I’m still awake and I’m still alert and I know what I’m promising. Have those conversations but be very direct, and then don’t back down.
Do You Roll Out New Prices or Go All at Once?
Now, there’s a school of thought in the cleaning industry. Do you go across the board at once, or do you do a rollout with your customers? The rollout usually works better, because if you go across the board and you raise your rates at a surprising rate, 20% or something, you will lose a lot of customers and you’ll lose them all at once.
You don’t want to lose all your business at once. You can roll it out over a two-month window, for example. But every time you go to a customer’s house, give them one cleaning notice.
So if you come back in two weeks, leave the notice today. When you come back, it will be the new rate. Make a note in the record that you gave them notice and that their rates are going up.
Don’t Guess If You Let Them Know or Not
Don’t just randomly guess, “Well, did I give them a note? I can’t remember. I’ll charge them the lower price this time, and then I’ll make sure…” Don’t do that. Be very clear about your records. Because if you do a rolling scale and you tell somebody the price is going up and you don’t charge them the higher rate, you’ve enabled them not to pay the higher rate now when you do raise the price. You want to make sure that it’s very crystal clear to both of you.
And then if they have any guff and they’re like, “Oh, I’m not paying the higher price“. Then you say, “Oh, I was so hoping that you would because I’ve loved having you as a client. But I completely understand if you have to go find somebody that is more budget-friendly for you. I completely understand. No harm, no foul. We will part ways as friends. Thank you so much for your business,” and then walk away. Because you will find new customers at the better price.
Resources
47 Ways to Raise Prices …Without Losing Customers – https://amzn.to/3bUfCRr
Scared t Raise Your Prices? https://amzn.to/34e19vB
Pricing for Profit: How to Command Higher Prices for Your Products and Services – https://amzn.to/34dYBxd
The Price of Time – https://amzn.to/2TjdNqQ
Raise Your Prices, Attract More Business – https://amzn.to/3uiW5R1
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