A rate increase is inevitable and house cleaners raise prices for 2018. How much of a rate increase depends on the maid service or house cleaner, inflation and their cleaning schedules?
You have to have a rate increase if you want to grow your cleaning business because your income depends on it. You don’t get any more hours in the day. So, your only option is a price increase and flexibility of houses you clean.
We Ask a House Cleaner how to market your cleaning business knowing rates will be going up. Angela Brown, The House Cleaning Guru shares tips.
Today’s sponsor is https://HouseCleaning360.com
#HouseCleaning360 connects house cleaners and maids with homeowners.
Listen: Rate Increase – House Cleaners Raise Prices
Watch: Rate Increase – House Cleaners Raise Prices
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.
Question: Rate Increase – House Cleaners Raise Prices
“Hi, Angela. My name is Holly. I have a cleaning business. I just work solo, and I have been doing so for about 10 years.
My question today is about rate increases.
Is it okay to raise my rates with my existing clients? If so, how much of an increase is fair?
I’ve been going back and forth. I’ve never raised my rates. My expenses have increased in the last year, fuel for example. I moved to a town further from my customers. So I am driving further.
I just wanted to know if that was something that is professional and okay to do.
I would love to know your feedback and get an answer to this question because I’m so torn. Thank you so much.”
Answer: Set Rate Increase Expectations from Beginning
So, ten years is way too long to go without having a rate increase. Because it is important that you get the money that your company deserves.
When we start out in the house cleaning business, we encourage people to start at a lower rate. This is for a variety of valid reasons.
But from the beginning, it is important to set up the expectations. You must be clear that within a year, you will have a price increase.
This is true whether you are just starting your business or starting to work for a new client.
By having the rate increase within one year, that preps the customer. They know that if they like you, they will end up spending a little bit more money to keep you.
Now at the end of the year, you can always choose to keep the customer at the same price if you so choose. But they are already prepped and they are expecting a rate increase. So then when you give them a rate increase there’s no surprise.
Rate Increase on High Maintenance Customers
There are other benefits of doing this.
Say the customer becomes high maintenance, and you’re charging them a lower rate. Both of you know that you’re going to be charging a higher rate within a year. You then have the flexibility of how much you will raise your rates.
What is a Fair Rate Increase?
Since you have not had any rate increases in the last ten years, I would suggest you start out with a 20% increase. It would be different if you had increases in the past.
20% flat across the board a good rate increase for your business. Because it’s affordable and it’s not going to shock anybody. But that’s going to bring you closer to where you need to be in the community of people whose houses you clean. On average your annual rate increase would be around 3%.
Rate Increase at the Grocery Store
When the grocery store raises the price on a gallon of milk, you don’t go to the shopkeeper.
You don’t say, “You raised your price on a gallon of milk. What’s up with that? I’m just not going to buy milk anymore.”
You don’t do that. You just say, “Wow, I guess I got to pay a little bit more money.”
Then you ante up the money and you pay the price.
Rate Increase at the Pump
When gas prices go up you don’t go in and talk to the gas station owner and get all upset that they raised their prices.
You just scratch your head and say, “Well, I guess I got to pay more money for gas.”
Everything has gone up over the last 10 years and it’s going to go up again.
How Often Should I Have a Rate Increase?
My suggestion is that you train your customers that on an annual basis you’re going to have a rate increase.
Like I said, you can always decide at the last minute that I’m not going to have a price increase this year. Your price gets to stay the same.
I am assuming that you have renewable contracts with your customers. At the end of their contract, if the price is too high, they can decide not to stay with you.
At the end of every renewable contract, there are so many things that are at play. Things like whether you like the customer if you get along with them, and if the workload is what you signed up for.
Are you getting paid a fair price for what you’re offering? If you have a renewable contract at the end of every year, that’s a perfect time to have a rate increase.
Is it fair? Yes, for sure.
What to Say to the Customer When You Raise Your Prices
What do you say to the customer when you raise the price?
You just come right out and say it. “Hey. I’m having a price increase starting January 1,” or whatever the annual renewal date of your contract is.
If it’s May 31st, then it would be May 31st.
Stick to the Dates of Your Announced Rate Increase
Say you have picked up clients throughout the year. Their contracts will be ending at different dates throughout the year as well. So you have a rate increase that happens all throughout the year.
It’s not like you’re scraping by until the end of the year for your rate increase.
It’s not all the way across the board. It’s a rate increase here and a rate increase there. That’s going to help keep the cash flow healthy for your business.
Is it fair? Yes, for sure.
What if Your Rate Increase Angers Your Customers?
You have no control over whether or not your price increase will make your customers angry. And it’s a business decision, not a personal one.
You’re going to say, “Man, I haven’t had a price increase in ten years. I wish I could go for another ten. Unfortunately, I can’t. Come January 1st I’m going to be raising my rates 20%. I know that that’s not going to even flicker on your radar but I just wanted to let you know so that are no surprises.”
If you just take an “It’s no big deal” attitude, then it’s going to be no big deal for the customer.
Don’t Make a Big Deal Out of a Rate Increase
But, if you make it a big deal out of it, your customers will be uncomfortable as well.
Don’t say, “I hope this isn’t too much of a challenge on your budget. Are you still going to keep my business?”
What wasn’t an issue to them is now going to become an issue.
Practice your “Rate Increase” Speech
If it’s uncomfortable to you to raise your prices for your house cleaning business, go and stand in front of the bathroom mirror and practice. Practice your new prices in front of the mirror over and over and over again until they roll off the top of your tongue.
Practice until you can announce them with pleasure.
But raise your prices already.
That’s my two cents for today. Until we meet again, leave the world a cleaner place than when you found it.
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Resources For This Episode
Premium: How Experts Just Like You Are Charging Premium Rates for What They Know and You Can Too! – http://amzn.to/2BMjrVE
What Should I Charge? Pricing Strategies for a Prosperous Service Business – http://amzn.to/2BMOwsd
How to Price Effectively: A Guide for Managers and Entrepreneurs – http://amzn.to/2zbv3yq
2 Ways to Raise Your Rates – http://bit.ly/2BwTvAs
Permissions To Share
SAVVY CLEANER – House Cleaner Training and Certification – https://savvycleaner.com
HOUSECLEANING360 – Referral database of the world’s most prominent home service providers and the homeowners they serve. https://housecleaning360.com