One question that comes up sooner or later in the cleaning business is this:
When is a good time to raise my prices?
After all, once you figure out what to charge and land the account, the next thing you start wondering is how long you should wait before asking for more money.
The truth is, there is no hard rule.
There is no magic formula that says every account should get a price increase after a certain amount of time. Every cleaning business is different, every customer is different, and every account has its own set of circumstances.
That said, one of the most common ways to handle a price increase is to use the anniversary date of the account.
So let’s say you started cleaning a building on January 1st. In that case, you might send a letter sometime in mid to late November letting the customer know that their one-year anniversary is coming up and that a modest price increase will go into effect for the next year.
That is a very normal way to do it.
Now as far as how much to raise the price, that part is up to you. My advice is simple:
Keep it reasonable whenever possible.
The bigger the increase, the more likely the customer is to start studying your invoice with an eagle eye. They may also become more picky about the quality of your work. In some cases they may question the increase, push back on it, or worst case, start looking for another cleaning company.
That does not mean you should never raise your prices. It just means you need to be smart about it.
And remember this too…
Just because you raise prices on one account does not mean you have to raise them on all of them.
That is where a lot of people get tripped up. They think it has to be “all or nothing.” Not true.
Some accounts may need an increase badly. Others may still be very profitable just the way they are. Only you know the numbers behind each job, so take your time and think it through carefully. There is no rule that says every customer gets treated exactly the same in this area.
I’ll also tell you something that may sound a little odd.
I personally did not do a lot of price raising on many of my accounts.
Why?
Because I usually tried to price my services on the high side right from the start. So even after a couple of years, many of those accounts were still making me good money. Instead of constantly going back and asking for more, I focused more on keeping my pricing strong on all new accounts.
That was always my goal:
Charge top dollar, then live up to the hype.
If you can do that, you put yourself in a much better position long term.
Now let me give you a few additional things to think about before raising prices.
- Has the scope of work slowly increased?
This happens all the time.
Maybe the customer added extra trash cans, more restrooms, another office, more foot traffic, or just more little things that now take extra time. If the job has grown beyond what you originally agreed to, that is one of the best reasons to raise the price.
In other words, if the work went up, the price may need to go up too.
- Have your costs gone up?
If labor, supplies, fuel, insurance, or other business costs have increased, that matters.
A lot of cleaning business owners wait too long and wake up one day realizing the account is no longer nearly as profitable as it used to be. Don’t let that happen. If your expenses are climbing, it may be time to adjust pricing before the account starts dragging you down.
- Make sure your service is solid first
If the customer has been unhappy, if there have been complaints, or if quality has slipped, that is probably not the best time to ask for more money.
Get the account cleaned up first. Tighten up your service. Make sure they see the value. Then, if a price increase is justified, you will be in a much better position to present it.
- Give the customer enough notice
Do not blindside people.
A short, professional letter with a little notice goes a long way. It gives the customer time to process the change and shows that you are running a real business, not just making things up as you go.
- Don’t apologize for being a business owner
This is a big one.
Too many cleaning business owners act nervous the second they have to talk about money. Don’t do that. If the increase is fair and thought through, then present it professionally and move on.
You are not doing anything wrong by making sure your business stays profitable.
At the end of the day, my advice is this:
Do what makes sense for your situation.
You are the CEO of your cleaning company. You know your accounts, your numbers, your customers, and your expenses better than anyone else. Just think it through carefully before making a move.
If raising prices is the right thing to do, then take a deep breath, make a simple plan, and handle it in a calm, common-sense way.
Don’t overcomplicate it.