IF IT DOESN’T MAKE MONEY IT DOESN’T MAKE SENSE
YOU ARE A YEAR BETTER AND SMARTER AND DESERVE A BIT MORE
Earning the money you deserve for the value you add to your client’s quality of life is a big part of owning your own residential cleaning company and many of us often don’t charge nearly enough. If you would like to raise your rates for existing clients, then just be honest. With vendors raising your rates you will need to raise your client’s rates as well. Doing a small increase of 2-3% each year to your base of repeat clients will not cost you one client but over the years will be a lot of money.
Calculate new rates for current clients, get mailing list prepared, write a letter and mail. Explain that you have been working on a new pricing structure to meet expenses and their new rate is $_____. If you do annual increases for your employees you could add that as a reason you are increasing their rates. You intend to share some of it with their cleaners. Recalculate rates for new clients with a larger percentage increase than 3%. Raise it as much as your market will bear, keeping your rates in the middle. Quote these rates to new and returning clients. This will help the ‘churn’ of current clients. They probably won’t leave you for a trunk slammer next time because they know when they return they will need to pay the higher rate.
Create a pricing strategy. Be sure the increase you are planning does meet your increased expenses. Undoubtedly you have received price increases from your vendors for the coming year. Be sure your increase covers theirs. After all, if it doesn’t make money, it doesn’t make sense. Be sure to allow sufficient time for your increase letters to reach your clients before the increase goes into affect. One month notice is considered appropriate. Change the client’s prices in their folders, on the computer and any other place that their prices are listed. If a client questions your actions, then try this:
• Explain the reasons behind the increase in a confident, non-defensive tone.
• Highlight any additional training or investments you’ve made in the cleaners, equipment and products which justifies the increase.
• Find a way to demonstrate the added value you can now provide to justify the increase
If you do lose a client and you’re more than confident with the value you provide, then perhaps the lost clients are not the greatest loss in the world. The clients who’ve walked are often the least desirable clients who never appreciate the value you provide; they may be difficult to work with and often end up costing your business more than they bring in, in terms of the additional time you spend keeping them happy. If that’s the case, don’t sweat the loss and simply move onwards and upwards. The fear of losing clients when you raise your rates is often nothing more than an irrational fear. Every year that you’re in business, you offer one more year of experience to your clients; one more year of learning; one more year of expertise. Doesn’t that in itself justify at least an annual increase in your rates? Follow the advice above and your clients won’t need to ask why, they’ll simply know it’s a standard part of your business policies.
PRICE INCREASE LETTERS FOR CURRENT CLIENTS:
Two template letters on word document that have preworded scripting for annual price increases for current clients.
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