33. How to Let Clients Know About a Price Increase

(Without Making Them Mad)

Matt Harris

May 11, 2023

My biggest dread as a cleaning business owner?

Raising prices.

You might be facing this prospect now because of inflation, increasing operational and staffing costs.

The reality is that you are not alone.

Clients are also facing increased costs and are having (or have had) discussions around raising prices with their clients.

In 2017, we raised the prices for our cleaning service. The first increase in 5 years.

This is how we did it.

Agenda:

The Announcement
The Set Up
The Increase
The Outcome

The Announcement

Announcing the price increase was made by email and on our blog.

It included the following:

A thank you to clients for being loyal to our business
The decision behind the price increase
Factors impacting prices
The added value we wanted to provide; and
Another thank you for clients support.

We launched the email campaign 6 weeks before the price increase was due on 1st October. A deadline of 25th September was set for clients to decide on their new price plan.

That gave us enough time to follow up with clients and handle any concerns.

It also meant that the increase didn’t catch clients by surprise - they were given plenty of notice.

Clients also had the opportunity to schedule a call with me to discuss the price increase and any other concerns they had.

The Increase

Depending on the size of the contract (hours cleaned per week), prices were increased between 20% (> 10 hrs cleaning p/week) and 60% (10< hrs p/month).

We offered 3 different pricing packages:

A 1 year contract extension + the max increase (20-60%)
A 2 year contract extension + a weighted increase (15-50%)
A 3 year contract extension + the min increase (10-40%)

Clients also had to commit to setting up a direct debit or standing order to automate payment collection on the 1st of every month.

In addition, we offered a free annual deep clean (including carpets, windows and high level) which the client could book anytime between 1st January and 30th April 2018.

The start of the year is generally a quiet time so it was more effective to fulfil the deep cleans then.

The Outcome

After the dust settled, we had 12% of our clients terminate their contracts.

That was offset by at least a 15% increase in prices for the remaining 88% of clients. Some prices were increased by 40%.

We automatically renewed existing contracts by 12 or 24 months, locking in future revenue at an increased price.

We switched clients from paying net 30 days to paying in advance, on the 1st of every month, by direct debit. This secured our cashflow for operational costs.

If you have a price increase on the horizon for your cleaning business, don’t procrastinate.

Most clients anticipate increased costs at some stage.

Qualify your increase and give clients enough time to make a decision.

In this week’s episode of The Growth Lab podcast, I break down why you need to collect customer reviews for your cleaning business. Listen here.
Prefer watching over listening? Check out The Growth Lab podcast on YouTube.

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