You don’t have to be an economist to realize that now is a good time to increase your cleaning service prices. Homeowners have cash in hand and are worried less about COVID – demand is WAY up. Meanwhile, it’s impossible to find cleaners to fill all the potential jobs in the market – supply is WAY down.
You could nerd out on all the economical factors that go into inflation, but at its most basic level when demand goes up and supply goes down the natural market reaction is for goods and services to increase in price.
Big-name companies, like Chipotle and PayPal, are already ahead of the curve.
If you’re ready to increase your prices professionally, then let me show you exactly how I did it with our cleaning business, while only losing 1 recurring customer.
Price Increase Case Study
Eloise’s Cleaning was feeling the pressure back in April when everything started to open up after the pandemic. The re-opening of the market at the start of the “busy season” for the cleaning industry, was a perfect storm that helped us bounce back to pre-pandemic numbers.
The only concern: we hadn’t hired any new cleaners since November 2020 and most cleaners weren’t seriously looking. I felt like I had a huge fish on the line and couldn’t reel it in.
I quickly discovered that we weren’t the only cleaning business struggling to find workers.
The local franchise owner of Molly Maids actually reached out to us to discuss their current hiring crisis.
“Are you taking on new clients? We can’t handle any more customers because we can’t find anyone to work. Do you mind if I send them over to you?”
After that phone call, I knew it was time to increase our rates – something we haven’t done in over 4 years.
But how and by how much?
This was the exact question I used to poll some awesome cleaning business owners from a Facebook Mastermind Group. With everyone’s help, we were able to determine the smartest way to approach this without losing all our customers.
Our Price Increase Strategy
Step 1 - Determine Your New Rates
To keep it simple, we increased our rates across the board by 10%. Yes, that’s quite a jump and a possible sticker shock to current customers.
Our reasoning for the steep increase was twofold: 1.) We haven’t increased our rates for 4 years and 2.) Some customers were extremely difficult and no longer worth the rate they were receiving.
Anything more than a 10% increase is risky – especially for your recurring customers.
All markets are different, depending on factors like location and cost of living, so what I charge on the east coast is likely underpriced for a cleaning on the west coast.
Spend some time researching your market’s price point by looking at your competitor’s pricing. Most cleaning businesses list their fees online or can be discovered with a quick phone call.
Keep in mind, you offer a luxury service. Never be afraid to charge what you’re worth.
Step 2 - Write a “Price Increase” Email Template
This part will make you cringe.
I remember sitting down at my computer and typing our price increase email template. I hit the “backspace” button like I was dribbling a basketball.
Pricing is emotional…
Sending the first “Price Increase” email was like watching a graphic horror movie. I wanted to cover my face, shut my eyes, and look away, but I had to press send.
How are they going to react?
Will I get fired?
What if they write a negative review?
Instead of going through the same painful writing process, you get to reap the rewards of my painful, agonizing labor.
You’ll need to customize it a tad to fit your business, but once you’re happy with how it sounds save it as a Gmail Template and send it manually to specific customers, which we will target in the next step…
Step 3 - Notify Current, Recurring Customers in Waves
Have you ever been to Vegas?
My wife’s (Lacy) favorite table game is Roullette (the wheel spinny thing). She’ll walk up to the table and put all her cash on red. One play, one spin of the wheel, one giant risk.
She’s either a winner-winner-chicken-dinner or I’m sleeping on the couch because I didn’t manifest red in my mind while the ball was bouncing.
On the other hand, I’ll have a few drinks, place a few bets accross the table, and enjoy an hour or two of play. Most of the time I’ll walk away with a little more than I sat down with.
Don’t gamble like Lacy.
Mass emailing your new, beautifully written price increase email to your entire recurring customer base seems like a simpler process…just rip the bandaid, right?
To us that seemed a bit too risky, so we took a more calculated approach and increased our cleaning prices in waves.
Email Wave 1
The first wave of recurring customers to send your price increase email to will be anyone who has been “grandfathered” into your pricing and is paying lower than normal cleaning fees (before the increase).
I recommend staying as organized as possible by creating a Google Sheet 👇👇 to track and manage the entire process.
Wait for some feedback before moving to the next email wave. Silence after the price increase officially takes effect counts as positive feedback and is a good sign that it’s safe to move to the next wave.
Here are a few emails we received after our first wave:
Email Wave 2
One of our bi-weekly customers has sampled every single team member on our roster and managed to submit a complaint for each one. She makes scheduling extremely difficult and is constantly phishing for discounts. One time she even complained about the perfume our team member was wearing…😒
Go through your recurring customer list and ask yourself: Do I secretly want to lose this customer?
These are the customers you’ll notify in wave 2, probably with a smile on your face.
Email Wave 3 (optional)
We have an extremely generous, weekly customer who has become like family. Never complains, extremely flexible with scheduling, and always tips.
Since she is such an excellent customer, we decided not to increase her rates. This is highly recommended for those customers whom you never hear a peep out of – don’t fix what ain’t broke.
Obviously, if they’ve dodged a couple of your past rate increases, then it may be a good time to go ahead and raise their rate. Most likely, these customers will be the most understanding.
After notifying over 40 customers and completing Wave 2, we have only received one customer who will not be continuing services.
She didn’t kick and scream, she didn’t leave a negative review, she didn’t do any of the things I feared when I pressed send.
Within a few hours of receiving this email, we were able to find another recurring customer who was happy to pay our new rates.
I can’t promise you won’t lose some recurring customers. But if you follow this method, the customers you slowly lose will be replaced with new customers at your new price.