Keeping prices current

The Office
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so my partner and i are at a point where we are maxed out time wise, how far out we are booked varies but we end up working 8-5 every day. we’re thinking of maybe hiring next year but thats another thread. for now i’m focusing on repeat customers. I want to make sure to keep their prices current. i’m thinking a customer uses us this year for X and we’ll keep the price the same next year but the third year i want to bump it up slightly.

for example, first year it’s $250, second year it’s $250 then third year it’s $260-270.

how should i go about doing the raise, do i have to tell everyone up front? do i say at the end of service on year 2 “next time it will be $260”? or when we schedule for year three “ok mrs johnson, we’ll come clean all the windows and it will be $260” or do we just schedule the 3rd year and when we’re done hand them an invoice for $260?

i’d like to hear from those of you who are doing this currently not speculation from those who haven’t faced this yet.

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My quarterly customers I keep at their present rate, although I did make adjustments to three of them because they needed it. Anyone new or who isn’t on a regular repeat schedule (quarterly) gets the adjusted price of the new year - if it changes. I haven’t changed prices since 2015 and will look at how things are next year.

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so how long would you go before you raise your quarterly customers? I mean if you wait 5 years then it’s going to be a rather large Jump won’t It?

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You do have to tell them up front, we do it at the beginning of the year when we book them and send out service agreements

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we don’t have service agreements, i’m refering to residential

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Most all of my customers I raised in 2012. The Quarterlies are at those prices now; maybe not next year.
I re-evaluate at the first of the year of how I think my prices are going and let them know for the first clean of the new year that “This year we have a price increase.” If a customer is not on a regular schedule (every quarter) I just hand the invoice after the job is done.
I had one yearly whom I hadn’t cleaned in like 3 years - her price was actually a bit higher than previously ($120) but I had realized I wasn’t charging enough with more experience under my belt. Her response? “That is a bit more than last time, but I know you do a way better job than who I used last time so it’s good.”

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the pest control company i worked for raised their prices every year. they did it on 50% of their customers each year so each customer got raised every 2 years. i think thats a pretty good way to do it. it was usually by a small amount so their $35 monthly service went to $36 or $37

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8

Yep, that is about right, in 2012 I raised $1 per window and 25¢ per French pane. A few jobs I simply underbid and fixed those in 2015.

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The grocery store doesn’t notify me when prices change. Same applies to our business.

The customer calls and we provide them the price for service, if they say it’s higher than last cleaning then we explain there was a price increase this year.

If they don’t agree to the new price, we don’t clean their windows. Simple.

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but we have a lot of people who have liked our work who just call and say “hey we want you to come out and clean the windows again” and it feels a little awkward saying “sure it’ll be XYZ to clean those windows” rather than just saying “sure we can do it Wednesday”

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We do as well. But our script is the same regardless; we always confirm… scheduled date, address, phone number, email, scope of work (In & Out or Out Only); and price. Very rarely do repeat customers say OMG the price is $15 more I’m not scheduling. It’s happened maybe a handful of times.

We raise prices 5% every year, on every single customer, no exceptions.

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12

Inflation is about 3% a year, nationally.

I raise those once a years, 3% every year. Those that clean multiple times a year, 5% every three years. Commercial gets raised 5% every three years.

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13

That’s good. This summer I discontinued 20% off on new quarterlies and now offer $25 off for new quarterlies after the first clean. I’ll keep the others I have had over the years as they are for now. Maybe in a year or two I’ll bump them up as well.

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I had a service contract from a vendor one time have the clause in it

“all conditions shall remain in full force throughout the initial term or any succeeding renewed term, except the price, which may be increased by 5% for each renewed term”

what I interpreted is that no notice need be sent unless rate will increase more than 5% in a one year period

what has worked for me is making a note on invoice:

[services performed] (after x years, 2017 rate)

follow the CPI index and you can adjust whenever so you’re under 5% (1,2 or 3 years) and it’s low enough too for it not to be a deal breaker for the customer

this is for recurring, of course if a job needs a major overhaul on rate that’s another story

“will calls” you can do whatever you want, I raise the price every year “you’re scheduled for x date and the 201x rate is just $x for that, see you then”

I also increase my bidding rates every Jan as well

you never want to get way behind, or even behind at all or you’re going to get a lot of churn, been there done that, not fun, neither is the loss of profit

it’s easier for customer as well, what’s easier for everyone? raising a $200 job to $210 or a $125 job to $200?

remember your dollars are eroding every month, each year you put it off youre just giving yourself a negative raise, another negative raise, another negative raise . . .

if you have a client flip out over regular CPI increases, then that is a person who is refusing reality and taking it out on you, they wont let you keep up with the times, well, time to go

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15

We do service agreements on all accounts including residential.

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16

it sounds like perhaps, up till this summer, your first time rate is your preferred rate and you were giving an additional 20% off that, leaving you with a lower per hour paying job (but a recurring one so a win for you in that respect) ?

why not add 25% to your desired qtly rate (your new non-discounted rate you mentioned) and then when you give 20% off, then it’s not a lower paying job but one at the rate you really want?

(add 25% because 80% of $100 is $80, but it takes $80 x 1.25 to equal $100)

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The question was do you tell them or just hand them a new price after cleaning.

I agree you don’t need to state it was a increase just get them a price prior to service.

Simply just good business.

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I know you replied to someone else, but to capsulize my post:

recurring: if at CPI or 5% or less a year - No
will call: no

if adjusting for issues and relatively minimal - No ($200 to $225)

if adjusting for issues and relatively higher - yes ($200 to $275 type stuff)

some is psychology, if you are crossing thresholds typical to resistance: $850 to $1,050

seems like going into the $400’s, $700’s and $1,000’s are typical resistance thresholds for residential

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19

I guess it wasn’t clear. No we don’t provide a new price after cleaning.

When we call them next season, or they call us, we go through the script I mentioned that includes our new price. They agree or they don’t at that point.

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Yes. 4 times a year at 20% less seemed like a win for me as opposed to once or twice a year at full price. So a $900 job is about $180 off - now a $900 job is $25 off. Still same great service, just bringing my pay up for quarterlies. The ones who wait a year or more to get cleaned are a pain to do as they are like first cleans. Some waterfronts with busy households are pain even quarterly!