Price rises

How do you guys go about raising your prices. What do you say to your residential and shopfront clients so they aren’t put off.
The reason I ask is that the first day I went door knocking, through inexperience and no research, I gave some estimates that were about 20% under what i would estimate now. I don’t know what to say to justify a 20% price rise.
Any ideas?

Honesty.
I’ve done that before, I Had to go back and tell them that I underbid their place, and for me to be able to do a proper job I need to charge this much. Most people understand.

By the way how long has it been since you bid those jobs?

“Proper” is price-dependent?

Good point Larry.

Porkie, you failed estimating the job, is your fault, not the customer’s.
Everyone of us has been there I believe … What I would do ? Bite the bullet and remember it for the next time. Is better to loose some money and keep your name untouched.
Chances are that you won’t be remembered if you go and do a quility job, but they’ll sure remember you if you stop by putting excuses that your price is wrong, or worse, doing a sloppy job, “because quality has other price”.
Don’t take wrong, nothing personal, just an opinion.

Carlos

Tehnically, that would be a 25% rise from your original estimate. I would also bite the bullet if it hasn’t been that long since you gave the quote.
Or you could say in the future :“This price is good till x/xx/xxxx”

I wouldn’t necessarily shy away from raising the price, but I would have to be prepared to lose the job.

Say this:

“Mr.________ , it’s been a real pleasure working with you these past _______ weeks/months. In fact, I wish that all of my clients were as pleasant and reasonable as you have been, and as prompt with their payments!”

(pause to let them acknowledge your praise)

"I have an unfortunate problem, though, and I’m afraid that it may mean the end of our working arrangement. Please let me know what you think:

When we originally looked at your beautiful store here, back in _________ , it seemed to us that we could easily complete all of your windows with the highest level of workmanship, for the great low price of only $_____ . Even these windows over here, with the challenging __________ , we felt we could do all of this for only $_____.

These last couple of weeks/months especially, we’ve been trying really hard to maintain our high standards and still pull this off, but we simply can’t complete this job properly for you in less than _______ minutes.

Unfortunately, spending _____ minutes to generate $______ falls considerably below our standard commercial window cleaning pricing requirements, and we just can’t keep caring for you for this price of $_____ indefinitely, anymore. I’m truly sorry for that, and understand if that needs to mean the end of our working together.

I do have 2 possible solutions for you, though:

  1. We can carry on as we have been, and raise the price from $_____ to $_____.

  2. We can stick with the price of only $_____ and complete these windows and those windows each and every time, and these and those windows over here every _____ weeks/months instead of every time, like we’re doing now.

Which of these 2 solutions would you prefer? Or would you prefer something else, besides these? I’m sure that your life would be a lot easier to just keep us on, and I know that you like us because we do ___________ & ____________ , you’ve mentioned that before, and our other clients love that, too, but I also know that it’s your call at the end of the day, so we’d just like to know what would best suit you."

Something like that should do the trick.

Remind him that you love them, they love you, that you understand and appreciate their business, and that you are empathetic to their fiduciary responsibilities.

AND you have engineered 2 possible solutions, leaving him feeling in control, by choosing which one suits them best.

What I do in these situations is increase the price over a year or so, ie wait six months from the original quote and increase it by %10 , then increase another %10 in six to eight months.

If I underbid the job that is my fault ,not the customers. I should have taken a closer look at the job in the first place. I have done it myself a few times. I didn’t take the time to properly bid the job. Bite the bullet and deal with it , until you get a chance to raise the bid. 6- 8 months down the rd.

Kevin,
Do you suggest giving that as a speech or is it a letter?

Definitely in person, speech.

Or “schpeel”, whichever you prefer…

Sometimes, all I do is put it at the bottom of an invoice.

"Please be advised that beginning Jan 1, 2009, the cost of your window cleaning services will rise from their current charge of $48/wk to $67/wk to compensate for rising industry expenses, marketing costs, and pressures from the local window cleaning marketplace.

If you have any questions or would like to terminate your services, please contact us at 416-779-7263 or email [email protected] on or before Jan 1, 2009.

Thank you for counting on Paneless Perfection Inc to make your world brighter and your life easier!"

The sign it in pen.

I think it’s important either way to let them know that you are prepared to stop coming if the $ thing won’t change. It’s a disarming approach.

I would definately be hesitant about raising prices with the economy the way it is. Especially on comm accounts. More or a chance of losing the account. I would probably wait until things started looking up first.

If anything, because the low estimate was your fault, instead of increasing the price 20% maybe only go 15%. Make it a smack instead of a punch.

When do you tell your residential clients that they’re cleaning is going to cost more?

A. When you call to book their 6 month cleaning?
B. At the time of service?
C. After the service has been performed?

I hope not C!

This info will be helpful in the Spring. Thanks.

Ye i wouldn’t like to risk it in this economic climate for fear of loosing customers.

Maybe try it out on 1 or 2.

Say that you have underestimated the time it takes to clean the windows.And that the price does’nt reflect the time taken to carry out the work.

Don’t be too hesitant. Resuraunts raise their prices, and people still go out to eat. I just raised prices on several of my commercial accounts, and didn’t have any problems. One of them said everything else is going up, I expected you to raise your prices months ago.

It also helps if you have a good relationship with your customers, give them good, dependable service and the price increase won’t matter too much.

D. After the previous service was completed

Like Kevin was showing, put a notice on the bottom of the invoice
Next service will be $…

If you miss that then A.

It has been 6 months since these estimates were given. I think I’ll use Kevin’s approach; using both the invoice and also talking with the client in person well before I raise my price.