So over the years we have increased the pricing for our residential customers (unfortunately not as soon as we should have), and we are planning to increase our price this year again, which will be around a 50 cents to $1 increase per pane, per side. Unfortunately, when we have raised prices in the past, we have only done it for new customers, and kept our old customers at the same rate. That was a mistake and we need to change it.
My question is, what has been the response from your customers when you tell them the price is increasing? Did you lose customers and if so how many?
I plan on letting them know when we schedule them, some thing like, “We’ve made some changes in our pricing in order for our company to remain profitable, the new pricing will be so and so, will this work for you?” or something to that effect.
I know in the long term it will be for the better, but I am concerned about a short term drop-off. We’ve already raised our new construction pricing for our builders and have gotten better responses than I was planning on.
I always struggled with price increases as well. It’s hard, especially when you’ve been in the biz a long time and prices don’t keep up. There’s also the emotional bond you can have with longtime customers. I would reestimate, and if there is a huge gap between current price and new price, show them the price you’d be charging a new customer, and tell them you still have to raise the price but because they are long time customers you’ll give them a little discount. (Only if YOU can’t stomach the whole cost increase). Often, I found even my most penny pinching customers surprised me by either saying ‘it’s about time’, or grumbling a little but continuing with us. Most people don’t care about the money. You have to remember, they have the money. It’s a luxury service, not a necessity. If they value good work, and they trust you, then they will pay. I had to do increases many times over the years, and it always freaked me out, but never ended badly. If someone walks away, they may come back anyway after getting other estimates.
It’s hard to remember we are in business to make money for ourselves and our families, not to save money for customers.
So what is “profitable” to you? What does it mean to the customer? Is it a new Mercedes, vacation home in the Bahamas, cars for your kids or what??
My point is the customer is not interested in your profit margins and putting that thought in their heads can be very bad.
Last spring I had a repeat customer complain for two minutes about how expensive I was and she should get a break, I reviewed her history and laughed when I told her I have not raised her price since she started using me 6 years ago, and a new customer with this size home will be paying “X” more than you are paying now, how much more of a break do you want?? She apologized and I added her to the schedule.
Approach them this way, on a one by one basis when you schedule them, no letters, it must be over the phone or face to face.
We have done our best to keep your (repeat customers) pricing the same for “X” years, but my accountant (and/or economy) is forcing us to make adjustments. You will not be increased to new customer rates but we need to bring you up to “X”, you will be saving “XXXX” from new customer rates
Dont ask if it works for them, why do you care?
You are in business to MAKE money by providing a high quality service (keeping customers happy) at the highest rates possible, not give your services away and work harder for less money
One more thing I’d like to add. Giving discounts to the family (I never charge family), elderly, military or church group is being a good person and in my eyes, has very little to do with running a profitable business. Unless you advertise it, then its becomes a marketing scheme and you can through the thought of being a “good person” out the window.
“to remain profitable” is a BAD idea in my opinion, but people do need a reason then they are usually okay, whether it be labor costs, insurance increase, fuel charge…whatever just give them a reason where YOU dont sound greedy also, increasing you customer service is always a good one, then they wont care!
When it comes to price increases…
I just inform what the increase is and when it will take affect.
Businesses ALLWAYS get and give out price increases .
If one is doing a great job there should be no resistance.
No questions no choices
** Belief Systems Are Fragile Things. How Will You React When Your Reality Suddenly Ceases To Exist?
Cleaning Windows is Just MyJob, Not My Life…
~ Pompous Basterd
I have increased prices a few times over the years. Tried to stay close to the original quote for long time customers but even brought them up to “today’s pricing” after a while. I just explain - if they ask - that I haven’t raised their price until know because of them being a long time customer. If they complain I let them know that insurance (both business and auto) went up, and general cost of living means we all feel it from the clothes we wear to the foods we eat, to the ability to remain a solvent business that services their needs.
I too dislike when my grocery bill for the same items jumps several dollars with no discount offered, or a full tank of gas in order to make it to the job site costs more than it did two months ago. These things, and more, rarely drop back down in price. Other than fluctuation in price of gasoline - what other costs of goods and services drops?
Great thread. This is what I do and not one person has complained. On the invoice I email them the next day, I say "thanks Mrs Smith, good luck with the party. I hope everything runs smoothly. Please note the slight price increase. It will stay at this price point for the next 2 years. Have a great day.
Regards,
Mark
I raise my prices every 2 years by 10%. No one has ever complained and keep track of every customers price point so I know exactly when to raise it again. Because I have already told them that the price point is valid for two years, there’s no issue.
Just deliver great service and be consistent with your price raises. People love predictability.
I hope that helps.
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The fact that this is such a huge deal to so many of us speaks to our mindset, as an industry.
Your mental posture has a great effect on how others perceive you, just as your physical posture does.
Talking price is just part of sales, and it should not have to be a big deal. If you truly believe you are worth the money, then get the money.
The specific tips in this thread about “what to say” are great, but the bigger issue, in my opinion, is the mental block that makes this such a difficult thing to do.
Hmmmm not too crazy about informing client about price increases on a invoice.
I have ALLWAYS sent/given them this important information about thier account in its own letter/email.
But I do like the idea that when giving some clients their price increase guaranteeing their prices will not raise for a set amount of time.
Just may implement a variation of that
Thanks!!!
Peace
** Belief Systems Are Fragile Things. How Will You React When Your Reality Suddenly Ceases To Exist?
Cleaning Windows is Just MyJob, Not My Life…
~ Pompous Basterd
I always let them know in writing on the invoice that the price will increase to X amount on the following cleaning and have never had an issue. Many times people will actually pay the new amount that day too as a sign that they understand. Pretty cool.
Another aspect of this that I have brought up before but many people argue with is tipping. It can sometimes be a customer’s self-imposed price increase that can be as high as 30-40% and they give it to you willingly every time you work for them. It makes them feel good and makes me feel good and is always more than any price increase I would add. This doesn’t work with all customers and obviously those people who never tip get the price increases.
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Good viewpoint. I remember my boss telling me in the past when selling not to treat the customer as if you were charging out of your own pocket. We sold high end bicycles and gear and many people would barely flinch at spending $3,000-$6,000 on a bicycle then add on accessories to go with it. People who have homes reaching into a million or a few million dollars know it costs money to maintain the property. No one is gouging anyone, but the prices can look pretty big to many of our own budgets. Just have to get into the mindset of house cleaning, window cleaning, auto detailing, pool care and yard maintenance is what people with disposable income spend their money on. When the electrician, plumber, or A/C repair come out do they fudge the numbers because they feel guilty of the price? It is what it is. Some times regular customers do get a break, seems that is what we do. I cut a discount for frequent cleanings, but otherwise I’m not in this to break even and I doubt any of the rest of you are either. It is much easier to deal with price with business people as they understand.
In most cases my customers ask me how much they owe before I leave the work site and they write me a check on the spot. I never mention a price increase. If I’ve been charging them $500 for the last 3-4 years, I’ll increase it 10% on the next service and I’ve never had any customer balk about the price in 20 years of business. Same goes for invoicing for those customers I don’t see. Even with price increases last season, I started to offer more frequent cleanings (quarterly/monthly) to those same customers and now they are spending even more money on my services.
I have one customer that I would consider a good client for the annual clean, but when I offer to do a fall or mid-winter cleaning (I know she likes to have clean windows), her husband (also a good friend) always wants to know how much it will cost so i always felt like I shouldn’t increase the price. Last month it was the same thing so I just decided I will no longer make the offer. It’s not a service they place a lot of value on unless they think it’s a good deal for one of them, so I’m not going to solicit their business. I have found they can easily be replaced with another customer.
We do not announce price increases either. We just raise the price. I have only had a few customers notice and only 1 who gave us a hard time in 11 years. I think of it like going to the store to buy something. They don’t let me know of price increases. They just raise the price. It’s is expected so I either do not notice or I notice and change my buying habits.
This method was suggested by a fellow WCRA Member years ago and it is one of the best pieces of advice I have ever received. I don’t even worry about it. I just do it.
A word to the reader… I think this works if you have your customers used to the price slightly increasing each time. If you’ve been charging Ms. Johnson $500 for the last 4 years, she will notice if the next bill is $600. But if you have been steadily and marginally adjusting your prices,there will be no huge reaction, which is what Randy is describing.