Price increases can be a tricky subject, especially if you’re just getting started with your cleaning company. On one hand, it is a powerful strategy that can help improve your company’s bottom line. On the other, it can become a point of contention among your customers, potentially causing them to evaluate alternative cleaning providers. By implementing a well-thought-out strategy, you can effectively increase prices without jeopardizing your customer base. Here are 4 tips to help you along the way.
1. Proactively tell customers
It’s never easy to communicate that prices are increasing. Having transparency with your customers during this process will help ease the blow and ensure no one feels blindsided. Reasonable customers expect prices will go up, sooner or later. Whether the increase was implemented to help defray costs or to simply keep pace with prices in the market, be honest with your customers. Have a well-thought-out approach and message to communicate your increase. Reinforce that you value their business. Pick up the phone and directly speak to those who are unhappy with the increase. The more personal the communication, the less resistance you will face. Also, be sure to acknowledge price increases in advance of service. There is no worse customer experience than finding out you owe more than expected the day of your scheduled service.
2. Research the cleaning market
Market research can help your business justify an increase. Gauging what competitors in the region are charging for their services will help benchmark your prices. Are you currently priced lower than the competition? Are you higher? Some customers will be inclined to test the market. Having a full vantage point on your competition’s pricing position can help determine how large or small of an increase you should push for.
3. Select the right cleaning service
Focus on value. Applying a blanket price increase across all of your cleaning services might not always be the best approach. You may be better served to stagger your price increases. Start with the cleaning packages that deliver the highest value to your customers. If there are services your customers NEED, they may not mind spending a few extra dollars for that specific service. Customers are more receptive to paying higher prices when they feel the quality of the service matches the price. Customers are far more likely to accept higher prices if they’re getting something extra in the bargain. Consider bundling services together or throwing in an extra incentive for customers. Also, make sure that your cleaners are fully trained to provide the best experience for this service. By adding to your offering, your cleaning services will have a higher perceived value.
4. Don’t get greedy
Put yourself in the customer’s shoes. Drastic price increases are hard for anyone to swallow. Make sure there is some logic to your increase. If customers feel they are being gouged on price, they will undoubtedly lose some trust. Use caution. Inflation rates in the US typically hover between 2 – 3%, historically. Unless you have not raised prices for multiple years, a 10% price increase might send shockwaves across your customer base. Also, it may be tempting to more frequently raise prices after seeing how a successful increase can boost your bottom line. Customers will be accepted – but within reason. Severely overcharging customers for cleaning or repetitively raising prices can frustrate patrons.
The best practice to achieve bottom-line growth is to increase both value and price while cutting your own costs. For your customers, the higher rate they pay for cleaning services is justified by the quality provided. For your business, the cost structure to deliver that service has been reduced, increasing net gains. For more information on how WorkWave’s cleaning business software is helping cleaning companies reduce their costs, and double workforce productivity click here.
