As business costs continue to rise, price increases are an essential part of running a successful, long term window cleaning business. Perhaps though, you fall into the category of window cleaners that have had many of their customers on the same prices for years. Maybe you’re concerned that introducing a price increase will trigger a mass exodus of your customers.
Those concerns are perfectly justified as, introducing a price increase badly could have just that effect. But, provided you follow the below steps, you should be able to do so without losing customers, or at least losing a minimal, insignificant number of them.
Decide who to increase and how
Deciding who should have a price increase and by how much by has to take a couple of factors into account – how long a customer has been with you (or how long it’s been since their last increase), and whether the job is under-priced or overpriced in comparison to your current ‘going rate’. It’s highly likely you’ll have a wide range of customers in your round.
Applying a blanket percentage increase to your whole round makes life easy, but probably isn’t appropriate For example, whilst you might have some customers in desperate need of an increase, you may also have customers brought on in the past 12-18 months that are probably a no-go – it’s fair for them not to expect an increase in this time and if they are drastically under-priced, it’s probably your fault, not theirs.
It’s likely that you’ll need to break your round into groups and apply fair increases based on the above criteria, with each group having their own percentage increase or even each job assigned an increase on a case by case basis.
Decide how much to increase by
It’s really important that you take the above criteria into account when deciding on how much to increase your price by – it needs to be a fair amount or you stand a strong chance of losing the customer. To give you a very general idea of what’s acceptable, in the past 10 years, the UK Consumer Price Index has risen by an average of 2.5% per year. Whilst that figure covers a whole host of different industries, it’s a fair benchmark to use – so one method could be to apply an increase of 2.5% for every year the customer has gone without an increase. That’s on the assumption the work was priced right to begin with – if it was already underpriced you need to take this into account as well. At the same time, avoid increasing a price by more than 15-20% in one go, unless you’re happy to accept that this increases your risk of losing the customer (there may be circumstances where this is a good idea – see below)
Side note – Cleansing your round
It’s worth noting at this point that whilst this article focusses on not losing customers, some window cleaners take increasing their prices as an opportunity to “cleanse” their round. Where you have work that is substantially under-priced and becoming less and less worthwhile, you can consider increasing their prices to above market rate – which often involves increases of more than 20%. The idea being that you’re willing to risk losing all of this window cleaning business, but at the same time could keep a proportion of it at far more profitable rates. Work that is lost is then replaced with new, better priced work.
Communicate the increase
It’s then vitally important to effectively communicate any price increases with your customers with enough notice. You do not want a bill or work slip with the extra charge to be the first your customers are aware of a price increase. Instead, use every means possible to inform your customers of the increase at least one month or one clear payment before the due change. Include a mention of the intended increase on their last bill or work slip for their current rate. All customers should also receive a formal, written confirmation – which should clearly state their new price and when it will take effect. Where possible, you should also include a reason for the change, perhaps mentioning when, if ever, they last had an increase as well as the fact that your costs have increased. Providing a few clear reasons is an effective way of getting across to the customer that the increase is reasonable and boosts your chances of them staying on board. Where possible, back this letter up by letting your customers know in person, or via text and email messages to maximise the chances of your customers being fully informed of the increase.
By following the above steps, you can drastically improve your chances of retaining your existing customers at higher prices, boosting the revenue and profit of your window cleaning business. It also gets your customers into the mindset that reasonable price increases should be expected going forward, making it easier to cover ever-increasing costs in the future.
Find out other ways to boost the revenue of your window cleaning business without having to gain new customers.
Header image courtesy of Concept