How To Raise Your Prices


#1

#2

How come you don’t just raise your prices every year by a certain percentage? Why are you raising the prices on them by such a large percentage?

I have to disagree with that method. It wouldn’t work with my clients. You can’t just pull numbers outta yer neck man. I have to justify why I’m raising the price. 5$ more from a 35$ dollar client is roughly 14.2% of a price hike when it should be between 1 and 3% per year.

My clients would take that as a bait and switch almost. Know what I mean?


#3

Great information! Thanks for the video! I’ve done this many times and as long as you are ready to loose the client then go for it!

I also raise all prices across the board in December of each year @thorSG1. Cut out the bottom to build up the top. Raise at least 2% on ones that I want to keep. 5-10% that I don’t mind losing. 10-55% on ones that I can afford to say goodbye to. You’d be surprised with how many will stay with you out of desperation of not finding anyone else who can offer the same value…that is if you are offering the best value. We had 5 large properties stay with us in 2016 after raising our prices 40%+ !!! What an awesome way to score more $$$ for doing the same amount of work.


#4

I don’t raise them very often. Some customers have been at the same price for 8-10 years. So, i didn’t mention that but It is an important premise to the message…
My B.


#5

Oh, well I guess that’s different. Maybe it should’ve been raised by more. How do you justify the price hike tho? I get what @Pure_Water_Window_Cl is talking about and I used to do the same thing until I got called to the mat on it by a property manager and I lost the property.

See, the job was a 300 dollar gig, quarterly that everyone hated to do because of the amount of time vs. what gets paid out on it…I hated it too. I bundled that job in with 12 other large buildings and lost the large ones and got stuck with the small ones. After 5 or 6 years I raised the price to 400$ which was still less than where it should’ve been (6 or 700) and they called me right away after I sent the email and said they were going to award it to someone else.

A couple days later, I emailed my contact and she was awesome enough to reply with a very detailed email as to why they dumped me. There is more but the relevant part I’m pasting below. Remember, I had just started maybe 3 years before this point in time when I was awarded the contract, so under bidding is not what I do, I made the mistake of giving them low prices on smaller buildings to get the big ones. Each building is its own entity, doing that only hurts you (me)…here’s what they said:

“Hi Tory – the main deciding factor was the 33% proposed increase. Many of our vendors will only provide for a 2-3% increase annually (if at all). This is the reason that we don’t generally go with the lowest bidder; we know that the vendor will eventually have to make up for it with a large increase a year or two down the road. While I appreciate you offering to hold the rate flat for us, that just seems to forestall the problem since you will inevitably have to make up for bidding so low in the beginning. At the time we bid out service at this property and others, we were actually happy with our then-current vendor, but decided that we would chance a change for the lower cost. Now that costs will increase to “normal”, we are justified in returning to our preferred vendor.”

Anyhow, didn’t mean to be disrespectful or rude.


#6

So they will pay “normal price” with someone else but not you?


#7

Good point.

Yes.

Mind you I was new with large projects. I screwed up big time with them. The re grand opening for Lily Pharmaceutical. Huge building, and my dumb ass didn’t even walk the property first. There was only ONE water source and that was 450 feet away from the building!

I know because I had to buy a bunch of hose.

So from there with the setup I had at the time I could only run 2 tucker poles while 4 other men were going nose to glass. The mayor was holding a press release on the day of the opening and I missed my deadline.

Not only that, but the “uniforms” my guys and I wore at the time were shorts and tank tops with a silk screened company name on it.

They called me on that too. Those ain’t uniforms.

So, they called into question my ability to handle large scale projects even tho I’ve successfully done all of their buildings twice before.

Honestly, I was still learning how to be professional. I’m STILL learning, but I made a LOT of rookie mistakes, and that company is NOT a rookie management company.


#8

Great post. Sorry that happened to you but at least you learned from it.

Important lesson.


#9

@dgalkin yeah, that was a spanking man.


#10

I love how open you are. Thank you for sharing that experience.

No disrespect taken. I can see how doing what i said at the end of every year would be a turn off to customers.

The greater overall point was using schedule and/or scope to leverage price.


#11

@thorSG1 We target and hand pick our jobs. No mail marketing. Only in person.

I look for mid rise jobs that prove difficult to do well by most other companies in my area. Many of our clients previously had companies that damaged their property or skipped difficult to reach windows. That’s often our in. Some of these companies even call us to sub out these few windows on their jobs.

We use our advantages over most other companies as leverage to raise our prices. Clients know the alternatives. To them our increase is actually much less of a cost then dealing with the mistakes, damages, and headaches that come along with other companies.

We also use our image as a selling point and leverage. We are a small operation, environmentally friendly in all aspects of our business. They know and deal with the owner and not a sub, sub, sub contractor.

We also use scarcity as leverage. Being as we’re a small operation we can only take on so many clients each season. We use language to emphasize this in our correspondence. Because I love working only part time as much as I can, I use this to our advantage. I routinely tell clients my availability and not cater to theirs. Bend them to your will and if there’s resistance be willing to let them go…

That’s my next point. Be willing to let work go. The more you push that point (while backed up with top notch value), the more you’ll be able to raise your prices. No risk, no reward.


#12

@Pure_Water_Window_Cl
Thats actually the same as my outfit.

The things I’ve said earlier were things that have happened years ago.

The point in sharing that was to give the circumstances of why they didn’t go with me as opposed to the other vendor.

The reason I needed that input is so I could be where I am today.

I agree with the majority of what you are saying, but here is where I needed to change my thinking:

My market has changed. There are a ton of other outfits out here, and a good handful that ARE qualified to do the same work I do (I know because I’ve trained them).

So when YOUR market is flooded with competition, and can do what you do just as well as you do are you still not catering to their schedule? Are YOU dictating price? Are you STILL letting go of work?

Be thankful you can say that right now, but be ready for a new thinking if and when that changes.


#13

Appreciate your wisdom based on years of experience! That’s what I’m missing and I’m sure some of my approaches have a shelf life but there has been zero signs of reversing the momentum we have.

Time will tell for us.

Thanks!


#14

I use scarcity as well. It works really well since I am a one man show.


#15

@Pure_Water_Window_Cl
I REALLY miss those days!


#16

This reminds me of the solo fisherman story.

“Employ some guys, lease more trucks and equipment, get big enough and then you can work less or even retire when you are older”

says the big businessman.

The fisherman says ‘I am there already, I work family friendly hours, I see my kids long before they go to sleep every day, I have one boat and a net, I earn what I need, why change?’


#17

would you mind sharing an example?


#18

“Because we are booked (3 weeks) in advance, we are not able to schedule you earlier than that… We can safely and effectively reach all windows on your building and that is why our services are in such high demand. We understand if you need to go with a larger, cheaper company. When you need a high quality window cleaning service feel free to contact us again.”