Latest / Cleaning Business Life / EP 238 | 45% of Cleaning Businesses Didn’t Raise Their Prices Last Year. Did You?

Transcript

EP 238 | 45% of Cleaning Businesses Didn’t Raise Their Prices Last Year. Did You? · Cleaning Business Life

• 1:08
  SPEAKER_00: If you keep telling yourself you'll finally get serious about your cleaning business when things calm down, I need you to hear me.
• 1:17
  SPEAKER_00: Things are not going to magically calm down ever unless you do something.
• 1:23
  SPEAKER_00: The clients will keep calling, employees will keep needing answers, fires will keep popping up.
• 1:29
  SPEAKER_00: And if your business doesn't have the structure, every new opportunity will feel like one more thing that you have to carry.
• 1:39
  SPEAKER_00: That is exactly what the Structure Scale and Profit Cleaning Business Academy is designed to change.
• 1:45
  SPEAKER_00: Over 400 businesses have gone through the program.
• 1:48
  SPEAKER_00: This scholarship isn't for the person with the saddest story or the most perfect application.
• 1:54
  SPEAKER_00: It's for the cleaning business owner who is ready to stop winging it, start implementing, and build a company that can actually support the life that you want.
• 2:04
  SPEAKER_00: You do not need to have everything figured out before you apply.
• 2:09
  SPEAKER_00: That's the whole damn point.
• 2:12
  SPEAKER_00: The scholarship application is officially open on my website, Clean Freaks University.
• 2:18
  SPEAKER_00: Applications close on Veterans Day, November 11th, and the recipient will be announced on Black Friday.
• 2:26
  SPEAKER_00: Stop deciding for me that you won't be chosen.
• 2:32
  SPEAKER_00: Fill out the application.
• 2:34
  SPEAKER_00: Tell me where you are, where you want to go, and why you're ready to do the work.
• 2:42
  SPEAKER_00: Talk to you soon.
• 2:47
  SPEAKER_00: Hey everyone! Shannon Miller here from Cleaning Business Life.
• 2:51
  SPEAKER_00: I I was doing some research for something else, and you know how when you jump down a rabbit hole and then you start to jump down another rabbit hole.
• 2:58
  SPEAKER_00: But what I found that was interesting for research on a podcast episode that I'm re working on is I was on a CRM, it was actually Gitjobber, and they were talking about how 45% of the industry hasn't raised their prices in the last 12 months.
• 3:18
  SPEAKER_00: Right?
• 3:19
  SPEAKER_00: The silence says everything.
• 3:22
  SPEAKER_00: So 55% of us are raising prices at least annually or every 18 months.
• 3:28
  SPEAKER_00: I'd like it to be at least every 12 months.
• 3:30
  SPEAKER_00: We have seen the prices for things go up exponentially.
• 3:34
  SPEAKER_00: I just filled up my Jetta.
• 3:36
  SPEAKER_00: It was 95.
• 3:37
  SPEAKER_00: I'm diesel, by the way.
• 3:38
  SPEAKER_00: It was 95 bucks.
• 3:39
  SPEAKER_00: And it's crazy to think that if you're still operating from two years ago and what those prices are and how much everything has increased in price.
• 3:47
  SPEAKER_00: Watermelons are like$9 this year.
• 3:50
  SPEAKER_00: I didn't I planted watermelons.
• 3:52
  SPEAKER_00: I did not get any watermelons.
• 3:53
  SPEAKER_00: There seems to be some sort of bee issue that we're working on for next year's crop.
• 3:59
  SPEAKER_00: But yeah, Jobber says 55% of all cleaning businesses raise their prices in the last 12 months.
• 4:06
  SPEAKER_00: So that means that 45% of you guys haven't raised your rates.
• 4:11
  SPEAKER_00: And there really is no excuse not to raise rates.
• 4:14
  SPEAKER_00: And I know it's really uncomfortable, but if you don't raise your rates, you're not going to be able to hire quality people.
• 4:20
  SPEAKER_00: You're not going to be able to pay your people top dollar.
• 4:23
  SPEAKER_00: And you guys hear Jamie and myself referring to them as golden unicorns.
• 4:28
  SPEAKER_00: And I used to say that a cleaning tech could generate about$70,000 in income.
• 4:33
  SPEAKER_00: It has increased so much that one cleaning tech could actually generate$100,000 in income for you if you have one who's trained who sticks around.
• 4:41
  SPEAKER_00: So I was shocked.
• 4:43
  SPEAKER_00: I thought maybe it would be like 66%, 67%.
• 4:47
  SPEAKER_00: I mean, after all, you guys hear me on the soapbox all of the time about price increase, price increase, price increase.
• 4:53
  SPEAKER_00: It's the first thing that I vomit out of my mouth.
• 4:55
  SPEAKER_00: Every chance I get is price increase, price increase.
• 4:58
  SPEAKER_00: But still, 45% of the industry has not raised their rates in the last 12 months.
• 5:05
  SPEAKER_00: I didn't, they didn't have any stats on other percentages, like, you know, from two years ago, from three years ago, from four years ago.
• 5:13
  SPEAKER_00: And I hope, I pray that it hasn't been five years or four years that you've at least done it every couple of years.
• 5:21
  SPEAKER_00: And I understand why the cleaning business owner hesitates, right?
• 5:25
  SPEAKER_00: It no one likes the conflict where people pleasers anonymous and we don't want to have the conflict.
• 5:31
  SPEAKER_00: I totally understand.
• 5:32
  SPEAKER_00: And then everything's gone up in price.
• 5:34
  SPEAKER_00: But the same reality is you're not going to be able to stay in business unless you raise your rates, right?
• 5:41
  SPEAKER_00: So while you're holding your prices steady or your expenses holding steady, right?
• 5:46
  SPEAKER_00: So we I just gave you the example of a$9 watermelon.
• 5:49
  SPEAKER_00: I mean, when we, I think we bought one watermelon this year.
• 5:53
  SPEAKER_00: And it's wild to think, and we used to, in my college days, and and you know, we used to stick vodka in them and have a good old time.
• 6:00
  SPEAKER_00: But that's beside the point.
• 6:01
  SPEAKER_00: The point is that watermelons are$9 or$12, depending on where you live.
• 6:07
  SPEAKER_00: Um, do you have to think about, you know, everything has gone up in price?
• 6:10
  SPEAKER_00: Your software, your um, your your insurance, the fuel I just mentioned, the Jetta, it was$95.
• 6:18
  SPEAKER_00: The Phillips Scion is about$65.
• 6:22
  SPEAKER_00: I remember complaining when it was$27.
• 6:25
  SPEAKER_00: That's how long I've had this scion.
• 6:27
  SPEAKER_00: I've had this scion forever.
• 6:28
  SPEAKER_00: Like that, that car has like almost 400,000 miles on it.
• 6:32
  SPEAKER_00: I love that car.
• 6:33
  SPEAKER_00: Six shift, right?
• 6:35
  SPEAKER_00: And you can have a full calendar and still be making less on each job than you were a year ago.
• 6:40
  SPEAKER_00: So if your prices aren't reflecting the current rate of increase for inflation, you're you're missing out.
• 6:46
  SPEAKER_00: You're missing out on money and you're not being paid.
• 6:48
  SPEAKER_00: And if you get too far in a deficit, you might not make it out of that hole, right?
• 6:53
  SPEAKER_00: Um, busy does not automatically mean profitable.
• 6:57
  SPEAKER_00: And I genuinely feel this to my core because if you're because you're busy, and I I talked to a cleaning business owner the other day, and she was like, oh my God, word of mouth, word of mouth, word of mouth.
• 7:09
  SPEAKER_00: Word of mouth is great if you can get it.
• 7:11
  SPEAKER_00: I'm not denying that it's still the best way to get a referral.
• 7:15
  SPEAKER_00: But then stuff like COVID happens and nobody remembers who you are because you don't have an advertisement.
• 7:22
  SPEAKER_00: You don't have a website, you're only on social media.
• 7:24
  SPEAKER_00: You haven't taken steps to get people to establish relationships.
• 7:28
  SPEAKER_00: There was a whole post today on, I can't remember which group I'm in too many of them.
• 7:32
  SPEAKER_00: And they were talking about the percentages of what the ROI is for advertising.
• 7:38
  SPEAKER_00: Not one of them was establishing relationships with anybody.
• 7:40
  SPEAKER_00: It was all online.
• 7:42
  SPEAKER_00: And I think that that's where the majority of everyone is.
• 7:44
  SPEAKER_00: And I get that.
• 7:46
  SPEAKER_00: But I can tell you from my own experience, I legitimately have walked into chamber meetings on multiple occasions and gotten several thousand dollar jobs just because I happen to be the one that showed up.
• 7:56
  SPEAKER_00: Oh, yeah, you're that cleaning lady.
• 7:57
  SPEAKER_00: Yeah, how are things?
• 7:59
  SPEAKER_00: How are the kids?
• 8:00
  SPEAKER_00: How was your wife?
• 8:01
  SPEAKER_00: I know she was really sick last time you blah, blah, blah, blah.
• 8:04
  SPEAKER_00: So those are the small things that do make a difference.
• 8:07
  SPEAKER_00: And then those people talk to other people, and then those people talk to other people.
• 8:11
  SPEAKER_00: And that's how relationships are built, especially if you live in a small town.
• 8:15
  SPEAKER_00: Larger towns are harder, you guys are more disconnected, you're further apart.
• 8:19
  SPEAKER_00: I get it.
• 8:20
  SPEAKER_00: But most of us operate in a small town.
• 8:23
  SPEAKER_00: And sometimes an owner can get stuck too, right?
• 8:27
  SPEAKER_00: They they know that a price needs to change, and you just postpone it.
• 8:31
  SPEAKER_00: Oh, I'm gonna do it next month.
• 8:32
  SPEAKER_00: And then before you know it, six months goes by, right?
• 8:36
  SPEAKER_00: Eight months goes by.
• 8:38
  SPEAKER_00: We have it happen to us every once in a while.
• 8:40
  SPEAKER_00: We had someone who was on the schedule who hadn't had a price increase in four years.
• 8:44
  SPEAKER_00: They go in the four years, and she's monthly.
• 8:47
  SPEAKER_00: So she was at the$165 price.
• 8:50
  SPEAKER_00: Was it four$175 price?
• 8:53
  SPEAKER_00: Sorry.
• 8:54
  SPEAKER_00: And it sat at$175 for a while.
• 8:58
  SPEAKER_00: And I I I called her on the phone.
• 9:00
  SPEAKER_00: I'm like, hey, just to let you know, we're gonna be bumping you up.
• 9:04
  SPEAKER_00: And they'll never, because she's now considered a legacy client, right?
• 9:08
  SPEAKER_00: She's never gonna be at current market rate.
• 9:09
  SPEAKER_00: And you can attempt to make them at current market rate, but the probability of them dropping you is gonna be more immediate than later.
• 9:17
  SPEAKER_00: And the whole idea is to have them gradually accept that things cost more.
• 9:21
  SPEAKER_00: But yeah, four, four years.
• 9:23
  SPEAKER_00: And she's like, I was wondering when you were gonna call.
• 9:25
  SPEAKER_00: So she was waiting.
• 9:27
  SPEAKER_00: She was waiting, waiting for it to happen and just knew that it was coming.
• 9:31
  SPEAKER_00: And you know, it was good.
• 9:32
  SPEAKER_00: I got to catch up.
• 9:33
  SPEAKER_00: I haven't spoken to her probably since we onboarded her like four years ago, five years ago, six years ago.
• 9:40
  SPEAKER_00: You know, still doing art, still doing her thing, right?
• 9:42
  SPEAKER_00: I love the independent woman.
• 9:44
  SPEAKER_00: And it's just changed.
• 9:46
  SPEAKER_00: Everything has changed.
• 9:47
  SPEAKER_00: It the current market value for a monthly cleaning is gonna start at 240 bucks next year.
• 9:54
  SPEAKER_00: And that's not because I want to stick it to them, but that's how much it costs to hold a space open for a monthly cleaning.
• 10:00
  SPEAKER_00: It's just it is what it is.
• 10:01
  SPEAKER_00: And it I eventually it will go up to$325, I would imagine, because you could have two clients, right, at a bi-weekly schedule, or you could have four clients at a weekly schedule, depending on how you rotate it and where you're placing your weeklies and how many people you have, and blah, blah, blah, blah.
• 10:18
  SPEAKER_00: So make sure that you're not undercharging inadvertently and that you are charging what the current market rate is, because it it affects your employees too, right?
• 10:30
  SPEAKER_00: If the money isn't there, you can't give them a raise.
• 10:32
  SPEAKER_00: And guess what?
• 10:33
  SPEAKER_00: You spent all that money you invested in them, you trained them, they're now perfect, and they're gonna go to Merrymade's because Merrymaid wiggled a little thing for a buck more an hour.
• 10:42
  SPEAKER_00: That person's gonna jump, right?
• 10:45
  SPEAKER_00: And you have to decide is it is it gonna be worth it?
• 10:48
  SPEAKER_00: And if you think about it, when you do regular price increases, your profit goes up.
• 10:54
  SPEAKER_00: Even if some of them drop off your schedule, you're still gonna make more money because you're getting more money for the rest of them that are around.
• 11:00
  SPEAKER_00: And then when the new people come in, they're not gonna know any difference.
• 11:02
  SPEAKER_00: They're just gonna say, Yeah, that's the price, no problem, right?
• 11:05
  SPEAKER_00: So this is just something I wanted you to think about and audit schedule.
• 11:11
  SPEAKER_00: It doesn't take very long, do five a day, depending on how many clients you have.
• 11:14
  SPEAKER_00: If you have a hundred of them, it'll take you 20 days, or if you wanted to extend it over a 60-day process, you could do that too.
• 11:20
  SPEAKER_00: And and just really audit five recurring clients.
• 11:25
  SPEAKER_00: See, write down each client's rate, the actual time it takes to do the job, and when the last time you changed the price was.
• 11:33
  SPEAKER_00: And it should be in the calendar.
• 11:34
  SPEAKER_00: If you have a CRM, we usually put like anniversary date, so it automatically comes up.
• 11:40
  SPEAKER_00: I used to make it way more complicated than it needed to be.
• 11:44
  SPEAKER_00: I had Jobber, and then I would put it in my Google Calendar.
• 11:46
  SPEAKER_00: Well, I'm not always managing the back end of this.
• 11:49
  SPEAKER_00: Other people are helping me too.
• 11:51
  SPEAKER_00: So they're not gonna be able to access my personal calendar, right?
• 11:55
  SPEAKER_00: So you got to make it easy for everybody.
• 11:57
  SPEAKER_00: So don't be your own bottleneck, get it out of your head, put it anniversary date of so-and-so, and you can color code it.
• 12:03
  SPEAKER_00: When you're in Jobber, you could actually assign it as an employee and just put price increase employee in there.
• 12:10
  SPEAKER_00: And then that's how it would remind you of so-and-so's thing up.
• 12:13
  SPEAKER_00: And then if you did it monthly, instead of waiting every 12 to 18 months, depending on your preference and what your comfortability is, then you're on top of it.
• 12:21
  SPEAKER_00: Oh, okay, well, who needs a price increase this month, right?
• 12:24
  SPEAKER_00: And it if you're brand spanking new and you don't know what to do and you're not comfortable using ChatGPT or don't have help from anybody else, you can always go to my website.
• 12:34
  SPEAKER_00: And that's Clean Freaks University, K-L-E Freaks University.com.
• 12:39
  SPEAKER_00: And if you sign up for my email list, it comes with a pricing blueprint masterclass.
• 12:44
  SPEAKER_00: Not no, not the pricing blueprint masterclass.
• 12:47
  SPEAKER_00: Sorry.
• 12:48
  SPEAKER_00: The price increase boot camp for free when you sign up to get on the email list.
• 12:54
  SPEAKER_00: Yes, you have to put up with 52 emails on the sequence.
• 12:57
  SPEAKER_00: It's not a big deal.
• 12:58
  SPEAKER_00: They're pretty painless.
• 13:00
  SPEAKER_00: But it gives you a little basic template in case you're old school.
• 13:03
  SPEAKER_00: You can print it out, you can copy paste it, you can shred it up, make a paper airplane out of it.
• 13:07
  SPEAKER_00: I don't know what you want to do with it, but you can use it.
• 13:10
  SPEAKER_00: It does have a purpose.
• 13:11
  SPEAKER_00: And you can start to give price increases.
• 13:14
  SPEAKER_00: It you need to not be the 45%.
• 13:18
  SPEAKER_00: 55, 45, 55, 45.
• 13:21
  SPEAKER_00: So make sure that you are giving price increases at least annually.
• 13:26
  SPEAKER_00: You can audit your depending on how many clients you have, you can pass that responsibility on to somebody else, and you could do monthly price increases.
• 13:34
  SPEAKER_00: Your VA could do them for you and send a letter, or you can do them in person, however, you're gonna do them.
• 13:40
  SPEAKER_00: And depending on how large you are, right?
• 13:42
  SPEAKER_00: If you're smaller, you can do them in person because no one likes to be rejected up front and in person.
• 13:47
  SPEAKER_00: Or you can just send a letter.
• 13:48
  SPEAKER_00: There's actually a couple of cleaning business owners that still mail letters with stamps.
• 13:52
  SPEAKER_00: What is stamps?
• 13:54
  SPEAKER_00: What is it?
• 13:55
  SPEAKER_00: Is it like 78 cents to mail a piece of snail mail?
• 13:59
  SPEAKER_00: That's how long it's been.
• 14:01
  SPEAKER_00: I remember I bought a whole bunch of forever stamps.
• 14:04
  SPEAKER_00: And that was in 2019.
• 14:06
  SPEAKER_00: I think I bought a grand worth.
• 14:08
  SPEAKER_00: And then my brother died, and I have not, admittedly, gone to therapy for this.
• 14:13
  SPEAKER_00: Still, I don't know if I'm gonna do it this year, but I've worked a lot on it.
• 14:18
  SPEAKER_00: 2019 was the last time I sent out Christmas cards to my clients.
• 14:22
  SPEAKER_00: Like it's awkward.
• 14:23
  SPEAKER_00: It became so awkward, they would like give me gifts through the cleaning tax to give to Shannon.
• 14:28
  SPEAKER_00: And then I would have to call them and then they would give like, oh, did you like your coffee mug?
• 14:31
  SPEAKER_00: I'm like, oh yes, thank you very much, you know, shoot him an email or whatever, because we live in a small town.
• 14:36
  SPEAKER_00: But I stopped giving out Christmas cards because it just my brother, my brother died over the Christmas holiday.
• 14:44
  SPEAKER_00: So it it, you know, my my dead father was born on Christmas.
• 14:48
  SPEAKER_00: I mean, it was just a weird thing.
• 14:49
  SPEAKER_00: So it's taken me many years.
• 14:51
  SPEAKER_00: I used to send out about 400 to 475 Christmas cards every single year, all handwritten.
• 14:57
  SPEAKER_00: I don't know.
• 14:58
  SPEAKER_00: I don't know if I'll do it.
• 14:59
  SPEAKER_00: And I've bought new cards subsequently since then.
• 15:02
  SPEAKER_00: I have boxes of Christmas cards that I have not given away.
• 15:06
  SPEAKER_00: And you could mail your price increases.
• 15:08
  SPEAKER_00: No, you cannot have my stamps.
• 15:10
  SPEAKER_00: Oh, they're forever stamps, which means they're good forever, right?
• 15:14
  SPEAKER_00: Pretty soon I think it's gonna be like a buck fifty.
• 15:17
  SPEAKER_00: The post office is not supposed to make profit.
• 15:19
  SPEAKER_00: It's the only bureaucra bureaucracy that runs in a deficit all of the time.
• 15:24
  SPEAKER_00: But I feel that everything should be run like a business because then we wouldn't have all of this ridiculous pricing crazy stuff.
• 15:31
  SPEAKER_00: I'm sure there's more to the story.
• 15:32
  SPEAKER_00: I haven't dug into it.
• 15:34
  SPEAKER_00: But that's what you can do to get the price increase boot camp for free.
• 15:38
  SPEAKER_00: Or if you don't want to go through the email sequence, you can always buy it.
• 15:42
  SPEAKER_00: I believe it's$9 the price of a Starbucks or a very cheap sandwich.
• 15:48
  SPEAKER_00: I don't know what those are costing nowadays.
• 15:50
  SPEAKER_00: So audit yourself.
• 15:52
  SPEAKER_00: Just audit five at a time.
• 15:53
  SPEAKER_00: Um, you don't have to spend a lot of time doing it.
• 15:55
  SPEAKER_00: Decide which way you're gonna do it and which works best for you.
• 15:58
  SPEAKER_00: And if you're one of the 45%, I want to look at your prices this week.
• 16:04
  SPEAKER_00: I want you to look at your prices this week.
• 16:06
  SPEAKER_00: It really is, it should be something that you pay any attention to because everything has gone up.
• 16:10
  SPEAKER_00: I mean 95 bucks for a Jetta.
• 16:12
  SPEAKER_00: Yes.
• 16:13
  SPEAKER_00: It's just wild to me.
• 16:15
  SPEAKER_00: Um, and make that decision with your current numbers, not with the price you quoted two years ago.
• 16:20
  SPEAKER_00: I hope that still works.
• 16:22
  SPEAKER_00: Anyway, you guys take care.
• 16:23
  SPEAKER_00: It was good chattin'.