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How to Raise Prices for a Cleaning Business
A cleaning company sells mostly labor, so when cleaners' pay rises and the price per clean doesn't, the margin disappears quickly; the same arithmetic shows why a modest, well-explained increase usually costs a cleaning business very few clients.
At a glance
- A break-even price increase is one where the added margin on every remaining clean covers the clients who leave; for a biweekly clean priced at $160 with $96 of cleaner pay, supplies and drive time, a 5% increase still breaks even if one client in nine cancels.
- Median pay for maids and housekeeping cleaners rose 16.2% between May 2021 and May 2023, according to the Bureau of Labor Statistics, while consumer prices rose 13.0%, so a company that has charged the same rate since 2021 has absorbed the difference out of its own margin.
- In household surveys published in the American Economic Review, 75% of respondents judged it acceptable for a landlord to raise rent at renewal to cover costs that had risen, which suggests clients accept an increase tied to a named cost and a natural renewal point.
- For an illustrative company with 100 biweekly clients, raising the clean from $160 to $168 and losing two clients adds about $17,000 a year in margin.
Part 1 | Cleaners' pay rose faster than prices
Owners of cleaning companies often hold rates for years because recurring clients feel like part of the family, and the inner voice before every increase is If I raise prices, they'll hire someone off a neighborhood app for less. The labor market has moved regardless. Occupational wage data from the Bureau of Labor Statistics show the median hourly wage for maids and housekeeping cleaners rising from $13.84 in May 2021 to $16.08 in May 2023, an increase of about 16.2%, while the Consumer Price Index rose about 13.0% over the same two years.
Because labor is most of what a cleaning company sells, a wage increase that the price doesn't follow comes almost entirely out of margin. At an assumed $160 biweekly clean with $96 of direct cost, a $4 increase in what each clean costs to deliver cuts the margin on that clean from $64 to $60, a 6.25% loss of profit on every visit, while the client's price never moved.
Part 2 | The break-even math favors a cleaning company
Labor-heavy businesses carry lower margins per job than membership businesses such as gyms, and that works in their favor when raising prices, because each dollar of increase is a larger share of what the company keeps. Break-even share of clients = increase ÷ (margin + increase), with both written as shares of the old price, where margin means the price per clean minus cleaner pay and payroll taxes, supplies and drive time for that clean.
How clients react depends heavily on how the increase is framed. The fairness surveys published in the American Economic Review found that 79% of respondents accepted a grocer raising a price to pass on a higher wholesale cost and 75% accepted a landlord raising rent at renewal to cover higher costs, so a cleaning increase tied to cleaner pay and timed to the client's anniversary reads as fair, while an unexplained jump in the middle of the year reads as a grab.
Part 3 | Seven steps for raising cleaning prices
The wage data and the fairness research point to a sequence that fits how recurring cleaning clients experience a company.
- Raise prices for new clients first. Update the price page and quotes; new clients see only the current rate.
- Raise recurring clients on their anniversary. The month a client started is a natural renewal point, and spreading increases across the year keeps any one month's cancellations small.
- Give 30 days' notice in writing, with the new price per clean, the start date and one sentence about why.
- Tie the reason to the team. Recurring clients value keeping the same cleaners, so say that the increase goes toward keeping good cleaners on their route.
- Re-scope homes that have changed. A client who added a dog, a home office or a third bathroom since the first quote is due a new price on its own merits, and saying so separately keeps the general increase modest.
- Hold the price for clients who move up in frequency. A client who switches from every four weeks to every two at the old rate is often worth more than the increase.
- Call the clients who have been unhappy before the notice goes out, so the increase doesn't arrive on top of an unresolved complaint.
The notice can be short: "Starting with your clean on [date], your biweekly price will be $168, up from $160. Our cleaners' pay has gone up since your rate was set, and this keeps the same team coming to your home every other Thursday. Nothing else about your service changes. Reply here with any questions."
| Recurring biweekly clients (Assumption) | 100 |
|---|---|
| Current price per clean (Assumption) | $160 |
| Cleaner pay, supplies and drive time per clean (Assumption) | $96 |
| Margin per clean (Calculated ($64 ÷ $160)) | 40% |
| Cleans per client per year (Calculated (52 weeks ÷ 2)) | 26 |
| Yearly margin before the increase (Calculated (100 × 26 × $64)) | $166,400 |
| New price after a 5% increase (Calculated) | $168 |
| Break-even share of clients who could leave (Calculated (5% ÷ 45%)) | 11.1% |
| Yearly margin if 2 clients leave (Calculated (98 × 26 × $72)) | $183,456 |
| Extra margin per year (Calculated ($183,456 − $166,400)) | $17,056 |
Illustrative example; replace every assumption with your own numbers.
How you compare
- Against the wage data: if your price per clean is the same as in 2021, cleaners' median pay rising about 16% since then means each visit is earning you less than it did.
- Against your margin: add up cleaner pay with payroll taxes, supplies and drive time for a typical clean, divide by the price and subtract from 100%; that is the margin Exhibit 2 needs.
- Against yourself: record recurring clients, monthly cancellations and average price per clean before the change, then check the same three numbers 60 and 90 days after.
Questions to ask this week
When did we last change recurring prices, and what has cleaner pay done since? Write down the old and new hourly pay.
What is our margin on a typical biweekly clean? Count drive time between homes, which owners often leave out.
Which recurring clients have an anniversary in the next 60 days? They are the first group to notify.
Which homes have changed since they were quoted? Re-scope them separately from the general increase.
Work out the margin on your most common clean this week, run it through the break-even formula at 5% and 8%, and send the first anniversary notices next month.
About this research: This article draws on Bureau of Labor Statistics Occupational Employment and Wage Statistics for maids and housekeeping cleaners, the Consumer Price Index via FRED and household fairness surveys published in the American Economic Review. The occupational wage data cover maids and housekeeping cleaners in all employer industries, including hotels and hospitals, not only residential cleaning companies. The worked example is illustrative.
Sources
- U.S. Bureau of Labor Statistics. Occupational Employment and Wages, May 2021: Maids and Housekeeping Cleaners and May 2023.
- U.S. Bureau of Labor Statistics via Federal Reserve Bank of St. Louis. Consumer Price Index for All Urban Consumers: All Items (CPIAUCNS). FRED; May 2021 and May 2023 values.
- Kahneman, D., Knetsch, J. L. and Thaler, R. Fairness as a Constraint on Profit Seeking: Entitlements in the Market. American Economic Review 76(4), 1986.
- Nagle, T. T. and Müller, G. The Strategy and Tactics of Pricing, 6th edition. Routledge, 2018. (Break-even framework.)
Related reading: How Many Customers You Could Lose and Still Earn More After a Price Increase · The Price Increase Announcement to Send Your Customers · Service Packages and Bundles Customers Actually Choose · What Doing Nothing Really Costs a Cleaning Business · The Front Door Checklist for Cleaning Services
Work with osNOVA on raising your cleaning prices
We help cleaning company owners work out the real margin on each clean, including drive time, choose an increase the numbers support, schedule it around each client's anniversary and write the notice that keeps clients with the team they know, so the business covers rising pay, keeps its recurring clients and stops absorbing costs out of its own margin.
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