 Hi, I'm Tom Stewart with Cleaning Business Today. The cost of doing business continuously goes up. We want to make sure that what we're charging for our service goes up accordingly. There's always a concern when we're looking at rate increases, however, that we might lose a customer. So it's important for us to understand what the value of the rate increase we're considering is relative to the value of an average customer. We're going to show you how to do that calculation today. We're going to start with just an example of 25 clients. We're going to assume they've got various service frequencies, and this is the number of cleanings per year. We're going to translate that into cleanings per month. The total average monthly revenue for these 25 clients would be $6,000 in change. If we did a 5% increase, this is what that increase would look like on a per job basis. On a per month basis, it would look like this, or $300 a month. So that's the gross amount of income that we would get off of this 5% increase, but that really doesn't tell us what the contribution margin is, or gross profit would be off of that increase. Let me show you how we would do that calculation. We're going to start by figuring out what the average revenue per month per client is, and that's this number here, which is basically the $6,000 divided by 25. It gives you $240 per month per customer. We're going to assume that the average payroll percent to sale is 60%. It could be that much. It might be less. It might be more. But in this purpose, if we assume that for every dollar we bring in, 60% of it goes back out to cover payroll and other direct costs, that cost would be $144, which would leave us a gross profit of $96 per customer per month. That's really the amount of benefit that you're getting off of each one of these 25 customers. So let's compare that to the $300 that we're getting for our rate increase. One of the things that you often consider when you're doing a rate increase is, are you going to be increasing your salaries accordingly? First let's just assume that we aren't, and if that were the case, then basically we could take this $300 divided by the $96 average benefit per customer. That gives us a number of a little over three. Set another way with a 5% increase with these particular 25 clients. If none of them balked and you were able to hold that rate, it would be just like gaining three new customers without actually having to do any additional work. But let's go ahead and plug in a rate increase, because occasionally you're going to want to do that for a lot of reasons. Let's pretend that you do say a two and a half percent rate increase. So we're going to plug in two and a half percent there. The next number that we would want to calculate is the average payroll cost per client per month additional payroll cost. This is kind of a neat number. Let's see if we can show you how that's calculated. It's basically taking the average direct payroll cost per client per month, multiplying it times the two and a half percent times the number of clients, which in this case is 25. So if we did two and a half percent raise, we'd actually be increasing our payroll $90 a month. So that number minus the 300 gives us $210. That's the actual gross profit we'd be getting off the combination of the 5% rate increase and the two and a half percent salary increase for our cleaning technicians. So I take the 210, divide it by the 96, which is the average value per client. That gives us 2.09. So with the 5% increase, the two and a half percent raise, we're still getting $200 extra dollars a month. So even if we lost a client that they didn't want to take the rate increase, we'd still be better off. Hope you find this KPI tip helpful. Thank you for watching Cleaning Business Today.