How to Raise Your Prices Without Losing Your Best Customers

The short version

• Raise new customer prices first. The risk is lowest and the feedback is fastest.
• Give recurring customers notice in writing, with a date, and never apologize for it.
• Expect to lose a few. Losing your worst payers at a higher rate is a good trade.
• Do not raise prices and change your service in the same month, or you will not know which one caused the reaction.

Every owner who has been in business more than a couple of years knows their prices are behind. Costs moved and the price list did not. The reason it stays that way is not laziness. It is the fear of the conversation.

The conversation is smaller than it looks, and there is an order of operations that makes it smaller still.

Raise new customer prices this week

New customers have no anchor. They have never paid you the old price, so there is nothing to react to. Change the number on your quotes today and watch your close rate for a month.

This also gives you real data before you touch existing relationships. If new customers keep saying yes at the higher number, you have proof that the market supports it, and you will walk into the recurring customer conversation with a much steadier voice.

Sort existing customers before you touch them

Not every customer should get the same increase at the same time. Sort them honestly into three groups and treat each differently.

The group that pays on time, treats your crew well and books regularly gets the smallest increase and the most notice. The group that is profitable but demanding gets the standard increase. The group that pays late, argues about scope and calls after hours gets a full correction to current pricing, and if they leave, your calendar improves.

• Good payers, easy jobs: smallest increase, longest notice
• Profitable but demanding: standard increase
• Late payers and scope arguers: full correction to current pricing

Put it in writing with a date on it

Verbal price increases get forgotten and then contested when the invoice arrives. Send a short written notice with the effective date, the new price for their specific service, and nothing else. No essay about rising costs. No apology.

Thirty days is a reasonable notice period for recurring customers. It gives them time to plan and it makes you look like a business instead of someone who woke up needing more money.

Say the number and stop talking

The most common way owners lose a price increase is by talking past the number. They say the new price, then immediately start justifying, then offer a discount before the customer has said a word.

Say the price. Then be quiet. Most people accept it. The ones who push back will ask a question, and a question is a conversation, not a rejection. Answer it in one sentence and stop again.

Decide in advance what you will do if someone leaves

Some customers will leave. Write down, before you send anything, how many you can afford to lose. If a ten percent increase costs you five percent of customers, you are ahead on revenue and ahead on hours.

That math is the whole argument. Run it before you send the notices so that the first cancellation does not feel like evidence you made a mistake.

A four week sequence for a price increase

| Week | Action | What you learn | | --- | --- | --- | | 1 | New quotes go out at the new price | Whether the market supports it | | 2 | Sort existing customers into three groups | Who is actually profitable | | 3 | Send written notice with an effective date | Who replies and who does not | | 4 | Handle pushback one conversation at a time | Which objections are real |

Do this before your next job

Run the four week sequence starting with the customers who carry no history.

1. Change the number on new quotes today and watch your close rate for thirty days.
2. Sort your existing customers into good payers, profitable but demanding, and chronic problems.
3. Write the notice once, with an effective date, and send it to the recurring list.
4. Decide in advance how many customers you can afford to lose before you send anything.
5. Practice saying the new number out loud and then stopping, because the silence is the hard part.

Common questions

How much can I raise at once?

It depends how far behind you are. An increase that brings you to current market pricing is defensible at any size. If the gap is very large, two steps six months apart is easier for recurring customers to absorb.

Should I explain that my costs went up?

One sentence at most, and only if asked. Customers know costs went up. A long explanation reads as a request for permission.

What about customers under a signed agreement?

Honor the agreement through its term and raise at renewal. Put a rate review clause in future agreements so this is not a fresh negotiation every year.

Can I grandfather my favorite customers forever?

You can, but pick a small number and know what it costs you. A permanent discount that you never revisit becomes the price you charge your best customers for being loyal.

Keep reading

• How to Price a Service Job Without Guessing
• Hourly or Flat Rate: Which One Fits Your Work
• Invoicerus for cleaning companies
• Invoicerus for landscapers

Try it on your next job

Open the job price calculator and run one real job through it. No account, no card, nothing to install. If it saves you time, the free invoice generator is the next one to try.

Invoicerus does the same work on autopilot once your services and prices are set up. Start free and bring one week of jobs with you.