Almost every owner is underpriced. They know it, they fear raising prices, and they tell themselves the customers will leave. In reality, well-executed price increases retain the vast majority of customers and instantly improve margin because the cost base didn't change. The fear is bigger than the actual customer loss. Here is the playbook.
When to raise prices. Annually as a baseline — always — to keep pace with cost inflation
How much to raise. Routine annual: 5–8%. Tracks inflation, easy for customers to absorb, no announcement required beyond updating the price book.
How to announce a price increase. Give 30–60 days notice. Send email or letter to active customers; post on your website; verbally tell crews so they can answer questions.
Scripts for the awkward calls. Customer asks why the price went up: 'Our costs have increased substantially over the last two years — labor, parts, insurance, fuel. I have held our rates as long as I could. The new rate reflects what it actually costs to deliver the quality you expect.'
Frequently asked questions
Will I really lose customers?
Some — usually 5–15% on a routine increase, 15–25% on a catch-up. The customers you lose are almost always the lowest-margin ones, so revenue per customer goes up and total profit increases even with the loss.
Should I raise prices for existing customers or just new ones?
Both. If you only raise new customers you eventually have a two-tier system that resents you and is unmanageable. Phase existing customers in over 60–90 days.
How often should I raise prices?
Annually, at minimum. Pick a date (e.g., January 1 or your business anniversary) and treat it as a non-negotiable line on your calendar.
