Raising Prices
How to Raise Prices Without Losing Customers
Short answer
Raise prices 5–10% annually as a baseline; 15–25% if you have been holding rates for multiple years. Announce 30–60 days in advance, lead with the value not the cost, and grandfather a small set of strategic customers for goodwill. Done right, you keep 90%+ of customers and immediately improve margin.
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
- When you are booked out more than 3 weeks (demand signal)
- When supplier costs jump materially (pass-through, fully justified)
- When you add a tech or capability that raises the quality you deliver
- When you have not raised prices in over 2 years (catch-up time)
How much to raise
Routine annual: 5–8%. Tracks inflation, easy for customers to absorb, no announcement required beyond updating the price book.
Catch-up after multi-year hold: 15–25%. Requires advance notice and a clear story (new equipment, new staff, new warranty).
Major repositioning: 30%+. Only do this when you are deliberately moving upmarket, narrowing your customer base, and you are prepared to lose 20–30% of existing customers.
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.
- Lead with what changed, not the price. 'We have added a second tech, expanded coverage to weekends, and extended warranties from 6 months to 12 months.'
- State the new pricing clearly. Include the effective date. No apologies.
- Offer a grace window. 'Jobs quoted before [date] honor the current pricing.' This converts hesitant customers immediately.
- Grandfather strategically. Top 10 accounts can keep current pricing for 6–12 months. Everyone else: new rate applies on next invoice.
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.'
Customer threatens to leave: 'I completely understand if our service no longer fits your budget. Here is what I can offer: [reduced scope option] or [introduce them to a lower-cost provider]. I would rather refer you out than provide a service I cannot stand behind at the lower price.'
Customer asks to keep the old rate: 'I appreciate the long relationship — I can honor the previous rate for the next [60 days / 1 project]. After that the new pricing applies.'
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.
Turn pricing into invoices.
Glo Invoice creates branded estimates and invoices from your pricing in seconds — free for 14 days.
Sources & further reading
Primary sources we consulted when writing and reviewing this guide.