6 Ways to Raise Prices Without Freaking Out Your Customers


After working so hard to grow your client base, it makes sense to be worried about how to raise prices without losing customers. Breaking this type of news can make even the bravest business owner want to hide under their bed.

But the financial needs of your company come first. You aren’t helping your clients if you run out of money and need to cut back on services. These six strategies will help you raise prices while keeping customers happy.

1. Explain the Increase

Being upfront is the best way to deliver the news of a price increase. Send out a notice to your customers that explains when your rates will be going up and why. For example, perhaps you’re raising prices to cover your supplier’s higher cost of materials, to develop more products, or to expand your service area.

Even if part of the goal is to increase your profit margin, you should still find some price-increase justification related to running your business. That way, clients don’t think you’re just trying to pad your bill.

2. Don’t Apologize or Hide It

Raising prices can make you feel nervous about upsetting your clients, and you may want to apologize for the trouble. Don’t. That comes across as weak, as though your business doesn’t need or deserve the extra money. People are used to costs going up. Your internet provider won’t apologize for charging more, and neither should you.

At the same time, you shouldn’t try hiding the price increase by starting to send out invoices for a higher amount. This could upset your customers much more than an upfront notice because it feels sneaky and dishonest.

3. Deliver Excellent Service Before the Increase

In the days or weeks before you announce your price increase, aim to deliver the best possible customer service and results. You’re likely doing this on a consistent basis, but make sure you’re really shining during this time. This is your chance to remind them about what they gain from working with you rather than a competitor, even one that charges less. If your customers are satisfied with your work, they will be more willing to accept a price increase.

Mechanic provides friendly service, an example of how to raise prices without losing customers

4. Create a Lower Cost Alternative

Not all of your existing customers will be able to afford a price increase on your existing products or services. Is there any way to create a new, lower-cost offer? The price of the new offer should be lower, but it should be more profitable for your business.

For example, if you currently charge $700 for your day rate, you could increase that to $1,000 while creating a new half-day package for $600. The new half-day option sounds more affordable to your existing clients while helping your business earn more — you can earn $1,200 a day by booking two half-days versus your current $ 700-day rate.

Another option is to create some sort of discount, like a markdown during your slow season or a one-time return bonus for customers who leave. Customers who can afford your higher rates will sign on, while the clients who can’t will come back later with the discount.

5. Add Features or Benefits to Justify the Cost

Another way to offset a price increase is to deliver more for your customers. This could be faster delivery times, an extra feature or an easier sign-up process. The improvement doesn’t have to cost the entire price increase, but by giving your clients something extra, it creates a price-increase justification and makes them feel better about paying more.

6. Follow a Schedule

Price increases upset customers most when they are caught off guard. The increase may be easier for them to swallow if you follow a predictable schedule, like when it makes sense for prices to go up. For example, if customers sign a one-year contract, the renewal time is the ideal time to negotiate a higher rate. Another good time is at the start of the calendar year, when people are putting together their annual budget.

With this goal in mind, try not to raise prices too frequently. If you asked for a rate bump in June, you shouldn’t be going back for more money in the fall. This can upset customers and make them think, “They’re asking for more money already?” Make sure that you raised prices enough the first time so you aren’t forced to ask for more in the near future.

Ultimately, there is no guaranteed approach on how to raise prices without losing customers, but that’s true of every business change. By following these tips, you give yourself the best chance of keeping all your customers while earning the extra money you need to keep growing your business.