Raising prices on people who already pay you is a different problem

Two situations that get discussed as one

Advice about raising prices usually treats it as a single act of nerve. It is two quite different transactions, and conflating them is why people either freeze entirely or make the change badly.

With a new enquiry, the price is simply information. They have no history with you, no expectation to be revised, and if the number does not suit them you lose a quote you never had. The feedback is fast and the cost of being wrong is small.

With an existing client, you’re changing the terms of something already running. They have budgeted, they have an internal view of what you cost, and the increase requires them to revisit a decision they had stopped thinking about. That is a heavier thing to ask, and it deserves a different approach.

Why the existing clients are usually the underpriced ones

Prices drift upwards for new work as confidence and evidence accumulate, while established clients stay on whatever was agreed when they joined. Left alone, this produces a client list in which the longest-standing and often most demanding relationships are the least profitable.

The loyalty argument runs the other way from how it’s usually stated. A long client relationship should be worth something to both sides, and it frequently ends up worth something only to one — the one whose costs have risen every year while their price has not.

There is also a quiet compounding effect. Every year at an unchanged price is a real-terms reduction, because your own costs move whether or not your invoices do. Nobody notices this at the time. It is very noticeable after five years.

Notice, reason, and a date

The mechanics that work are unremarkable and consistent. Give real notice rather than announcing it with the next invoice. Give a short reason, without an essay of justification. Attach a specific date from which it applies.

Notice matters because it lets the client plan, which is most of what they need in order to say yes. A reason matters because an unexplained increase invites the suspicion that it was arbitrary, and a brief one closes that off. Length is counterproductive — a paragraph reads as fact, three pages read as an apology looking for an argument.

And it should be a statement, not a request. Asking permission to raise your prices invites a negotiation you did not intend to open. Telling somebody what your rates will be from a given date is ordinary business practice and is generally received as such.

What to do about the ones who resist

Some will push back and a smaller number will leave. Both outcomes should be priced in advance, because deciding in the moment is how people end up reversing a rise for the client who complains loudest and keeping it for the ones who were gracious about it. That is precisely the wrong distribution.

A useful preparation is to work out beforehand how many you could afford to lose. Fewer clients at a higher rate can produce the same revenue with less delivery, less administration and less chasing, and the ones most likely to leave over a modest increase are often the ones consuming the most attention.

Where a client genuinely cannot pay more, the honest options are a reduced scope at the old price or an agreed transition period. What is corrosive is an unspoken exception that persists indefinitely, because it becomes a permanent second rate you can’t explain to anybody else.

Changing the shape rather than the number

Sometimes the better move is not a percentage increase at all. Repackaging the work — a different scope, a defined set of deliverables, a minimum engagement — resets the comparison, because the client is no longer weighing a new price against an old one for the same thing.

This isn’t a trick, provided the new package is genuinely different. Where it is only the old arrangement with a new label, clients notice quickly, and the credibility lost is worth more than the increase gained.

Make it a scheduled event

The reason most price rises are difficult is that they are exceptional. Something that happens once every four years feels like a confrontation, whereas an annual review that both parties expect is simply part of how the arrangement works.

Saying at the outset that rates are reviewed each year does most of the work for you, and it costs nothing to include. It also means a year in which you decide not to increase becomes a visible piece of goodwill rather than something nobody noticed.