How to explain a price increase to customers

Know why, and what is changing

Before you tell anyone, be clear on what is changing and why: materials cost more, your insurance went up, or you have been underpricing and are not making what the work is worth. A clear reason makes the conversation easier, and it makes you more confident.

Work out the new prices with your costs in front of you rather than adding a round number. The job profit and hourly rate calculators help.

Tell existing customers first, with notice

People who have used you before should hear it from you, not discover it on their next invoice. Give them notice before the new prices apply, and say the date. Repeat customers who know it is coming rarely mind.

Keep the reason short and true

You do not owe a long explanation, and over-explaining sounds defensive. Say what is changing, when, and one honest reason. Then thank them for their business.

Honor quotes that are already out

A quote you sent with a valid-until date should stand until that date, even if it is after your increase. Changing a price a customer has already been given costs you trust. After the date, issue a new quote at the new prices.

Handle pushback calmly

Some customers will push back. Listen, acknowledge it, and do not apologize for charging fairly. You can say what the price includes, or offer a smaller version of the job. If a customer leaves over a fair price, that is information about whether the work was right for your business.

Update your prices in one place

Change your price list once, so every new quote uses the new rates. Quotes and invoices already made keep the prices they were written with, so you do not rewrite the past.