AvoidPutting prices up across the board and hoping nobody notices.
Do this insteadModelling what happens at plus 10 and plus 20 percent with different levels of customer loss, then choosing.
The question is never whether you lose customers. It is whether you end up with more money and fewer headaches.
Example conversation with Cash & Profit
You
I want to put prices up 15 percent but I am scared of losing customers.
Cash & Profit
Then let us find out how many you can afford to lose.
At your current numbers, 14 jobs a month averaging £2,400, gross margin 31 percent.
At plus 15 percent your break-even loss is 4 jobs. You would have to lose 29 percent of your customers before you were worse off.
Realistically you will lose one or two, and they will be the ones who haggle hardest and pay slowest.
You would also be working roughly three fewer days a month for the same money. Want me to draft the notice to existing customers?
At your current numbers, 14 jobs a month averaging £2,400, gross margin 31 percent.
At plus 15 percent your break-even loss is 4 jobs. You would have to lose 29 percent of your customers before you were worse off.
Realistically you will lose one or two, and they will be the ones who haggle hardest and pay slowest.
You would also be working roughly three fewer days a month for the same money. Want me to draft the notice to existing customers?
Fear turned into a number: you can lose four before it hurts.
- Model the numbers first.MAYA can show you the break-even loss rate for any increase.
- Decide who hears it first.New customers get the new price immediately. Existing ones get notice.
- Say it plainly.No apology, no long justification. A date and a number.
Paste this to MAYA
I charge [current price] and have not raised prices in [how long]. If I put them up 15 percent, how many customers could I afford to lose before I am worse off?
Try it on your business
Every lesson ends with a question to hand to a Greymill specialist, who answers with what it knows about your business.
More in Pricing and profit
- Working out what to chargeNot what competitors charge. What covers your costs and leaves a margin.Read the lesson
- Is this job actually profitable?The one where the answer is usually no, and it is always the same type of job.Read the lesson
- Writing a quote that winsThe cheapest quote does not always win. The clearest one usually does.Read the lesson