I have raised prices almost every year since I started except this year. Mostly because I started out doing work for way too little. So as I grew I could afford to be more choosy and raise prices.
First, the best way to start with raised prices is on new customers. That is, make your new clients pay the increased amount. You probably already figured that out. But just wanted to add that.
Second, if at all possible, raise prices in the spring time, when you can afford to lose a few because you are so busy with new work coming in.
Next, with existing customers I have always just sent them a letter. The first several times I raised prices I lost a few clients.
Finally, last year had to raise prices pretty significantly. So I asked one of my client's, who owns and is editor for a large magazine, to review my letter and revise it for me so my clients would understand more. They revised it and worded it much better than I had. And the revised letter is what I sent out. It worked wonders! We barely lost any customers as a result. And we increased our revenues a lot! What's more is, because I raised prices so much last year, we didn't have to this year.
Below is the text of that letter;
Dear Sir or Madam:
I wanted to send you a letter to update you on our new rates for fall 1999 and next year. We value you as a client and hope that our service to you over the last year has been up to the standards that you expect. Your opinion matters--without you, the customer, I would not have the opportunity to create my own small business. If there are things we can do to improve our service to you, please let me know.
I started this company on the motto: "Setting the Gold Standard in Landscape Maintenance," because I really believe that it is possible to build this landscape business on integrity and value received. I know that sounds kind of corny, but I really do believe it. If my company works hard, each and every week, to deliver value--I believe we will keep you as a customer for many years.
Due to the tight job market here in town, increased equipment repairs, and training for employees, it has been necessary to incur higher expenses than I had last year. That means that I will need to increase my rates $15 a month --just $3 a week-- this fall.
Because of the increase in rates, you'll see us working even harder to keep your trust. We believe we're still the best on price and service in southwest Portland and expect to keep continue proving it to you over the next year.
If you have any questions or comments, please give me a ring at 555-555-1212
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Hope that helps! - Jim
[Edited by jimlewis on 01-02-2001 at 04:30 AM]