How to put your prices up without losing customers

Every SME owner I speak to is under-pricing. Almost every single one. And most of them know it.

The conversation usually goes the same way. They tell me they’ve been meaning to put their prices up for ages. They know their numbers don’t really work. They know they’re cheaper than they should be. But they’re scared. Scared of losing customers. Scared of the awkward conversation. Scared that the moment they raise prices, the phone stops ringing.

I get it. I’ve been there. So let me tell you a story.

The Stickers and Decals story

A few years back I built a business from scratch called Stickers and Decals. I loved that business. I still do, even though it’s in new hands now and I just have a bit of input here and there these days.

When we started, we bootstrapped it. No funding, no safety net. Which meant the only way to get traction was to come in with low prices and earn the orders. So that’s what we did. We priced ourselves to win business and we focused everything on doing the work brilliantly.

It worked. Within twelve months we were taking orders from across Europe. We had Google ordering from us. DHL. Ariel Motor Company. We had hundreds of small businesses and marketing agencies on the books. The business was flying.

But the prices we’d launched with were never going to be the prices we stayed at. They couldn’t be. They were a tactic to get going, not a long-term plan. The business needed equipment, the team needed to grow, and the margins needed to make sense. So we put the prices up.

Here’s what I expected. I expected pushback. I expected a wave of customers leaving. I expected the phone to go quiet for a few weeks while everyone adjusted.

Here’s what actually happened. Nothing. None of it. Not one large client batted an eyelid. The big brands didn’t even mention it.

The marketing agencies kept ordering at the same volume. And the bit I really didn’t see coming, the awkward, time-draining, low-value small orders quietly disappeared almost overnight.

The customers who’d been arguing over a few pounds, asking for endless tweaks, and generally costing more in time than they brought in revenue, just stopped coming. The customers we actually wanted, kept coming.

It was one of the most freeing moments of my business life.

The thing nobody tells you about price increases

You lose fewer customers than you think, and the ones you lose are almost always the ones you should have lost anyway.

Read that again, because it’s the single most important thing in this article.

The customers who leave over a price increase are the ones who were never really committed to you in the first place. They were transactional. They were comparing your invoice to a competitor’s invoice and picking whoever was cheaper that week. They were, in a lot of cases, the customers costing you the most time, energy and stress for the smallest return.

The customers who stay are the ones who value what you actually do. They’re paying you because you do the work properly, you communicate well, you deliver on time, and they trust you. A reasonable price increase doesn’t change any of that. It just means you can keep doing it sustainably.

Once you’ve internalised that, the fear gets a lot smaller.

How to actually do it

Right, the practical bit. Here’s what I’d do, having now done this more than once.

Don’t apologise. This is the single biggest mistake I see. SME owners send out price increase letters that read like a confession. They explain themselves to death. They list the reasons. They apologise for the inconvenience. Don’t do any of that. You’re running a business. Prices change. State it clearly, state when it takes effect, and move on. Apologetic emails invite negotiation. Confident emails get accepted.

Give notice, but not too much. Thirty days is plenty for most service businesses. Long enough that customers don’t feel ambushed, short enough that they don’t have time to spiral about it. Avoid giving three or six months’ notice. All that does is give people time to start shopping around.

Bring existing customers along gently, but bring new customers in at the new price immediately. This is a useful split. You can give your loyal existing customers a smaller increase, or a longer transition, as a thank-you for being there. New customers coming in from day one of the new pricing? They never knew the old price existed. The new price is just the price.

Wording matters, but less than you think. Here’s the kind of message that works:

“Hi [name]. A quick note to let you know that from [date], our prices will be increasing. The new rate for [service] will be [price]. This is the first increase we’ve made in [time] and reflects the continued investment we’re making in delivering the best possible service. Existing work already booked in is unaffected. As always, please let me know if you’ve got any questions.”

Short. Direct. Confident. No apology, no over-explanation, no inviting a negotiation.

Expect a couple of conversations and prepare for them. One or two customers will reply asking about it. That’s normal. The trap is in how you respond. If your answer is “well, I could maybe hold the old price for you,” you’ve just trained every customer to push back next time. The right answer is something like “I appreciate you raising it. The new rate reflects what the work actually requires to do properly, and it’s the same for all customers from [date].” Then stop talking.

Don’t roll it back if one customer complains. This is the moment most SME owners lose their nerve. One customer pushes back and they cave. Don’t. Hold the line. The other customers who said nothing are watching how you handle it.

A quick word on how much

I’m not going to give you a magic percentage because it depends on your business and how far behind your pricing has fallen. But two pointers.

If you’re nervous about a 10% increase, you probably need a 20% increase. The fear is usually a sign you’ve been under-pricing for longer than you realised.

And if you haven’t put your prices up in over two years, you’ve already had a real-terms pay cut thanks to inflation. Catching up isn’t a price increase, it’s just keeping still.

The real truth about under-pricing

Under-pricing isn’t humility and it isn’t customer service. It’s a business risk. It means you can’t invest in better tools, better people, or better processes. It means you’re working harder than you need to for less than you deserve. And it means the customers who’d happily pay more for genuinely good work are subsidising the customers who’d never pay more no matter what you did.

Putting your prices up isn’t greedy. It’s how you build a business that actually works.

When we did it at Stickers and Decals, the business got better almost overnight. Better margins, better customers, less stress. The big brands stayed. The pain-in-the-neck small orders went away. The team had room to breathe.

If you’ve been thinking about putting your prices up, this is your nudge. Pick a date. Send the email. Hold the line.

You’ll lose fewer customers than you think, and the ones you lose, you’ll be glad to see go.