How To Raise Prices On Repeat Customers

How do you handle raising prices on repeat customers that you’ve previously charged a lower rate?

Early in my career, I consider using a low price strategy to capture the market, but after hearing a story from my dad, I changed my mind.

My father’s colleague’s wife, Sarah, opened a beauty salon, and her goal was to be the most expensive solan in Boston. The starting price was $200 for a haircut – and it worked. Sarah’s solan was booked solid, customers were pampered, and Sarah’s business was booming.

4 Quick Strategy To Establishing A Price

  1. Make up a price that you think is fair for your time and labor
  2. Establish your price based on your competitor’s price
  3. Formulate a price based on labor and material cost
  4. Find your competitor’s highest price and double, if not triple, their rate

Raising Prices On Repeat Customers

At some point in a customer relationship, a price increase will occur.

Here are the primary reasons why businesses raise prices, besides the mistake of starting too low and regretting it.

  • Cost of living adjustment (COLA)
  • Material, labor, or shipping cost have increased
  • Regulations and insurance charges

Over my 35-years of entertaining, I’ve been forced to increase prices because of COLA and material costs increase. My initial fee to the customer was fair, but over years of service, I could not maintain my initial rate that now was subsequently lowered than my current status.

How You Can Raise Prices On Repeat Customers?

First – How big of a price increase is being implemented?

Research comparing price increases to consumer happiness shows an unsurprising trend: the greater the price increase, the greater the impact on customer happiness.

I learned raising prices on happy customers was effortless, compared to those who hired me because my rate fit their budget requirements.

Any deviation from their annual budget price causes them tremendous stress and would generate replies of, “OK, can I get back to you?”

When I met their budget requirements, it was an instant booking.

How To Increase Your Price With Clients Working In A Budget

A gradual price increase works the best. I found increasing the hourly rate an additional $5 an hour to my labor charge was easy for the client to swallow.

I charge $150 an hour and increase my prices to $155, which gives me a 3.3% increase. This exceeds the 3.1% COLA for 2020.

Raising the rate in intervals has been the best option for me. Each year the client asks. “What is the price, and can I get a quote?”

In my experience, a 3-5% increase can be absorbed by most fixed budges. A 10-20% increase becomes harder, and over a 30% price increase will cause the client to reevaluate how important your service is to their event. Anything over a 30% increase I must now show an increase in the perceived value

Secondly, is it a labor or material price increase?

When I first started balloon entertaining, gas, balloons, and shipping were cheaper. Each day customers are faced with rising prices.

I simply justify to the customer that material prices have risen. Thus a new fee will resolve the question of why the price has gone up?

Finally – The client no longer meets your demographic market

There comes a time when you will no longer service this market niche, and the price increase will not affect your business bottom line.

Losing clients is not bad if you are rebranding your business to a different clientele niche.

How To Explain To A Repeat Client That Prices Have Gone Up

My personal opinion is that most people like an explanation of why a price increase

Here are comments I found in an industry forum explaining what they would recommend.

  • Price increase because supply and demand are high/low.
  • Honor the price for 1-year as long as its product/service is identical.
  • State new price and move on
  • Special rate for 1st-time buyers
  • Material price increase
  • Monthly special


Price increases are expected in business, as some companies have a new price yearly, while others seek to establish a standard price.

Businesses increase their prices because of labor, material, or COLA and do as needed.

Whatever pricing method you choose, understand, you can raise prices without putting yourself out of business.

How To Can Raise Prices On Repeat Customers
Article Name
How To Can Raise Prices On Repeat Customers
A detailed look at how to raise prices on an established customer.
Publisher Name
Balloon Animals Blog
Publisher Logo

2 thoughts on “How To Raise Prices On Repeat Customers”

Leave a Comment