When did you last change your prices?
If you had to stop and think, it's been too long. Petrol is up 19% on a year ago. Power is up more than 9%. Council rates are up again. Prices overall rose 3.7% in the year to September, and bank economists expect that to climb before Christmas. If you still charge what you charged in 2024, you've given yourself a pay cut without meaning to.
Most owners know this. They just dread the conversation. So here's how to do it without losing sleep, or your best customers.
Why a small rise matters more than you think
Say you're a Hamilton plumber charging $100 an hour. After wages, the van, fuel and insurance, you keep about $20 of that.
Put your rate up to $110 and your costs don't change. You now keep $30. That's half as much again, from a 10% rise.
Here's the bit that surprises people. At $110, you could lose a third of your work and still take home the same money as before, while working fewer hours. You almost certainly won't lose that many. The few who do leave are often the ones who argued over every invoice anyway.
Leaving your prices where they are while costs keep climbing is the bigger risk.
Who to start with, and how much to add
You don't have to raise everyone's prices on the same day. The easiest place to start is with people who have never paid you before. They don't know your old prices, so there's nothing to explain.
Update your website, your price list and your quote template this week. Every new enquiry gets the new rate from now on. Watch what happens over the next month. If your quotes still get accepted at about the same rate, that's a strong sign you were too cheap.
Existing customers come next, with some notice. And keep each rise small. A 4% rise every year is easy for customers to accept. A 20% jump after five years of nothing feels like a shock, even though it adds up to about the same money.
Pick one month each year when your prices change. 1 April, the start of the financial year, works well, or January. Once customers know it happens every year, it stops being news. Most people don't ring their insurance company in a rage when the premium goes up. They expect it.
Round to a clean number, too. Going from $95 to $105 an hour reads as simple. Going from $95 to $101.65 looks like you worked it out on a calculator, which invites people to argue with the maths.
Give them a little more at the same time
A price rise lands better when it comes with something new. It doesn't have to cost you much. It just has to matter to the customer.
A cleaner might add an oven wipe-down to every regular clean. An electrician could include photos of the work in every invoice. A lawn mowing round might start sending a text the night before so people know when to expect them. Small things like this make the new price feel like a better deal, not just a bigger bill.
This is the same thinking behind every strong offer: people don't mind paying more when they can see what they're getting for it. If you want the full picture of how price, bonuses and guarantees work together, I've laid it out in our guide to building offers customers say yes to.
How to tell your regular customers
Give at least 30 days' notice. For customers on a monthly or yearly plan, give more. Nobody likes finding out from an invoice.
Keep the message short. Say what's changing, when, and why, in plain words. Don't apologise over and over, and don't write three paragraphs about the economy. Something like this is plenty:
Hi Sarah, just a heads up that from 1 February our hourly rate goes from $95 to $105. Our fuel, parts and insurance costs have all gone up this year, and this keeps us able to turn up on time and do the job properly. Any work booked before then stays at the old rate. Thanks for sticking with us. Give me a ring if you have any questions.
The line about booked work does two useful things. It's fair, and it often brings in a few early bookings from people who want to lock in the old rate.
For your best few customers, the ones who send you referrals and pay on the day, think about ringing them instead of texting. Or keep them on the old rate for an extra few months. It's a small cost for a lot of goodwill.
When someone pushes back
Some people will grumble. A few might leave. That's normal, and it's fine.
If someone asks for the old price, don't cave straight away. Ask what part of the job matters most to them. Sometimes you can trim the scope to fit their budget instead of cutting your rate. A gardener could offer a visit every three weeks rather than every two, for example.
If they leave anyway, look at what that frees up. You now have time for a customer who's happy to pay what the work is worth.
So, choose the date your new prices start, and work backwards. Update your website and quote template today. Send the notice to regulars a month out. Then stop thinking about it until next year.
