Raising prices can help boost the bottom line, but many small-business owners understandably hesitate to adjust their pricing. Whether you run an HVAC company, a plumbing business, a med spa, a law firm, a restaurant, or a local boutique, price changes can feel risky. At the same time, as one business consulting firm points out, such increases are inevitable, given inflation, supply chain issues, and other economic pressures.
The good news is that many customers are surprisingly understanding about price increases at their favorite small businesses. Here’s how to raise prices without losing customers and achieve sustainable growth.
When To Raise Your Prices
Price increases shouldn’t be haphazard. Before making any changes, look for clear signs that it’s time to adjust your rates.
Operational Indicators
Like many business owners, you’ve likely noticed that the cost of doing business has increased. Across the board, it’s more expensive to pay for insurance, labor, utilities, rent, bank fees, and more.
HVAC and plumbing companies may need to raise pricing annually in response to the rising costs of equipment, tools, and parts. Restaurants face rising food costs. Med spas deal with higher prices for medical-grade products and device maintenance. Law firms may experience higher staffing and administrative expenses.
If your margins are shrinking — or you’re absorbing those added costs without adjusting your rates — it’s a strong sign that it’s time to revisit your pricing to reflect new economic realities.
Business Growth Indicators
If you’re consistently booked out for weeks in advance, it means demand is high — and your pricing may be too low. A bit of scarcity can be a powerful marketing tool, enticing customers to book before they miss out. However, too much of it will drive customers away if you can’t meet their needs.
Examples:
- HVAC or plumbers: Booked out two to three weeks for repairs
- Med spas: Long waitlists for injectables or new treatments
- Boutiques: Selling out of key inventory quickly
- Contractors: Turning down work because you can’t keep up
To meet the demand, you may need upgraded tools and equipment, more staff, new software, or additional training. Those enhancements justify a higher price. Take action before these added costs eat into your margins.
Competitive & Market Indicators
Do your competitors offer comparable services for higher prices? That’s a signal to re-evaluate your own rates.
While consumers are increasingly price-aware, according to McKinsey & Company, over one-third of them are still willing to splurge — especially when companies deliver exceptional service, speed, and convenience. Focus on the latter, and customers will see you as the go-to expert in your field — and gladly spend more if it means a better customer experience.
How to Raise Your Prices Strategically
As long as you communicate clearly, reiterate the value you offer, and time your messaging appropriately, you can increase prices while keeping your customers happy.
Communicate Early & Transparently
Aim to notify existing customers at least 30 to 60 days in advance of any price increases. With Townsquare Interactive’s email and SMS marketing tools, you can segment customer lists and send a clear explanation that conveys value.
A short, simple message works best:
“To continue providing high-quality service and support our growing team, we’ll be adjusting our prices starting January 1. We’re committed to delivering exceptional care and appreciate your loyalty.”
Lead With Value, Not Just the Increase
Customers accept price increases more readily when they understand the reasons behind them and the value you offer.
Examples (make sure any statements you make are true):
- HVAC company: “We’ve added 24/7 emergency availability and upgraded diagnostic equipment.”
- Med spa: “We’ve invested in state-of-the-art laser devices that improve comfort and safety.”
- Restaurant: “We’re sourcing higher-quality, ethically raised ingredients.”
- Contractor: “Our expanded crew now delivers faster project timelines.”
Use social media posts, your website, and your Google Business Profile to showcase improvements before the price change takes effect.
Offer Options Instead of Ultimatums
Providing choices helps customers adjust on their terms.
Examples:
- Contractors: Good/better/best estimates
- HVAC: Maintenance memberships or seasonal service packages
- Med spas: Prepay specials, packages of three or six, or loyalty tiers
- Restaurants: Prix fixe menus or early-bird specials
Giving people flexibility strengthens retention and eases transitions.
Update Your Website & Listings
Before new rates go live, update your:
- Website pages
- Service menus
- Online listings
- Google Business Profile and other social media posts
- Any downloadable PDFs
Townsquare’s web design team can assist with updating your pricing, reorganizing service pages, and communicating a consistent value proposition across your entire digital footprint.
Use Social Media to Reaffirm Value
Before a price increase, highlight the expertise and professionalism that set your business apart. Social media is the perfect place to put your people and brand in the spotlight.
Examples:
- Plumber: A reel showing how advanced diagnostics prevent unnecessary repairs
- Med spa: A post explaining medical training and safety protocols
- Boutique: A behind-the-scenes look at sourcing higher-quality brands
- Restaurant: Prep videos featuring local suppliers or farm partners
If you’ve conveyed your value consistently, your customers won’t balk at a price change.
Reward Loyal Customers
Price changes can be an excellent opportunity to thank long-time customers and even secure longer contracts.
- Grandfathering current rates for existing customers
- Offering exclusive bundles
- Sending “last chance” reminders to lock in current rates
- Providing early access to seasonal pricing
With Townsquare’s cloud-based CRM, you can identify your most engaged customers and deliver personalized communications that nurture those relationships.
How To Communicate a Price Increase
It’s not what you say but how you say it when it comes to telling your customers about higher prices. Here are three messaging examples you can adapt for your needs.
Service-Based Business (HVAC/Plumbing)
“To maintain rapid response times and continue using high-quality parts and equipment, we’ll be adjusting pricing on March 1. We appreciate your trust in our team and remain committed to exceptional service.”
Med Spa or Professional Services
“As we expand offerings and introduce new technology, we’ll be updating our pricing on January 15. Our new pricing structure ensures we continue delivering safe, high-quality care and industry-leading results.”
Retail/Boutique
“As we transition to sustainable, ethically sourced brands, we’ll be updating our pricing to match. We appreciate your support of local businesses as we do our part to help the planet.”
Pricing Mistakes To Avoid
The way you approach price increases sets the tone for how your customers will respond.
Avoid:
- Waiting too long and needing to raise prices dramatically or within a short timeframe
- Apologizing or sounding unsure
- Failing to update your website, social profiles, or listings
- Changing prices without improving the customer experience
- Ignoring customer feedback or losing track of sentiment
- Not using CRM data to understand purchase patterns
Knowing How & When To Raise Your Prices Is Both Art & Science
Raising your prices is a normal, healthy part of business growth — and, when done tactfully, customers understand. Yes, you can raise your prices without losing customers, and you can even increase customer loyalty along the way.
Townsquare Interactive’s business management platform makes it easy to plan and communicate your pricing strategy, whether you’re just getting started or need to increase prices. With expert support across web design, search engine optimization, CRM, online scheduling, billing, and email and SMS marketing, we provide everything you need to position your business for long-term success.
To learn more and get started, request a demo today.