What a 10% price change actually does to your profit

There's a small piece of arithmetic that changes how most owners think about their price list, and almost nobody sits down and runs it. Say the rate is $150 an hour, or $1,500 for the standard job. Move it 10% — $165, or $1,650. For revenue to fall, more than one customer in ten would have to leave because of the change alone. Owners who have actually done it report something closer to two to five in a hundred — and the ones who go are usually the most price-sensitive, highest-maintenance accounts on the books. The raise pays for itself, and the client list gets easier to serve.

What makes this feel dangerous is the way most prices get set in the first place: add up the costs, put a margin on top. Cost-plus feels safe because it's defensible — but the customer never sees the spreadsheet. What they see is the next-best alternative. If the shop down the road charges $2,200 for a worse version of the work, a $1,500 price doesn't read as humble. It reads as a signal that something must be missing.

The owners who move prices without drama tend to do it the same three ways:

1. New customers simply meet the new price. No announcement required — they never knew the old one.
2. Existing customers get 60–90 days' notice, in three sentences. “Starting November 1, our rate moves from $150 to $165. Current projects finish at the old rate. Thank you for being with us.” The plain version outperforms the apologetic one — an apology reads as an invitation to negotiate.
3. It happens on a schedule. A 4–6% annual adjustment is nearly invisible. A 30% correction after five frozen years becomes a story customers tell each other.

And one strange final data point: when a raise draws zero pushback, that's usually evidence there was more room. The well-judged change collects a grumble or two — and no departures that hurt.

Filed under Pricing Science · Field guide: Pricing Science