August 29, 2026

Putting your prices up is two different jobs, your contract picks one

By Nik Stapleton · 5 minute read

I watched the same business put its prices up twice, years apart, under two different managing directors. I only understood the second one long after it happened.

Here's what I missed. Putting your prices up is two different jobs. One is about earning more from the customers you have. The other is about changing which customers you have. They arrive as the same number on the same letter, and they need opposite things from you.

Work out which one you're doing before you write a word to anybody.

The first one was about money, and it went badly

Costs had moved, margin hadn't, and the arithmetic was straightforward. Letters went out to existing customers telling them the new rates.

The customers were furious. Weeks of difficult conversations followed, none of them planned for, with people who felt they'd been told rather than asked.

Nothing about the arithmetic was wrong. The number was right and so was the notice. What nobody had decided was whether a letter was the right instrument for what they were actually trying to do, and nothing in the process asks that question. Sending the letter is the step the system makes easy, so it's the step that happens.

The second one wasn't about money at all

His successor put prices up too. Same company, same kind of customers, and on the face of it the same move.

She wasn't chasing margin. She wanted a different set of customers: bigger ones, better paying ones, doing the kind of work she wanted the business known for. The price rise was how she made room. Some customers were going to leave, and that was the point rather than the risk.

That's a completely different job wearing the same clothes. And it took me a long time to see it, because from the outside both look like a percentage on a letter.

The clause that makes the first job easy can't do the second one

This is the part most people never get told, and it explains why almost every price rise ends up being the first job.

Under English law you can't simply raise your prices mid-contract. CMS put it plainly in their guide to price increases in commercial contracts: a supplier "is not entitled to unilaterally increase prices under an agreement that it has entered into with a customer if that agreement does not contain an explicit right to do so." Without that right, any increase has to be agreed as a variation, and trying it on anyway can hand the customer a route out.

Which is why, as the same guide notes, it's common practice to write a price adjustment clause into long-term business agreements. Usually that clause is indexation: your prices move with RPI or CPI, automatically, for everybody.

Read that again with the two jobs in mind.

Indexation is a machine for doing the first job. It moves every customer by the same amount, on the same date, with no conversation. If all you want is to stop inflation eating your margin, you already have the tool and you barely need to think about it.

Indexation can't do the second job at all. Changing who your customers are means moving different customers by different amounts. Different amounts means a variation. A variation means agreement. Agreement means a conversation, one customer at a time, in which some of them say no and you're glad.

So the contract quietly pushes you towards the first job, because the first job is nearly free and the second is expensive in the one currency most people are short of, which is difficult conversations.

Which is why the first one is usually the one that happens

Look again at the two managing directors.

The first did the job the contract was built for, using the instrument the contract hands you, and it still cost weeks, because nothing on that route asks whether a rate change is about to land on a person.

The second did the job the contract can't help with, and the reason it worked wasn't that she was better at pricing. It was that she could sit in front of a customer and be straight about what was changing and why, and hear the answer either way.

Both jobs need that skill. Only one of them lets you pretend otherwise.

I was wrong about this for years

I put the second one down to temperament. She was warmer than he was, so of course it went better for her.

That was lazy and it was wrong. Warmth wasn't the mechanism. She had decided what the price rise was for before she decided what it should be, and everything else followed from that one piece of sequencing. He had decided the number first and treated the telling as admin.

I've watched a lot of businesses since, and the ones that get this wrong nearly always get it wrong in that order.

What to actually do

Before you calculate anything:

Write down which job you're doing. More money from these customers, or a different set of customers. If the honest answer is both, they're still two jobs and you sequence them.
Read your contracts, and read the wording rather than the heading. If you have an indexation clause and you're doing the first job, use it. Send the notice, don't hold a summit. Check it actually says somebody can change the price, though. A vague line about fees being reviewed as costs rise has been held not to give anyone that right [Amberley v West Sussex County Council, Court of Appeal, 2011].
If you're doing the second job, work out who you want to lose. Not who might leave. Who you want to leave. If you can't name them, you're doing the first job and telling yourself a story.
Price the second job per customer, not across the book. A flat percentage is an indexation move, and indexation can't select.
Book the conversations before you send anything. For the second job the conversation is the work. The letter is a diary entry.

If you have an indexation clause and you simply want to keep pace with your costs, you don't need me or anyone like me for that. Read the clause and send the notice. That's a genuinely solved problem.

The part nobody enjoys

The second job tells you what your customers actually think you're worth.

Some of the ones you assumed were loyal turn out to have been staying because you were cheap. Some of the ones you were braced to lose pay the new rate without blinking, which tells you that you've been underpricing them for years and they knew.

Neither of those is a verdict on your customers. Both are a verdict on your pricing, and you don't get to see it until you move.

Questions people ask

How much notice should I give?

Whatever the contract says, and then read it again. If there's no clause, notice isn't really the question, because you need agreement rather than notice.

Should I explain why?

For the first job, briefly. For the second job, yes, and honestly, because you're asking somebody to choose. A reason that's really a justification will read as one.

What if I get it wrong and lose the wrong people?

You'll lose some of the wrong people. That's the cost of the second job and it's why it's worth deciding deliberately rather than drifting into it.

Can I do both at once?

You can, and it's the most common way this goes wrong. The customers you wanted to keep hear the message aimed at the customers you wanted to lose.

Decide the job, then decide the number

Both of these are offer design, and that's one of the areas my own method, Revenue ReSET, works on. It's the part most businesses never really get to. The contract makes the money version nearly free, and nothing in the process forces the other question.

So the number isn't where this goes wrong. It goes wrong earlier, when nobody writes down which job they're doing, and it shows up months later in who stayed and who left. Decide that first and the rest of it is arithmetic and diary management.