It’s December. You know your prices are too low. You’ve known for two years. Your costs went up 15% to 20% since 2022, but your prices stayed the same. Your margin shrunk from 24% to 14%. You’re working harder for less money.
You need to raise prices, but you’re terrified. What if customers leave? What if they’re angry? What if they tell you they’re going with someone cheaper? The fear feels bigger than the financial pressure, so you do nothing. Another year passes with inadequate pricing.
Here’s what you don’t know. December is the PERFECT time to announce a January price increase. Your customers expect price increases at the start of a new year. They budget for them. They plan around them. What frustrates customers isn’t price increases, it’s surprise price increases in random months with two weeks notice.
You have just a few days left to announce your January 2026 pricing professionally. Give proper notice, communicate clearly, and most customers will accept it without drama. But you need to do it right.
Why You Should Listen to Me About Announcing Price Increase Strategy
I’m Ryan Herrst with Media Ace Advisors. I’m a Certified Profit Advisor and author of “Profit Foundation.” I help service business owners earning $250K to $5M annually discover hidden profit opportunities, and pricing strategy is one of the seven profit levers I work with most frequently.
My father taught me “All because you can, doesn’t mean you should.” That applies to pricing in an interesting way. Just because you CAN keep your prices artificially low to avoid uncomfortable conversations doesn’t mean you SHOULD. Underpricing hurts your business, your team, and ironically, even your customers because you can’t deliver excellent service when your margins are too thin.
The 7-Step Pathway to Profit examines leads, conversion, transaction size, frequency, margins, retention, and referrals. Transaction size, which is your pricing, is one of the fastest levers to move. A 10% to 15% price increase can improve your profit margin by 30% to 50% without adding a single new customer or working one additional hour.
Over the past 18 months, I’ve helped dozens of service businesses implement annual price increases. The pattern is consistent. Business owners expect 20% to 30% customer loss. The actual loss is typically 3% to 8%, and the customers who leave are usually the price-sensitive problem clients they wanted to lose anyway. Revenue increases. Profit increases dramatically. Stress decreases.
January isn’t arbitrary. It’s when most B2B price increases happen across industries. Your customers are getting similar notices from other vendors. You’re not the outlier, you’re following standard business practice. The psychology works in your favor when you’re announcing price increase changes at the right time.
Why January Price Increases Work (Psychology Matters)
Announcing a price increase works best when it aligns with how people naturally think about change. January feels like a fresh start. New year, new prices, new agreements. It’s natural timing that makes sense to customers psychologically.
December gives customers four to six weeks notice to adjust their budgets for Q1. They appreciate the heads up. They can plan around it. Business owners adjust their quarterly projections. Finance teams update their vendor cost forecasts. The advance notice shows respect for their planning process.
Industry standard timing matters more than you think. When you announce a January price increase in December, you’re doing what most professional service businesses do. Your customers are receiving similar announcements from their insurance company, their software providers, their other vendors. You’re not the outlier creating friction, you’re following accepted business practice.
Compare that to announcing a price increase in March with two weeks notice. That creates pushback. It feels sudden. It disrupts their quarter. It makes you look disorganized. The price increase amount might be identical, but the customer reaction will be completely different based purely on timing and notice period.
This isn’t about manipulation. It’s about communicating professionally and respecting your customers’ need to plan. When you do that, most customers accept price increases without drama. Fair pricing enables excellent service delivery. You can’t maintain quality when your margins are razor-thin.
The 4-Week December Announcement System
You need a system for announcing price increase communications professionally. Here’s the four-week timeline that works.
Start in early December by preparing your materials. Create three documents. First is your price increase letter or email. This formal notification includes your new pricing, the effective date of January 1, 2026, and your reasoning for the increase. Second is your FAQ document. Anticipate questions before customers ask them. Why now? Can I lock in old pricing? What am I getting for the increase? Have answers ready. Third is your value reinforcement sheet. This reminds them what they already receive from working with you. Response time, quality, expertise, track record, reliability. Most customers forget the value they’re getting until you remind them.
In mid-December, send your announcements. Email all active customers on a Monday morning. The subject line should be clear and professional, something like “Important: 2026 Pricing Update for [Your Company Name].” The tone is matter-of-fact, not apologetic. You’re not asking permission, you’re providing advance notice of a business decision. Include the specific percentage increase, the effective date, your reasoning (cost increases, quality maintenance, team investment), value reinforcement, and an offer to discuss questions with a calendar link or phone number.
In the third week, mid to late December, handle the responses. You’ll get three types of responses. About 80% of customers won’t respond at all. They accept it and plan accordingly. No drama. About 15% will have questions. Answer honestly using your FAQ document. Most convert to acceptance after a brief conversation. About 5% will push back. These are either negotiation opportunities or disqualification moments. For pushback, offer to maintain current rates through December 31, but explain that January 1 reflects your new pricing structure across all clients for fairness. This creates urgency while maintaining consistency.
In late December, the fourth week, execute the changes. Update your invoicing systems, contracts, and proposals with new rates effective January 1. Document everything. Anyone who didn’t explicitly push back automatically moves to new pricing. Make it seamless. You’re executing a professional business practice, not asking for favors.
The Price Increase Letter Template That Works
Your email for announcing price increase should follow this structure. Start with a clear subject line that says “2026 Pricing Update for [Company Name].”
Open by thanking them for their partnership in 2025. State the change directly without burying the lead. “We’re adjusting our pricing to reflect increased costs and our continued commitment to quality. Starting January 1, our rates will increase by [X%].” Be specific about what changes. “[Service] will move from $[old] to $[new] per [timeframe].”
Explain briefly why this is happening. “Over the past year, our costs for labor, materials, insurance, and technology have increased significantly. To continue delivering the level of service you expect, we need to adjust accordingly.” Keep it honest and straightforward. You’re not apologizing, you’re explaining reality.
Reinforce value by listing three to four specific benefits they receive. What makes you different? What results do you deliver? What problems do you solve? Remind them why they chose you in the first place and why that value hasn’t changed.
End with an offer to discuss questions and include your contact information or calendar link. Keep the tone professional and confident, not apologetic. You deserve to charge what you’re worth. Confident businesses charge confident prices.
Handling the Top 5 Objections
When announcing price increase changes, you’ll hear some common objections. Here’s how to handle them.
“That’s too much.” Ask what feels fair given the value they receive. Sometimes they just need to be heard. Often they’ll realize their own number is actually close to yours when they think about what you deliver.
“Your competitor is cheaper.” Acknowledge that might be true, then specify what differentiates you that they won’t get elsewhere. Don’t compete on price. Compete on value, reliability, and results.
“Can I lock in current pricing?” Offer to maintain rates through December 31, but January 1 all clients move to the new structure for fairness. This maintains your integrity while giving them a small transition window.
“Why didn’t you tell me sooner?” Point out they’re hearing this in early December for January 1, giving them several weeks notice, which is industry standard. Most vendors give less notice than this.
“I need to think about it.” Ask what specifically they’re considering so you can address concerns directly. Don’t let it sit as a vague maybe. Get to the real objection.
You deserve customers who value your expertise enough to pay fair rates. Customers who won’t pay market rates after you’ve proven your value aren’t your ideal clients anyway.
The Difference Between Random and Strategic Price Increases
The system I just shared works. You can use it this December and successfully raise your prices in January without losing customers. Do it. Don’t let this article sit in your bookmarks while another year passes with inadequate pricing.
But here’s what you should know. There’s a difference between raising prices because your costs went up, which is what I just taught you, and raising prices because you’ve established Position of Market Dominance in your community.
When I work with clients on price increases, it’s calculated and data-driven, not guesswork. We don’t just pick a percentage that sounds reasonable. We examine your market positioning, your competitive differentiation, your value delivery, and your customer perception. We implement Position of Market Dominance first, which means establishing clear market messaging that stops you from competing on price entirely.
Position of Market Dominance takes several weeks to dial in properly. It’s the strategic work that happens before the price increase. When your market messaging is clear and your positioning is strong, you can justify higher prices more effectively because customers understand exactly why you’re different and why you’re worth more. The price increase becomes a natural extension of your market position rather than just a cost-of-business adjustment.
Think of it this way. The approach in this article gets you from where you are to 10% or 15% higher pricing with minimal customer loss. That’s good. The strategic approach with Position of Market Dominance and data-driven pricing analysis gets you to premium pricing with customers who don’t question it because they already see you as the obvious choice. That’s better.
You can do something now with what I’ve shared. You absolutely should. But realize there’s more strategic work that can be done to maximize your pricing power long-term. Being the trusted community leader in your market allows premium pricing that feels natural to customers rather than justified by cost increases.
Why Most Businesses Don’t Do This (And Why You Should)
Fear. That’s the only reason. Business owners are terrified customers will leave, so they don’t raise prices. Their margins shrink year after year until they’re working 70 hours a week making less than their employees.
Your costs went up 15% to 20% in the last three years. If your prices stayed flat, you absorbed that entirely. You’re subsidizing your customers’ budgets with your profit margin. That’s not sustainable. That’s not smart business.
The businesses thriving right now raised prices confidently, communicated clearly, and lost fewer customers than they feared. The ones struggling kept prices flat because they were scared. You built this business to be profitable, not to work harder for less money every year. Inaction has a cost, and you’re paying it every single month. Your business should support you, not drain you.
Want to Talk Through Your Pricing Strategy?
I’m currently interviewing service business owners for the second edition of “Profit Foundation,” my book on profit strategies for small businesses. One of the areas I’m researching is pricing psychology and how different industries approach annual price increases.
During our 45-minute conversation, I’ll share what I’m learning about pricing strategies across industries and you’ll see how your approach compares to the patterns I’m seeing. It’s a research conversation, not a business evaluation, but most people walk away with two or three ideas about their pricing strategy and communication approach.
If you’d like to participate and receive a complimentary copy of the book when it’s published in 2026, you can schedule here: https://mediaaceadvisors.com/contact/
There’s no cost and no sales pitch. These are genuine research conversations where I’m gathering insights for the book. The December slots are filling up quickly, so if this interests you, schedule before the end of the month.
About the Author:
I’m Ryan Herrst with Media Ace Advisors. I help service business owners (annual revenue $250K to $5M, 10 or fewer employees) identify hidden profit opportunities and create clear pathways to growth. My approach focuses on systematic improvements across all seven profit levers, with special emphasis on pricing strategy and Position of Market Dominance.