Question: Tips on raising prices

Here are my questions regarding B2B pricing:

1. How do you know it's time to raise your prices?

2. What are some methods you can use ahead of the price increase or during the transition to make it more palatable for customers?

3. How do you handle client complaints about the price changes?

Thanks for your help!

Expert Insight

On raising prices, the first issue is why?  Are your prices too low in comparison to the competitors?  Have you improved your value proposition and need to adjust prices to reflect your new position?  Have input costs risen forcing an overdue price increase?  Or, are you just keeping up with the Jones’s and following inflation.  All of these can drive a price increase.  
In increasing your prices, the driver behind the price increase determines the approach.  Some price increase drivers (simply priced too low, improvements in the value proposition) can necessitate gradual price increases over time towards a long run target price.  Other price increase drivers (input cost fluctuations) can enable a more dramatic an immediate price increase.  
In all cases, customers accept price increases better when they can be connected to an input cost increase.  Even when customers vocally balk at the price increase, they may actionably accept it as long as the price increase is justified in relation to a cost increase.
Starbucks has routinely increased its prices.  Each time, they note a cost increase (health insurance for workers, milk, coffee beans, etc.)  Every time, the cost increase was modest in relation to the price increase.  Every time, customers vocally stated that Starbucks was being unrealistic.  But, the next quarter’s numbers would come in and reveal that the customer base continued to grow and profits would increase.  
Which points to a key issue: do customers value you?  If they do, you can raise prices and move forward.  If you are just a commodity and they see you as no better than the others, that is, if you have no pricing power, raising prices must only be in relationship with your competitors.
For independent contractors, I like to remind them that they have a choice. They can give it away for free or charge for their deliverables  No one eats if they give it away.  What they produce is desired.  People will pay only if you demand what your worth.  Have a little backbone, a little backbone that is. Don't be arrogant.
The strategic price reaction matrix developed by me may be of help.  Please see
But note, this focuses on changes in pricing in relationship to a competitor’s move, not an independent price move.