Why You Are Almost Certainly Undercharging
Here is the uncomfortable truth: the longer a client has been with you, the more underpriced you probably are. You quoted them years ago based on the market then, your team then, and your confidence then. None of those things are the same. But because the conversation is uncomfortable and the client is happy, you just kept renewing at the same rate.
Research from Vendasta (2025) found that even a 1% increase in price lifts operating profit by approximately 8% — because unlike adding new clients or cutting costs, pricing changes have near-zero incremental cost. If you have 8 retainer clients all paying a rate set 2–3 years ago, a 20% across-the-board increase could mean $50,000–$150,000 of additional annual revenue for exactly the same work.
The agencies that have successfully raised prices consistently report the same thing: they expected more resistance than they got. Most clients, when given enough notice and a clear reason, simply accept the increase. The clients who do not were either already at risk of churning or were genuinely not worth keeping at any price.
Get the free Agency Sales Playbook
7 lessons on winning agency clients. Delivered free to your inbox.
The Psychology of Price Increases
Understanding why clients resist — and accept — price increases helps you structure the conversation to maximise acceptance rates.
Why Clients Resist
What Makes Clients Accept
Raise Now or Wait? Decision Framework
Not every moment is a good time to raise prices. Use this framework to decide whether to move now or wait for the next cycle:
✓ Raise Now When:
- You have not raised rates in 12+ months
- You recently delivered a major win you can reference
- Your costs have increased (team, tools, overhead)
- You have just repositioned or added new capabilities
- Contract renewal is coming in next 60–90 days
- New clients are paying significantly more than existing ones
✗ Wait When:
- Client is mid-crisis or unhappy right now
- You just missed a key deadline or deliverable
- Client is in a budget planning or cuts cycle
- The relationship is fragile or recently tested
- You have no concrete results to point to yet
- The contract has 3+ months before natural renewal
How Much Should You Raise?
The right amount depends on three factors: how long since your last increase, what the market rate for your services actually is, and how much of a repositioning story you can tell.
Annual routine increase (no repositioning)
Barely noticeable, minimal pushback. Sets the habit. CPI-level or slightly above.
Standard increase after 18–24 months
Requires clear communication and a concrete results anchor. Accepted well by happy clients.
Repositioning-driven increase (new positioning, new packaging)
Requires a full rationale: new positioning, new capabilities, demonstrated results. Most appropriate for clients underpriced for 2+ years.
Full rate normalisation (raising to true market rate)
Usually only viable for new contracts or major renegotiations. Use phased migration over 2–3 cycles rather than one jump.
Price Migration Calculator
Use this calculator to model your migration timeline and revenue impact. Enter your current rate, desired rate, client count, and migration pace — and see exactly how much revenue you gain and over what timeframe.
💰 Price Migration Calculator
Enter your current and desired monthly retainer, number of clients, and migration pace to see the revenue impact over time.
Free Tool: Website Audit
Audit any prospect's website and use the results as a cold outreach opener. Takes 30 seconds, no signup needed.
3 Email Templates for Price Increase Notices
These are real-world templates. Copy them, adapt the specifics, and do not overthink it. The goal is clear, confident communication — not a legal document or an apology.
Template 1: Standard Annual Increase (Low Risk)
Use this for routine annual price increases of 10–15%. Clean, professional, no drama.
Subject:
Upcoming adjustment to your monthly retainer — effective [DATE]
Body:
Hi [NAME], As we approach your [contract anniversary / renewal date], I wanted to give you advance notice of an adjustment to your monthly retainer. Starting [DATE — at least 60 days from now], your monthly fee will increase from $[CURRENT] to $[NEW] — a [PERCENTAGE]% adjustment. This reflects the rising cost of the talent and tools we use to deliver your results, as well as the continued growth in scope and complexity of what we do together. We review our rates annually to keep them aligned with the market and the quality we hold ourselves to. If you have any questions or want to talk through this, I'm happy to jump on a quick call. Otherwise, your updated invoice will reflect this change from [DATE]. Thank you for being a great client. We're looking forward to another strong year together. [YOUR NAME]
Template 2: Repositioning-Driven Increase
Use this when you have repositioned, added capabilities, or are raising prices significantly (20%+). Lead with the story.
Subject:
A note on your retainer — and what's changing for [COMPANY NAME]
Body:
Hi [NAME], Over the past [TIMEFRAME], we've made significant changes to how we work — [brief description: new team, new methodology, specific capability added]. These changes have directly benefited your account: [SPECIFIC RESULT 1] and [SPECIFIC RESULT 2]. I wanted to give you full transparency on how this affects your retainer going forward. Effective [DATE], we're updating our pricing to better reflect the value we're delivering. Your new monthly retainer will be $[NEW AMOUNT], up from $[CURRENT AMOUNT]. Here's what that covers: • [UPDATED SCOPE ITEM 1] • [UPDATED SCOPE ITEM 2] • [NEW CAPABILITY OR DELIVERABLE] I know a pricing change requires budget consideration, so I'm giving you [60/90] days notice. I'm also happy to lock in the current rate through [EARLIER DATE] if you'd prefer to confirm early. Can we get 20 minutes on the calendar this week to walk through this and answer any questions? [YOUR NAME]
Template 3: Long-Tenure Client (Tactful Catch-Up)
Use this when a long-standing client is significantly below market rate. Acknowledge the tenure. Do not make it weird.
Subject:
Something I've been meaning to bring to your attention
Body:
Hi [NAME], Working with [COMPANY] over the past [YEARS] has been genuinely one of the better parts of running this agency. I don't say that lightly. Which is actually part of why I want to have an honest conversation with you. When we first started working together, we agreed on a rate of $[CURRENT]. At the time, that was right. But a lot has changed — our team has grown, our process has matured, and frankly, what we do for you now is significantly more than what we initially scoped. I've been slower than I should have been to bring this up, and I own that. But in the interest of keeping this relationship healthy and sustainable for both of us, I want to move your retainer to $[NEW RATE] starting [DATE]. That's [PERCENTAGE]% more than you're paying now. I believe it accurately reflects what we're delivering and where the market is. I also know we've given you a lot of value at below-market pricing for a while, so I wanted to be direct about it rather than sneak it in at renewal. I'd love to catch up on a call this week and walk you through the value case. Happy to answer any questions. [YOUR NAME]
The Pricing Conversation Script
Some clients will want a conversation before accepting a price increase. This is a good sign — it means they value the relationship enough to work through it rather than just cancelling. Here is how to run that call:
Opening (30 seconds)
"Thanks for making time. I sent you a note about updating your retainer, and I wanted to walk through it with you rather than just leaving it in an email."
Signals confidence. Do not open with an apology.
Results anchor (1–2 minutes)
"Before I get into the specifics, I want to briefly recap what we have accomplished together over the past [TIMEFRAME]. [Three specific results: traffic, leads, revenue, time saved, etc.] That context matters for this conversation."
Always anchor on value first. Make the increase feel proportionate.
The increase (30 seconds)
"We are moving your retainer from $X to $Y on [DATE]. That is [PERCENTAGE]%, and it is the first time we have adjusted it in [TIMEFRAME]. I wanted to give you [60] days notice and a chance to ask questions."
State it plainly. No hedging, no extended justification — you sent that in the email.
Handle objections
Let them respond. The two most common objections: "That's more than we expected" → "I understand — what would make it feel like fair value?" / "We're going to need to think about it" → "Of course — what information would help you make that decision?"
Listen more than you talk. Pushback is rarely a hard no — it is usually a request for more justification.
Close (if needed)
"I want to keep working together — I think we have a lot of momentum. If the timing is challenging, we can lock in the current rate through [EARLIER DATE] if you confirm in the next two weeks. Otherwise the new rate starts [DATE]."
Offer a small carrot for early decision, not a major concession. You are not negotiating — you are being generous.
When to Grandfather vs. Migrate
Grandfathering — holding a legacy client at their existing rate while new clients pay more — is sometimes appropriate. But most agencies overuse it as a conflict-avoidance strategy rather than a deliberate business decision.
Grandfather when:
- →The client is a high-referral source within your niche and relationship value exceeds the rate delta
- →You are mid-project and raising rates would breach an implied agreement
- →You want to retain a flagship case study client who is genuinely budget-constrained
- →You are buying yourself 6 months to build a stronger value case before the next conversation
Migrate when:
- →The rate gap between this client and new clients is >25% and has persisted >12 months
- →The client is profitable, happy, and there is no genuine budget constraint
- →You have recently repositioned and the old rate sends the wrong market signal
- →Your team resents the client because they know the work is underpriced
⚠️ The grandfathering trap: Indefinite grandfathering creates a two-tier client ecosystem where your best-relationship clients pay the least. Over time, this erodes your margins and creates implicit permission for those clients to resist all future increases. Set a hard cap: no client stays grandfathered more than 12 months without a formal reassessment.
How Positioning Justifies Higher Prices
The easiest way to raise prices is to change what you are positioning for. When you are a generalist, the only lever you have is “we do better work” — and that is an unverifiable claim every agency makes. When you have a clear position, price increases are justified by specificity itself.
A general agency telling you they are raising prices feels like paying more for the same. A specialist agency telling you they are raising prices because their niche expertise has deepened, their team has grown, or they have added a new capability relevant to your exact situation — that is a different conversation entirely.
How Different Positioning Types Justify Price Increases
Vertical specialist
"We have now worked with 15 companies in your space. Our benchmarks, case studies, and playbooks are deeper than any generalist could replicate. That expertise has a price."
Outcome-focused
"We have helped clients in your situation achieve [average result]. The increase reflects the growing difference between what you pay and what you get back."
Service specialist
"The discipline has evolved significantly. We have added [new capability, new tool, new team member] specifically to deliver better results in this area."
Methodology-based
"We have refined our [proprietary process] based on 50+ client engagements. We are faster, more accurate, and produce better outputs. The process is more valuable and the price reflects that."
This is why positioning and pricing are inseparable. If you want to raise prices significantly and have them stick, the supporting move is to sharpen your positioning at the same time. For the full positioning playbook, see our guide on agency positioning strategy. And for the complete pricing picture — including how to set rates from scratch — our agency pricing guide covers all three frameworks in depth.
Frequently Asked Questions
How do I raise my agency prices without losing clients?
The key is communication, timing, and justification. Give at least 60 days notice, anchor the increase to added value or improved outcomes, and migrate clients in tiers rather than all at once. Clients who are happy with your work rarely leave over a 10–20% increase — those who do were already at risk of churning.
How much should I raise my agency prices?
For annual increases on existing clients, 5–15% is standard and rarely triggers pushback. For a full repositioning or repackaging, increases of 25–50% are common when justified. For clients who have been significantly underpriced for years, use phased migration over 2–3 cycles rather than one large jump.
When is the best time to raise agency prices?
Best times: at contract renewal; after a significant result you can point to; after adding new capabilities or team; after repositioning; or at the start of a new year or quarter. Never raise prices when a client is mid-crisis, unhappy, or after you have recently missed a deliverable.
Should I grandfather existing clients at old prices?
Grandfathering should be time-limited (maximum 12 months) and reserved for specific strategic reasons — high-referral clients, mid-project timing constraints, or buying time to build a stronger value case. Indefinite grandfathering creates a two-tier client system that is very hard to unwind.
What should I say when raising prices with an existing client?
Lead with results and what has changed — not what you need. Frame the increase as alignment of price with value delivered. Give 60 days notice, offer a brief window to lock in the old rate for early confirmation, and be direct. Never apologise for pricing your work appropriately.