Your finance team will tell you the fix is one price list. They are wrong, and the first customer to notice will prove it. Pricing looks like arithmetic and behaves like politics. The acquired company may charge more than you, because the customers value something you do not offer. It may charge less, because the former owner never raised prices. It may charge differently for customers who look identical.
Whatever the reason, the number on the invoice is a message to the customer. Change it without understanding the message, and you will hear the answer in the next renewal. For the customer side of the work, go to customer retention after acquisition.
Find out why the prices are what they are
Before you compare, ask. Is the price a reflection of service level, speed, local competition, a long relationship, or a mistake? A rate that has not moved in five years is probably a mistake. A premium rate with a loyal customer base is probably a reason.
Pull the price lists, the actual invoices, and the discounts, and compare real realized prices for the same job. List prices lie. Look at margin by customer and by job, not just revenue.
Three directions, chosen by segment
Move up where the acquired company is underpriced and the customers have few alternatives or low sensitivity. Move down, or hold, where their price is above yours and the premium is tied to something real. Leave alone where the gap is small and the change would cost more in friction than it earns.
Do not choose one answer for everyone. Segment by customer type, size, and length of relationship. A small customer who has paid the same for ten years will react differently than a large one with a contract and a buyer who compares quotes.
How to raise a price without losing the account
Give notice, explain the reason in the customer's terms, and tie it to something they value. Raise in steps if the gap is large. Start with the accounts where the reps are strong and the relationship is deep, and where you know the price is well below market.
Brief the sales team first and equip them. A rep who is surprised by the letter is a rep who agrees with the customer. If a large account has a special arrangement with the former owner, treat it separately; see handshake pricing with the seller.
The shared customer problem
When both companies serve the same customer at different prices, someone will notice. It is better to decide in advance than to explain afterward. See shared customers who want one price for how to handle the moment when a customer asks for one price.
Watch the effect on the add-on strategy as a whole. A price decision made for one acquisition sets a precedent for the next, so read integrating add-ons into a platform if you plan more deals.
Measure what happens
Track win rate, churn, and margin by segment for two quarters after any change. If churn rises where you expected stability, stop and ask. A pricing mistake is easy to fix in the first quarter and expensive in the third. I would not touch a price in the first ninety days unless I knew why it was set.
Decision table: harmonize this customer segment up, down, or not at all
Apply to each segment. Keep the answers with the pricing decision record.
| Question | If yes, it points to | If no, it points to |
|---|---|---|
| Is their price clearly below market and the customer has few alternatives? | Raise in steps, with notice and a reason | Do not raise yet. Find out why the gap exists before you move |
| Is their price above yours because of a real service difference? | Hold, and keep the service that justifies it | The premium may be a mistake. Check the invoices and consider moving it down |
| Is the gap small? | Leave alone. The friction costs more than the gain | Segment the account and decide up or down on the merits |
| Is the customer large, or under contract? | Treat individually, with the account owner leading | Apply the segment rule and brief the account rep |
| Do both companies serve this customer? | Decide the single price rule before they ask | Apply the segment rule |
A worked example of the segment approach
Picture a distributor that bought a regional competitor. The acquired company sells a core product at a lower price than the buyer, to a small group of long term contractors, and a premium price to occasional buyers who value same day delivery. The buyer's list treats them all the same.
Applying the list across the board would raise the contractors' price and cut the occasional buyers' premium, which is exactly backward. The segment approach holds the premium for same day customers, raises the contractor price in two steps over a year with notice, and leaves the mid sized accounts alone until the first review. The result is a price list that follows the value customers see, not the one the spreadsheet prefers.
Keep the long view
Pricing is where you can make or lose the most money in the first year, and where mistakes are the hardest to see. Move slowly, segment carefully, and measure.
Keep the customers. If you protect the relationship first, you earn the right to raise the price later. If you raise it first, you may not get the chance.
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Questions
Should you raise prices after acquiring a business?
Not across the board. Find out why their prices are what they are, then decide by segment. Raise in steps where they are clearly below market and customers have few alternatives, hold where a premium reflects real service, and leave alone where the gap is small. Brief the sales team first and measure churn and margin for two quarters.
Should I wait before changing prices?
Usually for at least the first ninety days, while you learn why the prices are what they are and who the real accounts are.
How do I tell customers about a price increase?
Give notice, explain the reason in their terms, tie it to something they value, and have the account rep deliver it.
What if one customer buys from both companies?
Decide the single price rule in advance, and see the guidance on shared customers.