Problems › Should We Raise Our Prices? › Construction & Trades
The question is never "should we raise prices" in general. It is which customers, by how much, and what you expect to lose. This page works through it for construction and trade contractors specifically — including an unedited excerpt from a real analysis of a contractor.
The question is never "should we raise prices" in general. It is which customers, by how much, and what you expect to lose. For construction and trade contractors, this shows up in a particular place. The numbers that carry the answer are job gross margin and backlog cover, and the complication specific to this industry is that service work earns double the margin of projects and loses every staffing argument to liquidated-damages clauses. The general version of this problem and the one you are actually in have different first moves.
Price is the fastest lever in any business — it requires no new customers, no hiring and no new product, and it arrives on the next invoice. It is also the one owners are most reluctant to touch, which is why underpricing is far more common than overpricing.
A useful price analysis does not produce one number. It produces a segmentation: which customers are paying below the value they receive, which are already at the ceiling, and where the discount distribution shows price being set by the sales conversation rather than by policy.
The uncomfortable part is that a good price change deliberately loses some customers. If a rise costs you nobody, it was too small.
These three together are the signature. One on its own usually points somewhere else.
✓ Almost every deal closes, and closes quickly
✓ Discounting is common and inconsistently applied
✓ Price has not moved in more than two years while your costs have
The move that usually makes it worse. A uniform percentage rise across the whole book, which overcharges the price-sensitive customers and still undercharges the ones who were never buying on price.
It is for you if you run or finance a contractor and almost every deal closes, and closes quickly. It is the situation where the numbers are available but nobody has put them in an order that produces a decision.
It is not for you if Percision is the wrong tool if you already know the answer and only need execution capacity, or if the business is pre-revenue — then the constraint is evidence about the market, not analysis of your own figures. Percision is not a lawyer, tax advisor, auditor, licensed appraiser, clinical or regulatory filer, or an AI implementation shop. It does not do HR casework, creative-only brand work, or impersonate a named consulting firm. It is a strategy analysis engine — not a template library. Also wrong if you need facilitation, politics, or someone to sit with a lender or buyer. Those are human jobs.
Percision is not a lawyer, tax advisor, auditor, licensed appraiser, clinical or regulatory filer, or an AI implementation shop. It does not do HR casework, creative-only brand work, or impersonate a named consulting firm. It is a strategy analysis engine — not a template library.
Below is an excerpt from a real run of this analysis on a contractor. It is a sample profile rather than a customer, and it is unedited engine output — this is the format you get, on your own numbers.
The subject is Halloway Mechanical, a sample company profile used for testing rather than a customer — $180M revenue, mechanical contracting.
Excerpt from a real Percision run · Pricing Strategy · sample company profile
The move. Deploy 12 existing journeymen to lock in 40 new hospital service contracts, converting construction relationships into recurring 32% GM revenue.
The leak it closes. Reduces $4.2M overtime drag by re-allocating 12 journeymen from construction backlog to service fleet.
The assumption it rests on. Hospital procurement will accept 12–18% premium pricing for single-source mechanical partner — the engine put the probability at 0.75.
| Investment required | $2M cash (Phase 1); funded by existing $6.4M cash balance. |
| Expected return | 128% gross-profit ROI on $2M investment in Year 1; payback <12 months. |
| Revenue, year 1 | $8M incremental service revenue |
| Revenue, year 2 | $12M cumulative incremental |
| Revenue, year 3 | $18M cumulative incremental |
| Exit criteria | Terminate move if fewer than 15 hospital SLAs signed by Month 9 OR construction backlog falls below 6 months. |
This is one move out of a full analysis. Read a complete report — every page, no email required.
This question routes to Pricing & Revenue Optimization, one of 29 engagements the platform runs. For construction and trade contractors it works through job gross margin, backlog cover, change-order capture and service attach rate, then produces the sequence rather than a list of options — which move first, what it funds, and the observation that would say the sequence is wrong.
You watch the analysis get built before paying anything. Read a complete report here if you would rather see the depth first.
There is no general answer, and the useful analysis is per segment. What can be said is that the loss you fear is usually concentrated in a group whose economics you would improve by losing them.
New first is safer and slower; existing is where the money is. A defensible sequence is to move new-customer pricing, watch win rate for a quarter, then bring existing customers up at renewal with notice.
Then you are selling against them on something other than price, or you are not — and that is the real question. Competing on price without the cost structure to support it is the most reliable way to lose money at increasing volume.
Materially, yes. Service work earns double the margin of projects and loses every staffing argument to liquidated-damages clauses — which changes both the diagnosis and the order of the fixes. The metrics that decide it here are job gross margin, backlog cover, change-order capture, and an answer built on industry-general benchmarks will usually point at the wrong one first.
Less than most people expect. Your last twelve months of revenue and cost split the way you already split it, plus whatever you hold on job gross margin and backlog cover. The analysis is explicit about what it is assuming where your data stops, which is more useful than waiting for numbers you may never have.
Percision is the wrong tool if you already know the answer and only need execution capacity, or if the business is pre-revenue — then the constraint is evidence about the market, not analysis of your own figures. Percision is not a lawyer, tax advisor, auditor, licensed appraiser, clinical or regulatory filer, or an AI implementation shop. It does not do HR casework, creative-only brand work, or impersonate a named consulting firm. It is a strategy analysis engine — not a template library. Also wrong if you need facilitation, politics, or someone to sit with a lender or buyer. Those are human jobs.
Percision is not a lawyer, tax advisor, auditor, licensed appraiser, clinical or regulatory filer, or an AI implementation shop. It does not do HR casework, creative-only brand work, or impersonate a named consulting firm. It is a strategy analysis engine — not a template library.
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