How to adjust service pricing for long backlog customers?

1QuickS

I have a specialty service based business where each project takes about one week to complete. The number of similar service providers in the USA are about four and as such the backlog for all of us is typically six months.

I need to adjust pricing and want to apply my current price to those customers that sent their project six months ago under old pricing.

What words should I use to announce this policy in my T's & C's?

Alternately, should I adjust pricing and wait for six months and apply new price schedule to those new customers just now submitting projects for service?

Steffi Dsouza

The pricing and capacity (service rate) decision of a monopolist for which is  the customers will worry that this will create excessively long backlogs, and so a monopoly that can adjust its price based on the number of customers in the queue.

Tuah Bao

I don't think you should adjust the old prices because:
1) The customers had sent in their projects 6 months ago. It was clearly not their fault, but the service providers (couldn't managed to deliver on time or cope with the volume, but still accepting orders) .
2) If both parties already entered into contract (agreed and signed by both parties), then it had a legal effect.

I am not sure what were the terms and conditions, but you may be fortunate that no customers had tried to drag the company to the court for failing to deliver product/service after X period of time (if that was part of the contract).

Anyway, you can consider include the following on the contract:
1) This price is only valid for X weeks/months from the date of order received.
2) This price is valid until further notice and can be revised at the earliest X month(s) from sending of the notice.

If you are in doubt, get legal advice