The price rise applied to new business. The back book is most of the revenue.

Grandfathering existing customers through a price rise feels like the cautious choice. The arithmetic of how long those accounts persist says otherwise.

By Steve 5 min read
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A price increase gets signed off. Sales are briefed, the rate card is updated, the website changes. Then someone asks the obvious question about existing customers, and the answer is the one almost every business gives: leave them where they are for now, we’ll bring them up at renewal. Three years later the new price has done its job on new business, and the revenue-weighted average price the business actually achieves is nowhere near it. The gap is not a rounding error. In a lot of businesses it is the…

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