In my experience, most clients care far more about the quality of the work than anything else that is on an artist's resume, including any prizes won at competitions.
If you have a lot of commissions coming in, by all means, raise your prices, often if you have to, in order to get your price to the level you feel your work is worth.
As far as the idea of not wanting to charge more to a friend of a previous client, they understand that prices on all types of items go up all the time. Many clients are impressed that an artist's prices are rising since they feel they made a good choice. The new prospective clients may well feel the same way. Your status as an artist goes up as your prices go up.
Another portrait artist told me that whenever she has a waiting list of six months or more she raises her prices.
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