As a business advisor, I often guide clients through the sensitive and strategic process of implementing price increases. Raising prices is a necessary part of business growth and sustainability, especially in the face of rising costs and inflation. However, it must be done tactfully to retain customer loyalty and market position. Here’s a step-by-step approach to effectively bring in a price increase.

1. Assessing the Need for a Price Increase

  • Cost Analysis: Begin by evaluating your costs, including raw materials, labor, and operational expenses. Rising costs can necessitate a price increase.
  • Market Research: Understand your market position and how your prices compare with competitors.

2. Calculating the New Price

  • Profit Margin Goals: Determine the new prices by considering desired profit margins and the overall financial goals of your business.
  • Competitive Pricing: Ensure that your new prices remain competitive and align with the value you provide.

3. Timing of Price Increase

  • Strategic Timing: Choose a time that minimises customer pushback, such as the end of a fiscal year, or after adding new features or improvements to your product or service.
  • Avoid Peak Seasons: If possible, avoid raising prices during your industry’s peak season when customers are most sensitive to changes.

4. Communicating the Price Increase

  • Transparent Communication: Inform your customers about the price increase in a transparent and straightforward manner.
  • Explain the Reasoning: Provide a clear explanation for the increase, focusing on the value and quality you deliver.

5. Gradual vs. One-Time Increase

  • Consider Gradual Increases: In some cases, gradual price increases may be more palatable to customers than a significant one-time hike.
  • Market Feedback: Assess how your market responds to smaller incremental changes before making larger adjustments.

6. Engaging with Key Customers

  • Personal Communication: For key clients or long-term customers, consider personal communication or meetings to discuss the changes.
  • Negotiation Flexibility: Be open to feedback and negotiation, especially with clients who contribute significantly to your revenue.

7. Monitoring the Impact

  • Customer Feedback: After implementing the increase, closely monitor customer feedback and sales metrics.
  • Adapt as Needed: Be prepared to make adjustments based on customer response and market conditions.

8. Providing Added Value

  • Justifying the Increase: Enhance the perceived value of your product or service to justify the price increase. This can include improving customer service, product quality, or adding features.

9. Seeking Professional Advice


Implementing a price increase is a delicate balance between maintaining profitability and customer satisfaction. By thoroughly assessing the need, strategically timing the increase, communicating effectively with customers, and continuously monitoring the impact, you can successfully navigate this challenge. Always remember, adding value to your offerings is key to justifying price increases and retaining customer loyalty.