Category: Pricing

It’s no wonder that many businesses are afraid to increase their prices given that it can go wrong, damage your relationship or at worse lose you customers. . Here are some of the most common COMMUNICATION pitfalls and how to avoid them.

What not to do:
❌ Surprising customers with no advance notice of price increases
❌ Failing to explain the reasons behind the price increase
❌ Using apologetic or defensive language when announcing increases
❌ Sending impersonal mass communications rather than tailored messages
❌ Not providing enough lead time before implementing new prices
❌ Failing to remind customers of the value they receive
❌ Using overly complex or technical language in price increase communications
❌ Not having a clear communication plan for different customer segments
❌ Failing to brief customer-facing staff on how to handle questions
❌ Not providing clear documentation of price changes

Instead:
✅ Give customers at least 30 to 60 days’ notice, allowing ample time for budget adjustments
✅ Clearly explain price increase reasons, enhancing services, or new quality improvements
✅ Use confident, factual language, position increases as necessary for continued excellent service
✅ Personalise communications for customer segments, tailor messages to their specific needs and value
✅ Implement a two-stage communication process, warn first, then confirm with specific details
✅ Remind customers of the full value package, highlight all benefits and improvements over time
✅ Use clear, straightforward language, avoid jargon and clearly state the new pricing
✅ Create segment-specific communication plans, different approaches for premium vs standard customers
✅ Thoroughly brief all customer-facing staff, provide scripts and objection handling training
✅ Provide comprehensive documentation, create FAQs if necessary

Remember, price increases don’t have to cost you customers. When communicated properly, they can actually strengthen your relationships by demonstrating how you are continuing to invest in your service and are a safe partner for them in the long term.

How has your business handled price increase communications?

Before you plan your next increase, it’s worth knowing how far behind your prices have fallen. Our Pricing Health Check gives you that picture in a couple of minutes.

This was an email I received from a hosting provider.

The tone is apologetic and they don’t make any effort to talk about the value they have delivered or will be in the coming year other than a vague reference to improving infrastructure.

I appreciate that their costs have gone up, along with everyone else’s but with a little more effort they could have taken this opportunity to communicate the wide range of products and services they offer and their planned roadmap for the year. It would even be a chance to upsell additional services.

Suffice to say I am not with them now and I am instead paying considerably more with another provider but one who I feel is delivering more value.

For a much better example of how to word a change, check out this one from Amazon,

And if you haven’t put your prices up for some time, use this handy calculator to see what your price should be based on just UK average inflation.

For a fuller picture of where your pricing stands, our Pricing Health Check goes beyond inflation to show how much margin you may have quietly given away.

There are good ways and bad ways to communicate changes to your pricing or service. This is an example of a well managed one from Amazon in January 2024 that you may well have received yourself.

Lets break it down,

They make it clear what the change is and why they are making it. They stress the value early on in terms of how it will enable them to continue investing in their content.

They also play down the negative impact of this change on customers by comparing how they will have fewer ads compared to other streaming platforms.

They also provide the upsell option where you can keep your existing service and remove the new ads by paying an additional £2.99 a month.

Next they reinforce the value and everything that you get in the service to remind you just how good it is,

And finally they wrap it up with the following,

They clarify that there is no action required and also give another gentle push towards their ad free additional subscription.

They made this change in January 2024 and in that year alone they generated over $2 billion in Prime Video related revenue.

Amazon knew that their customers (including myself) might not be happy about the ads but they also knew that customers love the convenience of next day deliveries and all the other parts of the Prime service.

This meant that they had very little risk of losing a significant percentage of customers and any losses would easily be offset by the increased revenue.

They also provided an upsell to at least give those customers who are really upset about the ads a way to avoid them, albeit at an additional cost.

The reality is that Amazon were actually degrading the customer experience to develop a new revenue stream. They way they positioned it though was extremely well done and by focusing on the value they are delivering they avoided any significant customer push-back.

Wondering whether your own prices need a similar adjustment? Our Pricing Health Check is a quick way to see how far your margins have drifted while costs have risen.

In 2025’s challenging business landscape, your pricing strategy isn’t just about covering costs – it’s telling potential clients exactly how you value your expertise. 💡

Rising operational costs (Wage increases, higher National Insurance contributions, increased supplier costs) are pressuring many UK service businesses with many seeing their margins shrink. Despite all of these pressures, I am often surprised by how many businesses still decide to “stay competitive” by keeping prices low, consider this:

🚫 What Your Low Prices Actually Signal:

– Lack of confidence in your service value

– Struggling to retain clients

– Competing solely on price (race to the bottom)

✅ What Strategic Pricing Communicates:

– Confidence in your expertise

– Premium service delivery

– Strong client relationships

The reality is that the vast majority of customers are not as price sensitive as you might believe and so businesses consistently underestimate what clients will pay for quality services. In fact, most clients use price as a proxy for quality – especially in service industries where tangible comparisons are difficult.

What you can do about it

– Audit your current pricing against market positioning

– Segment your services into clear value tiers

– Focus communications on value delivered, not cost

– Implement changes with confidence

– Remember: Your price is your story. Make sure it’s telling the right one.

If you want to see where your own pricing currently stands, our Pricing Health Check is a quick way to gauge how much rising costs have eaten into your margins.

I often encounter a familiar scenario: successful small business owners, delivering excellent products and services, yet hesitating to adjust their prices despite rising costs. If this resonates with you, you’re not alone – and more importantly, your fear of increasing your prices is nearly always unfounded. A modest 10% increase in pricing can result in a 25% increase in profitability. Pricing is the most powerful lever you have in your business.

Understanding the Fear Barrier

The reluctance to raise prices often stems from a deep-seated fear: “If I increase my prices, I’ll lose my customers.” This concern, while natural, is typically more perception than reality. In my experience working with numerous SMEs, well-implemented price increases rarely lead to significant (if any) customer loss, particularly when handled with transparency and confidence.

The Art of Value Communication

The key to successful price increases lies not in the numbers themselves, but in how you communicate them. Consider this your opportunity to:

1. Showcase Your Evolution: Highlight the improvements you’ve made to your business and how they benefit your customers
2. Demonstrate Investment: Share how you’re reinvesting in your capabilities to serve clients better
3. Reinforce Value: Remind customers of the specific benefits and results they receive from your service

Most importantly, don’t forget that your customers want you to be successful too. You are solving a problem for them through the product or service you provide. They don’t want to see your service degrade or worse case for you to go out of business.

Not increasing your prices is not helping your customers!

If you’re not sure how far your prices have fallen behind your costs, our Pricing Health Check gives you a quick, honest read before you plan your next increase.

Inflation is a constant force in the economy, averaging around 2-3% annually for many countries, although recent years have seen spikes closer to 8-10%. For businesses, this means that the cost of rent, utilities, goods and salaries steadily rises. The impact may be imperceptible over just one year but the compound effect can have a huge impact on a businesses profitability.

To give an example, let’s say your business has annual expenses of £100,000. With inflation averaging 3%, that means your costs increase by £3,000 in the first year and a little more every year thereafter. If your prices remain the same, you’re effectively absorbing this loss directly into your profit margins. Over five years, you’re looking at £16,000 in increased costs.

Unfortunately for many businesses, inflation has gone up by a massive 21% over the last 3 years, with the majority of smaller businesses not passing on those increased costs to their customers and instead eroding their margins.

Inflation is coming down to more manageable levels but there are always new challenges such as recent changes to National Insurance contributions in the UK so it’s more important that ever to get your pricing strategy right and make sure to increase your own prices on an annual basis.

Not sure whether your prices have kept pace? Our Pricing Health Check shows you how much margin several years of rising costs may have quietly eroded.