With rising operational and employment costs, and creeping inflation, businesses across the UK are facing significant cost pressures. Swift, strategic action is required to protect margins and maintain competitiveness.

Companies are considering multiple approaches, including cost-cutting, new product launches, and price increases. However, without a robust strategic approach, these actions risk alienating customers as well as failing to deliver sustainable results.

The Executive Survey 2025, delivered by Make UK in association with PwC reveals that 69% of businesses intend to pass on their increased cost to customers to offset rising costs. However, raising prices isn’t as simple as just applying a percentage increase across the board. A poorly planned price increase can lead to customer resistance, sales decline, and loss of market share.

To successfully implement a price increase that sticks, businesses must follow a structured and strategic approach.

 

The 5 Steps to a Successful Price Increase

1. Evaluation: Understand the Full Impact

Begin by reviewing and fully understanding how your business, customers, industry, and competitors have been affected by the rising costs and other recent economic pressures.

Evaluate the specific factors driving cost increases and assess the potential impact on your customers and market dynamics.

A targeted approach based on cost structures, customer value, and competitive positioning is essential.

 

2. Planning: Develop a Tailored Pricing Strategy

A one-size-fits-all approach does not work and ends up fitting no-one. You need to review and model the impact of price changes at customer and product level.

Simulate various pricing scenarios and their impact on volume, revenue, and margin. Involve your Sales team and evaluate the impact on customers.

3. Communication: Reinforce Value & Minimise Pushback

Maintaining trust and confidence both internally and externally is vital. Avoid confusion and mixed messages. A well-communicated price increase is more likely to be accepted. Equip your sales teams with value-based messaging to handle objections.

When communicating to customers explain the why behind the increase whilst emphasising the value you deliver and decide whether to implement the increase in phases or all at once.

When discussing price changes with customers, frame the conversation around value, not just cost.

 

4. Execution: Implement with Confidence and Discipline

Price increases often fail due to poor execution. Ensure success by training sales teams to negotiate and defend the increase with confidence.

Update your systems and contracts and ensure ERP, CPQ, and invoicing systems reflect the new pricing.

There will be instances where an exception is required, monitor these and agree them on a case-by-case basis.

 

5. Monitoring: Measure Success & Adjust Where Needed

Once implemented, continuously track customer reactions and identify any shifts in demand or customer concerns.

Measure margin and revenue impact to ensure the increase delivers the expected financial uplift.

Monitor competitor activity and stay agile and adjust your approach if needed. Continuous evaluation ensures long-term success.

 

Why This Matters

The stakes certainly are high, however, the opportunity to protect profitability and strengthen market position is within reach. Businesses that execute price increases strategically will not only defend their margins but also enhance customer relationships and long-term growth.

If your business is considering a price increase, let’s discuss how to make it a success.