How to protect margins and trust when you need to raise prices

Raising prices is one of the most commercially sensitive moves a business can make. Whether driven by inflation, tariffs, wage pressures, or shifts in demand, the result is the same: cost increases put margins under pressure and the need to pass those costs on to customers grows.

Price increases can be a double-edged sword. Handle them well and you protect margins. Handle them poorly, and you risk not only losing revenue but damaging trust. Customers can be quick to notice higher prices and even faster to judge the fairness behind them.

Take inflation. It’s one of the most visible and well-publicised reasons for price hikes, yet also one of the most mistrusted. Businesses experience it through rising input costs and shrinking margins. Customers experience it as higher bills and reduced spending power. Add to that a media narrative we sometimes hear of ‘greedy’ businesses profiting during tough times, and you’ve got a trust gap that’s difficult to close.

If this trust gap isn’t managed carefully, the impact can be felt in both your margins and your customer relationships.

In this article, we explore how to raise prices with intention and transparency. Whether inflation is the trigger for a change in pricing or not, we’ll give you the ideas, tools and strategies to keep customers on side:

• Communicate price changes in a way that builds credibility
• Frame pricing decisions through the lens of customer value
• Avoid common pitfalls that undermine trust and confidence

Why customers don’t see inflation price rises the way you do

Inflation is the incremental increase in the price of goods and services over time. It’s inevitable that costs will rise, but how fast and how much can dramatically impact your business.

For example, you may be affected by high raw material costs, perhaps your workforce is looking to you to raise wages, or you may be managing the effects of increased tariffs and duty fees. For many, the answer is to charge more for their products and services to cover costs.

But it’s not always that straightforward.

From the inside, it can feel like a simple financial equation. You’re covering higher costs, protecting profitability, keeping the business on track. But from the outside, customers aren’t working off your spreadsheet. They’re making a judgement about whether your product or service still feels worth it.

Although UK inflation has been trending downward since its peak in 2022, many customers are still feeling the effects. A return to “normal” inflation levels doesn’t necessarily mean a return to normal consumer sentiment, especially with ongoing political uncertainty and the lingering impact of higher costs. According to the BBC, “prices in the UK rose by 3.6% in the 12 months to June [2025].” For many, that still translates into higher bills and tighter budgets, making them more sensitive to what they’re being asked to pay.

It’s this often overlooked difference that is at the heart of the risk to any company when increasing pricing. But there are ways to protect both margins and trust. Value communication, bundling, and being smart about your price architecture can help maintain profitability, while transparency can turn a price rise into an opportunity to strengthen, not weaken, customer relationships.

How smart companies do pricing strategy differently

How you communicate your prices has much more impact than many businesses give it credit for. It’s not just how, but what you say that’s important. In fact, there is a whole specialism dedicated to pricing communication tactics that can help you land a price increase message with your customers in a way that builds loyalty and trust.

When it comes to increasing prices under pressure, due to inflationary or other forces, there are a number of pricing strategies that can be applied to help protect margins without damaging your consumer trust.

1. Highlight add-on costs to preserve customer perception

If cost increases are out of your hands, in some cases, it’s possible to highlight the root cause of your price increase in a way that distinguishes external cost pressures from your overall pricing strategy. You will need to choose your moment well and speak with clarity and honesty.

Example:

In 2025, American cycling brands faced new tariffs being imposed on imported parts and products. One leading brand, Specialized, opted to face the tariff head-on by listing it out separately on invoices of affected products.

For example, this message can be found at checkout on the Tubo Levo 4 Pro: “This surcharge is limited to specific items and helps minimize the impact of government-imposed costs on the price of Specialized bikes and equipment”

By spelling it out, they avoided ‘greed’ perceptions and helped buyers see the broader market forces at play, keeping their customers on side.

2. Give options without diluting value

Good-better-best is a proven pricing strategy that works by attracting lower-value customers while allowing your business to also charge a premium rate for ‘top-tier’ products. So, why is this so valuable during times of inflation? It’s all about choice and value protection.

Example:

The Apple iPhone lineup has long been a prime example of a pricing architecture that protects brand value. Their tiered structure of pricing, from the ‘affordable’ entry-level model to the ‘professional grade’ model, lets them offer a broad price range without undermining the brand.

Each tier builds on the last with distinct upgrades: improved cameras, materials, processors, and finishes. These enhancements justify higher prices and encourage trade-ups, all while preserving the quality perception of entry models.

With the iPhone 16 launch in September 2024, Apple added an even more affordable model to the lineup. The iPhone 16e, was priced at £200 lower than the iPhone 16, featuring a single rear camera, a smaller battery, and a slightly less bright display. It maintained the cache of the brand at a more approachable price, allowing customers to make up their own minds on what value the additional features are worth to them.

Thanks to the added lower-value choice, unlike their competitors, the brand didn’t need to raise prices across the rest of the lineup. Instead, they were able to appeal to more audiences and raise profits without seeming to transfer rising costs to the consumer.

3. Anchor price changes using value, not cost

An important element of pricing psychology is helping buyers see the value in your products at the point of purchase. This is no less true when communicating a price rise. By showing customers extra value alongside a price increase, customers can make a rational assessment, rather than an emotional one.

Example:

HubSpot, which offers a suite of marketing, sales, and service tools with tiered pricing, doesn’t talk about what rising prices are based on (e.g. increased server running costs or the hire of new engineers). Instead, they focus on added value and benefits for the end customer with messaging like

“While 78% of marketers report increased personalisation capabilities, your team saves 2.5 hours daily on manual tasks.”

Their communications emphasise business outcomes—such as ROI and efficiency gains—shifting the focus away from cost and toward positive impact.

4. Turn expenses into an asset with cost transparency

Where the value of your product or service goes beyond consumerism to a bigger cause, for example, community or the environment, you have an opportunity to turn inflationary pressures into a part of a positive brand story.

Openly sharing the ‘why’ behind your pricing decisions can be an effective way to bring your customers along on the journey, even when everyone is feeling the pinch. However, it has to be authentic, a well-documented part of your brand mission, or you risk doing more harm than good.

Example:

Dr. Bronner’s pricing strategy is inseparable from their unique philosophy (“from soakmaking to peacemaking”). The soap company, known for its distinctive, densely-printed labels, has a history of price adjustments.

Like many businesses, Dr. Bronner’s has faced challenges due to the rising cost of raw materials like coconut oil, olive oil and hemp oil, which impact the final product price. On top of this, they are committed to sustainability and Fair Trade, which play an essential role in their pricing decisions. They’ve turned even their price increase into a brand asset by highlighting and owning those fluctuations:

While showing that they could cut corners to make cheaper soap, forgo sustainable materials, pay workers less, or skip organic certification, they’re also proving that they never would. They are aligning with their core brand principles to justify a higher price point over their cost-cutting competitors and winning fans and allies amongst those who are prepared to pay more for a higher cause.

5. Introduce ‘break points’ to give customers time and choice

Showing that you respect your audiences’ right to choose helps to show commitment to customer service. Not all price changes need to be immediate or binary. Forward-thinking businesses use future-dated changes, grace periods or usage thresholds to give customers time to adapt, or opt in on their own terms. These ‘break points’ soften the impact of rising costs and build goodwill, helping to reduce churn.

Example:

For example, Hershey announced in July 2025 that it would raise prices across its U.S. confectionery portfolio due to increased cocoa costs. However, the company intentionally held off on hiking the prices of seasonal products, such as Halloween and holiday candies, and delayed the full rollout of higher pricing until Easter 2026. This gave both retailers and consumers time to plan. Being mindful of how you talk to customers can go a long way to helping to nurture trust even in more challenging times.

Our top tools for navigating price increases

So, what next? Why not get started with our top three tools to help build your pricing strategy:

• Bank of England Inflation Calculator
  Free to use and insightful for any company, no matter what products or services you offer, the Bank of England’s self-service digital tool lets you check how your prices might need to change within the context of the current inflation landscape.
• Ask a pricing strategy expert
  Now couldn’t be a better time to consider talking to an expert about a pricing appraisal. A specialist team like ours will be able to offer an expert view of where you’re at with your pricing and what you should be doing next to maintain healthy margins in the light of external cost pressures.
• Understand the link between transparency and trust
  Transparency and perceived fairness are intimately linked. In fact, the amount of transparency required to be seen as ‘fair’ is directly related to the size of the price increase.

This research paper found that “a limited explanation was fair for small price increases, while a more detailed cost explanation was appropriate for a larger price increase.”

Is your pricing strategy ready?

Raising prices—whether due to inflation or other pressures—isn’t just a financial decision. It’s a test of how well your business understands, communicates, and delivers value. The tools and tips in this article are designed to help you approach pricing decisions with clarity and confidence.

As we’ve seen time and again, the businesses that treat pricing as a strategic lever emerge stronger. So why not get ahead now by building a flexible, inflation-ready pricing strategy that prepares your business for what’s next?

If you’d like support shaping a pricing strategy that protects both profit and perception, we’re here to help.