How much should I raise prices?

A good rule of thumb is 5-10% at a time. This is often below the 'noticeable threshold' for consumers. If you need a 30% increase, it is better to do it in two stages over 6 months or launch a 'New Version' of the product.

Should I tell customers in advance?

Yes. Announcing a price hike creates urgency. 'Prices go up on Friday' is a powerful sales trigger that can lead to your biggest sales week of the year as people rush to lock in the old rate.

What is Shrinkflation?

Shrinkflation is keeping the price the same but reducing the quantity (e.g., selling 10 oz of coffee instead of 12 oz). While effective for preserving margin, it can damage brand trust if customers notice they are getting less.

How to Raise Prices Without Losing Customers: The 2025 Guide

Supply chain costs are up. Inflation is real. Your margins are shrinking. You know you need to raise prices to survive, but you are terrified that your customers will revolt.

Here is the hard truth: Loyal customers expect price increases. They see it at the grocery store and the gas station. They are not shocked by inflation.

They are only angered by unexplained or sneaky price increases.

In this guide, we will give you the scripts, strategies, and psychological framing to raise your prices confidently—and maybe even increase sales while doing it.

Strategy 1: The "New & Improved" Frame

The easiest way to raise prices is to stop selling the "Old Product."

If you raise the price of "Version 1.0" from $20 to $25, customers feel they are paying more for the same thing. It feels like a loss.

Instead, launch "Version 2.0" at $30.

Update the Packaging: A sleek new box design signals a "refresh."
Bundle a Digital Asset: Include a free QR code for a PDF guide or video course. The cost to you is $0, but the perceived value is high.
Add an Accessory: Add a $0.50 cleaning cloth to your sunglasses. Now it's a "Kit."

Why it works: You break the "price anchor." Customers cannot directly compare the new price to the old price because the product has changed.

Strategy 2: The "Last Chance" Sale

Turn your price increase into a marketing event. This creates scarcity and urgency.

The Email Script:

Subject: Bad news (and good news)

"Hi [Name],

We pride ourselves on using the highest quality [Material]. Recently, the cost of raw materials has increased by 40%.

We had two choices: Lower our quality or raise our prices. We refused to lower our quality.

Starting Friday at Midnight, the price of [Product] will increase to $50.

However, we want to look out for our loyal customers first. You can still grab it at the old price ($40) for the next 48 hours.

Stock up now before the change happens."

Result: You will likely have your biggest sales week of the year as people rush to "beat the hike."

Strategy 3: Shrinkflation (Use with Caution)

This is the favored tactic of big food brands. Keep the price exactly the same, but reduce the quantity.

Old: 16oz for $5.00 ($0.31/oz)
New: 14oz for $5.00 ($0.35/oz)

Pros: Customers are more sensitive to price than quantity. They notice a $1 increase instantly; they rarely notice a 2oz reduction.
Cons: If they do notice, they feel tricked. This works best for consumables (supplements, snacks, lotions) but is risky for hard goods.

Strategy 4: The "Grandfather" Clause (For Subscriptions)

If you sell subscriptions (SaaS or "Subscribe & Save"), never raise prices on existing loyal members if you can avoid it.

The Move: "We are raising prices for new customers to $20/mo. But because you have been with us since the beginning, your price stays locked at $15/mo as long as you stay subscribed."

This reduces churn to near zero. Nobody wants to cancel a "legacy rate" they can never get again.

Calculating the "Churn Break-Even"

You will lose some customers when you raise prices. That is okay. You just need to know the math.

Scenario:
Current: 1,000 customers x $10 profit = $10,000.
New: Price hike increases profit to $15 per unit.

How many customers can you afford to lose?
$10,000 / $15 = 666 customers.

You could lose 33% of your customers (334 people) and still make the exact same profit. Plus, you would have 33% less work (shipping/support).

Usually, churn is only 5-10%. This means a price hike almost always results in higher total profit with less work.

FAQ

Should I explain why?

Yes. Transparency builds trust. "Raw material costs" or "Fair wages for our workers" are valid reasons. Customers want to know you aren't just buying a second yacht.

How often can I raise prices?

Aim for once a year. Small, annual increases (3-5%) are expected (inflation). Waiting 5 years and then doubling the price is a shock to the system that causes anger.

What if competitors don't raise theirs?

Then they will likely go out of business or lower their quality. Do not race to the bottom. Position your brand as the "Premium" option that refuses to compromise quality. (See our Race to the Bottom Guide).

Conclusion

Pricing is a signal. A low price signals "Commodity." A rising price signals "High Demand."

Do not apologize for being a profitable business. You need profit to innovate, hire great support staff, and keep the product in stock.

Action Step: Open the calculator. Input your current sales volume. If you raised your price by just $2, how much extra profit is that per year? ($2 x 10,000 units = $20,000). Is fear of a few angry emails worth losing $20k?

How to Raise Prices Without Angering Your Customers (The 2025 Playbook)