Raising Prices: When and How to Increase

About half of businesses that raise prices never hit the profit goals they were aiming for. A founder tells customers, “We’re increasing prices next month,” and braces for cancellations—only to see almost no one leave. Same move, opposite outcome. Why?

Netflix’s 2022 price hike is a perfect case study: a $1–2 monthly increase, more than 90 % of U.S. subscribers retained, and roughly $1.2 billion in extra annual revenue. Same climate of inflation and consumer fatigue as everyone else—very different outcome. The difference wasn’t just “charging more”; it was *how* and *when* they did it.

Most companies that raise prices miss their own margin targets—only 41 % hit them in 2022, despite 60 % increasing prices. The gap between those numbers is execution: whether customers see added value, whether groups with different sensitivity are treated differently, and whether people feel blindsided or respected.