Your 2026 Pricing Strategy: How To Justify Price Increases

Based on our survey, 48% of small businesses plan to raise prices in the next six months. This is up from 2025, when only 36% of SMBs considered increasing prices.

Expansion is no longer the immediate goal for the majority of businesses – instead, business owners are looking to save money by reducing costs internally.

With the One Big Beautiful Bill Act (OBBBA), new tax changes in 43 states, and annual filing fees, SMBs are hoping to find short-term relief by increasing prices. While it’s not a long-term solution, it’s a quick fix to protect your margins while navigating the complexity of tariff and tax changes.

After all, our survey found that the majority of operating expenses for businesses go towards taxes and regulations compliance. Right now, the focus for most business owners isn’t expansion, it’s preservation.

How Much Should You Increase Prices By?

We asked business owners how much they plan to increase their prices by, and the majority of SMBs want to raise prices by 2.1-5%. You can see a full breakdown below:

• 39% will increase prices by 2.1-5%
• 33% will increase prices by 5.1-8%
• 11% will increase prices by 8.1-12%
• 8% will increase prices by 0.1-2%
• 6% will increase prices by 12% or more
• 3% aren’t sure

As you can see, most SMBs are playing it cautious with a 2-5% increase, but a large number (44%) of the businesses we surveyed are considering a higher increase of 5-12%.

The Pros and Cons of Raising Prices

While raising prices can protect your profit margins, it also puts you at risk of losing customers and sales to competitors.

Of the 322 small businesses we spoke to, 1 in 4 aren’t sure whether to increase prices. If you’re also undecided, I’ve listed the key pros and cons below to help:

Customers won’t want to pay extra for no reason, so you must highlight the value your business provides to justify the higher price.

When setting your new prices, assess the current market and consider how you can improve the customer experience too, whether that’s through responsive service or personalized messaging. This is the best way to build brand trust and loyalty, while also growing your profits.

We asked SMBs about the methods they’re using to find new customers and retain their existing audience, and there were two clear winners: improved customer service and email marketing.

1. Improved Customer Service

As of January 2026, improving customer service is the number one customer retention strategy for SMBs. If you can provide high-quality shopping experiences, responsive customer support, and transparent communication, your business is more likely to keep customers happy and encourage them to return.

As a result, your business could see an increase in engagement and sales.

A positive customer experience can make your target audience feel valued and listened to, so they’re more likely to stick around if you increase product prices.

2. Email Marketing

After improved customer service, 42% of SMBs use email marketing to connect with customers. Personalized newsletters, welcome emails, and targeted messaging are a great way to build a positive relationship between your business and customers.

Adding a personal touch, with a customer’s name or recommended product based on their recent purchase history, really helps build brand trust and loyalty. And, if you need a helping hand with your emails, you’re not alone – in fact, nearly half of all SMBs use automation or AI to support with personalized marketing and writing.

Of course, raising prices is a risky move and one you need to consider strategically as a business. Here are a few mistakes to avoid:

• Apologizing for the price increase – as a business owner, be confident in your decision to increase prices and remind customers about the benefits of shopping with your brand
• Keeping customers in the dark – be transparent about any price changes you’re making, so customers are prepared for the prices they’ll see at checkout
• Responding negatively to feedback – increasing prices will result in disgruntled customers, so make sure to respond to any negative feedback in a calm and professional manner
• Neglecting long-term planning – while reactive price hikes can help your business increase profits initially, you need to consider how your business plans to succeed over the next few years
• Not educating yourself on external challenges – our survey found that 60% of businesses aren’t changing their financial plan in response to tariffs, largely because they’re confused about complex tariff policies and regulations

With almost half of SMBs looking to raise prices in the next six months, it’s something every business owner should consider if they want to compete in the market and stabilize their overall costs.

Going forward, ensure your business focuses on delivering a high-value, high-quality experience to customers. By investing in the right areas and tools, especially in customer service and email marketing, SMBs will find it easier to justify price increases and build a more loyal and less cost-sensitive community online. This will help your business react strategically to any future economic challenges.