After 16 years running Green Planet Cleaning Services in the San Francisco Bay Area, I've learned that how you handle input cost swings can make or break client relationships. Our approach has always been transparency first, knee-jerk price hikes last. When costs spike — whether it's our eco-friendly cleaning products, fuel for our fleet, or rising wages for our W-2 employees — I run through a simple framework. First, I ask: is this temporary or structural? A short-term supply chain hiccup on a specific product doesn't warrant repricing our entire service menu. We absorb it and move on. But when something fundamental shifts, like minimum wage increases or a permanent jump in the cost of non-toxic cleaning supplies, that requires a real conversation. For structural increases, I've found that adjusting list prices with advance notice works far better than surcharges. Surcharges feel sneaky to clients — like a hidden fee on an airline ticket. Nobody likes that. Instead, we communicate directly: "Starting next quarter, our rates will increase by X% to reflect rising costs of our premium eco-friendly products and fair wages for our team." We frame it around the value they're already getting. One specific example: back in 2022, the cost of our plant-based cleaning solutions jumped nearly 30% due to supply chain issues. Rather than passing that through immediately, we absorbed it for about six weeks while we tested alternative suppliers. When we couldn't find a comparable eco-friendly option at the old price, we raised our base rates by about 8% — well below the actual cost increase. We sent a personal email to every client explaining why, emphasizing our commitment to non-toxic products and that we'd absorbed as much as we could. We lost maybe two clients out of over a hundred. Several actually replied saying they appreciated the honesty. The key was framing the increase around what clients already valued — the quality and safety of the products we use in their homes — rather than just passing through a cost number. Protecting long-term demand is really about protecting trust, and trust comes from being straightforward about what's happening and why. Marcos De Andrade, Founder & Owner, Green Planet Cleaning Services — greenplanetcleaningservices.com
My decision framework has three tiers based on how long I expect the cost increase to last. If it's a temporary spike, under 90 days, I absorb it. Anything between 3-6 months gets a transparent surcharge with a published expiry date. Permanent increases get baked into new list prices with 30 days notice. The move that protected demand without backlash happened during the 2023 cloud infrastructure cost surge. AWS and Azure both increased pricing, which pushed our hosting costs up 18% overnight. Instead of raising prices across the board, we introduced a temporary infrastructure surcharge of 8% and absorbed the remaining 10% ourselves. We sent every client a plain-language email explaining exactly what changed, showing the actual AWS pricing notification, and committing to remove the surcharge within 90 days if costs normalised. The transparency was the key. Not a single client complained. Three actually thanked us for the honesty. When costs partially came down after 60 days, we reduced the surcharge to 4% and eventually removed it entirely at 85 days. We retained 100% of clients through that period, and two prospects who were evaluating us at the time said the transparency during the surcharge was what convinced them to sign. Hiding cost increases or silently padding margins always gets discovered eventually.
Sharp swings in input costs usually call for restraint before reaction. A pricing change can solve a short term problem while quietly damaging long term demand if customers feel surprised or squeezed. At Scale by SEO we look at cost changes through three filters before touching list prices. The first is duration. Temporary volatility rarely justifies a permanent price change. The second is visibility. If customers can easily see the cost increase in the market, they are more receptive to an adjustment. The third is demand sensitivity. Services tied directly to revenue or lead generation tend to tolerate modest adjustments better than discretionary add ons. A good example came during a period when software and data provider fees jumped almost 35 percent in a single quarter. Rather than raising retainers across the board, we introduced a clearly labeled analytics surcharge tied specifically to third party data costs. The amount was modest, around 4 percent of the monthly fee, and the explanation was transparent. Clients understood that the charge funded the tools producing their keyword data and reporting. Demand stayed steady and churn remained below 2 percent that quarter. Once costs stabilized, the surcharge was quietly rolled back. That approach protected margins while preserving trust, which often carries more long term value than a quick price increase.
When input costs swing quickly, we favor moving volatility into a usage-based charge while keeping a small, predictable platform fee rather than repeatedly changing list prices or relying on ad hoc surcharges. We tested that approach by replacing all-you-can-eat pricing with a hybrid model (platform fee plus per-study usage) across 10 sites for 90 days. That test improved win rate by about 12 points, raised ARPU roughly 23 percent, and sped payback enough that we rolled the model out company-wide. The combination gave customers budget certainty while letting power users scale, which protected long-term demand without sparking customer backlash.
I decide by anchoring the choice to measured customer acquisition cost and contribution margin: we run small, segmented tests, fix obvious funnel leaks, and only scale or change pricing once CAC stabilizes. If CAC and margin can absorb the input cost swing after those fixes, we absorb the hit short term; if not, we prefer targeted adjustments such as segment-specific price changes or temporary surcharges rather than a blanket list increase. We always test any consumer-facing change in a controlled way and prioritize conversion improvements before raising prices. For example, at Eprezto we shifted promotion and pricing emphasis toward limited liability policies because they had lower CAC and stronger contribution, and we simplified the purchase flow instead of raising overall list prices, which protected long-term demand and avoided broad customer pushback.
When input costs swing quickly I prioritize predictability for customers over abrupt list price hikes. Building a local steel plant taught me to rely on transparent pricing logic and firm delivery-time proofs when explaining short-term adjustments. We reserve surcharges for truly unavoidable shifts and absorb small fluctuations when it keeps projects on track. For example, after opening the plant we used a clearly explained, time-limited pricing adjustment paired with delivery commitments rather than a sudden list price increase, and that approach protected demand without sparking customer backlash.
When input costs swing quickly, we consider our current price position, the scale of cost increases, and competitor pricing to decide whether to change list prices or absorb the margin. In our case we chose to adjust list prices rather than absorb the cost or layer on surcharges. Over the last year we raised prices three times: first to correct being too low, then to offset inflation and sharply higher shipping and material costs, and finally to align with competitors. That measured approach protected long-term demand, customers did not pull back and, in fact, we have been overwhelmed with orders.
When input costs swing, I start by asking whether the customer's perceived value has changed; if it has not, I avoid quick list-price increases and look first for cost moves that protect the same experience. If the change is temporary, a surcharge can be a cleaner option than resetting the list price, but only if it is simple, clearly explained, and easy to remove. If the change is small and short-lived, I may absorb it to protect trust and price integrity. One move that has helped at The Bag Icon is working at the manufacturing and materials level, such as standardizing shared hardware across styles and streamlining construction, so we can hold the retail price steady while maintaining the quality customers expect. That approach protects long-term demand because customers still see the same design and durability, and it avoids the frustration that comes with sudden sticker changes.
As input costs swing quickly, I favor approaches that preserve predictability for clients rather than frequent list price changes or ad hoc surcharges. We implemented a monthly subscription model for our digital marketing services instead of relying solely on investor funding. That move created predictable recurring revenue and customers responded positively because it gave them clarity, flexibility, and better control over their marketing budgets. By offering a steady monthly price, we protected long-term demand without sparking customer backlash.
When input costs swing quickly, I treat pricing as one lever among sourcing and channel choices and keep our revenue plan flexible. Rather than immediately raising list prices, we first explore sourcing shifts and channel tactics to protect margin without hurting demand. For example, during the disruptions of 2025 we prioritized those levers to hold posted prices steady while managing cost through alternate sourcing and channel adjustments, which maintained long-term demand and limited customer backlash. We then communicate clearly about temporary operational changes so customers understand the path forward.
Diesel jumped 40% in 2021 and I watched half my fulfillment competitors immediately slap fuel surcharges on their invoices. We didn't. Instead, we locked pricing for existing clients through their annual renewal and built the increased cost into new customer contracts. That decision cost us about $180,000 in margin over six months, but we didn't lose a single client to churn that year. Here's what I learned: surcharges feel like punishment even when they're justified. Customers see them as nickel-and-diming, not transparency. When you absorb short-term cost spikes for existing relationships, you're buying loyalty that compounds. Those clients referred four new brands to us during that same period because we became known as the partner who wouldn't surprise them mid-contract. The trick is knowing which costs are temporary versus structural. Fuel swings? Usually temporary, so I absorbed them. But when labor costs jumped permanently in our market, we adjusted base pricing for all new contracts and had honest renewal conversations three months before existing deals expired. No surprises, just "here's what changed in our cost structure and here's the new rate starting next quarter." I also built a buffer into our pricing model from day one, about 8-12% cushion depending on service tier. Most founders price to their current cost structure with razor-thin margins, then panic when anything moves. That's backwards. Price for the volatility you know is coming. The worst move is reactive pricing, changing rates every time your costs hiccup. Customers can't budget around chaos. At Fulfill.com now, I tell brands to look for 3PLs with annual or biannual pricing reviews built into contracts, not quarterly "adjustments" that are really just excuses to raise rates. Predictability is worth more than rock-bottom pricing because it lets you actually plan your business. One more thing: if you do need to raise prices, lead with the value you've added since the last increase. We once raised rates 7% but paired it with new technology integrations and expanded carrier options we'd invested in. Nobody complained because the conversation wasn't about our costs, it was about their improved service.
Backlash usually happens when people are surprised or feel singled out. During a period of high wage inflation, we faced higher delivery costs in several markets. Instead of raising list prices for ongoing agreements, we introduced a temporary premium for rush timelines where the cost pressure was the highest. We made sure to frame it as a choice, with standard delivery staying the same and the rush work clearly marked with an add-on and a published end date. Clients appreciated the honesty, and many chose to adjust their timelines instead of walking away. Long-term demand stayed healthy because we did not change the rules midstream. At the end of the period, we shared a brief update showing that the premium was removed as promised. This follow-through mattered more than the numbers.
In the electrical industry, material costs can fluctuate quickly, especially for copper cable, switchgear, and electrical components. The key is adjusting pricing in a way that customers perceive as fair and transparent. At Bright Force Electrical we try to avoid sudden base price increases. Instead, when material costs spike temporarily, we apply project-specific material adjustments rather than changing our overall pricing structure. For example, during a period when cable prices increased significantly, we kept our service rates unchanged but clearly itemised the material cost in quotes. Customers could see that the labour price had not changed and that the adjustment was tied directly to supplier pricing. This approach protected demand because clients understood the reason for the cost difference. When material prices later stabilised, the quotes naturally returned to normal levels without needing another price announcement. Transparency tends to prevent backlash. Customers are usually reasonable when they can see exactly where the cost change comes from.
When material or freight costs move quickly, we try to avoid sudden list price changes that create uncertainty for customers planning store projects. Instead, we assess whether the change is temporary or structural before adjusting pricing. During a period of rapid freight cost increases, we introduced a temporary freight surcharge rather than increasing shelving prices across the board. Customers could clearly see the reason for the adjustment and understood that it was linked to shipping rather than product pricing. Once freight stabilised, the surcharge was removed, which helped maintain long-term trust while protecting margins during the spike.
CEO at Digital Web Solutions
Answered 2 months ago
We start with a decision tree based on customer memory. People remember list prices and accept surcharges when they are clear and temporary. They do not notice margin absorption, but it can hurt delivery if you cut too deep. We track the impact in three stages: under eight weeks, we absorb costs and focus on efficiency. Between eight and twenty-four weeks, we apply a surcharge with a clear end date. After twenty-four weeks, we adjust list prices but only once and with a clear value explanation. We also protect long-term demand by keeping entry-level prices stable. Higher tiers, where customers are more willing to pay, are adjusted to keep adoption easy while maintaining business resilience.
When input costs fluctuate quickly, the first step is evaluating whether the change is temporary or structural before adjusting pricing. In one situation, we avoided altering the base price and instead introduced a clearly explained, temporary adjustment tied to the underlying cost shift. Framing it as a transparent response to market conditions helped customers understand the context rather than feeling surprised by a permanent change. It also signaled that the core pricing philosophy remained stable. The broader lesson is that clarity and context often matter as much as the pricing move itself.
I avoid sudden price changes unless absolutely necessary. One time we held pricing steady but clarified service value more clearly instead. Demand stayed stable because customers understood what they were paying for. In service businesses, clarity often protects margin better than reactive pricing.
When costs move quickly, I look at two things first. How temporary the change might be and how sensitive customers are to price shifts. Short spikes usually call for smaller, temporary adjustments. Structural changes sometimes require a real price update. Absorbing the increase is always an option, but only when the margin impact stays manageable. Sudden list price jumps can damage trust, so I prefer a measured response that keeps pricing predictable. One situation stands out from a period when infrastructure and software costs increased faster than expected. Instead of raising base prices across the board, we protected existing customers and adjusted pricing for new plans moving forward. That decision protected long term demand and customer trust because current users did not feel penalized for staying with the product. Over time the new pricing aligned revenue with costs without creating backlash or churn.
Service businesses almost always make the mistake of absorbing cost increases; this is a type of hidden debt that will eventually negatively affect your quality of service. We do our best to avoid using surcharges because they seem too transactional and can create friction between businesses and customers-customers typically do not view surcharges as legitimate adjustments, only as arbitrary fees. Instead of absorbing the cost increase, the most effective method of handling surcharges is to maintain your base price while providing clients with carefully-priced, tiered options that allow them to have more control over their own budgets. A few years ago, we experienced a sudden spike in our operating costs and, rather than impose a uniform price increase on all of our clients, we "unbundled" our delivery system; created a new "lean" tier for clients that did not require delivery; and were subsequently better able to satisfy the needs of both clients that wanted to maintain their existing budget and clients that were looking to reduce their costs. By giving clients a choice, we were able to assist them in meeting their budgetary needs as a partner rather than as a vendor, increasing our likelihood of long-term retention. Pricing serves the primary purpose of being a signal or indicator. If you change your pricing without providing your clients with new options or new forms of transparency, you are basically asking for an argument. By providing your clients with choice over their expenses, you develop the kind of trust that is able to withstand the uncertainties of the market.
We had a period when platform-level infrastructure and compliance-related costs spiked. We decided not to raise list prices, as we knew buyers were already dealing with budget scrutiny. Instead, we introduced a small surcharge that applied only to contracts requiring elevated security reviews. This surcharge was optional since clients could choose a standard path. We communicated it as a pass-through fee tied to specific requirements. We also set a review date and shared the criteria for removal. This approach prevented the surcharge from feeling like a hidden price hike. Demand remained steady, as most customers did not need the extra layer. When our internal processes improved, we reduced the surcharge for renewals which protected relationships.