Your Price Moves Once a Year. Make This the Year. Right Now.

Eight times a year, the Federal Reserve Bank of Cleveland asks business owners and leaders across our region how things are going, and publishes what it hears. It’s called the Beige Book, and it is about as plain as economic reporting gets. No grand forecasts. Just people who run things describing what they see.

The October report has one sentence I’d put in front of every leadership team in Northeast Ohio this month:

“Many contacts across sectors noted that their prices are set annually or by contract.”

And the thought that follows: “they anticipated raising prices at upcoming renewals.”

That reads like an ordinary observation. It’s also a warning hiding in plain sight.

What the report says

From the outside, the picture is a region doing fine on activity and getting squeezed on costs. Business activity in the district “increased modestly.” But “Nonlabor cost pressures remained robust for the eleventh consecutive reporting period.” Fuel led the way and spread into freight, packaging and materials. One builder called the mix of high fuel costs and tariffs a “double whammy.” “Many services contacts cited sharp increases in health insurance premiums,” and professional firms noted rising costs for software, AI tools and computer hardware.

The outlook: “Looking ahead, contacts expected nonlabor cost pressures to remain robust.”

On the selling side, the report found a split. Manufacturers kept raising prices to cover higher costs. But “Some restaurateurs and grocers held prices steady or increased them only selectively,” because customers were price sensitive and competitors were close.

If your price moves once a year, this is the year

Here is why the annual pricing sentence matters. If your prices reset once a year, every month you wait is a month of rising costs you have already agreed to absorb.

Your price decides how hard your year is. Take your profit goal and divide it by the margin you make on each sale. That’s the volume you need. When costs climb and price stands still, the margin shrinks and the volume you need climbs right along with it. Underpricing quietly turns a reasonable plan into an impossible one.

So my rule is simple. Raise prices at least with inflation, every year. Not when it hurts. Every year.

Run it like a campaign

The companies I see handle this well don’t treat a price increase as an awkward email. They run it as a campaign:

One owner. A name, not “sales” or “finance.”
A date. The renewal date is the deadline, so the decision gets made 60 to 90 days before it.
The numbers. Margin by product or service line, so the increase lands where costs actually moved.
The steps. Who hears first, what we say, how we answer the hard questions, and what the team does when a customer pushes back.

Will some customers leave? A few might. In my experience they’re usually the ones who didn’t value you much in the first place. The clients who are a “Hell Yes” for you tend to stay, and profit often goes up even with fewer accounts.

The other side of the story

There is a sobering line in this report, too. In a semiannual survey of nonprofit organizations, 87 percent said their clients’ financial well-being had declined over the past six months, “the highest share in the survey’s history.” Customers are feeling it.

That’s a reason to price with care and to explain your value clearly. It is not a reason to skip the increase and hope the year cooperates.

If you are building your 2027 plan right now, put pricing on the agenda with an owner and a date, before the renewal letters go out. The tools we use for this season are on the Annual planning hub.