After Inflation: How Pricing Conversations With Business Customers Have Changed

What has inflation changed about pricing conversations?

In autumn 2022, one sentence was often enough: “Our energy and material costs have exploded.” Customers nodded because they were experiencing the same. Three years later, the same sentence lands differently with the buyer. He asks which costs exactly have risen, whether energy prices haven't long since fallen again, and why the increase from back then is still in the price.

The period of high inflation has changed pricing conversations for good. Both sides have learned that prices can move and that they have to be negotiated. For owners of small businesses this is both an opportunity and a risk. If you can justify your prices, you have it easier than before 2022. If you merely assert them, you have it harder. So the question is: how do you conduct pricing conversations now that customers have learned to ask why a price is what it is? To answer it, we first look at how high inflation was and why companies pass on cost reductions less often, then at how business customers react to increases, and then introduce the price logbook before turning to price adjustment clauses and demands for reductions.

Inflation taught customers to ask why a price is what it is. Whoever has an answer wins.

How high was inflation, and where does it stand today?

Germany's Federal Statistical Office measures inflation using the consumer price index. For business customers, other prices often matter more, such as those for energy, raw materials, or inputs. The consumer price index nevertheless shows well the climate in which pricing conversations took place.

In 2022, inflation was as high as it had not been for almost 50 years. In 2024 it fell to 2.2 percent, the lowest annual figure since 2011, and stayed at that level in 2025. In 2026 it picked up again: in September the rate was 3.3 percent, in October 2.8 percent. According to the office, energy was 12.2 percent more expensive in October 2026 than a year earlier, heating oil even 84.5 percent, while electricity was 5.2 percent cheaper.

For your pricing conversations this means there is no longer one inflation that everyone can point to. Some costs are rising sharply again, others are falling. Blanket justifications therefore work less well than in 2022. How the new interest rate environment additionally affects your customers' investment decisions is covered in Interest rates and investment.

Why do companies pass on cost decreases less often?

One of the most revealing studies on price setting comes from Switzerland. Seiler (2026) analyzes a survey by the KOF Swiss Economic Institute at ETH Zurich. Between February and April 2022, 1,555 private companies responded, mostly members of senior management. The results were weighted by industry and size to represent the Swiss private sector.

• Prices are reviewed more often than changed. Most reviews lead to no adjustment.
• Costs act asymmetrically. Rising costs for labor, suppliers, and raw materials trigger price increases far more often than comparable cost decreases lead to price cuts.
• Contracts slow things down. Prices stay stable mainly because of explicit and implicit agreements with customers, hardly because of the effort of producing new price lists.
• Competitors set the benchmark. As a reference point for pricing, companies cited competitors' prices more often than a fixed markup on costs.

The study also shows how differently companies review their prices. Among firms that generate more than half their revenue with other businesses, most combine fixed review dates with reviews triggered by specific events.

The survey took place at the very beginning of the inflation wave and concerns Swiss companies. The finding on asymmetry nevertheless matches what buyers raise today. They know that increases come faster than decreases, and they therefore demand evidence.

How do business customers react to price increases?

That a reference to costs reassures customers holds only to a limited extent in B2B. Using data on 966 international customers of a chemical company, Friess and Kassemeier (2024) show that larger price increases depressed revenue with those customers more than smaller ones, even though they were justified by higher raw material costs. The guide Raising prices without losing customers describes in detail how to prepare and communicate an increase and how to answer objections. It also discusses the findings of Damavandi, Antia, and Kopalle (2026) on the effect of different justifications.

For the period after inflation, another idea from Friess and Kassemeier matters. Buyers assess a price increase not only as representatives of their company but also as people in a business relationship. They can accept small increases within their own discretion out of regard for the relationship. Large increases have to be justified internally, and then only traceable figures count.

The price logbook: how to manage prices transparently

The answer to more critical buyers is not toughness but traceability. I call the tool for this the price logbook. It is a simple spreadsheet or a page in your CRM that records, for each important product group, how the price comes about and when it is reviewed.

1. Name the cost drivers

   For each product group, write down the three to five costs that determine the price most, such as materials, energy, wages, freight. Note their approximate share of unit costs.

2. Define reference values

   Assign each cost driver a public or internal reference, for example an official price index, your supplier invoices, or your collective wage agreement.

3. Set review dates

   Fix dates on which you review prices, for example every six months, and define triggers for unscheduled reviews, such as a cost driver jumping by more than a set amount.

4. Document decisions

   At each review, record what has changed, whether you adjust the price, and why. The decision to change nothing belongs in there too.

5. Think in both directions

   Decide in advance how you will handle lower costs. It doesn't always have to be a price cut, but you should have an answer before the customer asks.

An example shows how this helps in the conversation. A metalworking business has recorded for one product group that materials account for 45 percent, wages 35 percent, energy 10 percent, and other costs 10 percent of unit costs.

In this worked example, unit costs rise by 3.3 percent even though energy has become cheaper. If you show the buyer this calculation, you anticipate the question about lower energy prices and answer it instead of defending yourself.

Are price adjustment clauses a solution?

During the inflation period, many businesses began linking prices in longer contracts to reference values, such as an index for steel or energy. Such price adjustment clauses make changes predictable and take the edge off individual conversations. They work in both directions, however: if the index falls, the price falls too.

• Suitable for long terms, large material shares, and costs that can be read off a publicly available index.
• Less suitable for short orders, small amounts, and services whose costs consist mainly of your own working time.
• Legally demanding, because clauses in standard terms and conditions must meet certain requirements. The wording belongs in the hands of a specialist lawyer.

Even without a clause, a shorter commitment helps. Making quotes valid for 30 instead of 90 days, and explaining why, reduces the risk of having to deliver at old prices. The guide Quotes that win describes how to structure quotes so they still win.

How do you handle demands for price cuts?

The new side of the pricing conversation is the demand for a reduction. A buyer who accepted several increases in 2022 now wants something back. This demand is not outrageous but logical. It deserves a prepared answer.

• Check in the price logbook whether the costs mentioned have actually fallen and what share they account for.
• Show openly which costs have fallen and which have risen, and walk through the result.
• If a reduction is justified, pass it on. It strengthens your credibility for the next increase.
• If no reduction is possible, offer something else, such as a longer price commitment, better terms for larger volumes, or an additional service.
• Before the conversation, decide where your floor is and which concessions you will make in return for what.

The guide Negotiating as an owner describes how to set your room for maneuver before a conversation. Answers to typical price objections are collected in Handling objections. And which customers are worth special effort is shown by the calculation in Calculating customer value.

First steps for this week

Don't start with the next round of price changes but with the foundation. A price logbook for your most important product group can be set up in half a day.

• For your top-selling product group, note the three to five most important cost drivers and their share of unit costs.
• Define a reference value for each cost driver and calculate the change since your last price adjustment.
• Put two fixed review dates per year in the calendar and define triggers for unscheduled reviews.
• List the customers who have accepted several increases since 2022 and prepare an answer to a possible demand for a reduction for each.
• Check how long your quotes are valid and shorten the period where costs fluctuate.
• Have it checked whether a price adjustment clause makes sense for long-term contracts.

Back to the opening question, which was how to conduct pricing conversations now that customers ask why a price is what it is. A reference to costs alone no longer carries the argument; buyers ask for evidence and also ask whether lower costs are being passed on. If you address this question openly and record cost drivers, review dates, and rules in the price logbook, you can justify your prices instead of merely asserting them. That is the difference inflation has brought to pricing conversations.