Pricing strategy: changing what you charge without losing the people who pay it

A nickel for seventy-three years

For 73 years, from 1886 to 1959, a 6.5-ounce bottle of Coca-Cola cost five cents. Not because Coca-Cola decided, every year, that five cents was right. Because it could not change it.

In 1899, wanting to grow without paying for bottling plants, Coca-Cola had sold the bottling rights and supplied the syrup on fixed terms. That contract encouraged a fixed shelf price. Vending machines took a single coin. A price between a nickel and a dime was close to impossible.

In 1953 Coca-Cola's president, Robert Woodruff, asked his friend President Eisenhower to have the U.S. Treasury mint a 7.5-cent coin. The request was declined. The nickel finally broke at the end of the 1950s.

Now set that beside Amazon Prime. In 2011 Amazon added streaming video to the bundle for free. In March 2014 it raised the annual fee from $79 to $99, and in 2022 from $119 to $139. By 2021 Prime had more than 200 million members. Each rise landed on a richer bundle, so members compared it with a better product than the one they had signed up for.

That is the whole decision in two stories. A price is never just a number. It is tied up in contracts, machines, habits and, above all, in what customers compare it with. This guide is about moving it anyway.

What pricing strategy is

The last two matter more than they sound. Charging per employee instead of per user, or by subscription instead of once, changes what the customer thinks they are buying, not just how much. And some companies, like Hermès and Ferrari, decide who gets to buy before they decide what to charge.

Why it is so hard

A price is the easiest thing in a company to change on paper. Three things make it hard in practice.

The ways companies did it

The decisions on record take four shapes. Each moves a different part of the price.

What 54 companies did

Here is every decision on record, placed by the year it was made and marked by how it turned out. Hover a mark, or open the table, for the company and the outcome.

Of the 51 decisions that can be judged, 38 were never undone, 6 were walked back and 7 were kept only in part.

A price, once moved, tends to stay moved. Tesla's 2023 cuts were never undone, and neither was the fall in its margin that came with them. "Never undone" means the company kept the price, not that the price did what it was meant to.

The walk-backs

Put the pricing decisions that were walked back side by side and a pattern shows. Each price was set by what the company needed: a margin target, a platform plan, a public promise. None of them started from what customers would pay.

The price rises that held did something different first. Amazon made Prime richer before it charged more. Spotify waited until Apple and Amazon had raised their prices, so it was catching up rather than leading. Chick-fil-A raised prices every year but stayed below the chain its customers compare it with.

Costco shows the same discipline with a fee. It waited seven years, then raised the Gold Star membership by just $5 and said so well in advance. Membership fee revenue rose 10% to $5.32 billion in fiscal 2025, and the U.S. and Canada renewal rate slipped only from 93.0% to 92.3%.

Customers do not judge a price. They judge a price against something.

What the share price did

For many of the decisions there is a clean market record: the company's total return over the three years after the decision, against the S&P 500.

The chart does not sort by whether the price was right. Tesla's 2023 price cuts held and took its automotive gross margin from 32.9% to 18.7%, and its shares beat the index by 161.7 points over the next three years. NIO's cuts the same year trailed it by 116.6. Eli Lilly cut insulin by 70% and beat the index by 144.1 points, carried by its newer drugs.

A pricing decision is a small part of what moves a share price. Judge it by what happened to volume, margin and the customers you kept.

How to run this decision

If you are weighing a version of this choice, here is what the record suggests doing, in order.

1. Decide whether you are changing the number or the unit

   Ten percent more per seat is a number. Per user to per employee, or a one-time sale to a subscription, is a change of unit. Customers re-judge the whole relationship when the unit changes, so plan it like a product launch, not a price update.

   Seen in: Adobe, 2013 · Oracle, 2023
2. Give customers something new to compare the price with

   Before a rise, make the product better or the bundle bigger, so that the new price lands on a better offer. Amazon added video to Prime three years before it raised the fee, and members compared the new price with the richer service.

   Seen in: Amazon, 2014
3. Know which price your customers compare you with, and stay on the right side of it

   It is usually a rival, sometimes your own old price. Spotify moved after Apple and Amazon did. Chick-fil-A raised prices every year and still looked restrained next to McDonald's. Find your reference before you move.

   Seen in: Spotify, 2023 · Chick-fil-A, 2022
4. Watch volume, not just revenue

   A price rise always looks good in the revenue line first. Track how many units customers buy, and how many customers stay, every month after the change. That is where the cost of a wrong price shows up, often a year later.

   Seen in: Nestle, 2022 · Mondelez, 2025
5. Never promise a price you do not control

   A price tied to a coin, a slogan or a public pledge becomes hard to move when costs or rivals move. McDonald's spent years retreating from the dollar. Promise value, not a number.

   Seen in: McDonald's, 2002
6. Test where a mistake is cheapest

   Try the change in a few small markets first, and write down what result would make you stop. Netflix piloted paid sharing in Latin America in 2022 and widened it market by market through 2023, so the markets that carried most of its revenue came last.

   Seen in: Netflix, 2022

To work the numbers for your own case, read Price increase strategy: how much volume can a rise afford to lose?.

Warning signs

What it has looked like when this decision was going wrong.

• Revenue is up on price while the units sold are falling.Mondelez, 2025 · Nestle, 2022
• The price is set by what the margin target needs.Stellantis, 2022
• Someone has publicly promised a price.McDonald's, 2002
• The plan describes customers as captive.Broadcom, 2023

All 54 cases

Each case is one company at one decision: what was on the table, what it chose, why, and what followed, with every fact sourced.

Questions

What is a pricing strategy?

A company's choice of what to charge, for what unit, and how that changes over time. It includes raising and cutting prices, changing what the price is charged for (such as moving to subscriptions), and rationing access instead of raising the price.

How do you raise prices without losing customers?

On record, the rises that held gave customers a better comparison: a richer product first, as with Amazon Prime, or a price still below the rival customers compare with, as with Chick-fil-A. Watch volume closely afterwards, not just revenue.

What are examples of pricing strategy changes?

Amazon raising the Prime fee after adding video, Adobe moving to subscriptions only, Netflix charging for shared passwords, Eli Lilly cutting insulin list prices by 70%, and Hermès allocating Birkin bags instead of selling them to whoever pays.

Why do price changes fail?

The ones on record that were walked back were set by what the company needed rather than what customers would pay: a margin target, a platform plan, or a public promise about price that rising costs made impossible to keep.