The Pricing Tightrope: Value, Costs, and Market Reality in 2026

I've had more conversations about pricing in the past six months than in the previous two years combined. And - it's getting trickier to navigate.

The pressure is real. Operating costs are climbing. Suppliers are increasing their rates. Staff expect (and deserve) wages that keep pace with the cost of living. Meanwhile, your clients are dealing with the exact same pressures, which means they're scrutinising every invoice that crosses their desk.

If you're in the B2B or services sector, you're probably feeling this squeeze particularly acutely. The textbook answer - 'price according to the value you deliver' - sounds great until you're sitting there calculating how many hours a project will actually take, wondering if your client will think you're taking the mickey.

The Three-Way Pull

You know the theory: value-based pricing is the gold standard. Figure out what your work is worth to the client, not what it costs you to deliver. But here’s where it gets messy in practice.

First, there's the value question. A marketing campaign that generates $200,000 in new revenue is objectively worth more than one that generates $20,000. But if you work smarter and faster leveraging your years of experience to deliver a better result, does that justify you charging ten times as much for one? The value-based pricing purists would say absolutely. The part of your brain that worries about client relationships will hesitate.

Then there's your cost base. You've got to cover your expenses and pay yourself fairly - acknowledging the years investing in training. If a project takes 40 hours and your labour costs $100 per hour, you need at least $4,000 to break even before you even think about profit. Ignore this reality, and you're running a very expensive hobby, not a business.

And finally, there's what the market will bear. You might deliver extraordinary value and have perfectly reasonable costs, but if every competitor is charging half your rate, you've got a problem. Especially when clients are already watching their budgets like hawks.

The Current NZ Reality Check

What makes this particularly challenging right now is that everyone's costs have increased simultaneously. Your clients aren't just tightening their belts for fun - they're genuinely under pressure too. Their rent's up. Their insurance premiums have jumped. Their own suppliers have raised prices.

So when you need to increase your rates to keep your business viable, you're asking someone who's already stretched to pay more. It doesn't matter that your reasons are completely legitimate. The timing just feels ... uncomfortable.

This is where businesses can stumble. Some freeze their prices to avoid difficult conversations, slowly eroding their margins until they're working for less than they're worth. Others push through rate increases without properly communicating the value, coming across as tone-deaf or opportunistic. Neither approach is ideal.

Finding Your Way Through

There's no magic formula here, but there are some principles that seem to help.

Start by being really clear on your actual costs. Not what you think they probably are, but what they genuinely are. Include everything - your time, overheads, the hours that disappear into admin, the software subscriptions, the professional development. You can't make good pricing decisions without knowing your baseline.

Then think seriously about the value you deliver. Be realistic and practical - it's about understanding what outcomes you create for clients. Are you saving them time? Helping them avoid costly mistakes? Opening up new opportunities? Solving problems they can't solve themselves? The clearer you are on this, the easier it becomes to talk about pricing.

Market rates matter too, but they're not the whole story. If you're significantly more expensive than everyone else, you need to be able to explain why - to yourself as much as to clients. Are you genuinely delivering more value? Do you have specialised expertise? Better results? If you can't articulate the difference, you probably need to rethink either your pricing or your positioning.

The Communication Bit

Here's what I've noticed: businesses that weather pricing pressure well are usually the ones that communicate openly with their clients - and at the right time. Not apologetically, but honestly.

If you need to increase your rates, explain why. Most clients understand that costs have gone up across the board. What they struggle with is feeling blindsided or being left to guess whether you're just trying it on. Give them context. Show them you've thought it through.

When you're quoting for new work, tie your pricing back to outcomes wherever possible. Instead of 'This project will take 40 hours at $150 per hour', try 'This approach will help you achieve X, Y, and Z. Based on the scope and outcomes, the investment is $6,000.' It's a subtle shift, but it changes the conversation from cost to value.

And be prepared to walk away from work that doesn't make economic sense. I know that sounds privileged when budgets are tight, but consistently undercharging doesn't just hurt your bottom line - it devalues your expertise and makes it harder to command fair rates in future.

The Balancing Act

Perhaps what makes pricing so challenging isn't that any one approach is wrong. It's that you need to balance all three elements - value, costs, and market conditions - simultaneously, and the weight of each keeps shifting.

Some months, you might take on work that's slightly under your ideal rate because it's for a long-term client going through a rough patch, or because it's an interesting project that builds your expertise. Other times, you'll hold firm on premium pricing because you know the value you deliver justifies it.

The key is making these decisions consciously rather than reactively (and never after you’ve done the work). Know your numbers. Understand your value. Keep your ear to the ground on market conditions. And communicate honestly with your clients.

It won't make pricing easy - it probably never will be. But it will help you sleep at night.

Because ultimately, sustainable pricing isn't about finding the perfect number. It's about finding the sweet spot where you can deliver excellent work, run a viable business, and build long-term relationships with clients who value what you do.

And right now, in this economy, that's worth getting right.