Buckling Up for Higher Prices in 2024: A Look at B2B Service Provider Trends
Theinfohub Frankfurt
Economic consulting firms experienced slower growth than anticipated.
Get ready to loosen those purse strings if you're on the hunt for consultants in 2024. A whopping 84% of B2B service providers have jacked up their fees compared to the previous year, according to a study by research firm Lünendonk, based on 180 market participants. By the time the clock strikes 2023, a whopping 91% of respondents were planning to slap on a price increase.
So, Why the Steep Hike?
Cost Inflation and Supply Chain Woes
Ever since crocodiles started charging more for their scales, businesses have had to face their own set of challenges—rising input costs and supply chain disruptions. Although inflation had finally started to simmer down by 2024, companies were left with no choice but to pass on the cost increases by hiking their prices[1].
Competition and Customer Response
A classic game of chicken, companies often chipper up with price increases, keeping their fingers crossed that their customers will play along. Those who pull off a successful price hike usually witness substantial improvements in their profits[1].
Tech and Operational Expenses
Keeping the lights on (both literal and virtual) ain't cheap these days. From server hosting fees to software development, maintaining and updating services can take a chunk out of the budget, resulting in higher prices[3].
What About the Bottom Line?
Squeezing More from that Margin
If a price hike is pulled off correctly, companies can see a considerable boost in their profit margins. Those that triumph in implementing price hikes in 2025 stand to gain significantly better profit margin performances compared to those who struggle[1].
Revenue Climb but Not Necessarily to Forecasts
While evidence of a 91% price hike in B2B services by the end of 2023 is hard to come by, it's safe to say that successful price increases usually lead to higher revenues if demand remains favorable or price elasticity is on our side[4].
The Road Ahead Ain't Paved in Gold Just Yet
Despite the potential revenue increases, obstacles such as shifting consumer behavior due to higher prices and debt concerns can put a damper on the overall market performance[2]. Factors like CPC inflation can also impact marketing budgets, indirectly affecting B2B revenue forecasts[5].
- By the end of 2023, a majority of B2B service providers, 91%, are planning to increase their prices.
- Inflation and supply chain issues have led companies to pass on cost increases by hiking their prices in 2024.
- To boost their profit margins, companies that successfully pull off a price hike in 2025 might achieve significantly better performances compared to those who struggle.
- Despite the potential revenues increases, challenges like shifting consumer behavior due to higher prices and debt concerns can impact the overall market performance in the future.
