There’s a quiet assumption baked into almost every pricing decision made in the last few years: that the customer can absorb it. Grocery chains raise prices to protect margin against input costs. Streaming platforms raise prices to fund content spend. Insurers raise premiums to offset claims inflation. Landlords raise rent to keep pace with their own costs. Software vendors raise subscription fees because, well, everyone else is.

Each decision is defensible in isolation, a rational response to inflation, input costs, or investor expectations. But no consumer experiences a price increase in isolation. They experience one finite paycheck getting drawn on by every sector at once, sometimes in the same week.

This is the blind spot in a lot of pricing strategy right now: companies model their own costs, competitors, and churn. Almost none model what else is already pulling on that same customer’s wallet before their increase even lands.

Sector pricing committees are, by design, siloed. A telecoms provider raising its monthly fee isn’t in the room when a grocery retailer raises theirs, or when a bank adjusts account fees, or when an energy provider passes through a tariff increase. Each business is optimizing for its own margin, its own shareholders, its own quarter. But the customer on the receiving end doesn’t separate these decisions into categories. They just feel the total getting heavier.

This is how affordability erosion becomes invisible from the inside of any single company, even as it becomes very visible from the outside. This is seen in falling basket sizes, in subscription cancellations, in customers trading down to cheaper alternatives across multiple categories at once, not just one.

And it’s no longer only a lower-income phenomenon. McKinsey’s 2026 State of the Consumer research, spanning Brazil, France, Germany, the UK, and the US, found higher-income consumers, who account for a disproportionate share of spending in most markets, are now adopting the same “make do” behaviors as everyone else: DIY-ing services, budgeting tools, resale over new purchases. Not from necessity, but by choice. When customers with the most room to absorb increases start pulling back anyway, that’s a signal worth watching.

Subscription stacking is the quiet accelerant

No single subscription feels like the one that breaks a household budget. R200 or R300 a month, on its own, is easy to justify. But most consumers are no longer paying for one subscription, they’re paying for a stack: streaming, software, memberships, delivery services, cloud storage, fitness apps. Each renewal notice arrives separately, so no one experiences the stack as a stack. They experience it as a series of small, reasonable decisions that quietly add up to a large, unreasonable one.

This is precisely why subscription businesses are seeing churn accelerate even when individual price increases look modest on paper. The increase isn’t the problem. The accumulation is.

The gap between perception and reality is striking. 2026 research from C+R Research and West Monroe found the average consumer estimates their monthly subscription spend at around R1000 per month, but the real figure is closer to about R2000. That gap surfaces the moment someone actually adds it up, usually right before a round of cancellations.

Loyalty has a ceiling, and so does elasticity

Plenty of pricing strategy leans on the assumption that loyal customers will absorb increases rather than switch. But a lot of what gets called loyalty is actually inertia, the cost, in time and effort, of switching providers. Once staying costs more than leaving, that “loyal” customer becomes a churn statistic, and rarely comes back.

At a certain point, further increases stop growing revenue and start accelerating exit. This isn’t a failure of any one company’s pricing model, it’s what happens when enough sectors hit that ceiling at once, in the same households. The risk isn’t one company pricing itself out of its market. It’s many companies, moving independently, pricing a meaningful share of the population out of discretionary spending altogether.

Average Churn Rate by Industry | B2B vs. B2C

Research published in Harvard Business Review puts the cost of acquiring a new customer at anywhere from five to twenty-five times higher than retaining an existing one. Separate research from Bain & Company found that lifting retention by just 5% can increase profits by 25% to 95%.

Churn data across the industry underscores just how significant this problem is. On average, SaaS businesses lose 38% of their customer base annually, and roughly 29 percentage points come from voluntary churn (customers actively choosing to cancel), while 8 points stem from involuntary churn, largely failed payments that better dunning processes could recover (Churnkey).

Looking more closely, the B2B and B2C segments tell different stories despite landing at similar overall churn rates:

• B2B: 38% annual churn, but voluntary churn drives a much larger share at 84%, leaving involuntary churn at just 16%
• B2C: 39% annual churn, with voluntary cancellations accounting for about 76% of that and involuntary (payment-related) losses making up the remaining 24%

And when are customers most likely to churn? New customers are the most at risk of leaving. Churn drops sharply after the first few months, then continues to decline gradually as loyalty builds. The longer someone stays, the less likely they are to cancel.

Questions that need to be asked

Most commercial teams can answer “can we raise prices” with confidence, they have the cost data, the competitor benchmarks, the churn models. Far fewer can answer a harder question: how much of our customer’s remaining capacity has already been claimed by everyone else raising prices this quarter?

That won’t show up in a standard pricing review. It requires treating the customer’s wallet as a shared, finite resource rather than a captive one, and recognising that businesses competing hardest for share of wallet may, collectively, be the ones shrinking it.

Pricing power has long been treated as a fixed advantage, something a strong brand earns and keeps. But it isn’t fixed. It’s a resource that depletes, especially when every sector is drawing on it at once. So, the real question isn’t how much more the market will bear. It’s how much of it is already spoken for, and whether anyone’s actually checking before they raise prices again.

The way forward is to compete on retention economics rather than acquisition economics.

Most pricing decisions are still funded by an old assumption: that a churned customer simply gets replaced by a new one. That math gets harder to justify when the whole market is under the same pressure, acquisition costs rise as everyone competes for a shrinking pool of customers who can still afford to switch.

Retention economics asks a different question: what does it actually cost to lose a customer permanently in this environment, versus the short-term margin gained from the price increase that pushed them out?

In a market where every sector is competing for the same shrinking pool of customers who can still afford to switch, that gap only widens. Treat churn reduction as a priority equal to customer acquisition, not an afterthought. Even a three-month delay in addressing it can cost you the chance to retain 5% of your customer base.