With inflation impacting economies around the world, price increases are practically unavoidable, but that doesn’t mean customers welcome the price change. Even if consumers understand the price increase, it still could impact their buying decisions. How do businesses raise prices without sacrificing customer retention?

You can soften the blow and help ease the minds of your existing customers by offering a professional price increase letter, explaining the decision, and thanking them for their continued business.

How to Write a Price Increase Letter to Customers

Increasing prices can be an unpleasant experience for customers, staff and small business owners alike. Writing a price increase letter to customers can help ease tensions, but what process do you take, and how do you write the price increase letter? The following steps can help ensure you write an effective price increase letter to notify your loyal customers.

Step 1: Notify Team Members

Increasing the current price will impact your entire team, so make sure you notify everyone from sales reps and digital marketing to the customer service team and support staff. You don’t want your employees caught unaware when customer feedback about the impending price increases begins to arrive.

Step 2: Contact Customers Personally

Don’t let your loyal customers learn your plan to increase prices from anyone but you. Contact customers directly to explain the upcoming price hike, and be sure that the messages are personally directed at each individual customer by name. A price increase letter is a good way to notify customers while retaining customer satisfaction.

Step 3: Give Ample Notice

Give customers plenty of time to adjust to your news of a price increase. In some cases, they might need to reassess their own budgets to continue patronizing your business. In other cases, some customers might choose to discontinue the higher-priced service, and it’s courteous to give them ample opportunity to do so. Two months’ advanced notice of a subscription price change is considered a best practice, for example.

Step 4: Get to the Point

Don’t beat around the bush when you compose your price increase email or letter. State upfront that you’ve experienced higher operating costs (or whatever the reason for the increase), and as a result of these rising costs are forced to increase your prices.

Step 5: Express Appreciation

To avoid losing customers, be sure and express appreciation to your clients and demonstrate their value to your brand. Remind your customers that they are the reason for your business growth, and express more value by recognizing their contributions to your success.

Step 6: Emphasize Value

You don’t want to lose customers due to the new pricing, so be sure and emphasize the outstanding products and services that your company has provided them in the past. Reassure your customers that in order to continue providing the same level of outstanding services, the price changes are unfortunately necessary.

Step 7: Announce News

Follow up the disappointing news of a price increase with any exciting and welcome news and announcements. Is your company introducing a new product or service? Will it be including new features to accommodate for the price increase? Knowing you will be offering even more value will help ease any frustration with new prices and turn negative news into something positive.

Step 8: Offer a Timeline

Your customers don’t want to be caught off guard by a price increase. Be sure your customers know precisely when to expect the actual price increase on their bills. Nobody likes the bad news of a service price increase on their bill, but it’s worse to be surprised by one.

Step 9: Accept Feedback and Provide Support

Your price increase may be unpopular, but it’s important to remain open to customer feedback. A few customers might want to reach out and express their concerns, and accepting this communication helps these clients feel valued. Be sure that your price increase email or rate increase letter gives your customers a method to provide their thoughts, further questions, or concerns. Avoid including a call to action, as you don’t want to encourage an onslaught of complaints, but provide contact information for those who seek it.

Price Increase Notice Sample

Looking for a price increase letter template to help you craft your own? Be direct about the upcoming increased costs, and customize the following example to request your customers’ continued support.

Dear [Customer Name],

Thank you for your continued support of [Business Name]. Due to global inflation and unforeseen shipping and raw materials costs, our business will be making a small price adjustment to [Produce or Service] by [$Amount]. The price increase will take effect on [Date].

We understand the effect price increases can have on our customers, and so this was a difficult decision to make. We promise to continue delivering the highest quality products and services to our valued customers, and we thank you for your understanding and continued support during this change. Please contact us at [Phone Number/Email] with any questions, comments or concerns.


[Company Name]

More Examples of Price Increase Letters

You don’t have to use our price increase letter example to notify your customers of higher prices. Plenty of other examples of price increase letter templates are available with key points that will help customers understand the new price.

Template If You Plan to Raise Prices

Dripify offers this great price increase letter example for how to gently inform customers to expect a higher cost while detailing the new pricing plans.

Dear XYZ,

We’re on a mission to be the most affordable and accessible SaaS company for your business. But several market factors, including the raised server expenses and currency exchange rates, pushed us to take a step.

The never-ending wave of inflation has hit us, too, forcing us to raise our prices. We’ve tried to delay this hike for many months, but it’s time.

We’ll be increasing our service charges from $18.99 to $20.99 per month from January 2022.

But the good news is, you’ll get one-month extended services at the current price because you’ve been with us for a while now. You’ll receive another notification when the new price is effective. Till then, use our service to hit your milestones; you got this.

We appreciate your trust in us, and we’ll always keep up with our standards. If you have a question, contact our help center or call us at [Phone number/Email], we’re always there to help.

Mike Trevor


Direct Price Increase Notice Example

Another effective price increase letter template is one offered by Gosite, which reminds customers of the company’s service performance and offers a special deal.

Dear NAME,

Thank you for your continued support. We are grateful for your business.

The market is ever-changing, and these changes have caused price increases in materials, staff, and maintaining the high quality we provide our customers. 

So we can continue to deliver our services at the highest level of quality to you, we will be updating our prices.

Effective DATE, we will be implementing a price adjustment of CUSTOM. You will receive an updated invoice shortly that will reflect your price increase.

We value your business and look forward to your continued support. We are committed to continually bring our outstanding services to you, and believe this price increase will allow us to improve our services even more.

Please feel free to reach out to us if you have any questions.



Price Increase Letter Template with a Focus on Service

In this price increase notification template, Content Snare shows how to reach out to a customer base about a new price while reinforcing superior services offered.

Dear [Customer Name],

I’m writing to let you know that our prices will be increasing by 3% with effect from 1st April. For you, this will mean an increase from $800pcm to $824pcm starting with your April invoice. 

As you know, we value your business and have enjoyed working with you and achieved some great results along the way. Like any business though, our own operating costs do increase over time.

To maintain the level of service you’re accustomed to, this modest increase is necessary, so we wanted to communicate this to you in good time. We’re confident that our prices remain competitive within our sector for the quality of the service that we provide and as always, we’re focused on the results we provide to clients.

I’d like to remind you of the service we provide to you on a monthly basis, which includes:

  • Service 1
  • Service 2
  • Service 3

Thanks again for your business, and please contact me if you have any questions about your new prices.

Yours Sincerely,

[Business Name]

Price Increase Announcement Tips

The fear of losing customers might cause some small business owners to reassess their decision to increase the old price, even if the price increase will allow them to provide better quality. However, a price increase doesn’t have to be painful for you, your team or your customers. Just consider the following tips when making your price increase announcement.

Include Justification

Justification is one of the most important elements of a price increase letter. Customers want to know the reason for the higher costs, such as increased production and distribution costs, and that reasoning can help them to accept the increased rates.

Be Informative Yet Brief

Keep your price increase notice short and to the point. While you want to provide customers with all the pertinent details, you want to do so in as brief a format as possible.

Provide FAQs

Customers might seek additional information that can’t fit on the same page as your brief price increase notification. You can provide a link to an FAQ page attached to your website with additional details about any price hikes. This can provide customers details such as how to unsubscribe from a paid plan, as well as more details reinforcing the value offered.

Be Firm and Authoritative

It’s best to retain a professional tone in your price increase letter and avoid language that is overly apologetic or too explanatory. Most businesses will have to increase prices at some point, and while empathy is appropriate, apologies are not necessary.

Limit Price Increases to Once Per Year

Frequently increasing prices is a good way to lose customer loyalty. When adjusting prices, try and project what rate will allow you to remain profitable for at least the next year so you can avoid additional increases.

What’s another way to say price increase?

Looking for a gentler way to say, “price increase?” Or maybe you just need to avoid repetitive language in your price increase notice. Either way, there are other phrases you can use to communicate a price increase, including:

  • Inflation
  • Price hike
  • Rising costs
  • Price boost
  • Price raise

How do you introduce a price increase?

If you have to increase your prices, it’s vital that you inform your customer base in advance to retain its loyalty. This can be done in a variety of ways, ranging from a website announcement to a personal price increase letter or email. Some businesses might simply post a notice at their establishment, but this less personal contact will have a more negative impact on customer relationships.


Image: Envato Elements

This article, “How to Write a Price Increase Letter + Examples” was first published on Small Business Trends

Source: Small Business Trends

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