How to Send a Price Increase Notification (The Right Way)

Imagine you’re facing rising costs, but you’re afraid to tell your customers. Sound familiar? If you are reading this post, it is already time to let go of your hesitations and send your customers the much needed price increase notification.

Browse email templates for sending a price increase notice.

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Business Expenses: Recent Stats

In the third quarter of 2024, hourly labour costs rose by 4.6% in the euro area and by 5.1% in the EU, compared with the same quarter of the previous year.

On average, service firms expect costs to rise at a 5.7 percent pace, while manufacturing firms expect cost increases to rise 2.5 percentage points to 7.3 percent. (Source)

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The fear of a price increase notification is real. But what if it’s the key to your business’s sustainability?

Price is just one piece of a ‘good deal.’ Delivering exceptional service, ensuring on-time delivery, and maintaining transparent communication are equally crucial. If you’re excelling in these areas, don’t let fear hold you back. 

Increasing costs is an integral part of business, and you have every right to adjust your pricing accordingly. But what happens if you don’t? So let’s look at the alternative. 

This price increase is not arbitrary. There is a valid business justification for the proposed price increase. These could be an increase in raw material costs, higher manpower costs, external factors such as an unplanned increase in logistics costs etc. 

One or more of these reasons make it costly for your company to serve your customers. Higher costs put pressure on your profitability and the financial health of your business. So if you do not increase prices for your services, sooner or later the financial stress will negatively impact your business and the quality of your services. 

Not only you, even your customers will be on the losing side. This would be a much worse situation. So let go of your fear and act now. Be transparent and notify your customers. Send them a price increase notification.

Give them enough time to plan for increased costs. In the following sections, we’ll cover how to craft clear and effective price increase notifications, along with sample letters you can use.

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When to send a price increase notification?

Don’t rush into raising prices. Take your time to understand the situation.

First, look at the costs that have gone up. Gather all the information and data to see how much they’ve increased. Is this a short-term problem, like a temporary shipping delay? Or is it something that will last, like rising material costs? Check reliable sources, such as industry reports or financial news, to understand what’s happening.

If the costs are going to stay high for a long time, or if they’re permanent, then you need to tell your customers.

Give your customers plenty of notice before the price change. The amount of notice you give will depend on your business and your billing cycle. Usually, giving at least 30 days’ notice, or one billing cycle, is a good idea.

Try not to send price increase notices during your busiest times, unless you absolutely have to. If you have contracts with customers, it’s best to tell them about price changes when their contracts are up for renewal.

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What is the Need to Raise Prices?

Several things can make you need to increase prices:

• Higher material costs: The things you need to make your product or provide your service cost more.
• Increased labor or operating costs: It costs more to pay your employees or run your business.
• Economic factors: Things like inflation, tariffs, or supply chain problems.
• Changes to your services: You’ve added new features or improved your services.
• Adjusting profit margins: You may be adjusting prices to reflect current market value and ensure your business can grow.
• Strategic customer segmentation: You may be refining your customer base to focus on mutually beneficial long-term partnerships.
• Business growth: You’re expanding and need to invest in new resources.

You might have started with lower prices when you were new to the business. Now that you’re more established, you may need to adjust them. Or, you might want to focus on customers who care more about quality than price.

Remember, if you’re making changes for strategic reasons, like focusing on certain customers, it’s best to do this when contracts are up for renewal.

By thinking carefully about these things, you can decide the best time and reasons to raise your prices, and keep your customers happy.

Regular Reviews:

Stay on top of your business costs. Don’t ignore important trends or data. Small changes can add up quickly.

Regularly check all your business expenses. Look at outside reports to see what’s happening in the market and what experts predict. This helps you plan ahead and avoid having to make big, sudden price changes.

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How to Send Price Increase Notification (Best Practices)

Okay, now let’s talk about how to actually tell your customers about the price increase. It’s not just about the message, but how you deliver it.

Choosing the Right Way to Tell Them:

• Email:
  • This is good for most situations. It’s official and you have a record of it. You can easily send it to many customers at once. Make sure to use a clear subject line and a professional email address.
  • Example: “Subject: Important Information Regarding Upcoming Price Adjustment”
• Letter:
  • Send a letter to your most important customers for formal announcements. A physical letter shows extra effort and can be more impactful. It’s especially good for long-term clients or when you want to make a very strong impression.
  • Example: For a very long term client, a hand signed letter.
• Phone Call:
  • Call your key customers. It’s more personal and allows for immediate interaction. You can answer their questions right away and address any concerns. This is best for building strong relationships and showing you care.
  • Example: “Hello [Customer Name], I’m calling to discuss an important update regarding your account…”
• In Person:
  • If you can, talk to your very best customers face-to-face. This is the most personal and effective way to communicate. It shows you value their business and are willing to invest time in the relationship. This is best for very valuable customers.
  • Example: Setting up a meeting at their office or a neutral location.

Making Your Message Clear:

• Keep it Simple:
  • Use plain language. Don’t use confusing industry terms. Assume your customers may not be experts in your field. Write as if you were explaining it to a friend.
  • Example: Instead of “due to market volatility,” say “because the cost of materials has gone up.”
• Be Honest:
  • Tell them exactly why the price is going up. Don’t hide anything or make excuses. Transparency builds trust. If you have data, share it.
  • Example: “The cost of our raw materials has increased by 15%, which is why we need to adjust our prices.”
• Show You Understand:
  • Let them know you realize this might affect them. Acknowledge that price increases can be difficult. Show empathy and understanding.
  • Example: “We understand that price changes can be challenging, and we appreciate your understanding.”
• Remind Them of the Value:
  • Tell them what they get for their money. Focus on the benefits and quality of your product or service. Remind them why they chose you in the first place.
  • Example: “Even with the price adjustment, you’ll continue to receive our top-quality service and dedicated support.”
• Mention Any Improvements:
  • If you’ve made your service better, say so. Explain how the price increase will allow you to continue improving your offerings.
  • Example: “We’ve invested in new technology that will improve our delivery times and enhance the overall customer experience.”

Giving Them the Right Information:

• Tell Them the New Price:
  • Say exactly how much the price will increase. Be specific and clear. Avoid vague statements.
  • Example: “The new price will be $XX per unit, effective [Date].”
• Tell Them When It Starts:
  • Give them the date the new price takes effect. Give them enough time to adjust.
  • Example: “The price change will take effect on [Date], giving you [Number] days’ notice.”
• Give Them Options:
  • If you have different packages or choices, tell them about it. Offering alternatives can make the price increase more manageable.
  • Example: “We also offer a [Alternative Package] that might better suit your needs.”
• Give Them Contact Info:
  • Tell them who to contact if they have questions. Provide a direct phone number and email address.
  • Example: “If you have any questions, please contact us at [Phone Number] or [Email Address].”

Keeping it Positive:

• Say Thanks:
  • Thank them for being a loyal customer. Show your appreciation for their business.
  • Example: “We appreciate your continued partnership and loyalty.”
• Show You’re Committed:
  • Tell them you want to keep working together. Reassure them that you value their relationship.
  • Example: “We are committed to maintaining a strong and mutually beneficial partnership with you.”
• Offer to Talk:
  • Tell them you’re happy to meet and discuss it. Offer to schedule a call or meeting to address any concerns.
  • Example: “We’d be happy to schedule a call to discuss this further at your convenience.”

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Sample Price Increase Notification Emails

You can use one of the following templates to customize your notification of price increase.

Template 1 for general price increase:

Subject: Important Information Regarding Upcoming Price Adjustment

Hi [Customer Name],

At [Company Name], we’re committed to providing you with high-quality [industry] services. We value your partnership and appreciate your continued trust in us.

Over the past year, we’ve experienced increased costs in [mention specific areas, e.g., raw materials, operational expenses, etc.]. To maintain the quality of our services and continue to invest in delivering the best possible results, we’re implementing a price adjustment.

Effective [month, day, year], our prices for [services] will be adjusted by [percentage]. This means your invoice will increase from [current price] to [new price].

We understand that price adjustments can be a concern, and we want to assure you that this decision was made after careful consideration. This adjustment will allow us to:

• Continue using the best suppliers and materials to ensure top-quality results.
• Invest in ongoing training and development for our team.
• Maintain our high standards of customer service and support.

We value your loyalty and are committed to providing you with the best possible service. If you have any questions or would like to discuss this further, please don’t hesitate to contact us at [phone number] or reply to this email.

Thank you for your understanding and continued partnership.

Sincerely,

[Email Signature]

Template 2: Price Increase Due to Specific Factors

Subject: Important Update Regarding [Specific Material/Factor] Costs and Service Pricing

Hi [Customer Name],

We’re writing to inform you of a necessary price adjustment due to significant increases in the cost of [Specific Material/Factor].

Over the past [Time Period], we’ve seen a [Percentage] increase in the price of [Specific Material/Factor], which is a key component in providing our [services]. This increase is due to [briefly explain the cause, e.g., global supply chain disruptions, increased demand, etc.].

To maintain the quality and consistency of our [services], we must adjust our pricing. Effective [month, day, year], the price for [services] will increase from [current price] to [new price].

We understand this may impact your budget, and we’ve made every effort to minimize the adjustment. For more information on the industry-wide increase in [Specific Material/Factor] costs, you can refer to this report: [Link to Report].

We value your partnership and appreciate your understanding. If you have any questions, please don’t hesitate to contact us at [phone number] or reply to this email.

Sincerely,

[Email Signature]

Template 3: Price Increase with Service Enhancements

Subject: Exciting Enhancements to [Services] and Updated Pricing

Hi [Customer Name],

We’re excited to announce that we’ve recently made significant enhancements to our [services] to provide you with even greater value.

We’ve invested in [specific improvements, e.g., new technology, expanded features, enhanced support], which will [explain the benefits, e.g., improve efficiency, save you time, provide better results]. These improvements will allow us to [explain the overall positive impact].

To continue providing these enhanced services and maintain our commitment to quality, we’re implementing a price adjustment. Effective [month, day, year], the price for [services] will increase from [current price] to [new price].

We believe these enhancements will significantly benefit your business by [reiterate key benefits].

We value your continued partnership. If you have any questions or would like to learn more about the new enhancements, please contact us at [phone number] or reply to this email.

Sincerely,

[Email Signature]

Template 4: For Long-Term Client

Subject: Important Information Regarding Your [Services] and an Upcoming Update

Hi [Customer Name],

As a valued long-term partner, we wanted to personally inform you about an upcoming adjustment to your [services]. We deeply appreciate the relationship we’ve built with you over the years and value your continued loyalty.

We’ve experienced [briefly explain the reason for the price adjustment, e.g., increased operational costs, market changes]. To continue providing you with the high-quality [services] you’ve come to expect, we’re implementing a price adjustment.

Effective [month, day, year], the price for your [services] will be adjusted to [new price].

We understand that price adjustments can be a concern, and we want to ensure you have all the information you need. We’d like to offer you the opportunity to discuss this in more detail. Please feel free to schedule a call with us at your convenience by replying to this email or calling us at [phone number].

We value your partnership and are committed to ensuring a smooth transition.

Sincerely,

[Email Signature]

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Handling Customer Reactions and Questions

After you send out the notification of price increase, you’ll likely get some questions and reactions. Here’s how to handle them:

Preparing for Potential Concerns:

Anticipating common questions and objections:

Think about what your customers might ask. What are their biggest concerns likely to be? Will they worry about their budget? Will they question the value they’re receiving?

Example: “We anticipate customers may ask: ‘Why is the price increase so high?’ or ‘Are there any other options available?'”

Developing clear and consistent responses:

Prepare answers to the questions you expect. Make sure everyone on your team gives the same answers. Consistency is key.

Example: Create a FAQ document or talking points for your team.

Providing Excellent Customer Service:

Responding promptly and professionally:

Answer questions quickly. Don’t leave customers waiting. Be polite and respectful, even if they’re upset.

Example: “Thank you for your inquiry. We will respond within 24 hours.”

Offering personalized support and solutions:

Try to help each customer individually. Don’t give everyone the same generic answer. Listen to their specific concerns.

Example: “We understand your budget is tight. Let’s discuss some alternative packages that might work better for you.”

Documenting all interactions:

Keep records of every conversation. This helps you track customer concerns and ensure you’re providing consistent service.

Example: Use a CRM system or create detailed notes after each interaction.

Negotiation and Flexibility:

Understanding when to offer concessions:

Sometimes, it’s okay to give a little. If a customer is very valuable, you might offer a discount or special deal.

Example: “For our long-term loyal customers, we are offering a 5% discount for the next three months.”

Exploring alternative options or packages:

If you have different packages or options, tell your customers about them. This gives them choices and makes the price increase easier to accept.

Example: “We also offer a smaller package that may fit your current needs and budget.”

Knowing when to hold firm:

In some cases, you can’t offer any concessions. Know when to stick to your decision. Don’t let customers bully you.

Example: “We understand your concerns, but the price increase is necessary to maintain our quality standards.”

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Conclusion: Notification of Price Increase

Remember, raising prices should never be a random decision. There must always be a good reason – whether it’s rising costs for your materials, changes in the market, or improvements you’ve made to your services. Be open and honest with your customers about why you need to adjust your prices, and give them plenty of notice.

Checking your costs and market conditions regularly is important. This helps you plan ahead and avoid sudden price changes.

Don’t let the fear of raising prices hold you back. If you consistently deliver quality and value, you have every right to adjust your prices when necessary. 

Always make sure your customers feel they’re getting their money’s worth. By being transparent, prepared, and focused on value, you can navigate price increases successfully and maintain strong customer relationships.