How To Write a Price Increase Letter?
08 Nov 2022
4 min

How To Write a Price Increase Letter?

Every business comes to a point when it can no longer deliver its products or services at the old cost. The primary reason for this is always a pursuit of higher revenue. But, there are also many different factors driving this decision.

The only question though is how will your customers react to that? Will they stick with you or will you lose them? And, most importantly, are there any ways you can influence their decision?

The primary thing that will affect the reaction of your existing clients to a price increase is the way you announce it. Doing this via email is a traditional method. But, it’s never as easy as it seems.

If you are currently in the process of increasing your rates or already have done it and want to let your clients know about it in the most effective and compelling way, you’ve come to the right place! In this article, the experts from LeadsForce will tell you everything about a price increase letter and how to write one yourself. Let’s dive in!

What Is a Price Increase Letter?

As you can tell from its name, a price increase letter is a formal message used by businesses to notify their customers about cost changes in the products or services they offer. In short, it is a letter to customers about price increase.

No matter how simple it sounds, such emails are never a piece of cake. The trickiest thing about writing them is to announce the change without losing your clients. It shouldn’t be a surprise to you that a client who is used to purchasing products or services at a certain cost won’t appreciate it much to learn that now they will have to pay more. But, one way or another, price changes are inevitable for every business. So, the sooner you learn how to notify clients about such things the better.

One of the key tricks for making the transition seamless is to notify your clients about such changes in advance. But, that’s not all. There are many other tricks and tactics commonly used in this kind of letter that will help you avoid backlash and, in our guide, we will tell you about them.

Reasons to Increase Price

Before we move on to actionable steps and tips on how to write an effective price increase notice, it’s important to understand that this really happens to all businesses. As was already mentioned, cost adjustments are inevitable. But the reasons for them go far beyond the banal desire of every company to generate more revenue.

In fact, there are many additional reasons that affect the cost of the product or service. The key ones include:

  • Quality boost. Every business strives to deliver excellent experiences to its clients, and clients also want to get better experiences. It should be clear that better experiences are linked to an increased quality of the product or service. And, if you decide to give your products or services a quality boost, you will likely have to invest more in their production, which will lead to a higher cost.
  • Higher material or labor costs. Even if you don’t change the quality of your products, the costs of materials and labor you use both have a tendency to increase from time to time. When this happens, you also have to increase the products’ price tags to keep your business running successfully and receive income.
  • Higher production and distribution costs. Regardless of the industry and segment that you operate in, inflation is something that affects everyone by increasing production and distribution-related costs. And this is one more factor that can drive a business’s decision to change its product costs.
  • Business growth. Clearly, a growing business also needs to adjust its rates in order to grow seamlessly. But, this is not dictated by ambitions. When a business grows, the number of customers it acquires also grows. Respectively, processing more clients and sales ultimately requires investing more human, time, and money resources. So, there is always the need to increase rates to maintain a high quality of service despite the growth.
  • Competition. Lastly, one more thing that affects the costs of businesses’ products and services is competition. Every industry has ever-changing trends. So, in order to stay competitive, companies have to stick to these trends and, sometimes, it can mean changing their rates.

Tips for Announcing a Price Increase to Your Customers

Now that you know why you might need to change your prices every once in a while, it’s natural to wonder how to let your customers know about it. Here are a few tips for announcing such changes in a respectful and effective way.

  1. Notify in Advance

If a business is well organized, changes in pricing never happen out of a sudden. It is a long process that requires careful analysis and planning, so, there should always be a possibility to let your clients know about such changes well ahead of time. And this is the first tip we have for you. Notifying your clients about any changes in advance has several benefits. First of all, it gives them more time to come to terms with the new prices. They will have time to reassess their budgets and, possibly, consider alternative options. Also, it will give you an opportunity to encourage clients to make more purchases before the cost will increase.

  1. Contact Your Customers Directly

Imagine if you were paying $10 for some product or service and then your bill suddenly increases to $15 for the same item. That would sure feel very disappointing and even irritating. If such happens, you would probably stop doing business with a company that treats its clients like that. That’s why you should never increase prices without your customers’ knowledge or consent. Be sure to contact your customers directly to notify them about such changes to maintain your brand image and minimize the backlash.

  1. Always Explain Your Reasons

In order to convince existing clients to stay with you, you MUST justify the changes in prices clearly. So, when you notify about such changes, be sure to give every client good reasoning behind them.

  1. Make an Emphasis on the Benefits

It never feels pleasant to know that you will have to pay more. But if you know how exactly you will benefit from it, coming to terms with such changes gets easier. Thus, when notifying your clients about an increase in prices, highlight what they get from it. Emphasize that a higher cost also means better quality and added value.

  1. Give an Opportunity to Reach Out

After receiving an announcement about increasing prices, your clients will likely have certain questions or concerns. This is natural. So, you should give them an opportunity to reach back to you and discuss everything that bothers them.

  1. Make Sure Everyone Is Aware of the Change

Lastly, one more tip you want to keep in mind before informing your clients about an increase in prices is that you should first ensure that everyone inside your team is aware of it. If you overlook it, it can feel rather embarrassing to have one of your employees state the wrong price for your products or services to a customer. So, don’t miss this out of sight.

How Often Should You Raise Your Prices?

Although changes in costs are inevitable, every business should still provide good value for money to its customers. So it should be a no-brainer that frequent increases in prices can harm your company’s reputation and push clients away from you. Besides, preparing for such changes and writing emails to notify your clients about them is quite time-consuming. So, you really don’t want to do all this work to have your costs change again in a month or so.

The perfect formula for success is to only adjust your prices once a year. Even if the increase is more tangible but more infrequent, it will still feel more justified to your clients.

Price Increase Letter Templates

So, you need to write a notice of price increase. Where do you start?

If you’ve never done it before, getting started can be somewhat tricky. So, here are a few standard templates that will help you get on the right track:

  1. General

Dear [Customer Name],

This is a notice that [Company Name] is planning to increase prices for [products or services] starting from [date].

[Further logistical details (if necessary).]

Please be assured that our company is committed to providing an excellent quality of products and services to you. [Benefits that a customer will get.] Feel free to reach out to us with any questions or concerns.



  1. Material Cost Increase

Dear [Customer Name],

After carefully analyzing the cost of materials, we are reaching out to inform you about a necessary forthcoming increase in cost for our [products or services]. The new prices will be applied from [date].

[Further justification of increase.]

Although the increasing cost of materials will affect the cost of our products and services, we are still committed to delivering the best quality to you. [Benefits that a customer will get.]

If there are any questions or concerns about the forthcoming changes, feel free to reach us!



How to Write a Price Increase Letter

The templates provided above should help you understand what a good letter of rate increase should look like. Now, let us give you a brief step-by-step guide to writing such a letter on your own.

  1. Personalize

First of all, be sure to personalize every email you send. But, go a little further than just appealing to a recipient by their name. Use the data you get when you generate leads or buy lead list for prospects and the data from your CRM for existing clients to personalize your messages at a deeper level, for example, based on customers’ demographics or location.

  1. Get Straight to the Point

If you have to increase your prices, you should never be apologetic. So, there is no need to tiptoe around it and write very long and confusing letters. Instead, get straight to the point, keep it concise, and clearly state all the justification for an increase.

  1. Keep Focus on the Value

We’ve said this earlier, but it’s worth mentioning this tip once more. Emphasizing the benefits and value your clients will receive is the best way to smooth the corners and make the right impression on a recipient.

  1. Keep It Casual

Although notice of increase in price is a formal message, it is always a good idea to keep it more casual. When writing, use positive, friendly, and human-like language.

  1. Set a Deadline and Include a CTA

Whenever you inform your clients about an increase in prices, you should always specify when exactly the changes will apply. Also, you should use this opportunity to encourage your clients to make more purchases at old prices. So, be sure to include a powerful CTA at the end of your letter.

  1. Encourage Recipients to Reach You Back

This is another tip that we shared with you earlier. So, this is just a quick reminder that your letter must give recipients the possibility to reach back to you and ask their questions. This will help maintain trust. Besides, during further discussions, you will have a chance to convince your customers about the necessity and benefits of an increase.

  1. Segment Your Recipients

Not all your customers are the same. They have different needs, expectations, and pain points. Thus, in order to notify them about an increase in prices effectively, you want to write several variations of this message for different groups of recipients and carefully plan what approach you want to use for each group.

Price Increase Letter Examples

So, you already have everything you need to write effective letters about an increase in prices. Now, to help you grasp the concept even better and, hopefully, find some inspiration, let’s look at some examples of such letters by well-known companies.


A good example of a notification letter about changing prices is shown by Upwork. The letter they sent to their customers is very clear and explains what exactly the new pricing will look like. At the same time, the company emphasizes the benefits it provides and, thus, justifies an increase in its rates.

Upwork letter


Another example is offered by Netflix. Last year, the platform increased the cost of its pricing plan in different regions. Pay attention to how they emphasize a larger collection of movies and shows that a customer receives by paying just a little more.

netflix letter


Finally, one more example we’d like to share with you is last year’s letter by Spotify. The platform also increased its rates for a premium subscription and notified users about it. However, instead of just letting us know about the new pricing terms, Spotify highlighted that this increase will let them bring more features and content to us.

Spotify letter


So, now you know everything about how to create an excellent price increase letter to customers without pushing them away from you. Now you know that though changes in prices are inevitable, they don’t have to make you lose your clients.

With the help of this guide, you know how to make this transition smooth both for your business and your customers too. Start using it now to ensure the best outcomes!

Daniel Gorbenko
Daniel Gorbenko
Product Marketing Manager
Daniel is a Product Marketing Manager with more than 4 years of experience with B2B and B2C products. Daniel is a Product Marketing Manager with more than 4 years of experience with B2B and B2C products. Daniel is a Product Marketing Manager with more than 4 years of experience with B2B and B2C products.
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