Free Price Increase Letter [Examples & Samples]

free price increase letter 14

A price increase letter is written by the businesses in order to introduce the increasing rates without scaring off their clients. Informing your loyal customers that you have to increase the prices of the products or services isn’t easy. Price increases may create problems for them. However, a well-written and professional price increase letter can make the whole process easier.

The main purpose of writing a price increase letter all the customers about a price increase and explains the reason behind the increase. Notify them that increase is necessary for maintaining the quality of the products you provide.

In addition, the letter should be printed on the company letterhead. It should be written in a professional tone. Provide a detailed explanation of the increase.

Reasons for writing a price increase letter:

There are several reasons for increasing your prices and how to do this may vary from one business to another. The price increase is based on several factors. It is important to constantly review your prices, your services, and the competition. Below are the most common reasons that why you may decide to increase your prices;

  • Sometimes there is an increase in the cost of doing business may include increases in rent and contractor’s rate.
  • Increasing your rates will reflect your skills. You can offer service of a higher quality.
  • By changing your price structure you will indicate the value that you will provide to your customers instead how much time and effort you spend on doing the work for them.
  • You would require more revenue in order to expand your business and set more goals.
  • In your business market, if you discover you are underpriced for your services then you should align yourself with the competition.
  • You can raise your prices in order to push the customers to search for the services elsewhere who argue about every cent they pay you.

The advantages of writing a price increase letter:

When you have done with new service offerings and structuring your new rates, it’s time to inform your clients about the good news. If you have a small business, this is a very serious issue. Most customers will accept that the increase in price is a normal aspect of the business cycle. Some customers might appreciate you for keeping your prices low for such a long time.

If you are worried that customers might leave you it your increase the prices then start with a small group of customers. Moreover, you can also start the new rates on new clients. When the existing packages of previous clients have expires then roll increase to them. It doesn’t matter what process you use, a price increase letter will be beneficial for you.

How to write a superb price increase letter?

Here are some points that can help you in raising your prices and writing a superb price increase letter;

Detailed structure:

There should always be a balance between the following two factors;

  1. The maximization of the value given to clients
  2. Maintaining the momentum of your company

These two factors might not be mutually absolute. With a pricing structure, they will need a complex and calculation. They should be ever-changing and derived from their constant analysis.

The underlying analytics:

There should always be a team that on the basis of previously mentioned balance, constantly assesses packaging and pricing options. In the testing phase, the team has to focus on two clear indicators;

  1. Price sensitivity data
  2. The data which explains the market’s strongest price-performance ratio

Practice thoroughness:

You should run several tests to pinpoint the appropriate pricing and packaging mix of customers. It is a regular business practice. On all departments of the organization, there are several or fewer employees that contribute to any change from the primary analysis to the customer communication.

Guidelines for writing a price increase letter:

Keep the following tips in mind during writing a price increase letter;

Keep it to the point and simple:

Don’t beat around the bush because the time of both you and your customer is very valuable. A good letter should have the following;

  • A brief salutation
  • The statement that indicates your intent to increase your rates by a certain amount.
  • A specified date
  • A statement for thanking your customers for their business

Provide a justification:

Briefly justify your increase with a simple phrase. Don’t spend too much time on it. Make use of simple sentences that are straightforward. Never include sad stories. During writing the letter, you should add more value to the services you offer. This will surely alleviate the impact of any rate change.

Furthermore, you can say that your services or products have been improved in terms of their quality. State that how some new product characteristics can benefit the customers such as learning and applying new skills or giving some extra service.

Give your customers a lot of notices about the price increase:

Before sending the price increase letter, it’s better to give your client several notices. In the bushiness companies, rate increases aren’t uncommon. However, many departments may require more time to ask for an increased budget. They may also need approval from the management to pay higher prices to service providers. Also, before sending your planned rate increase, provide your clients a few months’ notice. For valued customers, you can also provide them an extension on the planned increase.

How to announce a price increase to your customers?

Here are some tips you can follow to announce a price increase to your customers;

Contact them directly

A customer doesn’t accept a sudden price increase in their product. Send a price increase letter to your customers who use that product or service. This letter notifies them of the change. To personalize the process, you can address the letters to each customer.

Inform the customers in advance

You should inform the customers in advance so that they re-assess their budget or consider other options. Also, you can motivate your customers to purchase one or more products before the price increase.

Higher prices mean better quality

If your customers are purchasing the same product for months or years then the necessity for a price increase can be confusing for them. Sometimes you have to raise the price to make sure the same level of high quality.

Describe the reason for price increase

You should describe what caused the price increase to make it clear that you’re increasing the prices to maintain the quality of the product.

Before announcing the price of increase to customers, make sure the whole organization is aware of it

In terms of the cost difference, the reasoning, and the logistics moving forward, all employees should be on the same page. This way, your company maintain consistency on the matter.

Customers are free for queries

Make sure that your customers get all the details they need. Assure them that they can ask more questions or concerns that come up regarding the price increase. They can easily reach out to anyone in your company.

How to know when it’s time to raise your prices?

You can consider different factors to determine the right pricing for your products and services. Below are a few indicators that indicate you it’s time to increase your prices;

  • When you aren’t seeing an increase in profit for longer period.
  • Without paying enough, your customers are demanding more.
  • Due to higher operating expenses, your profit margins have shrunk.
  • Your fixed costs are increasing.
  • The costs of supplies and inventory increase.
  • You are suffering with the quality of your product or service.
  • Your competitors have increased their prices.
  • You have lost money on the business.
  • When you are going to include more features that are more expensive than current ones.


In conclusion, a price increase letter is sent to the customers that informs them particular prices will be increased by a set date. Before customers receive the letter, it should be circulated within the company. This is because the employees have the answers at hand when customers reach out with questions and discusses about the increase.

Faqs (Frequently Asked Questions)

How often should you raise your prices?

You should raise your prices once a year. If you increase prices more often, your customers can turn off. While, if you can’t raise your price for an extended period, your bottom line can get affected.

Why does business increase price?

Here are the primary reasons when business increases price;

1- Increase in raw materials
2- Currency exchange rate fluctuations
3- New taxes
4- Reduced ROI

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