Here are 10 tips and examples on how to write a price increase letter
Like many other millennials, this past year I purchased a house. This house needs a lot more TLC, unfortunately. I’m sorry if you haven’t been paying attention: Materials are extremely expensive these days. The headlines raving about the high prices of lumber and glass and the delays in the supply chain indicate that I have been the recipient of many price increases.
To be completely honest, I don’t mind. All of us have to earn a living, and that can sometimes mean price increases.
- Common reasons for price increases
- Here are some best practices to communicate a price increase with your customers.
- Here are some examples of price increase letters and tips to help with writing your own.
Common reasons to raise your prices
Let’s suppose you are considering increasing your price but don’t know how to justify it. Customers, prospects, and employees need to understand why prices are rising, what they can expect, and how to adapt.
These are the three most common reasons to raise prices.
1. Rising costs require you to be prepared
As we all experience increases in cost-of living, so will the cost of supplies and labor. God bless inflation!
After your price increases, ensure you have a sustainable ROI. There are many other factors that impact the price of your increase. Market research and business considerations aside, it is always a good idea to predict the rise in costs for each product that you offer.
2. 2. You have pivoted or repositioned
Businesses evolve over time. While some start out as the most affordable option, others may become more familiar with their market and gain a better understanding of their ideal customer.
Perhaps your business is growing rapidly and your staff can’t handle all orders, subscriptions or packages. This could be a sign that it’s time to raise your prices. This will allow you to reduce your customer base and still generate the same revenue. Even better? Even better?
You’ll also rebrand your company as a premium business. You’ll be a high-quality company that is high-quality and high-reward. Your industry’s Lamborghini. It’s the Lamborghini of your industry. It’s possible!
3. You’re selling to retailers, or want to.
Although I sympathize with those who are prone to buying everything from Amazon, Grubhub, Etsy, and other online retailers, the truth is that convenience comes at a cost.
These retailers take commission from businesses, the price of doing business. This is understandable because of the efficiency factor. These retailers will be used by your customers, so they will know that you must increase the prices. In your price rise letter, explain this concept clearly and with lots of heads up.
Best practices and examples of price increase letters
No one wants to inform their customers of a price increase, but if you go about it the right way, you can minimize the risk of churn and/or angry responses. These are nine tips and examples that will help you do it right.
1. 1. Communicate the changes to your team first
All of your employees should be aware of this adjustment. Every team will be affected by an increase in cost, directly or indirectly. Your customer service team must be able to answer customers’ questions. However, marketing and sales teams need to know how to explain new pricing to customers.
2. 2. Reach out directly to customers
This is not difficult to understand. This is why you should not be surprised by the rising cost of memberships (Boston Sports Club I’m looking at it)Not coolPractice the Golden Rule here. Here’s how to apply the Golden Rule. Make it clear in the subject line as well as the first few sentences of your email/letter.
You should always prioritize how they communicate with you, but you might also consider using direct mail, phone, or other methods of communication. Depending on how you interact with your customers, these are some of the best email copywriting tips. And if sending via email, follow these email copywriting tips like staying on-brand.
4. Give ample notice
It is best to wait at least two months before you increase the price, especially if it’s a subscription fee. This will allow your customers to cancel their subscriptions without violating your policies or adjust their budgets accordingly.
Add the exact dates when your price will rise for each customer if you are able. You can insert the subscription origin date for each customer and then insert the date for the hike using SQL.
5. Personalize and segment
This is a given for all email marketing, but for a slightly different reason. You should not send one email to everyone, as customers will need to look through the details to determine what price increases are applicable to them. Segmenting your customers by service or plan allows you to personalize the message and highlight the most important details.
You may also want to segment by how long the customer has been with you so you can provide something special in the name of customer loyalty (e.g., extending your current price for another month or giving temporary free access to an upgraded feature).
6. Keep it brief but informative
This is one of our top email copywriting tips, and it’s crucial for price increase announcements. It’s important to explain the reason for the increase, how it will affect them, and what action they should take. Don’t get into the details. Customers want the facts. Explanations that are too long can make it sound defensive or apologetic. Be confident and concise with your writing (learn how to do that here!).
Netflix does send very short emails regarding price increases. However, this notification is not recommended.
It is Netflix. We understand that they participate in streaming wars. However, this doesn’t make it any less successful. Your subscribers might find it a bit arrogant to say, “Hey. We’re the best. Your fees are increasing. It’s not what you want. We don’t care. Cancel your subscription. Goodbye.
As I have said, don’t do that.
8. A FAQ page can be linked
Your price rise email will give you the information that your customers need right away: what amount, when and why. For some businesses, however, it is not as simple as that. A FAQ page can be useful to answer questions, address any ambiguities, or provide context.
This will prevent you from receiving too many calls and emails. It also shows that you have thought it through and are familiar with your customers. For example, Adobe created this
There are customers who will still want to speak to someone, even if they have a FAQ page. You should provide them with a clear method to contact you and ensure that your support team has the necessary tools.
Make sure that your team is certain that your price increases will not be announced to customers in a letter. This includes bumping up your price slightly to give your customers a cushion. It is better to not be the bearer for bad news more than once. Small increases can be sneaky.
- Notify all members of the team first.
- Reach out to customers directly.
- Give ample notice.
- Segment your email and personalize it.
- Be concise but informative (but not rude).
- Create a FAQ page.
- Give a clear path to receive support
- Limit price increases to a maximum of one per year
We are always looking for examples of great (or not so good) price rise letters. For inclusion in this post, please send them to us.
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