Price Increase Letter

There comes a moment for most businesses that causes much heartache and anguish – raising prices. You’ve done all you can to keep prices low, but as the business grows, costs keep increasing and now you need to write a price increase letter to your customers.

Considering raising prices to a long-term client, especially one that composes a significant percentage of revenue is scary because what happens if they leave? Will you still be in business?

While you aren’t the first business to have to suffer through this, writing a letter telling this customer that prices will increase will take some tact. Read some of our tips and look at our price increase letter template.

How do you write a price increase letter?

Some things to remember when writing your letter:

  1. Apologize for the situation – Try not to sound forceful or aggressive in your letter. Companies know prices do increase, so explain the situation.
  2. Personalize the letter – While it may be easy to address the letter to “Dear Valued Customer”, not many people will be receptive to a generically written letter like this. Instead, use your mail merge fields and put the customer’s first name instead.
  3. Reinforce the value you bring to the table – Nobody wants to see their costs increase, but your customer needs what you are offering so they can serve their customers or reach their goals. There is a cost to researching and switching to another vendor. If you have been a valuable partner, a price increase should pose no problems in continuing the relationship.
  4. Be sure to have a few other people read the letter. What may sound good in your head may not translate well on paper. Having other perspectives will help you in writing a letter that successfully strengthens the relationship with your customer and more income to serve them better.

Example price increase letter

Dear X

Due to increases in our XYZ raw materials, it has become necessary to increase prices on ABC products. In order to maintain our commitment to quality, prices will have to increase by XX percent or $XX.XX per unit. (Alternatively, you can include the new pricing as a separate enclosure)

We have avoided having to raise prices for quite some time, but are not able to continue doing so. The price increase will be effective beginning on August 1, 2019. All orders received by the close of business July 31, 2019 will be invoiced at the previous price.

If you have any questions about this increase, please contact me directly at 800-123-4567

I want to thank you for trusting us to serve you and understanding the necessity for this price increase.