It happens to every business. There's been a change in your industry and as a result, the resources and services needed to produce your product cost more. Now, you have to tell your customers, who have been loyally standing by you for years, that you have to raise prices.

You're probably putting off the conversation, worried about how customers will react. It almost feels like you're letting them down. After all this time that they've dedicated themselves to your business, you're repaying the favor by increasing prices?

Have no fear. Most customers expect that the cost of their beloved products won't remain stagnant forever. However, if a competitor's prices are staying firmly put, this could potentially put you at risk for customer churn. It's essential that you handle a price increase quickly and authentically, to ensure that your customers understand the situation and are willing to stick through it.

In this post, we'll explain what a price increase justification is, then we'll review some best practices you should consider when breaking the news to your customers.

→ Access Now: Price Increase Letter [Free Email Template]

Price Increase Justification

This conversation is never easy to have with customers. After all, who wants to hear that the product your business relies on is going to cost more?

No matter how well you communicate this change, your customer service team should expect some negative reaction. If you aren't seeing anyone complain about higher prices, then they're still probably too low. This leaves it up to your discretion whether you want to increase revenue or maintain customer satisfaction.

If you're experiencing pushback from your customer base, then it's helpful to sync your sales and customer service teams. Both departments should align when it comes to how you communicate this price change. This will provide customers with consistent information as they transition conversations from sales reps to service reps.

In general, the best approach your team can take is assuring customers that the increase will help maintain product quality. Customers who are dependent on your products will be more understanding of this reasoning and will want you to maintain the high-quality that they're accustomed to.

HubSpot's Chief Customer Officer, Yamini Rangan, reflects on this approach in the quote below.

"Some price optimizations were successful and others weren't. But, the ones that we communicated well were always value-driven." - Yamini Rangan, Chief Customer Officer at HubSpot

If you're not sure how to begin the conversation, take a look at some of the best practices below before you get started.

1. Contact them directly.

Imagine if your Spotify Premium bill increased from $9.99 to $14.99 per month without your knowledge or consent. You would be pretty mad, right?

It's completely unfair for a customer to suddenly find out there has been a price increase in their product. If a price increase occurs, make sure you go through your list of all customers who use that product and let them know about the change. If possible, it's an added bonus to address each letter to each individual customer to further personalize the process.

2. Let customers know well in advance.

You should provide your customers with plenty of time to come to terms with the price increase. They may need to re-assess their budget or consider alternative options, so you should keep them in the loop as soon as you're made aware of the situation. Additionally, you should encourage them to make one or more orders of the product before the price increase kicks in.

3. Remind them that higher prices mean better quality.

It can be confusing to customers why a price increase would be necessary, especially if they've been purchasing the same product for months or years. This makes it vital that you stress the importance of product quality.

Typically, products increase in price to match higher operating costs, increases in hires, or increases in prices of materials. To ensure the same level of high quality, sometimes you have to raise the price.

4. Explain the reasoning behind the price increase.

To make it clear that you're raising the prices to maintain the quality of the product, you should explain what caused the price increase. For instance, as some raw materials become increasingly scarce and expensive, companies that utilize these materials are forced to increase the prices for products that use them. Laying that out to customers will prove your willingness to be transparent.

5. Ensure the entire organization is aware of the price increase before announcing it to customers.

It would be embarrassing if a frontline worker wasn't made aware of the price increase and accidentally charged a customer the original price of the product. Even if all employees were made aware of the situation, they should all be on the exact same page in terms of the cost-difference, the reasoning, and the logistics moving forward. That way, your company has a consistent voice on the matter.

6. Allow customers to reach out with further questions or concerns.

You want to be sure your customers receive all the information they require. A lack of information could cause them to churn to a competitor with lower prices. Reassure them that they can always reach out to anyone in your company — including high-level executives — with any more questions or concerns that come up regarding the price increase.

Have a price increase coming but still not sure how to say it? The tips above have been included in the following examples of price increase letters that have been sent to real customers.

Download a Free Price Increase Notification Letter Template

free Price Increase Letter template

Price Increase Letter Examples

It's important to let your customers know about an upcoming price increase, but telling them can sometimes be tricky to phrase.

If you're stuck, take a look at the examples below for ideas on how to convey the message to customers.

1. General Price Increase

This is an example of a letter that lays out a general price increase to customers. It states the exact percentage of the price increase and which products will be experiencing the higher cost. The letter also states exactly when the price increase will come into effect and reminds customers of how long they have to order their products at the current price.

2. Increase in Cost of Materials

This letter also states the exact percentage of the price increase and when it will go into effect. It gives a specific reason for the price increase, providing transparency that many customers will understand. To make this message more impactful, considering adding the value that the price increase provides to customers.

3. Increase in Operating Costs

Like the others, this letter states the percentage of the price increase and when it will go into effect. The letter begins by stating a clear reason for the change. It's helpful to lay out the exact products that will be experiencing a larger price increase than the rest to avoid any confusion from customers.

Based on these examples, you can use the template below to create your own price increase letter to send to your customers.

Price Increase Letter Template

50 Customer Service Email Templates

Click here to download a free price increase letter template, available exclusively in HubSpot's 50 Customer Service Email Templates Kit.

Keep in mind that you'll want to adhere to the tone that you've set during the customer relationship so far while being transparent and personal every step of the way. Templates can help provide the necessary professional context for price increases and other difficult topics, but be sure to customize them for maximum impact.

Editor's note: This post was originally published in March 2019 and has been updated for comprehensiveness.

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Originally published Apr 13, 2021 5:00:00 PM, updated August 25 2021


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