Dreading telling loyal customers that you lot have to raise prices?

Have no fear. Virtually customers expect that the cost of their beloved products won't remain stagnant forever. However, if a competitor's prices are not increasing, this potentially puts yous at risk for customer churn. You must handle a toll increment chop-chop and authentically to ensure that your customers understand the situation and are willing to stick through it.

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

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

Price Increment Justification

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

No thing how well you lot communicate this change, your customer service team should expect at least a few negative reactions. If you aren't seeing anyone complain almost higher prices, then they're still probably too depression. This leaves information technology upwards to your discretion whether you want to increase acquirement or maintain customer satisfaction.

If you're experiencing pushback from your client base, it's helpful to sync your sales and customer service teams. Both departments should align when it comes to how you communicate this cost change. It volition provide customers with consistent data as they speak with both sales reps and service reps.

In general, the best approach your team tin take is assuring customers that the increase will aid maintain production quality. Customers who are dependent on your products will be more than understanding of this reasoning and will desire you to maintain the high quality that they're accustomed to.

HubSpot's Principal Executive Officeholder, Yamini Rangan, reflects on this approach in the quote below.

"Some cost optimizations were successful and others weren't. Just the ones that we communicated well were e'er value-driven." - Yamini Rangan, Master Executive 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.

Tips for Announcing a Cost Increase to Your Customers

  1. Contact them directly.
  2. Let customers know well in advance.
  3. Remind them that higher prices mean ameliorate quality.
  4. Explicate the reasoning behind the price increase.
  5. Ensure the entire organization is aware of the price increase before announcing it to customers.
  6. Allow customers to achieve out with farther questions or concerns.

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?

Information technology'due south unfair for a customer to suddenly find out there has been a price increase in their product. If a cost increase occurs, become through your list of customers who use that product or service, and send a cost increment letter notifying them of the change. If possible, accost the letters to each customer to personalize the process.

2. Permit customers know well in advance.

Y'all should provide your customers with plenty of fourth dimension to come to terms with the cost increase. They may need to re-appraise their budget or consider culling options, then you lot should go on them in the loop once you're made aware of the situation. Additionally, encourage them to make i or more product orders before the cost increment kicks in.

3. Remind them that higher prices mean better quality.

The necessity for a price increment tin can be confusing for customers, peculiarly if they've been purchasing the same product for months or years. It makes information technology vital that you lot stress the importance of product quality.

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

4. Explicate the reasoning behind the toll increase.

To make it clear that you're raising the prices to maintain the quality of the production, you should explicate what acquired the price increase. For instance, every bit some raw materials become increasingly deficient and expensive, companies that utilise these materials are forced to increase the prices for products that use them. Laying that out to customers will show your willingness to exist transparent.

5. Ensure the unabridged organization is aware of the price increment before announcing it to customers.

Information technology would be embarrassing for a frontline worker to accidentally accuse a customer the wrong price considering their company failed to notify them of a modify. Fifty-fifty if all employees were made aware of the state of affairs, they should all be on the same page in terms of the cost divergence, 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 desire to exist sure your customers receive all the data they require. A lack of information could cause them to churn to a competitor with lower prices. Reassure them that they tin always reach out to anyone in your visitor — including loftier-level executives — with whatsoever more questions or concerns that come regarding the toll increment.

Take a cost increase coming merely nonetheless not sure how to say it? Check out the following price increase letter templates to assistance you put it in the right words.

Price Increase Letter of the alphabet Templates

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

If yous're stuck, take a expect at the templates below for ideas on conveying the message to customers.

1. Full general Price Increase

This is an example of a alphabetic character that lays out a general cost 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 cost increase will come into consequence and reminds customers of how long they accept to gild their products at the current price.

2. Increment in Price of Materials

This alphabetic character also states the exact pct of the toll increment and when information technology will go into outcome. Information technology gives a specific reason for the toll increment, providing transparency that many customers will empathise. To make this message more than impactful, consider calculation the value that the price increase provides to customers.

3. Increase in Operating Costs

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

Based on these templates, you tin can employ the format beneath to create your cost increment alphabetic character to ship to your customers.

Sample Price Increase Letter Template

sample price increase letter template

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

50 Customer Service Email Templates

Click here to download a free price increase letter template, available exclusively in HubSpot'south 50 Customer Service E-mail Templates Kit.

How to Write a Price Increase Letter

Delivering notices of a price increment shouldn't bring a sense of dread. With the messaging tips below, you can make things easier for your squad and customers.

i. Be clear and concise.

Customers shouldn't have to guess or assume what your correspondence means. Communicate the important information at the showtime of the notice, letting them know explicitly what the new pricing volition be and when information technology will accept effect. Outline any steps customers need to accept earlier the increase happens. Next, explicate what their options are and where they tin can go more information.

2. Be empathetic.

Depending on your industry, the linguistic communication you use for written correspondence may need to be more formal, just it shouldn't come across every bit common cold. The Netflix letter of the alphabet higher up is a nifty case of being both personable and professional person. It makes customers feel that their business organization is valued and that the company sees them every bit more than than just a number. Put yourself in your customer's shoes and remember nearly how y'all'd similar to receive similar news while drafting the letter. Additionally you'll desire to thank them for their business earlier signing off.

iii. Don't repent.

Companies heighten prices all the fourth dimension and it'southward a completely normal aspect of doing business organisation. Apologizing volition not only make the reader remember you're unsure of the conclusion, but also creates unnecessary awkwardness. Your product or service provides excellent value and you should charge accordingly.

4. Transport a follow upwards.

Email notices can easily end up in spam folders and customers tin mistake physical letters as junk postal service. To combat this, it's skilful to send a follow upward observe before the increase goes into effect. It will too give a bit of cushion for customers who maybe read your starting time notice, but forgot to follow upwardly or take action to renew. Additionally, information technology will decrease the chances they'll feel blindsided by an increase.

With these templates in hand, let's become through some best practices for making your price increase declaration.

Price Increase Letter Examples

You have the tips. You take the templates. How do they piece of work in real life? If you are a paid fellow member of any subscription service, chances are you accept received one or 2 price increase letters in your e-mail inbox. Amazon Prime is a popular company you might take witnessed increasing prices over the last few years. They are non the but ones. Permit'south take a look at examples from Spotify, Disney+, Upwork, Hulu, and Netflix.

1. Spotify

price increase letter example: spotifySpotify sent an electronic mail to its premium Family Plan members nigh an incoming price increase. The Family Programme is a discount programme for up to vi family members who live together to enjoy Spotify Premium accounts. With the alter scheduled to happen only four days afterwards the electronic mail was sent, one might believe that Spotify blindsided its loyal customers. Diving further into the electronic mail, that would prove false. While we cannot be certain that they notified their unabridged organization before the announcement, this cost increase email hit on the five tips listed in a higher place.

1, they contacted their premium Family Plan members directly through electronic mail. 2, they permit customers know well in advance. Although the change would be constructive 4 days following the email, Spotify gave their subscribers an actress month with the previous toll. It would give customers fourth dimension to decide whether to cancel or continue their subscription.

Spotify combines tips three and four into the same statement: "...nosotros are increasing the price of Premium Family Programme then we tin can continue to bring you new content and features that you tin can relish…" Their reasoning behind the price increase is to provide customers with better quality.

And lastly, afterwards the trunk of the email, they prompt customers to follow up with any questions with their support staff.

Brusk, sweet, and to the point, this price increment e-mail is an ideal example to imitate when you lot write your own letter of the alphabet.

ii. Disney+

price increase letter example: disney plusLike Spotify, Disney+ announced a price increase to "The Disney Package'' subscribers. This bundle includes subscriptions to Disney+, ESPN+, and Hulu. The email informed customers of a price increment to $13.99 (previously $12.99). Disney+ touched on many of the tips listed above, but they also missed a few.

The streaming platform notified customers directly via email. Disney+ likewise gave three weeks to decide between keeping or canceling a subscription. This cost increase letter closes out with a call-to-action for customers to visit their Help Center for questions. While customers had ample time to decide or reach out with further questions, this example fails to tell them why their subscriptions increased.

Call back, Disney+ launched in November 2019. Compared to Netflix and Hulu, which launched in 1997 and 2008, respectively, the platform is very new. One could anticipate that customers were curious why their subscription price was already increasing later a relatively short time. While an commodity from CNN Business explains the reasons behind the increase, Disney+ did not share these reasons with customers in their email proclamation.

3. Upwork

price increase letter example: upworkUpwork, one of the largest freelancing websites, announced a price increment to its Freelancer Plus programme members. This paid plan is a step-up from its free Freelancer Basic plan. Information technology allows freelancers the added benefits of keeping their earnings confidential, customizing their profile URL, keeping their profile active during breaks, and more.

While this price increment letter is significantly longer than the previous examples, it is yet curtailed for the level of change explained. That is not the only thing this letter does well. Afterwards this email, the Freelancer Plus program members had a month to sit with this information. To explain the reasoning backside the toll increment, Upwork includes a section titled, "Why are we making this change?" One can assume that this price will greatly benefit Upwork, but the email focuses on the benefits to the freelancers.

At the close, this email does not prompt freelancers to reach out with further questions, but it does straight them to learn more about the changes happening to their membership. With Upwork being a platform where freelancers spend and brand coin, this price increase letter covers enough touchpoints to efficiently innovate customers to the change.

4. Hulu

Hulu price increase letter example

five. Netflix

Netflix Letter

Netflix took a much more than effective approach in their price increase messaging. Like Hulu, they sent notice well in advance just also took the opportunity to remind customers how their service adds value.

"This update will allow us to evangelize fifty-fifty more value for your membership — with stories that lift you lot up, move y'all, or simply make your day a little better." It perfectly sums upward why customers should stick effectually despite the increase.

Overall, Netflix'southward tone is warm and personable while nonetheless hitting all of the best practices listed above. To further retain customers, the company added a listing of new releases and top picks in the footer to retain loyal customers — showing them all the neat content they'll miss out on if they were to cancel their subscription.

Incoming: Cost Increase Notice

If you have made it this far, y'all probably have a price increase observe on the horizon. Don't procrastinate. Your customers have signed upward for a product or service, and they deserve ample time to make a decision. Most customers anticipate increased costs in the future. Follow the tips listed in this article, and keep moving forrad.

Editor'due south annotation: This mail was originally published in March 2019 and has been updated for comprehensiveness.

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Originally published January five, 2022 7:fifteen:00 AM, updated April 20 2022