BusinessExpert Advice

How to Write a Price Increase Letter (Sample Included)

A few weeks ago, we shared a piece about the trade war & tariff increases that are currently causing small business owners mounting levels of stress.

With costs rising across the board, business owners should be jumping on every possible opportunity to cut the costs they can control (a perfect opportunity to use your member benefits).

But if cutting costs is not enough, you may need to raise your prices. This is a major undertaking and needs to be managed correctly. But don’t worry! We’re here to guide you through it. Below, we’ll discuss an action plan for your small business as you navigate price increases and help you create a price increase letter to send to your customers.

How to Roll Out a Price Increase 

After running the numbers and doing a deep-dive into your financial situation, you’ve decided it must be done. There will be a price increase. Now what? This is an undertaking not to be entered lightly. 

According to a recent article published by Inc., tariffs have directly increased the cost of doing business for 37% of small businesses across the U.S. A majority of those affected have increased prices. And 46% of those that increased prices lost sales as a result.

You need to accept that you may lose business. But if it’s the only option forward, a price increase could be unavoidable.

How to Manage Your Message About a Price Increase

No customer wants to receive word that a vendor is increasing prices. Keep in mind that the message you are sharing is a hard one to digest. 

  1. Be direct and honest in your communication.
  2. Make your letter fact-based and relevant.
  3. Don’t use empty language or evasive phrases.
  4. Communicate that you have no other option, that your small business is forced into this change by external factors.
  5. Make it clear that you are increasing the prices so you can continue to deliver an exceptional level of service and high quality of product.
  6. Give outlets for customers to contact you directly with questions or concerns.
  7. Show that you are in the same boat and sharing the pain of the situation.
  8. If you have worked to absorb losses due to tariffs before rolling out the increase, let them know that as well. For example: “We’ve already absorbed a cost increase of 25% on our end but waited to make the change to our customer pricing until absolutely necessary.”

Give Customers the Chance to Maximize Purchasing Before Change

If at all possible, allow a period of time before the increased pricing goes into effect. Give customers opportunities to purchase in bulk. Show that you are working to ease the pain of the price increases for the customer. 

Create a Price Increase Letter to Inform Customers

As you craft your message in a thoughtful and direct way, you need to make sure you reach your customers effectively. The type of delivery will depend on the customer information you have in your database. If you generally communicate with physical mail, print and mail the letter. If it’s usually email, send it out digitally. If you have a blog where you can post the message, utilize that as well.

It’s important to make the message feel as personal as possible. Use the customer names if you can, through mail merge or your email marketing tool. Sign them with your real signature using an actual pen. 

We have created a Price Increase Letter template for you to use. Change the language as you see fit, but use this outline if it’s helpful.

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