Is It Time for a Price Increase? Here’s How to Tell Your Clients

Most owners treat an annual price review as standard practice—and even when they don't, factors outside their control (inflation, supply chain costs, wage increases, competitors' rates) tend to force the question. Deciding to raise prices is rarely the hard part. Telling your loyal customers is.

4 ways to increase your prices without backlash

Businesses need to raise prices at some point—even if it's just to adjust for inflation. But notifying your clients is a more delicate matter that has to be handled with care to avoid resentment.

Follow these 4 steps to help ensure your rate increase goes smoothly for your team, your customers, and your business.

1. Tell your team first

Once you decide to implement a price change, tell your employees first. This change affects all of them, even those who aren't on your customer service team. You want everyone on the same page and prepared.

This is also a good time to meet with your team and plan the messaging they'll use when customer questions inevitably arrive. Brainstorm the concerns customers might raise, and decide how your team will respond ahead of time. That way, your team won't fumble a response to an already unhappy customer, and they can handle awkward moments well.

This information can then be used as the foundation for a price increase FAQ page on your website (more on this later).

2. Give your customers advance notice

Nobody likes getting impersonal news from a business they rely on, and your customers are no different.

Your customers should hear about your price increase directly from you, so you need a plan for communicating the news to them in a tactful way.

Many of them will likely need to assess whether your new prices fall within their budget. If not, they’ll need time to adjust their expenses so they can continue buying from you, or find an alternative before your price increase kicks in. Either way, you want to ensure that, even though you’re not bringing your customers great news, they still feel taken care of.

Notify your existing customers or clients of the price increase 2–3 months before the scheduled increase date. Use a few different channels to get your message out.

For example, if you typically send updates via email newsletter, you’ll likely reach most of your customers through that channel. But not everyone checks their email inbox. Use additional methods to reach those customers, so they’re not surprised by the rate increase. Some options include:

Remind customers with another email a few weeks before the increase. By prompting them to buy or book before prices go up, you can use that nudge to bring in extra revenue.

3. Direct customers to an FAQ page

Your customers will likely have similar questions about the change. But most communication channels don't give you space to answer them all, and you want to respect customers' time.

An FAQ page lets customers get answers at their own pace. It can also cut down the questions your customer service, sales, and social teams field from concerned customers.

You may find it helpful to include:

As new questions roll in, update your FAQ page so everything customers need stays in one place.

4. Start with new customers

New customers are a great way to test your increased rates—they haven't worked with you yet and are still forming their impressions.

You'll get near-instant feedback on whether your new prices are too high, too low, or right. Go too high and leads reject the offer outright. Go too low and nearly all of them say yes to grab the savings. Ideally, you land on a number that supports your needs and that most qualified prospects accept.

How to communicate a price increase

A price increase message formally tells customers that the cost of your goods or services is going up. Whether you send it by email, post it to your site, or mail it, the goal is the same: notify people clearly while keeping the relationship intact.

Be direct and concise

Tell customers in plain terms that your prices are going up. Calling it anything but a price increase won't make them feel better, and being vague only confuses them (don't say "price adjustment" when it's a price increase).

State that prices are increasing, give the reason, note the effective date, and list any action items they need to complete (if any).

A long-winded essay isn't needed. Say what you need to; if readers want more, they can visit your FAQ page or talk to your team. Writing less makes for clearer communication and less room for confusion.n.

Don’t apologize—show appreciation and empathy instead

You don’t want to be overly apologetic here, either. Price changes are a natural part of doing business, and you need to do what's best for your business.

Instead of apologizing, show appreciation and empathy. It's because of your customers' business that you've been able to grow yours.

Skip the corporate speak and write directly to them. Thank them for their support, and offer to make the transition easier. Most importantly, don't make light of the situation—especially if what you provide is crucial to their life or business.

Taking the time to do this shows customers you care about them beyond the money they spend with you.

Provide justification for the decision

How you justify your increase can mean the difference between an angry customer and an understanding one.

By giving a reason they can understand (and maybe even relate to), you make it less likely they'll assume you're just padding revenue. Ideally, they'll be more open to the change and appreciate your transparency.

Explain why you're raising prices in your own words (again, ditch the corporate speak). Be as specific as you can without overloading on detail. For example:

Layer on the value to them wherever you can in order to tie their added cost directly to the benefits they get from your products or services.

If they have to pay more to continue working with you, it’s fair for them to know why.

Lead with value

This is a great moment to remind clients why they chose you and what they can expect going forward.

Can they expect better service or quality? More deliverables at the same price? An extra month added to their subscription free of charge? Be specific if you can.

For example, if you’re transitioning from hourly pricing to value-based tiered pricing, list the additional features or services clients will now get, so the new options clearly don't lack value.

If you have upcoming releases or new features clients would be excited about, announce those here too.

Use this price increase email template for your own business

Still struggling to write your own? Use the template below and tweak the details to fit your situation.

Subject line: Update: New Rates Starting [Date]

Hi [Client Name],

It’s been a pleasure working with you [and your team] over the past [X months/years]. I appreciate your business and value our professional relationship.

Because I consistently build on the level of skill, experience, and service I bring to every project, it’s important that my rates reflect the increased value you receive. [Add specifics. For example: Additionally, I will be expanding my team this year to better provide the hands-on service and digital marketing expertise you require from your marketing agency.]

So as of [date], I will be raising my hourly rate from $XX to $XX. [Include new rates per each service, if appropriate.]

Since I love working with you, I’m happy to extend my existing rate for any work you book now through [rate increase date]—even if you don’t need it until after the date passes.

If you’d like to discuss booking projects ahead of [rate increase date], or if you have any questions or concerns about the change, I’m happy to set up a call to discuss.

Thank you for your support and your understanding, [Client Name]. I look forward to our continued success together.

[Your favorite sign-off],

[Your Name]

Wondering if it’s really time for a price increase? 4 signs to watch for

So now you know how to communicate a price increase. But how do you know if now is just the right time? Here are 4 signs that indicate your business is ready to raise rates.

1. Your business costs are increasing

You know how much revenue you need to keep your business afloat and your bills paid. If it now costs more to deliver your products or services—whether from material costs, wage increases, or something else—it makes sense to raise prices accordingly. Otherwise, you're losing money.

2. You’re in demand

Maybe you're constantly working through a backlog that never seems to end. Or you keep getting referrals from happy clients but have to turn them away because there aren't enough hours in the day.

If you've got more work than you can take on, a price increase can give you the resources to expand your capacity—while keeping your current clients happy.

Don't worry too much about losing customers, though. If they're happy with your work, many won't mind paying a little more to keep working with you.

3. You’re undercharging

Pricing in the same range as your closest competitors signals that you take your business seriously and understand the value you bring. Rates that are too low can suggest the opposite to potential clients, even when that's far from the truth.

And if competitors charge more for work that's the same or lower quality than yours, your target audience is clearly willing to pay more for what you offer. By not raising rates, you're leaving revenue on the table.

4. You've leveled up your craft

How do you put a price on years of experience? The longer you're in business, the more value you bring through the skills to handle complex projects, improvements that raise customer satisfaction, and investments in tools, training, and people.

You made those decisions with customers in mind, but they came at a cost to you. As the value of your offerings grows, it's only fitting to charge more for them.

Raise your rates while keeping your customers happy

You've worked hard to get your business where it is. But if you never raise prices to account for growth and future needs, you're doing yourself a disservice.

Announcing a rate increase isn't at the top of anyone's to-do list. By following the tips above, you'll be better equipped to communicate the change and support your customers through the transition.