How to Let Customers Know About a Price Increase Without Losing Them

By Thomas Bennett Financial expert at Priceva
Published on March 30, 2023
Knowing that you need to inform your customers about an upcoming price increase for your products or services may be a cause for concern. However, this is a standard practice performed regularly by many businesses. In this article, we’re going to take a closer look at how you can plan and implement communication with your customers by notifying them about a price change while making sure that it will have a minimum negative effect on customer satisfaction.

We’re going to show you tips, examples, and ways to announce pricing changes over various digital marketing channels. The guide will also cover how to write price increase letter sample and price increase letter template will be also presented. Bellow are the main topics we are going to cover:

How do you explain the new price?

Whether due to inflation, increased market competition, or a new government policy, we do see occasional changes of prices for various products and services in most areas of the economy. While there are numerous factors that may lead to raising prices in your case, it is nevertheless important to be transparent and express the reasons for the price increase to your customers, as this will help to maintain trust and positive relationships with them.

There are several ways to justify a increase of price for a company's products or services:
1. Developing and enhancing your current product or service, which eventually requires increased costs;
2. Scaling your business, and the growth of your operations corresponds with growing expenditures;
3. External economic factors that affect your production and your business in general.

Product development

Improving product quality or functionality usually requires raising the product price. Enhancing a product often requires additional costs on research and development, management, application of new raw materials or know-how and technologies, as well as consequent quality assurance and product marketing. By improving a product or a service, a business provides more value to customers by making it more efficient, full of new features, and more high-end. These costs need to be compensated in order for the business to remain profitable.

Launching a new and improved product or service may often mean repositioning on the market. More features mean more perceived value, and in such a case a business has to differentiate its offering from lower-price competitors. Customers may also expect to pay more for a product that has been improved.

Business scaling and higher operating costs

Growing your business is another factor that will most likely require making changes to the pricing structure. Increasing the scale of production or expanding the sales team will lead to increased costs of rent, utilities, and/or salaries.

Or let's imagine a scenario where demand for your products and services has become so great that your business is becoming unable to handle and process all the incoming orders. A natural solution to narrow down your client base would be to increase the prices while keeping your revenue stream at the same level required for further company development. Business growth often leads to pivotal moments, when a company has to implement higher prices in order to balance the supply and demand and maintain the high quality of the products and services offered.

Economic factors and rising costs of production

Macroeconomic factors, such as inflation, will eventually affect every business, from SaaS to FMCG. Rising costs of raw materials and workforce will eventually affect production costs and urge companies to increase prices and pass the higher costs onto consumers. A new government policy or a tax increase may also lead to higher production and distribution costs, which will urge a business owner to eventually raise prices for existing or new customers.

With all the above factors considered, the next thing you will need to do is develop a solid plan to write a price increase notification for your customers that will justify and explain the price hike, keep them loyal, and maybe even temporarily boost sales.

What are the most effective ways to inform customers about price increases?

The way you announce a price increase will determine whether you end up losing customers or retaining their loyalty. It's important to deliver your increase notification well in advance and through multiple communication channels to effectively capture your customers' attention.

When writing a price increase letter, the correct wording is key to keeping customers satisfied, despite the fact that most will probably find the news displeasing. Let's go through the following points to ensure that everything is taken into account.

Direct price increase announcement

When making price increase announcements, it's better to contact your customers directly through all available channels: email, mobile application, website, social media, and blog. Your email should contain all the necessary links for customers regarding the increase. Your wording should be firm and not sound regretful. Briefly explain the reason for the increase, and instead focus on how the new price will bring customers more value and better quality of service over time.

As your business develops, the market also develops, and a change in price is something that may happen eventually sooner or later. Being direct and transparent with your customers helps you maintain a good reputation. Mention the price increase in the subject line and header of your letter. Publish a banner on your website and a pop-up in your app. Write a blog article and a social media post. Focus on the new improvements that will be implemented in your products and services, and let your customers know that this change is definitely worth it.

Updating current pricing on your website or app

A website is the primary place where customers will look for official company news and notifications, and if yours has a pricing page, the information there should be updated. Don't forget to update the current price on the same page of your mobile app and in all your other resources. If your business maintains a blog, you may also publish an article there, where you can broadcast the company's vision of the future and the direction the business will be taking, with all the benefits that an increased service price will bring.

It's considered good practice if your direct mail is also linked to your blog article, where through storytelling, you can speak in more detail, go "behind the scenes" of your business, and build more customer trust.

Announcing a price increase on social media

Besides sending price increase letters, it's important to also make an announcement on social media. Your customers should be able to interact with your company on the platforms they find most comfortable, and social media is where many of them spend a lot of their time. Consider reaching out to them on Instagram, Facebook, Twitter, and LinkedIn. Depending on whether you are targeting a B2C or B2B audience, existing or new customers, different social media platforms will allow you to announce this news on your brand page or through targeted advertising.

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How do you write a price increase notice that maintains customer loyalty?

OK, so your business requires increased prices, and you are set to announce them throughout your customer communication channels. How do you ensure that this message doesn't cause customer churn? While it's completely normal for your customers to have various reactions to the news, and a few customers will most likely be disappointed, there are actually several practical ways to maintain customer retention, even when it comes to such a tricky topic.

Here are a few tips that will help you enhance your price increase notice and make it clear, empathetic, and to the point.

Create unique messaging for various customer segments

Your company may work with different customers who use different products and services. Some may have a paid subscription plan, while others may still be free users. Some may be corporate clients, while others are regular end users. Different customers may also be at different stages of the customer journey. When writing a price increase letter, all of these factors must be taken into account.

It is important to divide your clientele into several segments and send them different variations of a price increase notice. You can find many free examples and templates of price increase letters on the internet. If you are unsure of where to start, you can use the following one as a starting point.

Do not forget to notify your clients with increase letter in order to let them know about your new prices. Increase letter will let your customers find out about price changes directly about you, and not during the purchase process at the time of payment. That's why it is important to write a price increase.

Let's now overview a price increase letter template.

Price Increase Letter Sample:

Dear [Customer Name],

We at [Company Name] value your support and would like to inform you that due to recent changes in shipping and materials costs, we will be adjusting the prices of [Product/Service] by [$ amount]. The new prices will take effect starting from [Date].

We strive to provide our customers with the highest quality products and services, and we are confident that the new prices will continue to reflect that commitment. Please reach out to us at [Phone Number/Email] if you have any questions or concerns.

[Company Name]

Test the waters with a select group before implementing a price increase across the board: to gauge customer reactions and minimize the risk of losing clients, try introducing the increase of price to a select group of your target audience first. This group can act as a sample to gather feedback and gauge public opinion. Based on the reactions of this group, you can adjust your approach and make informed decisions before expanding the price increase to your full client base.

Make the price increase announcement early

Avoid implementing a sudden price increase. Give your customers adequate time to adjust to the change, as they may need to readjust their budget, seek approvals from superiors, and make other necessary arrangements. A helpful step would be to encourage them to make additional purchases or consider an annual subscription plan at the current price before the price increase takes effect.

Be mindful that customers may explore alternative options. However, it's important to note that the cost of switching to another service and the possibility of losing existing customer relationships can act as barriers. Allow customers time to process the change before engaging in further discussions.

Remind customers that the price increase means more value

Value can be interpreted in various ways. There can be different reasons for a price increase, such as the need for additional funds for research and development to improve the product, or an increase in the cost of goods sold due to rising resource prices. In this case, the value provided is the consistency in product quality over time.

When communicating an increase to customers, emphasize that the increase is to upgrade the product's quality or that you are committed to maintaining the same level of quality in the future. The former is more easily accepted by customers. In the latter scenario, you are demonstrating value by not only committing to quality assurance but also reinforcing the fact that your product is of superior quality.

If it is a product upgrade, make sure to demonstrate the specific value that the upgrade brings, such as increased revenue, cost savings, reduced time and effort, etc.

Provide loyal customers with limited promos and bonuses

Provide loyal customers with the opportunity to continue enjoying the previous price for a limited time, to ensure they do not feel caught off guard by the new pricing and to maintain their loyalty.

This special deal demonstrates that you realize the impact of price increases on your customers and their businesses (if your product is B2B). It will help retain more customers who may need more time to adapt to the changes.

Suggest freemium users to change plans before new prices take effect

A price increase can be an opportunity to convert more freemium users to premium. Highlight the improvements on the product to free users and encourage them to review the new prices.

The new pricing plans could be exactly what they have been looking for, or their chance to secure a lower price before the increase could act as an incentive for them to upgrade and become a paying customer.

You can also provide customers with the option of choosing a lower-priced alternative. Give them the flexibility to choose by offering the same product with different features at various price points. This way, they can focus on the value they are receiving.

Don’t introduce new pricing more than once annually

Frequent price adjustments can harm customer loyalty and appear unprofessional. When making pricing decisions, it's important to base them on data and justify them accordingly. Ideally, it's best to avoid making more than one annual price change and minimize the need for customers to adjust.

Constant price fluctuations could drive customers to seek more stable pricing options from competitors.

Make your customer service team constantly available to user feedback and issues

Neglecting customer concerns after implementing a budget-affecting change can lead to a loss of customers. It can cause feelings of uncertainty, apprehension, and even perplexity. In this scenario, it is crucial that your customer service team is available to address customers' queries, feedback, and requests. Be responsive to their feedback, provide answers to their questions, and offer solutions to assist them in adjusting to the new pricing structure.


Raising prices for customers should not be an arbitrary decision. It's important to provide a justification for the price increase, whether it be for improved service performance, enhanced usability, or added features.

The timing and method of communication also play a significant role in maintaining a positive business relationship. Therefore, it is important to approach this sensitive matter carefully.

Consider using a multi-channel approach to deliver the message across various platforms.

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With our solution, which relies on machine learning for price prediction, you can easily modify product prices at any category, store, country, or regional level.

Our predictive analytics solution predicts changes in demand volume to determine the right prices at the right time. Using accurate pricing forecasts that match reality, you can increase sales and margins for your business.


How do you make your customers understand that the prices are not subject to any arbitrary changes?

You should make your new price policy transparent and standardized. Your goal is to make your customers understand that this decision is justified and consistent. Avoid making exceptions and offering special deals to certain customers, but do offer your existing customers promotions and discounts as a reward for their loyalty.

Is it necessary to notify customers of every price increase?

It is generally considered good business practice to do so, as it will help to build trust and maintain positive relationships with your customers. Customers appreciate transparency and will have a greater understanding of the reasons behind the price increase. Additionally, if you don't inform your customers of an increase, they may feel that they are being treated unfairly and this could lead to negative word-of-mouth, decreased customer loyalty, or even loss of customers.

In some cases, minor price adjustments may not need to be communicated, but it's important to evaluate the situation and the impact on the customer. Also, it's important to consider the industry, location, and the legal requirements in your area: some jurisdictions may require businesses to inform customers of any price increases.

Empower Your Business with Priceva's Price Tracking Solution
Take charge of your pricing strategy with Priceva's powerful price tracking tools.
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