How to raise your client’s rates with a price increase letter
When you have your own business, you know how important it is to make sure you adapt to different and new situations. If you want to meet your personal goals then you might want to take a closer inspection of your numbers.
If you are put in a situation where you need to send a price increase letter to your client list that this might be a bit challenging to do. Most likely you will not lose a high percentage of your clients due to a small increase but how you explain it needs to be straightforward and with a focus on what value is being added not justifying the increase.
What is a price increase letter?
At a certain point, any business or freelancer will need to raise their prices. A price increase letter can be quite easy to understand. It’s an option that you can use to inform a client that starts a specific period your rates/prices will start to increase with x amount.
Increasing prices are something that we can see quite a lot. As a business owner what you want to do is to make sure that the raised letters that you are about to send don’t scare your clients away. A well-written price increase letter for sure can do the job and it will not only inform the clients on the rate change that is going to take place but also to make them understand why the increase is needed.
When is it time to raise your rates?
The decision of raising rates depends on what is going on in each business. One of the main reasons why this is happening is because companies are trying to move away from time-based pricing.
As skills get higher this means you will be able to complete client work faster. If you work on an hourly rate this means that you lose money. It is always better to go for a fixed price when you are raising your rates because doing so your pricing model is not going to be tied to timing.
How to figure out your new rates
Discovering what amount to put in the price increase letter needs to be a situational scenario. There is no precise plan that works for everybody. There are different online rate calculators that you can try online like CreativeLive or Your Rate and they give you an hourly rate estimate that is based on what you’d like your annual income to be.
Tips for using Price increase letter
Keep it Direct and Simple
When you are making your price increase letter try to go for a simple version. Think about the time of your client because it is valuable so be direct. A short hello with the statement that you are increasing your prices on a specific date and a note where you thank your client is more than enough.
Avoid apologizing and ask the input for your client. If a client is going to see that you are not sure about the increase, he might ask to keep the current rates.
But first, you have to be worth it
If you ask for this for sure you will have to deliver phenomenal service to your clients. You will always know if a client likes your service because if they don’t you will start to receive complaints or suggestions.
Finding out what your clients think about your services is quite important. You might even consider asking them their opinion. This can be done with a quick questionnaire and for sure you are going to receive some opinions that matter.
Stay connected with them and make sure you remain connected with all the goals they set at the beginning of their business year.
Provide Lots of price Increase Notice
Until you send the rate increase letter you can also give some notice before you do it officially. For sure your client has experienced in the past rate increases but they still need time to make their budget according to the new rates.
Searching for a sample letter to inform customers of the price increase can be done easily now and you will not lose time with this. Just make sure that your client has a few months of notice before the raising rates. If you think that a particular customer is valuable for sure you will want to keep him in for the long-term.
Justify the Increase
You don’t have to spend too much time, if any at all, justifying the reason for the rate increase. The truth is that your customers aren’t interested if you increased the rates in many years or any other details. Probably the best way to put it is by being completely sincere and simple.
Add value
A good way to gain approval from your client on a price increase is to give added value to them. Always start in your price increase letter by thanking them for supporting your business. You should also explain what the new rate increase is especially when it goes in effect and after you can give them a little bit of an incentive that they will not refuse.
Don’t apologize or feel bad
Don’t feel stressed about this, it’s normal from time to time to have rates increased. Price rises are part of running a business so you need to appear confident about it even if you don’t feel like that at all.
After sending out the letter, make sure you:
- Follow up with a phone after a few days and check if the client understood completely what is going on and how it impacts them
- Show confidence in your prices and don’t let any client keep the same rate
- Show professionalism, even if a client gets angry show the value that you bring to the business
What if they can’t afford the price increase?
Don’t be stressed out when you sent a price increase letter, feel confident because you deserve the increase. For sure some of the clients will not be able to afford the new rates and those are the times when a decision will be needed.
Some clients might not be worth compromising for new pricing so you need to find a solution around that. Probably the best way to go about this is to ask yourself if you like working with this client and if you get excited each time they come with a new project. If you don’t find any good reason at all then it is probably best to stop the relationship.
The ones that do deserve a chance might be interested in a middle rate so make sure you present this option as well for them.
Sample price increase letters
Send first emails to let your clients know about the changes that are coming and keep your writing positive. Show the great results that you have achieved and don’t apologize.
Sample business letter for a Price increase
Check this price increase letter, it might be just the one you were looking for.
Letter – Notice of Price Increase
If you write to a customer or supplier that you are about to do a price increase you need the right document in order to make the right impression.
Sample Notice Letter to Clients for Price Increase
These are sample letter for rates revision format for customers, companies and so on. They are made by a courier company for revising rates due to an increase in expenses. You can change everything around your needs.
Announce a Price Increase – Sample letters
Go for this price increase letter template that can be helpful when you have this kind of situation.
Price Increase Announcement Letter Template – Free Example
Find out how to raise prices without losing any of your customers
Announce a price increase. Sample letter #5
Great price increase letter model that you can use in the future so take advantage of it and download it.
If you enjoyed reading this article about the price increase letter, you should read these as well:
- Create a UX designer cover letter that will get you hired
- Free MailChimp templates to use for your newsletters
- Great brochure mockup examples you could download right now
Bogdan Sandu, a seasoned designer with 15 years of diverse experience, has been designing websites since 2008.
Renowned for his expertise in logo design and visual branding, Bogdan has developed a multitude of logos for various clients.
His skills extend to creating posters, vector illustrations, business cards, and brochures. Additionally, Bogdan's UI kits were featured on marketplaces like Visual Hierarchy and UI8.
Renowned for his expertise in logo design and visual branding, Bogdan has developed a multitude of logos for various clients.
His skills extend to creating posters, vector illustrations, business cards, and brochures. Additionally, Bogdan's UI kits were featured on marketplaces like Visual Hierarchy and UI8.
Latest posts by Bogdan Sandu (see all)
- The Tecate Logo History, Colors, Font, And Meaning - 5 May 2024
- REM to PX Converter - 5 May 2024
- The Asahi Logo History, Colors, Font, And Meaning - 4 May 2024
