Price Increase Letter – How to Write it without Losing Clients
If you are planning on raising the prices for your goods and services, you will need to find a way to let your customers know without chasing them away. A well-written price increase letter is a great tool for this purpose. However, putting together this notice is hardly an easy task.
Luckily, there are some tips and tricks that you can use in order to write a price increase letter that won’t make your customers cancel their subscription to your product or service. From the tone and wording of the letter to the voice and the order of information, these little details could make a big change. Without further ado, here are some tips for writing a good price increase letter.
Don’t Beat Around the Bush
One of the biggest dos and don’ts of delivering bad news has to do with being direct and getting straight to the point. Beating around the bush can only make your customers angry. What’s more, a long wall of text can potentially deter them from even reading the letter, which will eventually lead to a series of angry phone calls once they’ve noticed the increase in their bill.
Instead, rip off the band-aid straight away. Clearly state what the purpose of the letter is in the very first paragraph. This is the only way to make sure the addressee will read and understand your message.
Make it Personal
To make the price increase letter stand out from the usual advertising newsletter, do your best to make it personal. Address the customer directly, instead of using the usual “Dear Sir/Madam”. This will let them know that the content of the message is something that concerns them.
Of course, it should go without saying that you should send out the letter to your customers, instead of just posting it on your website or social media. Firstly, this will ensure that everyone reads the notice. Secondly, it will increase your chances of keeping customers instead of driving them away.
A Price Increase Letter isn’t an Apology
Don’t be apologetic about the fact that you’re raising your prices. Stand firmly behind what you believe your product or service is worth. Clarify that this isn’t something you would do unless you had to, but don’t beg for forgiveness.
Briefly Explain the Reasons Behind the Increase
Instead of cluttering your price increase letter with apologies, resort to logic. Explain to your customers why you’ve decided to take this step. A simple justification in two or three sentences should be enough.
Remember not to go into too much detail. Odds are, your customers won’t be interested to know that your expenses of maintaining the website have gone up or that your bills are through the roof. Instead, simply saying that this price increase is necessary in order to be able to provide quality service should be enough.
Remind Clients of Your Quality Services
Now that your clients know about the increase, it’s time to remind them of all the great things they can expect by staying subscribed to your products and services. This is your chance to show them that staying loyal to you will be worth the extra expense. List some of your best products or services, important statistics, and big achievements.
Another good idea would be to offer a free trial, a gift or a one-time discount as a way to compensate for the price increase. In this way, your clients can rationalize the additional expense with the fact that they’re also getting additional value. And it can only help you convince them to keep using your service or product.
Keep the CTA Brief and Unassertive
In the area of advertising, we’re all used to writing elaborate “call to action” paragraphs where we invite prospective clients to contact us, purchase our product, leave a review, or carry out any other action we’re aiming at. This shouldn’t be the case with a price increase letter. You’ve just informed a customer that they will be paying more for your services – this is not the ideal time to invite them to buy more of what you offer.
This isn’t to say that there should be no CTA at all. However, you should keep it concise. Simply inform your clients that they are welcome to contact you if they need more information regarding the price rise or if they have any questions.
Send out the Price Increase Letter in a Timely Manner
Allow your customers enough time to process the information you’re giving them and decide whether they want to keep doing business with you. Sending out the price increase letter at the very last moment is a surefire way to chase them away. Depending on the type of service you provide, you’ll want to deliver this information at least a month in advance.
Follow up after a Couple of Days
Once you’ve sent out your price increase letter, follow up with a phone call a couple of days later. In this way, you will make sure that everyone has received, read and understood the notice. You will also allow your clients to voice any concerns they have to you directly.
Additional Tips and Tricks for Increasing Prices
Raising the cost of your product or service is not an easy task. You need to make sure that the price reflects the true value of what you have to offer. It should be able to cover all your expenses and still make a profit, but be affordable enough for people to want to buy it. To help you go about this, here are some additional tips and tricks.
Test Out New Prices
Before you raise the cost of your service and send out the price increase letter, it would be wise to test out the new prices. For example, if you have a price list on your website, increase the rates there for future clients only and keep an eye on how the change affects the number of new clients. If the number of your new clients significantly drops, the price increase was probably too drastic.
Be Flexible with Most Valuable Clients
Do you have any clients that you’ve worked with for a long time and you’d just hate to see them go? If so, consider being more flexible with them when it comes to the price rise. Losing a longtime customer over a cost increase is the last thing any business needs.
Create Budget Alternatives
Not everyone will be able to afford the increase you’ve just announced. Consider creating a budget alternative for those clients. This could include service bundles at a lower price or a basic version of the service at the old price.
To sum up, a good price increase letter should be straight to the point, professional, and informative. All businesses have to raise their prices every once in a while. As long as you provide quality services to your clients, you shouldn’t have to worry about losing them to competitors.