How to Write a Price Increase Letter - Free Templates & Tips

How to Write a Price Increase Letter (Templates & Tips)

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It seems that everywhere we look these days, prices are going up. Groceries, gas, lumber, and paper—you name it—are just more expensive than they were even a year ago. As a home service business owner, if prices are going up on the things you need to do your business, the chances are that you will need to increase your prices to offset those costs. But how do you raise your prices? What’s the right amount? And how do you inform your customer base of your new pricing structure?

We’ve got the answers to your questions, and most importantly, we’ve learned a thing or two over the years on how to write the perfect price increase letter to customers.

How Do You Know When It’s Time to Increase Your Prices?

Many business owners raise their prices annually to help account for increases in the cost of living and inflation. If the cost of living goes up three to four percent each year, failure to raise your prices means you’ll be doing the same work and putting less money in your pocketbook.

Here are some indicators that you need to increase your prices.

Increasing Operational Costs

If the cost of materials, labor, or overhead for your business goes up, it might be necessary to consider an increase in prices. Expanding your service offerings signals growth but may require a modest increase to cover elevated costs.

This isn’t just about maintaining profits—it’s about ensuring your business can continue to operate without compromising quality. When the expenses associated with providing your services increase, adjusting your prices helps keep your business sustainable and protects your margins.

You Want To Attract Higher Value Clients

Increasing your prices can be a strategic move to attract more premium clients. Higher prices often give the impression of a higher-quality service, which can draw in customers who are looking for the best in the market. This approach not only increases your profitability but can also enhance your brand’s reputation as a high-quality service provider.

Your Service Business is Growing

When more people want what you’re selling, it’s a good sign that your business is doing well. Increased demand can justify a price increase because it shows that customers value your service highly enough to pay more. It’s a balancing act to keep supply and demand in check without losing clients, but it can lead to greater profits and business growth.

Market Factors Like an Increase in Competition

Keeping an eye on your competition is a must—and something you should be doing often. If they raise their prices, it might be a good indicator that you should, too. Setting your prices competitively doesn’t always mean being the cheapest. Ensure your prices reflect the quality of your services, cover all costs, and provide a fair return. This strategy helps you stay competitive and attractive while making room for necessary price adjustments.

How to Write a Price Increase Letter Without Losing Customers

The truth is, that you might lose some loyal customers when you increase your prices. Many consumers today are out there looking for the best price, regardless of the quality of the goods or services they are purchasing. And let’s be clear, the lowest price and the best deal aren’t always one and the same.

This said, when communicating your price increase, you want to do so in a way that you keep as many customer relationships as possible. And, when you do it right, you might also gain future customers who are happy to spend money with a business that they perceive offers more value and higher quality work.

Here are the things you need to keep in mind.

Inform Your Team First

Be sure that your team is in the know before you increase your prices. Failure to do so can create some uncomfortable and embarrassing moments. Remember that open and honest dialogue with your employees needs to be a cornerstone of your business. So, it stands to reason that letting them know not only about the price changes, but why those prices are changing, is absolutely integral to the continuity of your business operations.

And, be sure to inform employees in many ways. Consider a team meeting followed by a written communication. Also, be sure that employees have an easy way to find those new prices, should they have any questions.

Be Transparent and Provide Justification

Even though no one likes to hear that something will cost them more than it used to, today’s consumers are used to prices going up. So trust us, you won’t be the first business they are hearing from. That said, make sure you are open and honest about the changes. The team at Housecall Pro suggests taking the five w’s approach to communication.

  • What: Clearly state that the prices for your services or products are increasing. For example, “We want to let you know that starting next month, the prices of our services will be going up.”
  • Why: Explain the reasons behind the price increase. You might say, “This adjustment is due to the rising costs of materials and the enhancements we’re making to deliver even better service.”
  • When: Specify the date when the new prices will take effect. An example could be, “The new pricing will start on July 1st, 2024.”
  • Where: Inform customers where they can find the new prices or more details. For instance, “You can view the new pricing on our website under the ‘Pricing’ section, or feel free to contact our support team.”
  • How: Describe how the change will be implemented or how it might affect current contracts or services. You could say, “If you’re currently under contract, your existing rates will be honored until it expires. New rates will apply upon renewal.”

Give Ample Advance Notice

Give ample notice of the upcoming price adjustment so they can get ready for the upcoming price increase. Just like you, they may need to adjust their budget to account for those price changes. As a best practice, we suggest giving your customers at least four to six weeks advance notice. And, if possible, try to give even more. Many businesses get into the practice of revising their prices annually at the same time of year. This helps customers know what to expect predictably. 

Personalize Each Letter

No one likes receiving a form letter address to “to whom it may concern.” And with modern word processing software, personalizing letters is easier than you might realize. Ensure the letter is addressed to your customer, personally, and where possible, list the services they receive, the current cost of those services, and what the new service cost will be. This helps customers find what they are looking for easily, and they will appreciate the extra effort you took in preparing the communication.

Need help crafting the perfect email letter? Grab our free customer retention email templates to attract and retain more customers and improve customer loyalty.

Provide Support & Focus on Adding Value

Your customers will want reassurance that you are still focused on providing them the high-quality products and services that they have come to expect from you. So, be sure to indicate that in your communication. And, remind your valuable customers of the added value that you continue to provide, and that you are here to support them throughout the changes.

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Tips for Informing Customers of a Price Increase

While price increases can be daunting, transparent conversations with customers build trust and understanding. By explaining the value they receive alongside the reasons for the adjustment, you can alleviate concerns and reinforce the quality of your services.

These conversations not only demonstrate your commitment to customer satisfaction but also empower clients to make informed decisions, fostering long-term loyalty and minimizing customer churn. Here’s how you can effectively inform your customers about a price increase while maintaining their trust and loyalty:

Express Your Gratitude

Always begin your communication by thanking your customers for their continued support and loyalty. Mention how their patronage has been essential to your business. For example, you might write, “We’re truly grateful for your ongoing trust in our services and are committed to continuing to meet your needs.”

Facilitate Open Dialogue

Encourage your customers to reach out with any questions or concerns they might have about the price changes. Make it clear that their feedback is valued and important. You could say, “We understand that this change may raise some questions, and we’re here to discuss any of your concerns.”

Avoid Poor Timing

Be mindful of when you announce the price increase. Avoid times when your customers might be experiencing seasonal budget constraints or during major holidays. Aim for a neutral time that minimizes stress for your customers. Trust us, this will help them be more receptive to the news.

Politely Follow Up

After sending the price increase notice, follow up with your customers. Depending on your business model, this could be through a phone call, email, or even a personal visit. Reinforce the value you provide and ensure they know you are available to help them adjust to the changes.

How to Write a Price Increase Letter Samples

Pro with satisfied female customer with blonde hair

Now that you’re armed with some helpful tips for writing a letter, we thought we’d take it one step further by providing you with some free templates that you can use. However, please understand that these are intended to be templates. As we mentioned earlier in this article, we highly recommend that you take the time to personalize these letters using word processing software, so that your customer receives a letter specific to them and the services they are using.

Generic Price Increase Letter Template

[Your Business Name]

[Your Business Address]

[City, State, ZIP]

[Email Address]

[Phone Number]


Dear [Customer’s Name],

First and foremost, we want to express our heartfelt gratitude for your continued patronage and trust in [Your Business Name]. It’s because of customers like you that our business has flourished, and we are able to continuously improve the quality of our services.

We are writing to inform you that as of [Effective Date of Price Increase], we will be implementing a price adjustment on our [services/products]. This change is necessary due to the overall increases in the cost of operations and to ensure that we can continue delivering the exceptional quality you’ve come to expect from us.

Details of New Pricing:

[List the new pricing details here, or direct them to where they can find more information]

We understand that changes in pricing might raise concerns, which is why we are committed to transparency. This price adjustment will allow us to maintain the high standards of our offerings and invest in the enhancements that add value to your experience with us.

We encourage you to reach out to us with any questions or concerns regarding this update. Our team is here to provide you with support and to discuss how we can continue serving you effectively during this transition.

Thank you once again for your understanding and continued support. We look forward to serving you with even greater dedication.

Warm regards,

[Your Name]

[Your Position]

[Your Business Name]

[Contact Information]

Rising Costs of Goods Letter Template

[Your Business Name]

[Your Business Address]

[City, State, ZIP]

[Email Address]

[Phone Number]


Dear [Customer’s Name],

Thank you for your loyalty and support as a valued customer of [Your Business Name]. Your trust in our services is something we deeply appreciate and do not take for granted.

We wish to inform you that due to significant increases in the costs of goods and materials, we find it necessary to adjust our pricing to reflect these changes. Effective [Effective Date of Price Increase], you will notice an adjustment in the prices of our [services/products]. This decision was made after careful consideration and is essential to continue providing you with the quality you expect and deserve.

Details of New Pricing:

[Provide specific details of the price increase or direct them to a resource for detailed pricing information]

We assure you that this price increase is aligned with the industry standards and enables us to keep up with rising market costs without compromising on quality. Our team is committed to transparency and is more than willing to discuss this change with you to address any concerns you might have.

Please feel free to reach out to us directly at [Your Contact Information]. Your satisfaction and continued business are very important to us, and we are here to ensure a smooth transition.

Thank you for your understanding and continued partnership.


[Your Name]

[Your Position]

[Your Business Name]

[Contact Information]

Mastering Customer Relationships and Pricing with Housecall Pro

Profit Rhino price book software Integration mock up

When adjusting prices is necessary, Housecall Pro simplifies the process. With Housecall Pro you can enjoy a host of benefits your customers will appreciate:

Strengthen Customer Relationships

Announcing price changes can be delicate, but Housecall Pro’s automated notifications ensure clear, timely communication. Personalize messages to express your value proposition, justifying increases while reinforcing your commitment to excellence. Customers are more likely to remain loyal when you prioritize open dialogue and demonstrate your investment in their satisfaction

Final Thoughts: How to Write a Price Increase Letter to Customers

We hope that this article has been informative for you, providing insights on how to write a letter announcing a price increase. We know that the process might feel a bit uncomfortable, but remember that all businesses go through this process—many businesses raise their prices annually.

By expressing your gratitude for their business, demonstrating your commitment to continued quality and a high-level of service, and ensuring that you can be reached with any questions, your announcement explaining the price increase will be received with respect and understanding.

Housecall Pro offers expert solutions designed to help you manage your business. From field service management software to solutions to help you drive sales, complete jobs, and receive and manage money, we can help you manage your business more effectively and efficiently. Start your free trial today.

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Housecall Pro
Solutions for your business Whether you need to improve dispatching, reduce paperwork, increase workforce or grow revenue, we have a solution.

Housecall Pro

Solutions for your business Whether you need to improve dispatching, reduce paperwork, increase workforce or grow revenue, we have a solution.