How To Write GREAT Price Increase Letters

How To Write GREAT Price Increase Letters

So you have a price increase initiative coming up, and maybe you are a little anxious about writing a letter to your customers announcing it. That’s understandable. After all, you don’t write these announcements every day. Price increases occur only occasionally and, like strategic planning, it’s hard to master something without routine practice.

There are a variety of reasons for a price increase. Some increases are driven by rising material costs, restricted industry capacity or increases in demand. It’s fairly easy to communicate these changes because you can blame external sources for necessitating price hikes. But what about instances when you realize that a customer is paying less than fair market prices, and you want to capture those incremental dollars?

There may be a variety of reasons why some customers are not paying market prices – for instance, one-time discounts that became institutionalized, end-of-year price incentives to meet sales goals, or maybe prices were just set too low from the onset. How do you talk to customers about adjusting these prices up?

Highlight Your Value

Look inside your company at active programs that are designed to deliver value to your customers. More than 90% of all activity in most companies can be tied to delivering value to the marketplace. Yet 90% of most companies don’t communicate that value to their customer base. Now is the time to speak up!

For example, consider new initiatives that might include a new CRM system to improve customer relationships and communication or a new manufacturing system that will improve delivery. And, how about added customer service personnel or field sales reps? Any of these programs deliver additional value to your customers.

What Buyers Want

Our research on buyers over the years has consistently revealed one theme that buyers rarely discuss: Buyers want to do business with suppliers that are profitable. Unprofitable suppliers are a potential risk to customers, and no buyer wants to be surprised and find themselves shopping for another supplier in an untimely manner.

Increased value and financial strength are valid arguments for increasing prices. Below is an actual price increase announcement for one of our clients. See if you can identify these themes throughout this letter.

Dear Mr. Smith:

ACME Corporation is constantly striving to better serve our customers with the best products and the best service in the market. We are currently managing several initiatives that will make it easier and more efficient for you to do business with us.

ACME is currently implementing a state-of-the-art Customer Relationship Management (CRM) program. This program will improve our communications with your company, provide you with information and data to better manage your processing systems, expedite service and ordering, and strengthen our overall relationship with our valued customers. In the end, your company will spend less time managing a vendor and more time managing the issues that are most important to you.

ACME is now a member of the Global Healthcare Exchange, an electronic Internet exchange that enables you to place orders with any vendor from a single location. This electronic solution saves you time in ordering and makes it easy to do business with ACME.

Additionally, we have invested more in our spare parts inventory to insure that we always have the components available for your equipment when you need them. We expanded our biomed training programs to train technicians to repair and service equipment on-site. And, we added more people to the technical and clinical hotline to assist you with troubleshooting and service.

These efforts have resulted in improved customer service that is being applauded by the industry. The National Group, a customer service research firm for the healthcare and high-tech markets, has awarded ACME with its prestigious Future Supplier Award for excellence in customer satisfaction for each of the past three years.

We are pleased to provide exceptional products and service, and will continue to invest in programs that create the benchmark for performance and satisfaction. In order to continue providing the highest-quality products and services, we are instituting a 2.7% price increase on some products effective May 1, 2015. These changes will insure that ACME continues to provide the highest-quality products in the industry backed by the best service for years to come.

We look forward to continuing our partnership with your firm and providing the service that has made ACME the industry leader. You will be contacted by an ACME representative in the coming days to answer any questions that you may have regarding our prices, service and products. In the meantime, if you have any questions or needs that require immediate assistance, feel free to contact your sales representative or our customer service department.


Taking time to create thoughtful price increase announcements can go a long way to improving increase outcomes. You likely have more to talk about than you may realize. Start with a brief brainstorming session to identify all of the possible programs that deliver value to customers and let these be the basis for writing an effective price increase announcement.

About the Author

Ralph Zuponcic

President, PricePoint Partners

Ralph is a national authority on strategic pricing. He has been featured in publications including The Wall Street Journal, Fortune Small Business, CFO Magazine and Marketing News.

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