These retailers take commission from businesses, the price of doing business. And that is understandable for the efficiency factor. If your customers use these retailers, they will understand that you need to increase prices on those platforms. Explain this concept in clear terms, with plenty of heads up, in your price increase letter.
Or perhaps your business is booming and your team can’t handle all the orders, subscriptions, packages, etc. That’s a sign it may be time to increase your prices. This can naturally narrow down your customer base while maintaining the same revenue stream. Even better? You can ditch those nagging clients that you just cannot stand anymore.
2. You’ve pivoted or repositioned
Simultaneously, you’ll rebrand yourself as a premium company. Think: high-quality, high-invest, high-reward. The Lamborghini of your industry. Who wouldn’t want that?!
We’re always looking for good examples of good (or ugly) price increase letters! Send them our way for inclusion in this post.
This barely needs an explanation. If you’ve been blindsided by rising costs of memberships (Boston Sports Club, I’m looking at you), you know that it’s not cool. Practice the Golden Rule here. And make it crystal clear—in both the subject line and the first few sentences of the letter/email.
3. You are (or want to start) selling to retailers
This is a given for all email marketing, but for a slightly different reason. If the price increase will have different implications for different customers, don’t send a blanket email where your customers have to dig through and figure out what applies to them. Segment your customers by plan or service so you can personalize the messaging and make the important details crystal clear.
Businesses evolve over time. Some start as the cheapest option around, but as they get a better sense of their ideal audience and market conditions, they may pivot to serve higher-end customers.
1. Communicate the change to your team first
While you should prioritize the method of communication they’re used to, you may also want to notify them via direct mail or even phone—depending on your relationship with your customers. I recommend using the same branded template that you use for any other company announcement, like a product update, fundraising announcement, event invitation, or discounted offer. It’s familiar and won’t run the risk of getting caught in spam traps. And if sending via email, follow these email copywriting tips like staying on-brand.
2. Reach out to customers directly…
Make sure that all of your teams know about this adjustment. Increasing your cost will impact every team in the business, whether directly or indirectly. While your customer service team needs to know how to answer questions, your marketing and sales teams will need to understand how to explain the new pricing and sell it to new customers.
While I can relate to those who have gotten into the habit of buying *everything* from Amazon, or Grubhub, or Etsy, the reality is that suppliers pay the price of convenience.
4. Give plenty of notice
The best practice here should be about two months from the price increase, particularly if it is a subscription charge. This allows your customers to cancel without violating any of your policies, or adjust their budgets accordingly.
You may also want to segment by how long the customer has been with you so you can provide something special in the name of customer loyalty (e.g., extending your current price for another month or giving temporary free access to an upgraded feature).
5. Segment and personalize
If you can, add the exact dates that your price will increase for each customer. Using a bit of SQL, you can usually insert their subscription origin date and insert the date of the hike.
This is one of our top email copywriting tips, and it’s crucial for price increase announcements. Convey the exact increase, why you’re increasing it, when it will take effect, and if there is any action needed on their part. But don’t get into the nitty-gritty details of the increase. Customers just want to know the facts. Plus, too much explanation starts to sound defensive and apologetic. Be confident and concise with your writing (learn how to do that here!).
6. Be informative but brief
And to be honest, I don’t mind. We all have to make a living and sometimes, that means price hikes.
- Notify all team members first.
- Reach out directly to customers.
- Give plenty of notice.
- Segment and personalize your emails.
- Be informative but brief (but not rude).
- Provide a FAQ page.
- Provide a clear way to get support
- Limit price increases to one or less per year
This past year, like too many other millennials, I bought a house. And very unfortunately, this house is in need of a lot of TLC. If you haven’t been paying attention, let me break the news: materials are very expensive these days. Headlines screaming about lumber and glass prices and delays in the supply chain mean that I’ve been on the receiving end of plenty of price increase letters.