How do you communicate a price increase to customers?

Updated: 4 hours ago

7 tips to effectively communicate a price increase without losing customers

Whether you haven't increased your pricing for years or your business is now feeling the cost of living (and business) pinch, communicating any customer change can be stressful. And communicating a price change or increase? Even worse.

Your first thought?

I'll just send out an email and justify why.

But after years of working operations and sales teams, I hate to tell you this 'blast and go' approach is only going to end one way.

Complaints.

Push back and angry emails.

Internal confusion and chaos.

Customers leaving.

Bad Google reviews.

Who does this well? Large corporates and global brands. Commercially-driven, these big names change up their pricing left, right and centre. They might still get backlash, and they might lose customers.

However, these impacts are reduced because they do this and do it well.

Take the customer on the change journey.

Here's 7 tips I learnt from the big guys that actually work, and you can easily adopt for your next price change.

Are you looking to increase your prices in the next 12 months?

Yes, in the next 3 months
Yes, in the next 6 - 12 months
No, we're trying to avoid it

7 ways to communicate a price change without killing business

(1) Tell them DIRECTLY

Relying on verbal only communications to tell customers about a price change isn't the way to go. Not only is it easy to forget about, it's easier to misinterpret and remember the details incorrectly.

Use direct customer channels to communicate price changes, such as email or direct mail, incorporating person-to-person follow-ups as part of the process. This could be as simple as all customers being notified by email and then your account managers or customer service teams following up with clients directly to ensure they are across the upcoming price change.

Written communications are also useful for another purpose: it gives you a change trail. Now, if complaints arise you have physical proof the customer was notified before the new pricing came into effect.

If it's a large change, think about using multiple touch points and leveraging existing touch communications to reinforce it's coming.

Add an insert or information banner on your invoices
Link back to a newsletter or news piece on your website that provides more information
Include an article in your newsletter that provides more context about the change or what it means to the customer.
Add information into customer service check-ins

(2) Tell them EARLY

No one likes to be hit with a price change without warning or as they go to renew!

When communicating a customer price increase, it's essential to tell them early. I generally recommend at least a month's notice, but for businesses that issue invoices you also need to take into consideration your billing cycle.

Ideally, you want to notify your customer one payment cycle before the change comes into effect. While each business is different, the below is a great guide to get you started.

Billing cycle	Recommended minimum notice period
Monthly billing	1 month prior
Quarterly billing	1 - 2 months prior
Six-monthly billing	2 months prior
Annual billing	2 months prior

You should also take into consideration any clauses in your contract or laws related to your industry that may define when you must notify customers of the change. For example:

Does your contract stipulate a set number of days, weeks or months changes need to be communicated?
Does it include how your customer will be notified?
Is there a clause that excludes the customer from the price increase? (such as X price for the first six months)
Does the contract include a clause around changes in pricing?
Will an amendment need to be provided or a new contract need to be signed?

In financial services? You might need to notify customers of changes via mail at least 45 days prior to the change. Other industries may need service changes stipulated in their contract. The key here: chat to a legal professional and know your contract terms! Better to chat first rather than get a nasty letter later.

But don't rely on one touch point (notifying once through a single channel, such as a one off letter). It’s easy for a customer to miss an email or a letter to get lost. Instead, integrate the change across several channels or think about reminder communications prior to the change coming into effect.

(3) Communicate the change's VALUE

This is a big one. Your communication should always link back to the value the customer will get from the change. After all, they are currently paying for a particular standard to be held. So, what will the price increase get them?

Why should they be OK to pay more?

Here, it's important to include how the change will help you maintain or enhance their level of service, support or product quality. Ask yourself:

Will the customer get access to more specialists / expertise?
Will they receive their products and services faster?
Will they get better quality products or services?
Will this ensure longer hours or more availability?
Will this give them access to additional benefits or services?

Remember, they are paying for a service outcome or product benefit. Tell them how the price increase benefits THEM.

--> Not sure how to do this? Book time with Steph and she can coach you through it

(4) Give CONTEXT about the change

Your customers need to know WHY and HOW the price change has come about.

But this isn't about justifying why, nor should this mean hundreds of words communicating how it's come about. Stick to information that is relevant and provides the background they need.

For example, your customer doesn't need know pricing has gone up because you want to increase salaries. Nor that your supplier has increased prices, reducing your margins.

Why has it come about? Be specific but keep it simple. Too much detail can appear as an excuse or justification (which is never a good look for a business). Link it back to the value they receive, and clearly state what it means for them going forward. Remember, all the customer really wants to know is the "so, what?":

So ... what does this mean to my service?
So ... what changes should I expect?
So ... what do I get?
So ... when will the change happen

Oh, and if the increase brings additional benefits or a better product or service, make sure you tell them!

(5) Be CONSISTENT

When communicating your change, consistency is key – whether that be across your customer channels or within your own team.

You need one unified set of messages (why, how and when) across all your communications and information you release. This makes sure no matter where or when your customer hears about the change it's the same.

Where things often goes wrong? Lack of communication with your team. Resulting in different information shared internally or your team not knowing about it at all. This leads to miscommunication or incorrect information being passed on. To ensure your entire team is singing from the same change hymn book:

Create iternal Q and A's for your operational, accounts or customer-facing teams.
Publish FAQs your customer-facing teams can point customers to for more information
Share short scripts for your inbound teams to reference on calls
Prepare slides or information for your management team to share in team meetings, including timelines and key customer communication dates

It's also important to chat to your account management or sales team to see if they need any additional support, such as an email templates for large accounts, a slide for their monthly customer meeting or what this means for existing quotes.

(6) DIRECT queries

If customers have a question, concerns or complaint ... who do they go to?

Sadly this gets missed a lot. The notice goes out about the price change with no contact details for questions. The result?

Customers get bounced around from department to people (because no one knows how to handle it). The complaint or question never gets recorded.

And customers get annoyed that no one seems to care or is getting back to them.

Before your communication goes out, make sure you consider how customer queries should be managed.

Do they need to be transferred to a particular team?
Are you happy to manage questions over the phone or prefer they are emailed?
Do you need to create a form on your website to capture feedback?
If your team is asked a question, do they have the tools to answer the question or do they need to direct customers to a particular part of the business?

Whatever your chosen outcome, it's important to communicate it to your wider team so they can respond correctly from the start. This not only empowers your team to better manage queries, it leads to a better customer experience.

(7) Have EMPATHY

Finally, remember that the price increase may be good for you but it could mean a more expensive service or product for your customer. And often businesses forget there is a human on the other end, especially when you are a business-to-business service provider.

Be empathetic and don’t be afraid to use emotive language (e.g. this has resulted in the difficult decision to increase … ).

Handling these changes formally might seem easier, but it will make you come across cold, heartless and disconnected from the real world. The more you can show you are a real human, the more likely your customers will accept the change.

To recap ...

DO:

Notify customers early and in writing
Be clear and direct about what is changing
Link the increase to quality and value
Provide simple, customer-focused context
Use consistent messaging across all channels and teams
Make it easy for customers to ask questions
Lead with empathy and acknowledge the impact

DON’T:

Surprise customers on an invoice
Rely on verbal communication alone
Over-explain or justify internal costs
Blame suppliers, inflation or “the economy”
Hide the effective date
Let staff find out after customers do
Ignore the emotional impact of the change

Looking to increase your prices?

Being unprepared increases the risk of customers leaving. Chat to us about how we can effectively communicate the change to your customers.

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