Price Increase Letter to Customers
Tells customers prices are changing, and why.
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Dear Sir / Madam,
I am writing to let you know that our prices will change with effect from [date]. The adjustment is [percentage].
The reason is straightforward: [reason]. We have held prices as long as we sensibly could.
Orders placed and confirmed before that date will be invoiced at the current price. Your updated price list is attached, and I am happy to talk it through if it causes you difficulty.
What is a Price Revision Notice?
A price revision notice tells customers what is changing, by how much, from when, and what happens to work already ordered. It matters because of how the news lands. A rise discovered on an invoice reads as sharp practice and triggers calls, disputes and cancellations; the same rise announced in advance, with a date and a reason, is usually absorbed with a shrug. The letter is cheaper than the churn it prevents.
Manufacturers and distributors send one when input costs move. Service firms and freelancers send one when rates have not changed in years. Subscription businesses send one before a renewal date. Maintenance contractors, cleaning companies, logistics providers and membership bodies all send them on an annual cycle. The audience is rarely uniform: a single letter usually has to work for customers on a published price list, customers on a negotiated contract with a fixed price, and customers with quotes already outstanding, and those three groups need different treatment.
The contract governs first. Most business agreements contain a price variation clause setting a notice period and sometimes an index or cap, and a letter that ignores it does not change the price. Consumer contracts face additional scrutiny: unfair terms rules in the UK and EU can affect a clause allowing unilateral increases without a right to exit, and various jurisdictions impose notice requirements before subscription renewals. Indirect tax adds another layer, so state clearly whether figures include VAT or GST. Check your own clause and the consumer rules where your customers are before setting a date.
The letter does not vary the contract on its own. If your agreement requires a specified notice period or a signed amendment, sending an announcement does not substitute for following that route. It does not apply to orders already accepted at the old price unless the contract says it does. It is not an invitation to renegotiate, though some customers will treat it as one. And it is not a price list — the operational work of updating quotes, systems, catalogues and the sales team's own documents still has to happen separately.
What to put in a Price Revision Notice
These are the details this template asks for. Anything left blank is marked in red on the preview so you can see what is still missing.
| Field | What goes in it |
|---|---|
| Business name | For example: Barton Supply Co. |
| Your address | For example: Unit 7, Barton Road, Columbus, OH 43212 |
| Customer name | For example: Halliwell Interiors Inc. |
| Customer address | For example: 44 High Street, Columbus, OH 43215 |
| New prices from | Free text |
| The change | For example: an average increase of 6% |
| Reason | For example: timber costs have risen 19% since our last revision and we have absorbed as much of that… |
| Issued to (full name) | For example: James Whitfield |
| Their address | For example: 588 Kinnear Road, Columbus, OH 43212 |
How to write a Price Revision Notice
Give the effective date and the notice period
Put the date in the first two lines, in full: ‘new prices apply to orders placed on or after 1 March’. Count backwards from it to check you are giving at least the notice your contract requires, and add a margin. Say explicitly which side of the line an order falls on — placed, accepted, dispatched or invoiced — because that is the question your customers will ask on the day.
Show old price and new price, per item
A percentage alone forces every customer to work out their own exposure, and some will get it wrong upwards. Give a table with the current price, the new price and the change for the items that customer actually buys. Where the rise is uneven across the range, showing it that way is more persuasive than an average, because customers can see that you have not simply applied a blanket figure.
State the reason once, and stop
One or two sentences naming the real driver — raw material costs, carriage, currency, a supplier's own increase, wage costs. Do not build a case across three paragraphs; length reads as guilt and invites a challenge to each point. If you have held prices for a period or absorbed part of an increase, say so in a single line. Then move on to what happens next.
Protect work already quoted or ordered
Say what happens to outstanding quotations and accepted orders. Honouring quotes issued before the announcement, for their stated validity period, costs little and removes the most common objection. Give a cut-off for orders at the current price if you are offering one, and be prepared for a surge of forward ordering — decide in advance whether you will cap it, and say so in the letter rather than afterwards.
Give customers a route to talk
Name a person and a direct line for questions about specific accounts. Some customers have a contract clause or a volume position that genuinely changes the answer, and you would rather hear about it before a disputed invoice. Brief your own sales and support teams before the letter goes out, with the figures and the reasoning, so the first customer to call does not get a different answer from each person they reach.
Common mistakes
- Announcing an increase inside a marketing newsletter, where it is missed entirely and then discovered on the invoice, turning a routine change into a complaint.
- Giving a percentage without line-item pricing, so customers cannot check their own exposure and assume the worst.
- Setting an effective date that gives less notice than the contract requires, which makes the increase unenforceable for those customers and unravels the whole exercise.
- Apologising at length, which signals the price is negotiable and produces a queue of customers who all want the old rate.
- Sending it to customers before briefing the sales team, so your own people give three different answers in the first hour and none of them match the letter.
Frequently asked questions
How much notice should I give customers before a price increase?
Start with your contract, which usually sets a minimum and overrides your preference. Where nothing is specified, thirty to ninety days is common for business customers and gives them time to budget. Subscription and consumer contracts may attract specific notice requirements in some jurisdictions, so check the current rules for the markets you sell into before fixing a date.
How do I tell customers about a price increase without losing them?
Give real notice, show the actual figures, name the reason once, and honour quotes and orders already in flight. Most cancellations after a price rise are triggered by surprise or by a sense of being handled, not by the number itself. Contacting your largest accounts by phone before the letter goes out is worth the time it takes.
Should I explain why prices are going up?
Yes, briefly and truthfully. One or two sentences naming a genuine driver is enough. A long justification reads as an argument, and any argument invites a counter-argument. Avoid reasons that sound like your own poor management, and never cite a cost increase you cannot substantiate if a large customer asks you to.
Can I increase prices on an existing contract?
Only in the way the contract allows. Many agreements contain a variation clause with a notice period, an index or a cap; some fix the price for a term. Consumer contracts in several jurisdictions face additional limits on unilateral variation. Read your own clause first, and take advice before relying on a general right to raise prices that the contract does not give you.
Should the price increase letter go by email or post?
Use whatever method your contract specifies for notices, since an increase served the wrong way may not count. Where the contract is silent, email is normal and gives you a timestamp. For your largest accounts, send it by the formal route and follow up with a call. Keep proof of sending for every customer, not just the ones who query it.
This page explains general practice and is not legal advice. Requirements differ between countries and, in some cases, between states — check what applies where the document will be used.