A price increase letter has to accomplish far more than announce that a vendor is increasing its prices. It must convince the existing customer.
[Subject: Normally bold, summarizes the intention of the letter] -Optional-
Dear [Recipients Name],
To my valued clients:
I hope that you have found that the last two years of your continuing patronage have been very beneficial for the both of us.
Due to the substantial increase over several years of office, supply, and labor expenses, I have found it necessary to increase my hourly rate. Although I would very much like to retain my current rates, I have found that increasing my rates would allow me to continue and improve my legal services for you. Starting April 1 this year, my rate per hour would increase to $200.
I look forward to your continuing patronage. Calls on concerns regarding this matter shall be most welcomed.
[Senders Title] -Optional-
[Enclosures: number] - Optional -
cc: [Name of copy recipient] - Optional -
Further things to consider when writing announcement letters to clients
Announcement letters are letters that notify or give information about a certain occasion, special event, or occurrence that people are required to be aware of. They could be for a concert, a special sale, or even a graduation party. Announcement letters are usually informal and state clearly and concisely what the event/occasion is and what further actions the recipient should take. Announcement letters can be used in many personal and business situations. In personal situations these letters may be used, for instance, to announce a birthday, death, wedding, or graduation. In the business world, such letters may be used to announce a new policy, change in management, financial summaries for investors, grand sale, or actions against a customer due to nonpayment.
Announcement letters should be written in a straightforward manner stating all the necessary facts. Clearly state why you feel the occasion is important. If you are delivering bad news, be optimistic for the future. Bold and highlight the points that need focus so that the content is clear to the reader. Add any information which you think your reader might want to know and do not miss out any important detail. End the letter on a positive note.
Letters to clients are letters a person or organization writes to other people and/or organizations that benefit from the senders' products or professional services. These could be welcome letters to welcome the clients to the organization, introduction letters to introduce a product or service to the clients, or thank-you letters to appreciate clients for their continued support. They could also be response letters to respond to clients' queries or inform letters to notify the clients of important matters like discounts on products and services, relocation of offices, etc. Basically, a letter to a client can be just about anything, as long as whatever you are communicating is business-related.
Letters to clients are business letters, and therefore, they should be formal and professional. Start the letter with a proper salutation. Clearly state the purpose of your letter. If a client is required to take a certain urgent action, make sure to specify exactly what he/she is supposed to do. Be brief and straightforward and avoid adding irrelevant details. Close the letter by warmly inviting the recipient to respond or to take the necessary action. Sign the letter and provide your contact details. Print the letter on the company's letterhead.
Sample sales letters with must-know tips, easy steps, sample phrases and a prospective customer to a sales appointment, presentation, or demonstration.
ANNOUNCEMENT TO CUSTOMERS: INCREASE IN PRICE
[NAME, COMPANY AND ADDRESS, ex.
14 Edith Street,
ZIP POST CODE]
Dear [NAME, ex. Tom Atkinson],
It has been a pleasure to serve you in the past, and we look forward to doing business with you in the future.
As you may know, [STATE REASON FOR PRICE INCREASE, ex. the dollar has fallen substantially against the yen and economists do not expect it to rise significantly in the near future. Since our Magnaflux compressor uses several parts which are imported from Asia, we have suffered a significant increase in our costs.]
Our first aim is to please our customers. Indeed, however, we will not be able to serve you if our business incurs losses. Unfortunately, we are left with no rational alternative but to increase our prices. We are confident, nonetheless, that you will find the quality of our [products/services] even in light of these new prices to be quite reasonable and competitive.
Enclosed, please find a copy of our new price list, which is effective [DATE, ex. immediately].
While we are not happy about this announcement, we are confident you will continue to be pleased with our superior [products/services]. We look forward to continued business together.
[YOUR NAME, ex. Tony Montana]
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Telling your customers about a price increase is one of the toughest emails that you’ll send. What if all your customers get angry and leave? Hello anxiety! You might be hesitant to bring it up at all — just change the pricing page and hope nobody notices, right?
Of course, the reality is that customers will notice and get confused and angry. Failing to be up front about pricing, of all things, is no way to treat people.
Appcues — a Boston-based startup that helps software companies create personalized in-app onboarding flows — recently increased their pricing across the board to better align it with the value provided to customers. Instead of hemming and hawing, they emailed every person who’d ever signed up for Appcues to tell them about the change.
Appcues co-founder Jackson Noel describes the deliberate goals they had for their pricing emails approach:
- Communicate the adjustment clearly to both customers and prospects
- Inspire urgency in the sales process
- Avoid pissing off our customers (and/or being compared to a cable company)
It worked. Not one angry response or customers lost (and only 12 unsubscribes).
More than that — these pricing increase emails ended up capturing 263% more sales, leading to Appcues’s best month ever. Here’s how they did it.
Appcues sent different emails to two different segments to notify them about the new pricing plan. The email on the left went to current customers, while the email on the right went to everyone who signed up for the app but wasn’t yet a customer.
With something like a pricing change, you want to be clear from the start. In these emails:
The less straightforward you are about what customers may construe as bad news, the more credibility you lose. By being up front, you earn your customer’s respect and maintain the trust required to develop a long-term relationship.
One huge insight that the Appcues team had was to treat the news as a sales process. They realized that when you raise the price of your product, the lower, legacy pricing becomes a promotional opportunity. That becomes a win-win window — customers get a deal at lower prices and the company gains conversions to higher plans.
In their call-to-action to non-customers, Appcues created urgency to take advantage of its promotional pricing by invoking the psychology of loss aversion. If you don’t upgrade to a paid plan before July 31st, you lose the opportunity for legacy pricing forever. That grabs your attention and propels you towards a buying decision. If you’re considering buying Appcues at all, now is a great time.
It worked — this email had a 60% open rate with 4.3% click rate. Appcues was able to close a number of those sales and bring in 263% more in revenue in July versus June as a direct result.
As for existing customers, Appcues did something awesome by grandfathering them into their current pricing instead of forcing them to move up to the new pricing scheme. They focused on this message because they wanted to keep current customers happy and not damage relationships for the long-term.
However, in doing so, the company missed a chance to nudge this existing customers segment towards the opportunity to upgrade to a higher tier at legacy prices. They could’ve made a similar offer to the one for non-customers: take advantage of legacy pricing to upgrade now. Because they didn’t, there were 0 upgrades.
If the Appcues team were to do it all again, here’s what they said that call-to-action would’ve looked like:
Never email from [email protected], especially for an email with this level of sensitivity.
Not only did Appcues send their email from a friendly account, they actively encouraged email replies. And they backed up their promise by responding to queries quickly to make sure that everyone was squared away.
The follow-up is crucial to closing deals, and that’s why Appcues decided to create short email campaigns for its non-customer segment.
Within a broad segment like non-customers, you’ll often find a heterogenous group. In fact, the non-customer group had 8x more people in it than the customer group, which made it ripe for some deeper segmentation. For example, people currently in their 15-day trial are much warmer leads than those who tried your product out 9 months ago and barely remember who you are. So Appcues created 2 separate email campaigns for its 2 non-customer segments.
For people currently active in their 15-day trial, Appcues created a specific follow-up to the initial announcement. One day before the new pricing took effect, they sent a second email to this specific segment reminding them of the pricing change and giving them one last opportunity to take advantage of legacy pricing.
This segment also had the most promising prospects for the pricing change. They were the most likely to convert to a paid plan compared to people who signed up several months ago. And since this was just a quick reminder to a targeted sub-segment, the email not only wasn’t annoying — it worked to move people onto their buying decision.
Often, people won’t respond or act on branded emails just by virtue of the fact that they come from the company, not an individual. Appcues decided to add the personal touch and email people directly, by hand.
John Sherer, Appcues’s Director of Business Development, reached out to sales prospects (people who’d shown interested in the product and weren’t yet customers) and divided them into two groups:
He wrote each active conversation email from scratch, drawing on the existing context of his sales conversation and without copy-pasting a template. They resembled this email:
These emails were incredibly effective in getting deals from interest to close because of the personal touch.
For prospects he hadn’t talked with in awhile, he copy-pasted and sent the following email to prospects that he thought had the potential to convert. He used HubSpot Sales to track opens on those emails.
This email reignited interest in a number of prospects. The Calendly link made it easy to book time for a call with John, where he would warm up the lead by demoing the product. After that, he would close the deal using the promotional legacy pricing.
What’s impressive about Appcues’s pricing campaign is that they were able to do what’s best for the customer and boost their bottom line, all with a pricing email that startups all too often are scared to send.
By thinking through their messaging strategy, they were able to send targeted emails that persuaded people to act positively in their own interest. The Appcues team accomplished its goals, simply by establishing some basic principles, creating 2 segments, and adding the human touch.
How have your pricing change communications gone? Share your story with us in the comments!
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Every now and again you may be required to write an email or a letter that contains bad news.
This may be to your customers telling them you are increasing your prices or ceasing to offer a particular service.
Alternatively, you may have to write to a supplier dispensing with their services.
Whatever the reason for your letter, you will (hopefully) want to write it in a way that doesn’t offend, that keeps you onside with the recipient (especially if it’s a customer) and doesn’t sully your reputation in your industry.
This is not a task for the faint-of-heart!
Learning how to construct a bad news letter that will ensure customers don’t immediately run off to your rival is a good skill to have in business.
It is not difficult to do, but judging by the emails and letters I’ve received over the years you would have thought it was like trying to climb Everest!
For instance, how often have you received a letter that goes something like this?
Dear Valued Client
Because of rising external costs, we are increasing our prices by 10%, effective immediately.
We apologise for any inconvenience.
What’s wrong with this? Let me count the ways:
Here’s how to write a good bad-news letter that helps you retain the client, shows them you care, and tries to explain what they’re doing and why.
|Dear [customer name]||First, personalise your bad news letter if you want to make people believe you are on their side.|
You have been a valued client of XYZ Company for [xx] years and we truly appreciate your business.
|Start with something positive. In this example, appreciation of the client.|
In the past 12 months, our external costs have risen continuously.
|Cushion the bad news to give the reader an inkling of what’s to come without actually giving them the news.|
While we have tried hard to cut our own costs to compensate, it has not been possible to offset all these external price rises and regrettably we must raise our own prices.
|Detail the bad news with a bit more cushioning that says we wish we didn’t have to do this and we’ve tried other methods first, this is our last resort.|
Although this increase is our first in three years, we have managed to keep it to just 5%.
|More good news first, or at least mitigation, before the detail of the increase. Using “just” implies it could have been worse.|
But because we value your business, we will not be implementing the increase until the beginning of the next billing cycle.
|Another cushion, this time saying we’re not doing so immediately so you have some warning. Something positive after the bad news.|
We do so wish we didn’t need to pass some of the cost increases on to you but if we want to stay in business it is our only option.
|Another apology. And reiteration that not all costs are being passed on, some are being absorbed.|
Now, you may have questions about this, which we fully understand. If that is the case, please pick up the phone and call us. We always like hearing from our customers.
|Here, we’re putting our arm around the reader and inviting them to get in touch if they wish. Finish with another feel-good message.|
We know you have a choice of suppliers and are so glad that you choose us!
|Another reinforcement of the value of the client to the company.|
[A real person’s name]
[Position in company]
|A simple sign-off by either someone the recipient knows or at the very least a real person’s name, not just a title.|
If you would like help to write a bad news letter, please contact us.
More tips to improve your writing.
Writing GREAT Price Increase Letters There are a variety of reasons for a price increase. How do you talk to customers about adjusting these prices up?.