What Is a Price/Rate Increase Letter?

86% of consumers specified that they are willing to pay a bigger amount if they will have a great experience as customers or clients (source: superoffice). A part of ensuring that your customers are always satisfied with your services is to let them be updated with particular information about your business and your offers. As an example, to prepare your customers for a price increase, you can first send them a price/rate increase letter which can help them make up their mind that they will be spending more during their next store visit. A price/rate increase letter is a letter document written by organizations intended for their customers, clients, and other stakeholders. Price/rate increase letters typically contain the statement of a price increase as well as the reasons that led to the finalization of the decision to increase the prices of products and services.

Purpose of Using a Formal Price/Rate Increase Letter

It will not always be an announcement of a new discount offer which will push businesses to send letters to their target audience. Sometimes, you also need to let your target audience be aware of some business decisions that you have made especially if it can directly affect them. If you want to announce a price/rate increase, developing a formal letter can be one of the things that you can do so you can spread awareness about the subject matter. Here are some of the objectives that your formal price/rate increase letter should be able to achieve:

1. To Document the Price/Rate Increase That You Will Implement

You can use a price/rate increase letter to properly document all the details of the price increase. A compilation of price/rate increase letters can enable you to observe trends about your price increase activities, customer experience, and business communication implementation. Hence, a price/rate increase letter can be highly-usable and beneficial not only for your customers or clients but also for your organization.

2. To Properly Announce the Price/Rate Increase to Your Target Market

You need to ensure that your current and desired audience are well-aware of the price increase. Gather all your customer database and sales leads list so you can already send your price/rate increase letter to your target audience. Awareness about the subject matter can make it easier for you to build and set the right expectations of your market towards your new pricing.

3. To Justify the Price/Rate Increase

Your price/rate increase letter can help you a lot when it comes to explaining why you needed to implement the increase in your prices or rate. If your letter can provide a concrete and believable explanation, then it is most likely that you can still retain your customers or clients even with the presence of competition.

Factors to Consider When Developing an Excellent Price/Rate Increase Letter

As you make a price/rate increase letter, you have to make sure that you are focused on all the major key points that you need to discuss. Aside from these, there are also some factors that you have to prioritize so you can get the best results out of the letter’s development and usage. Knowing how to create your price/rate increase letters appropriately can enable you to maximize its potential as an effective document. The major factors that you have to consider as you develop an excellent price/rate increase letter include the following:

The timeliness of your price/rate increase letter creation and dissemination: Make sure that the development and usage of your price/rate increase letter is timely. Never send the letter after the price increase as has already been implemented. As much as possible, send the letter once the decision to implement the price increase has already been finalized. You can lessen the effectiveness of the specific document if your customers have already seen your price increase during their visit in the marketplace even before you were able to send them a notice through your price/rate increase letter.The approach that you will use when announcing the price increase: Set the tone of your price/rate increase letter discussion. Be particular with the approach that you will incorporate in your messaging strategies as this can highly-impact the reactions that you will get from your target audience. Know how to select the proper tone and language for the letter so you can have a positive scripting that can lead to the successful usage of the price/rate increase letter.The completion of all the necessary and relevant information about the price increase: It is imperative for you to make your price/rate increase letter comprehensive. Complete all the details that you would like to discuss as this can lessen the potential inquiries and questions from your stakeholders. More so, a complete price/rate increase letter can let your audience easily understand the change in pricing that will happen, the purpose of the price increase, and all the other matters that are associated or aligned with the given concern.The identification of the stakeholders of your organization who will receive the price/rate increase letter: Are you going to send the price/rate increase letter to all of your stakeholders? Do you need to create copies that you can also send to your identified sales leads? Or are you planning to use the database containing the list of your loyal customers? It is necessary for you to know your expected target recipients so you can develop the content of the price/rate increase letter appropriately. Knowing your audience can also enable you to know the scope of your discussion and the limits that you should consider when disclosing certain information related to the price increase.

8 Steps for Writing a Detailed Price/Rate Increase Letter

Are you now planning to draft your price/rate increase letter? If you find it challenging and overwhelming to create the document, it will be best if you can break down the letter into segments. Doing this can help you to list down all of your manageable tasks depending on the area of the letter that you are working on within a given time frame. Do you need a step-by-step guide that can serve as your reference for the entire activity? Below are eight steps that you can easily follow if you want to write a detailed price/rate increase letter.

Step 1: Refer to a Pre-Formatted Price/Rate Increase Letter Template

Download a template fit with your layout needs and requirements so you can already begin formatting your price/rate increase letter. Having a document guide can help you with the proper placement of all the information that should be seen by your letter recipient in the letter document. A template can also make it easier for you to ensure that your output will be presentable.

Step 2: Format the Basic Information Found In a Standard Business Letter

With the help of the price/rate increase letter template; properly place the date when you have made the letter, the header, the inside address, the subject line, and the salutation in the layout of the document.

Step 3: Create an Introduction That Is Direct to the Point

Send warm and formal greetings to the person whom you expect to receive the letter. Your introduction should directly state the purpose of the letter and the reason why the entity received it. Give an idea about the price increase especially when it comes to the gap of your previous and new pricing. You can also discuss a few items about your relationship with the letter recipient and why you believe that the price increase should not affect the specified relationship.

Step 4: Present the Factors and Variables That Resulted to the Price/Rate Increase

After your introduction, you can create another paragraph that can further explain the purpose and/or reason of the price increase. Know the range of this area of your discussion so you can wrap it all up in a way that the price increase will not be deemed as a negative factor that can affect how your target audience looks at your business.

Step 5: Give a List of the Items, Services, Products, and/or Goods Affected by the Price Increase

Just as how an announcement of a change of address specifies both the previous and new addresses of an individual or a family, your price/rate increase letters should also give a clear idea of your current and new pricing. Make sure that you will make it clear on which products and/or services increased their prices. If there is a long list of items that you need to present, you can just create a separate document with complete price increase specifications and use it as an attachment to the letter.

Step 6: Give a Statement That You Are Still Hoping for Your Customer’s Continuous Patronage

On the bottom part of your price/rate increase letter, make sure that your target audience is well-aware that you are still hoping for their continuous patronage. Ensure that your customer service is something that you will always deliver excellently which can make the price of your products, services, and other offers truly worth it.

Step 7: Thank Your Target Audience For the Time That They Used to Read the Letter

Lastly, give a message of appreciation to your target audience. Let them feel that you are truly thankful to the time and efforts that they have allocated just to look into the document.

Step 8: End the Price/Rate Increase Letter With a Complimentary Close and Your Signature

Refine and finalize all of the details and features of the price/rate increase letter. Do not forget to review the document and let another entity assess it prior to its actual usage. Remove any errors, misleading information, and inaccurate details as you have to make sure that you will use the updated and error-free version of the letter document. To finally and formally end the letter, use a complimentary close followed by your name and/or signature.

Benefits of Coming Up With a Credible Price/Rate Increase Letter

A price/rate increase letter is an important business tool that you can utilize whenever there is a need for a price increase. Ensuring that your target market and/or other stakeholders are knowledgeable of the price increase can make it easier for you to transact with them in the future. Do you want to know more advantages that a well-developed price/rate increase letter can bring to the surface? Some of the benefits of coming up with a credible price/rate increase letter include the following:

A price/rate increase letter can make the price increase be smoothly incorporated in your daily operations and offers: The last thing that you would like to happen during a price increase is for your target audience to go to your business or to a store where you offer your products and be shocked about the increase in your pricing. Your price/rate increase letter can enable you to easily share information about the price increase. Through this, you can slowly but surely incorporate the change to your normal business operations without harming your sales potential.A price/rate increase letter can align your stakeholders with your pricing strategy: Aside from your customers and clients, there are still other stakeholders involved in your daily and special operations that should be aware of the price increase. Sending these entities a price/rate increase letter can help them become knowledgeable of the impacts or effects of the price increase to your relationship with them.A price/rate increase letter can help you have a continuous relationship with your loyal customers even with the changes in your products’ and/or services’ prices: Customer experience is an important segment of your business operations that you should always take care of. It is believed by 64% of customers that customer experience is a more important factor to consider, in comparison to price, when it comes to deciding on whether to make a purchase or not with a given brand (source: gartner). Hence, you should not be afraid that you might lose customers because of increasing your prices. Though this may happen, sending your loyal customers price/rate increase letters can showcase your desire to still provide their needs and to still transact with them since they are valued by your organization.

Dos and Don’ts for Making a Comprehensive Price/Rate Increase Letter

There is nothing wrong with increasing the prices of your products and services especially if it is brought by the price increase of raw materials and/or other acceptable and reasonable circumstances. What can go wrong is if you will not let your stakeholders know about the price increase beforehand. If you are already in the initial processes of writing a price/rate increase letter, it will be very useful if you can review a number of tips that can give you an upper hand when developing the content and other details of the specific document. A few of the guidelines that can help you make a comprehensive price/rate increase letter are as follows:


1. Do Use a Business-Appropriate Language For the Price/Rate Increase Letter

When writing a price or rate increase letter to your customers or clients, it is important for you to use the right language and tone. Considering these elements can help you to still sound formal and professional as you try to relay the specifications of the price increase that you will implement.

2. Do Know What to Say and How to Say It 

You need to be mindful of everything that you will write in the price/rate increase letter. Always consider your audience, the image of your organization, the goals, and objectives that you would like to realize, and the actual purpose of the document’s development. Have a checklist that can help you ensure the completion of all the details of the letter. More so, build strategies and tactics that can let you write the letter in the best way possible.

3. Do Make Your Price/Rate Increase Letter Clear, Straightforward, and Concise

Do not go in circles when discussing particular matters related to the price increase. You have to be direct to the point when giving details to your target market. Make your presentation clear and concise so that your customers and all of the other letter recipients can easily relate to what you are saying in the letter. Avoid making the price/rate increase letter lengthy. Rather, focus on building an informative and brief discussion that can enable you to communicate with your stakeholders effectively.


1. Don’t Rely on Generic Price Increase Statements and Explanations

The content of a rent increase letter is very different with the information that you will see from a massage rate increase letter. Though the purpose of the document is most likely the same which is to announce a price increase, the items that these letters will specify will be based on the nature of each of the organization that will execute the price increase. With this, you just cannot resort to the usage of the pre-formatted content of your selected template. It is also not recommended for you to copy price increase statements that you have seen online or from other documents as these may not be interconnected or aligned with the situation or circumstance that you are currently in.

2. Don’t Make Your Discussion Flow Disorganized 

You need to have a systematic flow of content presentation whenever you plan to make an excellent price/rate increase letter. Always make your discussion flow organized as the clarity of your statements and visuals can impact the way your target audience will understand the key message of the document. Look into the features of the letter, the structure of your content specifications, and the actual flow of the information that you would like to share to customers and to any other stakeholders of your organization.

3. Don’t Use Your Price/Rate Increase Letter As a PR Tool

A price/rate increase letter can be made as a part of your sales strategies especially if you want to maintain the relationship that you have with your current customers or clients even if you are planning to increase the prices of your offers. However, you should not make it seem like it is your target market’s obligation to support you. Let your customers understand your standpoint by ensuring that the letter will contain information that are specifically aligned with the concern at hand. Do not use the letter as a tool that will only present new items, offers, and products after the announcement of the price increase as you can create a separate letter for that. Make the price/rate increase letter as relevant and as connected to the specific announcement as possible so you can get the understanding that you are asking from your audience.

Your own price/rate increase letter can be easily and effectively developed with the help of references. We suggest you to browse through and download the printable samples and templates that we have prepared and listed above for your advantage.