Price increases are a normal part of doing business. Whether you need to raise prices to adjust to inflation or you want to offer an upgraded product, few businesses continue to offer the same price for an extended period of time. Stagnant prices often correlate to stagnant business prospects; and stagnation can kill a business.

The result is that customers of all types are understanding of a price increase; but, only when you communicate these prices correctly. Simply raising prices without warning is a good way to alienate your customers. No one wants to inadvertently pay more money for a product without understanding the reason why. Thus, communicating your price increase has little to do with the price itself. It is all about your methods of communication.

How to Communicate a Price Increase without Spooking Customers

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Today, you will learn 1) how to announce your price increase without alienating customers and 2) how to implement your price increase.


The first rule of implementing a price increase is that you must announce it to your customers. Talking to your customers about a price increase may sound counterintuitive; however, this is actually a great opportunity for your business. Announcing your price increase allows you to remain in control of your narrative.

When you are in control of the story, you can plan it so that it is told in a way that supports customers rather than alienates them. Here are tools to help you tell your story the right way:

Be Transparent

Transparency is key whenever you’re dealing with money. Committing to pricing transparency means that you need to announce your price increase before it happens.

Start by telling your most important customers about the price increase first. Avoid letting them hear the news second hand, in a general announcement or worse, from their internal billing department. A good rule of thumb is to encourage price increases to be couriered between executives to show respect for the relationship.

After your important customers know, it is time to make a general announcement. Use the announcement to tell customers why you are raising prices and be honest. Explain the reason that you are raising prices and bolster the reason with credible facts. However, don’t create excuses. Customers understand why you need price increases but no one wants to listen to another business whine about it.

Finally, remain transparent as a business by avoiding price increases rationalized solely by profitability. While profitability is important, your customers do not want to suffer for you to win. Even hinting that you are trying to widen your profit margins with your price increase can damage your relationships.

Focus on the Positive

The best price increase announcements are not negative. In fact, they are overwhelmingly positive. Instead of focusing solely on the price, tell your customers what they get in exchange for more money.

Keep it positive by avoiding an apologetic tone. Apologizing makes it sound like you are not in control of your costs and profits. This sends the wrong message to your customers. Your customers want to know that you are in control of your business.

Also, if you are raising your prices for a good reason, there is no need to apologize. In an ideal world, you’re asking for money for a better product which benefits your customers.

Don’t forget to thank your customers for their continuing business. It cements the positive tone and a future relationship with your customers.

Provide a Timeline

Every price increase requires a timeline. It is imperative that you do not spring a price increase upon your customers. You need to create a timeline for the announcement and a timeline for implementing the increase.

Providing a clear time line for the price increase allows your customers to prepare for it. It gives them time to update their own systems. It also allows you to pad the timeline so that you do not breach any pre-existing agreements with your customers.

Having a timeline will also help you drive business before the increase takes effect. It helps you implement strategies that soothe worried customers Be careful to avoid violating revenue recognition rules by creating a situation where the demand is greater than the supply

If you choose to drive demand with your timeline, make your terms transparent and then stick to them. Ensure that you do not drive demand beyond what you are capable of fulfilling. This is a fragile period and you want to avoid making customers angry by breaking promises.

Remind Them That You Are Still Offering a Valuable Product

You should always avoid raising prices for the sake of raising prices. You want to ensure that the price hike will reflect the value of your product. When you announce your new prices, focus on reinforcing your key value propositions. Remind customers why they do business with you and it will be easier to swallow the new pricing.

When making the announcement, subtly remind customers that paying a small amount of money for a service they love is not a big deal. This will ring more true if you are adding value to the product that complements the price increase. No customer wants to pay more money for an inferior product. Thus, it is essential that you provide an incentive in value.

The logic behind a price increase is simple and should be communicated to customers. A price increase allows you to continue to offer a product or service that is still better value than your competitors. With the price increase, you can continue to offer this service in a sustainable way.

Sustainability is a key component of a price increase. When you use small increases to adjust to changing conditions and foster innovation, you protect yourself from getting into trouble and having to bail yourself out with huge price hikes.

Everyone can appreciate businesses that focus on sustainability and this will give you points during your announcement.

Don’t Be Nervous

Remember that there is no reason to be nervous about a small price hike if you have a solid business. If you are afraid of raising prices less than 10%, than you have bigger problems.

You want customers who are not with you because you offer the cheapest option. Those customers are not loyal and are willing to jump ship at any time. Ultimately, if your customer is not willing to pay 3% more for a better product then you do not have a very good customer.

If you’re afraid that your customers will jump ship at the first sign of trouble, it is better to go back to the drawing board and reconsidering your customers and your sales tactics before you work to sell a more expensive product.

Go through this slides and learn how AIESEC raised their prices without alienating customers.

[slideshare id=53913877&doc=10waysincreasingpricewithoutlosingcustomer-151014080309-lva1-app6891&w=640&h=330]


You can transfer the techniques for communicating your price increase over into implementing the price increase. Implementing price increases is all about being honest, transparent and not coddling your customers.

Follow these suggestions for actually raising your prices without scaring off customers:

Give Customers a Choice

No one wants to pay a higher price straight off the bat. This increases the chance of sticker shock which can shake even loyal customers. Instead, create a timeline that gives customers a choice regarding which price they pay.

This method works well if you are offering an enhanced product at a more expensive price. You can then transform your product into two different products. The first product is the same old product at the same old price. Make this one available for a limited time, allowing customers to continue to stick with what they know.

However, if you offer the second product with enhanced value, you give them the option to upgrade to the price increase. This second product demonstrates the value between the packages and allows customers to feel as though the decision is theirs to make.

This feeling of choice is important for the sales process. Customers will feel good about their decision to pay more money for a better product. It will feel like a smart business choice rather than a forced price increase.

Make the Change Easy for Customers to Implement

Your customers are sticky and they do not just change suppliers or products on a whim. They’re sticky not just because they like your product but also because making changes is difficult and expensive in terms of labor and capital. Thus, customers do not just pick up and leave unless you give them a good reason to. Generally, a small price increase is not a good reason to make these changes. The high cost of change does not make sense in this scenario.

However, you can help ensure they don’t leave by making the changes easier for them to implement. This begins with the transparency discussed earlier. It is important to give specific information to your customers to help them feed it back to their own company. Be sure to provide your customers with the correct data to ensure that it is easier to update their systems.

Avoid simply stating that you are increasing prices by x %. Instead, provide a breakdown of the new prices for customers’ purchasing orders. Keep both the old price and the new price available. The easier it is for customers to implement, the more likely they are to pay it.

When changes are easier to implement, the level of frustration decreases. This keeps customers from making emotional decisions. Keeping frustration down helps prevent the customer from shopping around for other options.

Watch this youtube video and learn more about raising your prices.


Price increases often fuel times of uncertainty but you can help prevent turmoil by communicating the increase in the appropriate way. Remember that the fear surrounding a price increase rarely has anything to do with the price itself. Be transparent, honest and continue to offer real value to your customers and you can communicate a price increase with very little pain.

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