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How to Draft a Subtle Yet Effective Price Increase Letter to Your Top Customers

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Communication is the lubricant on which the wheels of business run smooth. A successful business keeps its partnerships robust and relationships fluid. However, lack of good communication can lead to friction in any relationship be it business or otherwise.

Communicating the news of price increase is one of those events that can sometimes feel enervating. It happens to every enterprise. You can be straightforward but you need to be diplomatic in your manners. A subtle way to express it is the only way to maintain continuity is a relationship. While sometimes it takes the business partners by surprise, explaining your case helps and eases the tension.

A smart letter of communication on price escalation should be carefully thought out. Give them reasons why decision has become inevitable. Show them you are doing all you can to make the impact minimal and make sure to tell them that your business relation is what matters most. Going all out will win their support and keep your relation intact.

A letter of price increase includes the sellers decision to revise the previous contract/agreement. Before we get to that, let’s understand-

  • What is a letter of Price increase
  • When is the letter of Price Increase required

What is a Letter of Price Increase?

A letter of price escalation or price increase is a simple letter written between two business parties, the writer being the seller of products or services. The letter of price increase is meant to act as a formal communication of the change in prices of products or services. The purpose of a letter of recommendation is to show you have communicated your intent or decision. This helps the buyer know of the price revision that is going to take effect and the buyer should be prepared for the eventuality.

A letter of price increase includes the sellers decision to revise the previous contract/agreement. Before we get to that, 

How to request a Price Increase Letter on Naviance? Before we get to that, you need to understand some aspects.

  • Why a letter of recommendation is important
  • When you should hand in your request for one

When is a Price Increase Letter Required?

A letter of price increase is a letter of amendment to the current contractual obligation. Even though it does not alter the terms of commitment to supply the product or service, it does change the pricing of the contract with respect to the obligation. A contract is a successful amalgamation of innumerable variables including the pricing. 

The Price increase letter is required as a reference to enforce the new terms and to alter the contract eventually. The letter can also be used as a document by the buyers side to recommend their side of changes to the terms. It is then eventually used to enforce the terms when the contents of the letter become mutually agreeable.

The agreed terms can then be amended legally in presence of both the parties. The new contract thus changes the status quo of the business. The letter of price increase (agreed by both parties) can be used as an addendum to the new contract as it explicitly details the reasons for the proposed changes in the contract. 

Sample for Price Increase Letter

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Tip to write a thoughtful letter of price increase

You now know everything you need to about the letter of Price increase. But how do you make a convincing case and how do you make it more subtle. You have had a great relationship with your business associations and now is the time to let them know. 

Here are some tips to help you write a Letter of Price Increase to your buyers.

  • It is not always easy to talk about the prices per se. You can justify your decisions with a genuine reason. Talk about commodity cycles, inflation, rising overhead costs if that has been reason for price escalation. If you do not want to particularly give a reason, talk about high quality standards, highlight preferential business terms. You can also talk about years of partnership and trust.
  • No one want to hear about the product or service getting costlier. You should let them know this decision is across the board and not limited to only them. You can talk about exploring options as and how you can add-to tertiary benefits like reduced turnaround time or service efficiency.
  • Highlight your product as the best in the industry and how you have never compromised on that parameter.
  • Highlight how you have added to their business strengths with your product or service. Tell them you would rather give them superior product or service experience instead of cutting costs.

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Price Increase Letter Templates

Template #1

Your address

Date 

Customer’s Organisation

Customer’s address

Website 

Subject line: Letter of Price Increase from X (company name)

Dear Mr./Ms. B (Customer’s name/Enterprise name),

Please be advised that (XYZ INC.) will generally raise the prices to the tune of upto 5% on high tensile steel cast iron mouldings and metal casting products (Product Name). The price raised will be for the automotive parts and accessories effective 1.04.2021. In some products, the price change will fall outside the general range of reference and will be communicated accordingly. All orders received post the month end will be invoiced at the revised prices. 

During the past year we have seen the ever-increasing costs of commodities, manpower and transportation. We cannot continue to absorb the costs and are forced to increase the prices of our products. Rest assured, we have made sure that you are burdened with minimal cost appreciation. We have resorted to extreme cost-cutting measures, invested in business synergies, streamlined the supply chain and reduced business overheads to make the burden of the cost escalation is capped to its lowest. We would be furthering these initiatives in our effort to keep the prices of our products in check.

As always, we are committed to providing you superior products and look forward to work with you closely in bringing new innovations that delight your customer. We appreciate your continued partnership and support. 

Thank you in advance for your time. 

Regards, 

X (your name). Business Stamp

Sample #1 for Price Increase Letter

Template #2

Your address

Date 

Customer’s Organisation

Customer’s address

Website 

Subject line: Letter of Price Increase from X (company name)

Dear Mr./Ms. B (Customer’s name/Enterprise name),

After carefully deliberating on the changing business headwinds, we are writing to inform you that our rising overhead costs have necessitated the price appreciation on the entire range of automotive parts and accessories. Even though the logistical bottlenecks have impaired supply of the components across the world, we assure you that we will fulfil our agreement past or future without any fail. We are hereby giving you an adequate notice to manage and incorporate the change accordingly.

We are hereby issuing a new price list that will take into effect from 1.04.2021. The additional prices are in line with the current business scenario. We are proposing a 5% increase across our product range. Rest assured, we promise to do good to our obligations and maintain old pricing on the invoices raised before 1.04.2021. 

After forbearing most of the cost spikes, we assure you that every effort is being made to keep the price revision to the bare minimum. We appreciate your continued patronage and look forward to working together on many more projects in the future.

Looking forwards for your reply.

Regards, 

X (your name). Business Stamp

Sample #2 for Price Increase Letter

Template #3

Your address

Date 

Customer’s Organisation

Customer’s address

Website 

Subject line: Letter of Price Increase from X (company name)

Dear Mr./Ms. B (Customer’s name/Enterprise name),

The letter is generated for the express purpose of informing you about the impending price rise that we are considering at (XYZ. Inc). The price appreciation will take effect from 1.04.2021 and will across the product range. You are advised to incorporate an increase of about 10% on the input cost. We are forced to pass on the cost. We want to assure you that we are ready to provide you credit support for a month to tide you over at this moment of uncertainty. 

We will honor our previous orders at the current prices and as a token of appreciation would like to advice you to put your orders in advance before the price revision takes effect. We are making this special offer only to you and would request you to make the most of it. 

We understand that you are a valuable partner to us, and we would extend every possible help in case you need it. The company looks forward to working with you through this phase of growth and change. If you have any further concerns regarding price increase, pleased not hesitate to get in tough. Our team is always happy to be at your service. 

Sincerely, 

X (your name).

Sample #3 Price Increase Letter

Template #4

Your address

Date 

Customer’s Organisation

Customer’s address

Website 

Subject line: Letter of Price Increase from X (company name)

Dear Mr./Ms. B (Customer’s name/Enterprise name),

First, we would like you to thank you for your support and loyalty (THANKS). We owe our success to supporters like you who have been part of our journey since the very first day (EMOTIONAL EXPERIENCE). It is you who gives us the courage to think out of the box and follow our instincts frontiers. We hope that you are liking our new content library, and genre based programs. In an effort to keep you entertained we are signing up with new content innovators, going all out to discover untold stories and betting on newer frontiers (SERVICE SATISFACTION). 

To keep up with the innovation, we are asking for your support. We are writing to let you know we are making some pricing changes in the subscription that will take effect immediately on 1.04.2021. You can review your membership details at any time by visiting your account. Connect with us if you have any other questions or queries. We look forward to delighting you with high-quality content from across the globe at the comfort of your liking. 

Regards

The XYZ Team.

Template #5

Your address

Date 

Customer’s Organisation

Customer’s address

Website 

Subject line: Letter of Price Increase from X (company name)

Dear Mr./Ms. B (Customer’s name/Enterprise name),

As you already know, we have been in the midst of business restructuring in the past year. We are happy to inform you that we would be launching the more advanced version of our accounting software (SERVICE TYPE) from the next quarter. Our program experts have worked on the prototype and have assured us quick turnaround efficiency, inbuilt network tools for better synergy and effortless transaction management (SERVICE OFFERINGS.) In an effort to provide better services, we would be implementing the software across our client base.

This new advanced software will create synergies across the business enterprise. In order to transition to the new interface, we are hereby asking for your formal approval. We would be effectively raising the service costs only by 5% from the installation date. The company assures you that software will slash your overheads by up to 10%. You retain the rights of the products and you will also get the cloud security at no added cost.

We have always been at the forefront of innovation and been partners in your progress. We have been your preferred consultants and hope to remain so as we step into a new phase of evolution. 

We would like to thank you for your loyalty over the years. You have been with us since the beginning, and we appreciate your support.

Together let’s make a better future. 

With Regards

X (your name). Signatory

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