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Effective Strategies to Tell Clients About a Price Hike

Worried about raising prices? This guide reveals how to smoothly communicate a price increase to your clients with effective planning and strategies.
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Step-by-step guide to tell clients about a price increase

1. Conversation first, correspondence second

There’s nothing worse than an impersonal email arriving out of the blue to notify you of a price hike. For a big price rise, you must talk with your customer first. They’re going to pick up the phone anyway and ask you what the hell this is all about, so you might as well make the first move.

Explain the circumstances behind the price increase. The let your client know a formal communication will follow and to reach out with questions.

Remember, the price increase puts pressure on your clients’ costs and creates extra work to manage the change. It’s important to be sensitive and sympathetic.

2. Give advance notice

Give as much notice as you can: the bigger the increase, the greater the notice.


Because there are things your clients will need to do in response. They need to notify internal stakeholders and update procedures and systems.

And fair warning, your clients may send a formal reply to object to the price increase… or make some phone calls to alternative suppliers. 

3. Provide context

Raising prices is often linked to extra or improved services. That ongoing investment in products, services and people doesn’t come cheap. Give context to the price increase by explaining the factors that led to the rise and how your clients have benefitted.

While you’re at it, let them know your vision for the future and that there’s more to come.

4. Don't apologise

Be sympathetic and sensitive to the impact of a price increase, but don’t apologise for it. Operating a business costs money, not to mention market forces over which you have no control.

Deliver the message of a price rise to your client with confidence. If you don’t believe you have a great solution that’s worth every penny and then some., why would your client.

If you apologise, clients will question the validity of the price increase. All that leads to are long conversations about why that may put your relationship at risk.

5. Don't over explain

Your client does not need to know how the sausage gets made. The details of the inputs that lead to the outputs should be confidential. Offer the briefest explanation you can about what has led to the price rise.

Too much information confuses clients. It also opens the door to discussions about your business that are none of their business.

You have one goal – to tell clients about a price increase. 

Focus on that.

6. Keep it simple

If your price rise also includes a change in the pricing structure – ensure it’s simple. I’ve had menu based pricing that needed a Mathematics Degree to put together or bundled pricing with optional extras that don’t make sense. I’ve had situations where a client could buy a bronze package with add-ons and end up with the platinum package at half the price.  So put the pricing through it’s paces and look for loop holes – your clients sure will.

And if you can’t explain it easily – how do you expect your client to understand it?

7. Consider alternatives

If you have clients that you know will be enraged by a price increase (it happens), evaluate alternatives that may yield a similar result to your bottom line. For example, moving to/from fixed fees, longer contract periods, linked to volume or a change in configuration. 

I had some clients that were on ancient contracts with dedicated dedicated account management. They paid £2,500 per year, when the going rate was £10,000. So I had to say to keep the account manager you have – you need to start paying more, or to if you want to pay the same – then you need to move to an inbound, telephone based account management solution. Some loved their account manager and decided to pay more, while others chose to reduce the level of account management to pay less.

8. Decide your negotiation strategy

When you tell clients about a price increase – you are initiating a power play. Will they accept? Will you negotiate or will you back down? If your client challenges you and you immediately say to revoke the increase and pretend you never had the conversation – you’ll forever be a doormat.

Before you present the price rise, know what you will concede on and have your walk away position in mind.

Always ensure that any concessions you make are an exchange, not a gift – your client should offer something in return. In Exactly What to Say: The Magic Words for Influence and Impact, Phil M. Jones suggests a simple question: 

If I can, will you?

For example, I can keep the price the same, will you sign a 3 year contract?

Never Split the Difference: Negotiating as if Your Life Depended on It

Negotiate better using tricks from a former FBI hostage negotiator, making it a great read for getting what you want in work and life.

Note: As an Amazon Associate I earn from qualifying purchases.

9. Loyalty doesn't equal discounts

If your price increase coincides with a renewal – be prepared for a conversation about discounts. Can you imagine your client saying something like, “Oh, so I’ve been with you 5 years, and that’s you how repay me – with a price increase?!”

It happens, and it’s completely irrational. The cost of your business operations has nothing to do with how long your clients stick around.

But we’re so used to frequent flyer schemes and customer loyalty cards that some people think it’s how business works too.

So know what you’ll say when you tell your client about a price increase and they say they want discounts.

10. Implement annual price reviews

If you find yourself constantly negotiating price increases with your client year after year, then set expectations within your agreements about what, how and when you review commercial terms. For example, include conditions that raise prices every year in line with inflation (calendar year not contract year), or provisions that formally return you to the negotiating table every year for a price review.

Through enhanced terms and conditions you can automate some price increases and make initiating pricing conversations much easier.

10. Assume you'll be asked to "Speak to your manager"

So you’ve done everything you know how to get your client to accept this price increase and they are still pushing back. What is the escalation path for a formal complaint or dispute about the price increase?

Who do they contact and how? Better to know in advance than scramble around for someone to help you when it hits the fan.

On a related note, if you have a client you know will not take a price rise lying down and concerned about your ability to lead the conversation – let your manager know. They can help coach you, rehearse the conversations or even join you when you deliver the message.

Make sure everyone is on the same page when it comes to whether you are prepared to let a client go or back down. There’s nothing worse than when you dig your heels in and then your manager over rides you because they couldn’t manage the confrontation.

It happens.

12. Consistent message

On the subject of messages, ensure your entire organisation is aware of the price increase, why and when it’s happening and what the approved message is.

There are many contact points – customer service, delivery, back office etc – and your communication strategy could become undermined if your teams aren’t aware of upcoming changes, know what to say when asked questions or who to direct callers to that want more information.

13. Manage your feelings

Commercial discussions and negotiations are high stakes and can trigger specific emotions in you and your client. Feelings of anger, sadness, disappointment, anxiety, envy, excitement and even regret can impact your behaviour and your ability to communicate the price increase effectively.

Acknowledge your reactions are valid and explore coping strategies to help you manage your feelings.

Anxiety is the most common, and my advice is to do as much preparation as you can.  That will help you engage with confidence. It’s also helpful to talk with colleagues ask for advice on how they might approach the situations that are making you anxious.

For more on the subject, Harvard Business Review has an comprehensive article with practical advice on how to prepare your emotional strategy in negotiations.

If you disagree with the price increase or associated strategies, remind yourself the job of a key account manager is to deliver the message and publicly support your employers position. In private, it’s OK to share your constructive feedback but then move on.

Holding on to a grudge makes delivering the message more difficult and may impact how people perceive you in the organisation.

Don’t kill your career over a disagreement on how, when or if your company should raise its prices.

Key Takeaways: How to announce a price increase

  1. Conversation first, correspondence second. Give your clients pre-warning that a price change is coming.
  2. Give advance notice. Your clients will need to take further action in response to a price rise so give them enough time to do what needs to be done.
  3. Provide context. Frame the price increase in terms of the value you’ve delivered, the benefits they’ve received and the promise of more  to come.
  4. Don’t apologise. You have every right to change your prices. It costs money to develop products, services and people.
  5. Don’t over-explain. Your client doesn’t need to know all the gory details of what led up to your price increase. You’ll only confuse them or invite conversations on topics that are none of your client’s business.
  6. Keep it simple. Complex pricing models are difficult to explain and hard for your client to understand.
  7. Consider alternatives. Instead of a price increase, what else can you do to reduce the cost to serve?
  8. Prepare to Negotiate. Prepare for the best case scenario and the worst. What’s your walk away price?
  9. Loyalty doesn’t equal discounts. When it comes time to renew, clients may expect discounts, not price increases, as a reward for their loyalty. Be prepared for that conversation.
  10. Implement annual price reviews. Save time and set expectations by embedding annual price reviews into your agreements where appropriate.
  11. Let me speak to your manager. Define escalation paths if your client does not accept a price increase
  12. Consistent message. Ensure everyone in the organisation delivers the same message to your clients.
  13. Manage your feelings. Acknowledge that conversations with clients about price increases are tough and your feelings are valid.

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