How To Write a Rate Increase Letter (With Examples)

How to Tell Clients You’re Raising Your Rate (and Sample Rate Increase Letter!)

Reasons for increasing rates

Here are a few reasons that businesses may want to raise their rates:

Determine which reasons apply to your companys decision to increase prices. In the rate increase letter, you may need to justify the rate revisions to the clients, so try to gather specific data as you prepare to write.

What is a rate increase letter?

A rate increase letter is an announcement that a business makes about a decision to raise prices on goods or services. Often, businesses raise their prices because they are trying to compensate for increased costs of their own, and they want to explain this to their clients. The letter includes the amount the prices will increase and when the changes will take effect. You can send this letter by post, email or even as a public notice.

Why do businesses use rate increase letters?

A rate increase letter should be clear and concise. By reading it, the client should have a complete idea of what is happening, why it is happening and when it will happen. It should foresee and answer potential questions that the client may have. Here are some additional tips to consider when writing a rate increase letter:

Rate increase letter template

Here is a rate increase letter template that you can use as a guide when writing your letter:

[Date]

[Company name]
[Street address]
[City], [State] [ZIP code]

[Greeting],

Because of [reason for price increase], [Company name] will institute a [percentage] increase in our rates, effective [effective date].

We thank you for your understanding and support in helping us to grow alongside you. Please feel free to call us with any questions, concerns or comments.

[Close]
[Signature]
[Position or department]

Example rate increase letters

Based on the above template, a rate increase letter might look like one of the following:

Example 1

Example 2

FAQ

How do you announce a rate increase?

1. Be Transparent and Clear.
2. Make Change Easy for Customers to Implement.
3. Update Your Marketing Materials.
4. Announce the Price Increase Directly to Your Customers.
5. Offer to Chat or Call.
6. Give the Reasons for a Price Increase.

How do you explain rate of increase to clients?

1. Initiate the conversation with the customers. …
2. Be transparent and upfront. …
3. Give them enough time. …
4. Demonstrate value. …
5. Assure them high prices resonates better quality. …
6. Show confidence while approaching the customers. …
7. Over-deliver before delivering the news.