Do You Know How To Tell Clients About Price Hikes?

Jim Luff
Posted on October 5, 2016

It doesn't have to be handwritten - but it should be written well. (Photo via PEXELS,

It doesn't have to be handwritten - but it should be written well. (Photo via PEXELS,

I was amused when I saw a copy of a letter sent out by an operator announcing a price increase. As an operator, this was always a very difficult decision to make, and I knew my clients generally would not take it well if not well worded.

The fact is, everything goes up. The cost of a gallon of milk is more than last year. Utility rates are rising. Do you remember when basic cable service was about $30? I think we pay about $85 a month now. But, come hell or high water, we will have HBO in our house. The price will never be a factor as we love HBO and other premium channels. My point is - People realize price increases are inevitable. People expect price increases, so there is no need to apologize for it. There are two ways to notify customers of a price increase. The letter below has WRONG written all over it.

Here is a copy of the letter that was recently sent out:

To our valued customers,

Please accept this letter as notification of a slight rate adjustment, effective October 1, 2016. Unfortunately, because of ever increasing costs, it has become necessary to adjust our fare base.
Our last increase was 1/24/2011.

Calls or concerns regarding this matter shall be most welcomed.

Thank you for doing business with us.

While it's all subject to opinion, I would have taken a much different approach. You should make it personal and spin it into a good thing. The letter was sent out using Constant Contact. That system allows you to personalize the letter. Instead of starting with “To our valued customers," it should say, "Dear John" or "Dear Suzy" and make me at least believe it was written to me as a person rather than a group.

The letter comes off almost apologetic and attempts to justify the increase based on the length of time since the last increase. It’s okay to include that as it spells out the seriousness of the matter. I have done the same.

Here’s how I would have written the same letter:

Dear Jim,

Thank you for your loyalty as a client of ABC Limousines. It’s always a pleasure serving you. We understand you have choices in your ground transportation and we consider it an honor you have chosen us as your provider.

Our company is constantly investing in new vehicles, technology upgrades, and training of our employees to provide the best experience for you delivered in the safest manner. We view your safety as a top priority. We invest in safety meetings and vehicle maintenance programs that exceed industry standards. We are constantly searching for ways to enhance your travel experience. That’s why we invested in Wifi in all of our vehicles to help keep you productive and connected as you travel. Our computerized dispatch system connected with GPS capabilities to each vehicle allows us to serve you better. These little touches set us apart as a premium transportation provider.

We will be making slight adjustments to our rates to continue delivering service at the level you expect. We wanted to let you know in advance so you are able to budget accordingly. While it's pennies on the dollar for you, the enjoyment and the security of knowing our service level will not fail nor disappoint will more than justify the investment we are making in our infrastructure.

Happy traveling and thank you for affording us the opportunity to be of service to your company.


Again, this is just my opinion. I think people deserve a little more explanation written on a more personal level. Please feel free to copy and paste my letter if you are planning on raising your rates soon.

By the way, I also think raising rates at the beginning of a new year is the best time to do it. People expect changes at the start of the year. From their personal resolutions to new laws going into effect, we're also getting a new president. That could be a whole other blog. Please look for a full article about setting rates, implementing rate increases, and everything rate related in our January issue. If you want to have input on that article, please feel free to email your comments to [email protected]

Related Topics: business communication, client markets, communications, customer service, Jim Luff, operations, rates, service pricing, Shop Talk blog

Jim Luff General Manager
Comments ( 3 )
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  • Charlie Horky

     | about 7 months ago

    That's a great letter Jim, Just when I thought..... Maybe not, you came around on every point and is well written.

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