What if I could help you raise your prices by at least 20% and not only keep your current customers happy, but generate a cash injection and close any current deals with ONE email?
You should be increasing your prices by at least 10% per year. As an absolute minimum you need to charge 10% more than last year, in order to keep up with rising costs and inflation.
Beyond that, you should probably increase your price anyway, because you’re almost certainly not charging enough. I’ve got an email template below that you can use with customers to announce a price increase, without pissing anyone off.
In fact, this email will not only help you justify a price increase, it’ll help you sell more of your current products and close any current deals that are floating around.
Won’t people be mad with a price raise?
That’s the initial reaction isn’t it? That your customers will be annoyed if your raise your prices. You’re worried that they’ll get pissed off and leave you.
How can we raise our prices, expect people to pay more and have them happy with that? Gas and electricity bills, rent, software subscriptions, Netflix. All these things go up in price each year and we all get annoyed about it.
Except. We don’t. Not much at least. And those that do become irate usually don’t hang around long enough to spread their unhappiness. Price increases are like any other cost increase. The question isn’t “will people be unhappy?” the question is “can we justify it?”
When you move to a bigger house, you are probably going to pay more. When you get a nicer car or upgrade your phone, you pay more. When Netflix increases their price, they usually do it when they’re about to release a new series or feature.
No one likes paying more. But then, no one likes paying what they’re currently paying. We just expect to get something in return. And if that return is easily worth the payment, then it’s not that big a deal.
If I raise my prices, won’t I lose customers?
Using my price raise email template below, you’re not only going to keep customers happy. You might make some new ones. As I mentioned above, a price raise isn’t just about making more, it’s about giving more. You’re justifying the increase in price so you can continue to improve your offer and deliver better results.
Will raising your prices make it harder to find customers? Absolutely not. It’s just as much work finding a $25,000 customer as it is a $2500 one. If anything, I’d argue that the $25K customer would be easier to work with too.
Raising your prices is not just necessary, it’s expected. People want to know that you’re growing and they’re getting a better service. So with that, let’s jump into the email template.
Email template to raise your prices without pissing off customers
You can download this template as a Google Doc here or below. It also includes a response email for anyone who’s annoyed about the increase, or who has questions.
Price rise email template
Our email is split into 3 basic sections. The goal of the email is to not only increase your prices, but to justify the increase and celebrate that you’re growing.
It also provides us with a unique opportunity to sell recurring revenue or subscription products, bulk sell some support hours for a cash injection AND close any current projects that are out there.
Increase the price
First, we open the email by telling people why we’re increasing our prices, then we tell them the price increase. It might be 20% (it should be really), but it you’ve decided that you’re going to charge $10,000 minimum for a funnel, then great, tell them that!
You need to know what you’re going to charge first of course, before you announce a price raise. Interestingly, I used my first “price raise” email to my customers as an excuse to set a firm price in the first place.
I decided that £7500 was my minimum price for a website and I would consult for £100 a day (crazy high prices to me back in the day). So I used this email as a way to announce it. Because before I had just kind of made it up on the spot.
Outline why you’re growing and even if you haven’t hired anyone, you are constantly looking for new partners and you’ve got the entire Sell Your Service community working with you, as well as me, Mike – your sales coach. Then, tell them what the price is going up by.
Remember, you can download a simple swipe file for this email (and a bonus one) here and get it sent straight to your email.
Sell a new product
Now we’re going to use this as an opportunity to give ourselves a cash injection, move some people onto some care plans and make sure we’re being seen as fair.
We start this section explaining how as they are a previous customer, we not only wanted to give them a warning, but we also want to be as fair as possible.
If they want to bulk buy hours at our previous rate, they can buy as many as they want at the lower price before the price goes up. Even if they don’t use them before the new price, you’ll honor any bulk bought support and consultation hours that they buy before the price goes up.
It’s a good idea to give a firm date when the price increase will happen. You need to let them know that there is a time limit and nudge them with a little scarcity.
This is also another good chance to concretely set a price for your hourly rate. As a rule, you don’t want to charge by the hour at all, but some projects do require your time and it’s only fair that you’re paid for that.
If you decide that $100 an hour is good, then great, your new rate is $120. Remember, it’s supposed to be a little bit scary because you need that fear to justify the price. If you’re afraid of it, you’ll work for it.
Then if you have a scalable care plan or support plan product like GoWP, then you can move them over to an unlimited support plan for just $X per month. This is a fantastic opportunity to start moving people over to a recurring revenue product.
Close current deals
Finally, we’re going to close any deals that are out there. Maybe you sent a few proposals out before the holidays or you’ve got some deals that you know you need to close. This price raise email is a fantastic way to close any lose deals.
Explain that any deals out there will be honored at their current price, up to the deadline. Then, after that, they’ll be subject to the new price. This way, your prices are seen as definitely going up. You’re giving them plenty of warning and if they want to buy, at this price, they need to do it now.
Wrap up with a thank you and a final note on the moral high ground, talking about how you know they’re looking forward to working with your new team and better results in the future.
What if they do get annoyed?
I understand your hesitation. None of us wants to annoy someone unnecessarily, And in my experience, I’ve found people to be largely positive and welcoming of a price raise.
They were smart, they got in there before you increase your prices. And you’ve given enough warning so that anyone who wants to take advantage of the current price can do so.
However, if anyone is either hesitant or negative, you need to simply remind people that it’s right for your business and you’re sure they understand. Remind them also that they can still get on a lower price if they act now. But negative responses are seldom the case when it comes to a price raise like this.
Charge 20% more today
Make sure to download our email template doc here and swipe the copy so you can increase your prices today.
Have you raised your prices? Have you used this email template? Let me know in the comments below.