Quick answer: To communicate a price increase to customers, give at least 14 to 30 days’ notice, state the new price or percentage clearly, and name the specific reason – such as rising material or energy costs.

Send a personalised letter or email in your brand’s tone of voice, avoid softening language like “price adjustment,” and follow up to make sure the message lands. Customers respond better to transparency than to surprises.

Small businesses are struggling to balance increases in their own costs with how much they can charge customers. And financial uncertainty is cited as a top concern for 48% of small business owners, according to our SME Insights Report, our survey of almost 2,000 small business owners.

In the same report, 82% of small business owners admit they’ve absorbed some or all of their own increased operating costs. But sometimes a price increase is the only option.

How you communicate a price increase with customers is an important part of running a business. Done well and you’ll minimise the risk of disgruntled customers and instead keep them loyal to your brand. Done badly and you could lose them to a competitor.

When should you raise your prices?

There’s no rule about when to raise your prices, but these are a few examples of why you might consider it:

rising costs, for example from suppliers, materials, energy bills, fuel, or employee salaries
annual price reviews to make sure you’re competitive
increased demand
improved service or where you’ve added value

Read more: Cash flow forecasting can be a prompt to review your prices.

How to tell customers about a price increase

Raising your prices is a normal part of running a business – not something to feel guilty about. When your costs go up, adjusting what you charge keeps you profitable and lets you keep delivering the quality your customers expect. The key is clear, consistent communication, so a price rise never comes as a shock.

Give notice

Tell customers 14 to 30 days before the change takes effect. That window gives them time to plan, rebook, or ask questions before the new price kicks in. For ongoing contracts, retainers, or subscriptions, aim for the longer end – more notice shows respect and softens the impact.

Explain the reason

Be honest about why prices are going up. Whether it’s higher material costs, rising energy bills, or investment in better service, customers appreciate the transparency. Don’t bury the message or dress it up – a clear, straightforward reason builds trust and makes the increase easier to accept.

Use the right tone

Match the message to your relationship with the customer. A formal letter suits corporate clients, while a warmer, casual note works better for regulars you’d normally text (we’ve included both templates below). If you use a CRM system, personalise each message with the customer’s name – it lands far better than a generic email blast. Above all, keep it in your usual tone of voice so it still sounds like you.

Read more: What is good customer service?

Make it easy to ask questions

Always give customers a simple way to get in touch. Include your phone number or email, and let them know you’re happy to talk things through. Being open to questions shows you’re confident in your decision – and it’s a chance to reassure loyal customers before any doubts set in.

What to include in a price increase letter or email

Your price increase letter or email should include:

Clear subject line or header
Details of the price increase / change
When changes are coming in
Why you’re making these changes
Reassurance
If they need to do anything now
How to contact you if they have questions

Price increase letter templates

Sructure your letter in a way that suits your style and your customers (we’ve included two templates below):

Formal version – suited to small business owners with corporate clients, larger agencies, or high-end retailer contracts where a more professional tone is expected.
Informal / casual version – suitable for freelancers, tradespeople, or anyone dealing with clients where you have a less formal tone.

Quick tip: if you usually text your clients with emojis, then sending a formal letter won’t sound like you and will feel inauthentic. The message should be clear but match the tone you usually use.

Formal price increase template

Dear [customer name],

We wanted to share an update with you about our pricing. After a lot of consideration, there will be a small increase of [X amount or %] on [product or service]. This change will come into effect on [X date].

This unavoidable increase is due to [X reason – be as specific as possible and name the cost that’s driving this change].

We’ve done everything in our power to minimise the increased cost to you while still maintaining the high quality [product or service] you’re used to.

Current prices will be in place until [date], so please [order/book] soon if you would like to take advantage of this.

We’re so grateful to all our customers who make [business name] what it is. Thank you to everyone who’s part of our community we’ve all built.

Please don’t hesitate to get in touch if you have any questions. You can also call us on [phone number].

Thank you,

[Your name]

Informal price increase template

Hey [customer name],

Hope you’re doing well!

I’m reaching out to let you know that starting [date], my rate for [service/product] will be increasing slightly to [new price or X%].

I try to keep my prices as stable as possible, but due to [reason, e.g., rising material costs / equipment maintenance], I’ve had to make a small tweak to keep delivering the quality work you expect.

Any work booked before [date] will still lock in my current rate, so feel free to reach out now if you want to get something on the schedule.

Thanks so much for the ongoing support – it really means a lot. If you have any questions at all, just drop me a reply here or call me on [phone number].

Best,

[Your name]

Founder tips on raising prices

Gea Krajcar, founder of Soma Yoga, explains how she set prices for her yoga studio in London. Now, two years later, Gea is faced with raising her prices again. Read her tips here:

Review the market rate

“When I opened the studio, I tried to set an average market price. But I also wanted to make it affordable. I wanted it to be accessible because it’s community-led work, so it can’t be expensive.

“Now, two years on, I’m trying to set a realistic market price that’s competitive. We offer high-quality yoga classes with great teachers who also need to be paid well.

“It’s not just whether I’m going to raise prices or not, it’s also how am I supporting those who bring their knowledge and expertise here?”

Tiered pricing – an option for everyone

Gea offers a regular community yoga class at a lower rate, so there’s still something accessible to everyone if other class prices go up. She also has a tiered pricing structure with a mix of class packs, drop-ins, and unlimited memberships so people can pay what suits them and their commitment level. She explains:

“I introduced community classes and we have a weekly class that costs £5 – so I hope everyone can access something. This is possible because I do teacher training as well, so I have a lot of fresh new teachers around me who need experience. This is a great way for them to get exposure and teach full rooms.

“We also offer discounts for NHS workers and students so we target the groups who need a little more support, but also charge what is currently relevant to everyone else.”

Multiple income streams

Gea also speaks about having multiple income streams, which means she can adjust the pricing in some areas and remain profitable but still accessible and true to her brand:

“If you want to make it sustainable financially then you can’t rely on only one income stream like studio classes. I run my studio, retreats, an online platform, and I also offer teacher training and mentoring. These different branches mean I’m not relying on one thing.

“Money was never my drive, but I didn’t want to live on anyone else’s terms. I chose yoga over my software engineering career after university and needed to be sure that it was possible for me to live on this and feel stable.”

FAQs

How much notice should I give customers about a price increase?

Give 14 to 30 days for ongoing services and subscriptions. For retainers and annual contracts, apply the change at renewal and flag it at least one billing cycle in advance. Retail price changes should be displayed in‑store and online before they take effect.

Should I include the exact new price or a percentage?

Yes. State the new price or the exact percentage change, plus the effective date.

What if customers complain about the increase?

Acknowledge the concern, restate the reason, and offer support options – such as booking at the old price before a set date or a loyalty perk. Keep track of and respond to any online reviews, for example on Trustpilot, to manage any negative responses to a price hike.

Is it better to raise prices gradually or in one go?

Gradual increases can reduce churn for price‑sensitive customers, but a single, clear change may be simpler to manage. Choose the option that best fits your costs, customer expectations, and admin effort. Read more about customer retention strategies for small businesses.

Do I need to apologise for raising prices?

You don’t need to apologise, but you can be empathetic and transparent about the reason.

How should I word a price increase message to customers?

Be plain and direct. Call it a ‘price increase’, state what’s changing and when, and give a brief reason. Avoid euphemisms like ‘price update’ or ‘adjustment’.

How many times should I follow up after a price increase notification?

Send one reminder about a week before the change, and a final reminder 48 to 72 hours before. Add a clear subject line and an FAQ link.

Final thoughts: review prices regularly to help protect profit

If you’re still struggling to justify passing on costs to your customers, remember that your business can’t grow or even survive without a clear pricing strategy. If your own costs are increasing then it’s inevitable that some of that has to be passed on to customers.

Reviewing pricing regularly is all part of building a profitable business that can stick around for the future.

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How to increase your prices (without losing customers)