How Do You Write a Winning Price Increase Letter?

If you’re new to freelancing, there is one thing you need to have for sure, if you want to make this a full business.

It’s a price increase letter and it’s a type of announcement you can send to your clients to let them know that you are increasing your rates.

How Do You Write a Winning Price Increase Letter?

One thing I’ve noticed about freelancers is that they often don’t know their own value and are hesitant to charge what their services are worth!

It’s important to give your clients a  proper heads-up and explain to them why you are raising your prices.

Your price increase letter needs to include the amount of the increase and when it will take place.

One thing I’ve noticed about freelancers is that they often don’t know their own value and are hesitant to charge what their services are worth!

While I’m not going to go into great detail about how much you should be charging but you can check out my article here on how to set your rates as a freelancer.

The point of this article is to help you set up your price increase letter in a way that both makes you feel confident in raising your rates and makes clients feel comfortable about the changes.

Let’s get started!

Why Should Freelancers Increase Their Rates?

There are many reasons why a freelancer should increase their rates.

For starters, you’ll never grow your business if you stick to the same rates for years.

When you look around the world in general, prices increase all the time. Whether it’s the cost of milk or your Netflix subscription, you can always expect prices to go up.

It’s no different when you’re a freelancer.

Here are a few reasons why you should increase your rates:

  • You’re charging too little. Doing a little research will help you determine what the average earnings are for the services you offer. You should be at par with your competitors!
  • You’ve improved your skills and expertise. If you’ve grown and improved as a freelancer, don’t you deserve a raise? Think about your price increase in this way.
  • Rising costs of offering your services. If you’ve had to upgrade the equipment you use, purchase new software, or even outsource overflow work, it’s time to up your rates!

The above reasons are just a sampling of why you are raising your rates. Think about why it’s time to bump up your earnings.

Knowing the reason for your price increase is going to come in handy when you start writing your price increase letter.

How to Write a Winning Price Increase Letter

Give Your Clients Advanced Notice

No one appreciates a last-minute price jump, and neither will your client. Make sure you give your clients plenty of advanced notice in writing.

While there’s no set-in-stone timeframe for notifying your clients of a price increase, 2-3 months is pretty standard and considerate.

This gives your clients time to decide if they will continue with your services and, if they don’t, it’s time for you to find a new client.

Explain Why You Are Increasing Your Rates

Telling your clients that you are increasing your rates can be nerve-wracking – will they stay or will they go?

In order to showcase your overall value as a freelancer, it’s important to explain to them why your rates are going up.

When you write your price increase letter, provide justification for your decision.

You can use specific data (such as the average rates of your competitors) to present your reasoning in a way that is understandable and relevant to the client.

You can say something like, “Due to the increase in projects, and in order to provide you with timely and high-quality work, I have put together a team of freelancers to ensure the products continues to meet your standards. For this reason, I have to increase my rate.”

Not only are you giving the client a reason but you are highlighting your value and ensuring them that a price increase will ensure that you can continue to meet their expectations.

Show Your Worth as a Freelancer

This kind of ties into what I was talking about above, but you really need to drive home your value in your price increase letter.

Overall, you need to prove to your client that you are worth the extra money by going beyond pointing out all the amazing work you have done for them.

Dig deep and show them HOW your amazing work has positively impacted their business!

For example, if you are a freelance writer, highlight how your articles have drawn traffic to their site and increased their business.

If you can show your client how your services have improved their bottom line, you can prove you are worth the additional cost!

Tips for Writing a Price Increase Letter

Price increase letters are simple and straightforward.

All you need are the three elements I listed above: advanced notice, justification, worth.

But how do you put this all together to write a winning price increase letter?

Here are some tips you should follow!

1. Be Specific and Concise

When you notify your clients that you are raising your rates, you need to be clear and concise. After reading your price increase letter, your clients should know exactly what is happening, why it is happening, and when it will happen.

You don’t have to get into all of the dirty details of why you are increasing your rates.

Keep it simple and to the point.

2. Offer Help

You should also address any potential questions they may have and let them know if there is any action needed on their part.

You can create a FAQ (Frequently Asked Questions) page on your business site to answer any questions they may have and any follow-up questions you anticipate.

For example, if you sell apparel like Cathrin Manning does, it’s a good idea to have a FAQ section for merch.

3. Don’t Raise Your Prices More Than Once Per Year

Before you decide on your rate increase, be sure the price will sustain you for the next year.

No client is going to be thrilled about having to pay more for your services so you don’t want to drop this bomb on them more than once a year.

So, don’t be tempted to announce multiple smaller increases throughout the year to soften the blow!

Make your price increase letter a one-and-done deal maximum once a year.

Bonus: make sure to give a client gift at the end of the year to show your appreciation!

4. Be Grateful

Not only do you want to show your clients your worth and value but you want to ensure they feel valued as well.

While I’m not suggesting that you grovel, it’s important to express your gratitude for their continued support and understanding.

This shows your client that you understand a rate increase is not ideal

5. Follow Up

Lastly, you want to be sure that your client has received the information.

So often emails get sent to spam folders or are simply overlooked!

Make sure you send regular reminders about the price increase until your client has acknowledged that it has been received.

Price Increase Letter Template

Now that you know what should go into a price increase letter, let’s look at a template you can use to write your own.

Just keep in mind that the best price increase letters are ones that are written for and tailored to your specific clients.

That means that you should use this template and the examples I provide as guides and not simply copy and paste them!

Dear {Client},

Once a year, I review my freelance rates and determine a rate increase based on the cost of running my business so I can continue to provide quality services to you.

Starting on {Date}, my rates will increase from {Current Rate} to {Increased Rate}.

Compared to other freelancers in this industry, this is a standard cost with the average rate being $X. It’s important that I keep up with industry standards so I can continue to offer my services and contribute to the growth and success of your business.

If you have any questions, feel free to contact me or you can visit my FAQ page for more information.

Thank you for your continued business and I look forward to working with you in the future!



Examples of Price Increase Letters

The above template is a simple and straightforward way to notify your clients about your price increase.

To give you an idea of different ways you can word and present your letter, let’s look at some examples:

1. Simple and Straightforward

Maybe Netflix and freelancing don’t have a lot in common but I wanted to show you an example of a price increase notice that is simple and straightforward.

This email clearly states how much the service charge is increasing plus the applicable date.

It also outlines the customer’s current services which is Netflix’s way of reminding the customer of the services they are receiving as well as the value.

At the end of the email, there is a little blurb about where the customer can find more information.

2. Informative and Supportive

While this price increase letter doesn’t detail the actual price increase, it does inform the customer that they will be notified shortly if their services are going to be affected.

What I like about this notice is the opening statement. It shows that the company truly understands the inconvenience of a price increase.

Then it goes on to explain why in a backhanded sort of way: They have to increase costs to maintain business efficiency but they frame this in a way that assures the customer that they have done their best to keep prices low.

3. Price Increase Explanation

I definitely wouldn’t suggest announcing your price increase on social media because you deal with individual clients.

However, this one is a good example of how a company is giving its customers a thorough explanation of why their costs are going up.

As I mentioned, you don’t want your price increase letter to be too wordy, but this example will give you an idea of how you can phrase your reasoning in a way that sounds beneficial to the client.

4. Justification and Reasoning

Here’s another example of a company justifying and explaining the reason for their price increase – but in a way that is concise and short.

The goal is to keep your letter to the point but also tie your justification in with your value. In this example, I would probably relate the reasoning for the price increase to the value of the services provided.

Don’t Be Afraid To Raise Your Rates – You’re Worth It!

It’s always possible that you may lose some clients along the way when you raise your rates. Unfortunately, some people just can’t afford to pay more for your services even though they are beneficial to their business.

However, even if a client leaves because of your price increase letter, that doesn’t mean you aren’t valuable and worthy of a higher rate!

There are clients out there that will pay you what you are worth. You just have to get out there and find them!

But with a winning price increase letter that is well thought out and written, the likelihood of losing clients is significantly low.

Have you ever sent a price increase letter?

How did it go?

Let me know in the comments!

Elna Cain is a B2B freelance writer  for SaaS businesses and digital marketing brands and the co-founder of Freelancer FAQs. She's been featured on Entrepreneur, The Ladders, The Penny Hoarder, Leadpages and more. If you want to learn how to freelance write, check out her free course, Get Paid to Write Online.

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