Price Increase Announcement: Announce Price Changes the Right Way6 min read

Let’s face it, nobody likes a rate increase. But sometimes, to continue providing value and growing, companies need to adjust their current pricing.

A price increase announcement is how companies inform customers about upcoming changes to their products or services.

The goal? To avoid surprising your users and give them time to adjust. This shows you value them and their experience, which is crucial for a smooth transition and continuous customer retention.

Why do companies increase prices?

Several factors can lead to a company increasing its prices. Here are some common reasons:

• Product improvements: Continuously improving a SaaS product means investing in new features, enhancements, and functionalities. These updates require larger design, development, and management teams, which increases costs.
• Business growth: As your customer base expands, you’ll need to grow your customer support and success teams. This requires a price increase to sustain without shrinking profit margins.
• Inflation and rising production costs: Inflation affects the price of everything, including infrastructure, subscriptions, and salaries, which impacts operating costs. These increased costs often necessitate a rate increase.

How to Announce a Price Increase

The way you communicate a price increase announcement can significantly impact your customer relationships. A single banner or email isn’t enough; you need a multi-channel approach to ensure your customers are well-informed.

Email

An email is your official communication channel. It keeps customers in the loop about important updates. Your price increase letter should include a concise summary and links to detailed information, so customers can easily learn more and contact your team with questions.

Here’s how Netflix handled its price increase letter to customers:

This is an old email, but it still applies all the best practices.

In-app (Web)

In-app announcements are contextual and timely. If customers regularly use your product, a banner is an effective way to ensure they see the price increase notice.

Here’s how Ahrefs announced their recent price increase on the customer dashboard:

They communicated the main message and directed users to their blog for more details or to the pricing page to compare options. They also reassured existing customers that they could keep their current subscription plan.

Make sure to update your pricing page to reflect the changes. Ahrefs confirmed that old subscription plans were now legacy plans, unavailable to new customers but still valid for existing ones. This is a common strategy when increasing prices, allowing you to focus on showcasing the value of new plans and encouraging upgrades over time.

In-app (Mobile)

Don’t forget your mobile users! With Userpilot’s new mobile features, you can create mobile-optimized announcements that match your brand, without needing to code. This ensures a consistent experience across all platforms.

Make sure your price increase message is short and concise, with a CTA to follow for more information.

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Social media posts

Everything we showcased above talks about reaching out to existing customers.

Once you’ve done that, you can consider social media posts that will reach not just your customers but potential new ones.

Price is sometimes the number one reason people decide to go with one product over the other. When you announce new prices over social media, you can get your message out to the people who decided your product price doesn’t justify its value, and make them reconsider.

It’s also a good way to reinforce your brand and positioning.

Ahrefs published their price increase notice on LinkedIn, where most of their B2B users hang out. The way they explain the why behind the new plans and how they are dealing with existing subscriptions says a lot about their brand values.

Best practices for announcing a price increase

To avoid frustrating customers and causing churn when you announce a rate increase, follow these best practices:

• Segment and Personalize: Tailor your message to address the specific concerns of different user segments. Users at different stages of their journey have unique needs, so adjust your message accordingly. For example, you might grandfather in one plan while replacing others. Use a tool like Userpilot to segment customers based on pricing plans or usage frequency and trigger contextual in-app messages.
• Announce Well in Advance: Notify users of any changes well before they take effect. This gives them time to understand the impact on their business. Letting them know before their next subscription is due (or even months in advance, depending on the size of the change) shows you care.
• Justify with Increased Value: Remind customers how your product has consistently solved their problems and the increased value you’re delivering through product enhancements. Take a cue from Spotify, which justifies price increases by promising new content and additional features.
• Offer Limited-Time Offers: Give loyal customers a chance to keep enjoying the old price for a limited time. This shows you care about the impact on their businesses and helps retain customers who need more time to adjust.
• Encourage Freemium Upgrades: Use the price increase announcement as an opportunity to drive freemium-to-premium conversions. Remind free users of product improvements and prompt them to check new pricing details. The new plan bundles might be the incentive they need to upgrade.
• Limit Price Increases: Avoid announcing price changes more than once a year. Frequent changes can affect customer loyalty and encourage them to switch to competitors with more stable pricing.
• Stay Open to Feedback: Be open to suggestions, questions, and requests. Acknowledge their feedback, answer questions, and offer solutions to help them adjust to the new pricing structure.

Price increase notice sample

Here’s a price increase notice sample you can adapt for your own communications:

You can also use a price increase letter template to streamline your communication.

Conclusion

Asking for higher prices isn’t a random decision. By justifying the increase with better service, improved usability, or additional features, and by delivering the news thoughtfully, you can make your business sustainable and maintain customer relationships.

Take a multi-channel approach and ensure your message is clear across all platforms. Get a Userpilot Demo and see how we can help with your in-app communication.

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