How to tell customers that we are raising prices?

Despite wage growth and slowing inflation, consumer confidence remains low, and the input costs of many products have risen sharply this year. Furthermore, a VAT increase looms this summer, affecting the prices of nearly all goods and services. How can businesses communicate an upcoming price increase to their customers in such a situation? The fear that customers might leave after receiving bad news is real. It may also attract media attention and cause reputational damage to the company. Therefore, price changes must be communicated thoughtfully, honestly, and convincingly. Success requires good preparation and a well-considered approach.

Analyze your client’s situation

A well-worded mass email might suffice if the economy is strong and enough time has passed since the last price increase. However, early planning is crucial in the current climate, where consumers are saturated with negative news and emotionally strained. Price change communication should be taken as seriously as a new product campaign.

Start by analyzing the market situation: What is your customers’ current state? Do they primarily seek discounted products or look for cheaper alternatives? How have they reacted to competitors’ price increases? Has this influenced their purchasing behaviour? This groundwork helps justify the price increase and determine the most appropriate communication strategy.

Start communication early

Price increase messaging should begin early and be reflected in other corporate messages. Companies often prefer to highlight positive numbers when presenting economic results, focusing on growth. However, if a price increase is imminent, it’s wise to stop sugar-coating. A sudden price hike can feel contradictory and frustrating if customers constantly hear that the business is thriving.

“Research shows that customers are most irritated when they feel price increases are driven solely by profit motives. That’s why justifications must be clear and easy to understand.”

It’s also beneficial to hint early that price adjustments may become necessary. Speaking honestly about rising costs and the impact of inflation ensures the price increase won’t come as a surprise. Larger companies should raise industry-wide issues before implementing price hikes—especially if the challenges affect the whole sector. Research shows that customers are most irritated when they feel price increases are driven solely by profit motives. That’s why justifications must be clear and easy to understand. Transparency and proactive communication help reinforce that customers have chosen a trustworthy partner.

Messages must be clear and human

Clarity and transparency are essential when explaining price changes. Customers shouldn’t have to calculate or search for the new price themselves. Vague or overly generic statements can lead to frustration and a loss of trust. The reasons must be specific—”rising costs” says little, but pointing out increases in raw materials, supply chains, or energy makes the message more relatable.

For example, avoid saying: “Due to general cost increases, we adjust our prices. The updated price list is available on our website.”

Instead, say: “Our production costs, especially for raw materials and transportation, have risen significantly over the past year. For instance, our costs increased by 20% in Q1 compared to last year’s period. To maintain high product quality and continue investing in customer service, we need to adjust our prices starting next month by 10%. As a result, a product currently priced at €10 will cost €11 as of next month.” You can emphasize your continued competitive advantage to soften the message: “We continue to offer the most affordable price in the market” or “the best quality.”

What does the customer get in return?

“A well-crafted value proposition helps customers understand why the increase could benefit them.”

A price increase doesn’t just mean higher costs for the customer—it also signifies an investment in quality. A well-crafted value proposition helps customers understand why the increase could benefit them. However, this works only if the added value is something the customers genuinely want and have mentioned in feedback or surveys.

In such cases, emphasize the customer-centric approach in your communication. If people feel heard and understand that improvements require extra cost, they are more likely to accept the change. Still, don’t justify a price hike with added features that the customer neither requested nor valued.

In conclusion: Be honest and open

• Avoid negative language or apologetic/defensive phrasing.
• Emphasize what the customer gains, not just that prices are increasing.
• Provide early notice about rising costs to give customers time to adapt.
• When price increases are communicated clearly, with solid reasoning and customer value in mind, it’s possible to avoid backlash and maintain a relationship of trust.
• Be present for the customer—include contact details or a link to more information in every communication. Prepare for a spike in customer inquiries and ensure your team is ready.
• Also, ensure your spokespeople can respond to media inquiries or give interviews. This signals that the company is not hiding anything and helps shape the narrative while supporting the change with well-crafted messages.