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Launching a Price Increase: How to Inform Your Clients

by Sean

You spend your first few years as an independent contractor building up your client base as big as possible.

Then, two things happen:

One, you end up with so many clients that you’re overworked and seemingly underpaid.

Two, you find yourself in a situation where you’re several years into your career and still charging novice rates.

It might be time to raise your rates.

But, raising your rates in an unprofessional or impulsive manner can cause you to lose even your most loyal clients immediately. That’s why you need to be thoughtful and plan out your price increases.

Justifying Your Reason for the Price Increase

The longer you’ve had clients, the harder it’ll be to explain a sudden price increase. That’s especially the case if this is the first time you’ve done so.

You’ll need to have a pretty good explanation for why your services are worth more now. You may also need a “pitch” for why your clients should continue to invest in your business.

You need to prove to yourself and your clients that this is a good business move.

Orient Your Price Increase Around the Customer

You know first-hand what it’s like to keep a business running from day to day. After all, you have expenses that need to be paid and equipment or software that needs to be purchased. You may even be paying some subcontractors to help you scale your operation.

Right now, you might be spreading your resources thin. When that happens, the quality of services you provide clients is at risk.

No matter the reason behind the price increase, you need to focus on what a customer stands to gain from it.

They’re more likely to go along with a price hike if it means they get high-quality service. If you simply tell them that you’re charging more because you want to hire an assistant to do your paperwork, they may not be as receptive.

Customers may not understand the data behind the increase, but they should realize that this price increase is in their best interest.

Related: How Do You Write An Estimate for Clients?

Increasing Your Rate in a Fair Way

How to increase your rates

Price hikes aren’t about putting more money in your pocket; they’re about placing more financial value on the skills you possess and the services you provide.

Even the most loyal customers will turn their backs on you if they feel your price increase is unfair or unjustified.

Related: How to Track Business Expenses

Compare Yourself to the Competition

It’s harder to put a dollar amount on services than it is to put a listing price on a product.

The best way to set a price increase is by comparing yourself to your competition.

What are your competitors charging for the same or similar services?

You can’t entirely avoid disappointing your clients with a price increase. But when they see that your new rates are in line with industry standards, you don’t have to be afraid that they’ll ditch your services for a cheaper yet equal option.

It’d be much harder to explain why your service is worth $500 while your competitors are worth $100. Unless you provide something significantly more valuable than similar companies, make sure to keep your prices competitive.

Standard Percent Increases for Pricing

If you suddenly introduce a 50% or 100% increase in your services, it’s safe to say that you’re going to lose a lot of clients.

It’ll be hard to explain why your rates have nearly doubled, especially considering the cost of inflation is nowhere near that high. That’s even more of a concern now, with economic troubles related to COVID-19.

So, how much should you raise prices or rates?

10-20% is usually a pretty good range to start with. An extra few dollars on a package won’t usually make or break the deal.

This will subtly improve your profit margins without turning customers away.

Current clients can’t pay their invoices due to COVID? Check out our article about How to Write an Invoice When Your Clients are Struggling Financially.

Planning the New Rate Transition

A price increase is not something that you introduce overnight. No client wants to wake up to an email that says their favorite service is now $50 more expensive.

If you want your clients to be okay with it, you have to handle the process delicately.

Setting Consistent Price Increases

As the years go on and you set yourself apart in the industry, the value of your services will increase.

So while this might be your first price increase, it won’t be your last.

Many independent contractors and small business owners implement annual price increases around the same time each year.

This will keep you ahead of inflation and will put both long-term and short-term clients on a predictable pricing schedule.

They’ll know June means increased rates, whether they like it or not.

Deciding When the Plan Will Take Effect

A sudden and unexpected price increase can come off as callous to your most loyal clients. After all, they’ve given you referrals and kept your business financially stable for years.

You’ll want to give at least 60 days’ notice before bumping up your rates.

This will give your clients some time to review their options. It will also allow them to book your services at the current rate for a little while longer.

Note: Err on the side of caution when it comes to bumping rates for brand new clients. A price increase shortly after entering a contract can be off-putting, so hold off for a few months before initiating the increase.

Providing Some Alternative Packages

If you have a growing client base, then your services are probably pretty affordable. Unfortunately, a price increase may make your services too expensive for some people.

Fortunately, you don’t have to say goodbye to all of your clients—you can offer them an alternative package.

Creating Tiered Packages for Your Clients

Let’s say the cheapest service you currently offer is valued at $100.

An increase to $120 might be too much for some customers.

So, instead of making your most affordable package $20 more expensive, you can simply readjust what’s offered in each package.

That means you can keep the $100 price point that many of your clients buy while creating a more expensive package that offers more.

For instance, you might lump in some extra services with the new package to justify your new price point. As a photographer, for example, that could be as simple as a few extra prints.

That way, you can retain your current clients even if they can’t pay more. And at the same time, you can start booking more sessions with new clients who are willing to spend more money!

Planning Out Your Announcement

Announcing a price increase

By now, you’ve figured out what your price increase will be, how you’ll explain it to customers, and when it’ll take effect. The only thing keeping you from that extra funding is the announcement.

This step will probably take longer than any other thus far. That’s only because it’s the most important step of the process.

Taking Note of the Details

You’ll have to write a formal price increase letter to send out to each of your clients.

But before you do that, you have to figure out what to write in the letter. You don’t want there to be any room for questions or confusion.

Be sure to include:

  • How much you’re increasing your rate – 10%, 20%, etc.
  • Why you’re raising your prices Emphasize quality of work
  • When your prices will increase – Include the month, day, and year

You should also discuss any changes that your packages or services are undergoing. And, let your customers know that these prices are firm and non-negotiable.

At no point in your letter should you apologize for the price increase. Many clients will see this as a sign of weakness and as an open door to negotiate.

Prior to sending out the letter, proofread it several times. Use a grammar-checking tool like Grammarly to ensure that it’s free of mistakes.

Example Scripts for Raising Prices

So, what should your price increase letter actually look like?

Here’s an example that includes all of the criteria we went over above:

Dear [client name],

Thank you for being a valued client at [your company’s name]! Thanks to loyal clients like you, we have been able to expand our business in recent months.

We are writing to inform you that, as of [date of projected increase], we will be raising our rates on [service or package] by [percentage]. This price increase is necessary to continue providing loyal clients like you unrivaled service.

Thank you for your continued support!

If you have any questions or concerns about this price increase, feel free to reach us at [phone number].


[Your name]

Related: The Best Apps for Independent Contractors

Notifying Your Clients

How to raise prices on services

No matter how well you perfect that price increase letter, you’re going to feel anxious before (and even after) sending it out. But you need to pull the trigger and send out that email as soon as possible.

Luckily, Bloom can help you to make that even easier.

Using a CRM to Alert Your Clients of Price Increases

A customer relationship management, or CRM, system, is a great tool for any independent contractor, freelancer, or small business owner.

When it comes to notifying your clients of a new pricing structure, you’re covered.

You can neatly craft your email in the platform until it’s absolutely ready to send. Then, you can send this email out to every client on your contact list to be sure that everyone is accounted for.

But that’s not all a CRM can do for you.

You can also create a follow-up email campaign to remind customers of the coming price increase. It’ll notify them every week, month, or however often you choose. This is a great way to allow customers to capitalize on your current rates while they’re still active.

Personalizing Your Price Change Email

Emails can come off as informal, even if you manually type each client’s name into the header or the subject line.

Your best clients deserve a more personal approach.

Be sure to reach out directly to your most active and high-paying clients. Remember to thank them for the role they play in your business’s success, and tell them that you wanted to speak to them personally about the price increase.

You may also want to send out a physical letter to each client to cover all of your bases and to be sure that everyone gets the message.

Try Bloom free for 14 days!


No matter how justified your price increase is, there’s no guarantee that all of your clients will be on board with it. Don’t be surprised if you receive emails from disgruntled clients looking to negotiate a deal.

Don’t negotiate with them. That’s the last thing you should do.

Remind your clients that charging higher prices is necessary to cover overhead costs and keep your business running. Remind yourself that the increase reflects the quality of your services.

A loyal customer will accept a minor price increase without incident. Putting your price increases on an annual schedule will yield better reactions with time.

Remember, using a CRM like Bloom can make this process easier with email templates, invoice templates and more. Try Bloom free for 14 days to see how you can simplify price increases now and do them next year in just a few clicks.

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