Announcing a price increase to clients is a subject every digital agency has to confront from time to time.
Agencies may wish to raise service fees because they:
- Need to meet rising costs such as higher wages and software as a service (SaaS) fees
- Are expanding the services they offer, which means investing in new skills, employees and technologies
- Weren’t charging enough initially, perhaps because they were new and kept prices low to win their first customers
- Found out competitors are charging more for similar services
- Are exceeding clients’ expectations substantially
- Increased their team size significantly, thus providing more value to customers over shorter periods of time
Regardless of the reason, raising fees is a sensitive topic with clients. Here, we examine key considerations in announcing a price increase and provide the perfect price increase letter to customers for your agency to use.
1. Communicate the change to your team first
Mary Lister, Content Strategist at internet services provider Starry, says it’s critical for agency owners to first tell their own employees about cost adjustments.
“Increasing your cost will impact every team in the business, whether directly or indirectly,” she says.
“While your customer service team needs to know how to answer questions, your marketing and sales teams will need to understand how to explain the new pricing to existing clients and sell it to new customers.”
2. Quickly get to the point
James Rose, Co-Founder and Head of Marketing at Australia-based Content Snare, says it’s unfair to force clients to wade through a huge chunk of text in an email to learn about a price increase.
It’s better to be upfront about it in the first few sentences rather than bury it at the bottom of a message.
“If you waste too much time on fluff and preamble, your client will see right through it. As they read it they’ll be thinking ‘come on, what’s the bad news?’,” Rose says.
Instead, it’s best to just get to the point quickly – tell them how much their prices will be going up by, what they will be afterward, and when this all takes effect. If they want to read the whole email and find out more, they would.