Once you’ve decided to implement a fee increase at your firm and you’ve worked out how you are going to structure your new rates, now all that is left to do is break the news to your clients. This will be one of the toughest emails that you’ll send and you’ll be anxious that you may lose clients as a result. To help you break the news successfully, this article outlines the 8 specific elements that you must include in your price increase letter to clients.
**(Trust us when we say, a lot of your clients will be more than fine with the increase! Seriously, we've helped many accountants increase their bottom line this way!).
How to write a letter to clients announcing a price increase
Crafting a letter in just the right way can make a world of difference when it comes to your client deciding to stay with you and accepting your new price. So take your time with this!
Your price increase letter to clients needs to be as personal as possible. It needs to address the client and their individual financial needs first, and only then will they be far more willing to listen and be understanding about the change.
To write a perfect letter, you need to:
- Grab attention quickly - talk about how this will benefit the client.
- Establish your credibility - mention recent value or good results you've provided.
- Set yourself apart - make the case for paying more with you versus moving to a cheaper competitor.
- Announce the fee increase - tell them that you are increasing your prices.
- Reward your client’s loyalty - offer them some sort of reward to ease the transition.
- Remind them of your value - refer to a specific goal or desired outcome that you can now help them achieve.
Read more about these 6 steps here: How to write the perfect letter to your accountancy clients to tell them about a fee increase
8 things you must include in your price increase letter
1. A professional and positive tone
You're worried about approaching this topic and your clients aren't going to want to pay more initially, that's just fact. We all understand that it is business and that prices increase over time, however, so make sure to communicate in a positive but professional tone throughout your price increase letter.
How you make your client feel will impact their decision to stay with you greatly, so if you make them feel like these changes are positive and necessary to continue your great service, then they will be much more likely to accept the fee increase without any issues.
2. Lead with something personal
You want to make your client feel valued so open your price increase letter with something personal. This could be a previous glowing testimonial that they gave you or great results that you previously achieved for them. For example, "Thanks to the glowing testimonial that you gave me, I know that you are incredibly happy with the value that I bring to your business."
By leading with something personal, you are immediately reminding them that you have a great working relationship and you bring them value. Just remember to keep this brief.
3. A clear explanation of why you're increasing your fees
If you just send a letter informing your clients that you’re implementing a fee increase and now they have to pay X amount, they are going to be confused and annoyed. This is not how you want this conversation to go down at all as it will most probably end up in the loss of clients.
When writing your price increase letter to clients, explain why you are increasing your fees as clearly and as briefly as possible and always link it to the benefits you’re bringing the client. For example, we are increasing our fees to continue our great client service or to deliver even an even higher-quality of work etc. This will help your client understand the change and they will be far more willing to accept it.
Need more help with your price increase letter? Download our letter template to implement a fee increase successfully and keep the clients that you want!
4. Their new rate
Once you’ve informed the client that you’re implementing a fee increase and the reasons why you’re doing so, don’t forget to tell them what their new rate will be. The goal is to give them as much information as possible so that they are much more likely to accept this change.
If you have clients that are paying via direct debit, this gives them all the information they need so that they can just let you carry on. The less effort on the client’s part, the better.
5. The date of when the increase will take effect
The client needs time to make adjustments so clearly state the date when the fee increase will be taking effect in your price increase letter. Don’t suddenly spring this change on your client, give them time to digest it and even to exercise at least one more month at the existing price.
If you wanted to, you could even give your long-term clients further time to transition to show that you appreciate their business. (Find out how to successfully implement a fee increase)
6. A clear call-to-action
Whatever your call-to-action may be, make sure to clearly state it towards the end of your price increase letter to clients. Perhaps you want to move your clients onto the cloud, you want to get them paying monthly via direct debit, you want them to upgrade their package or you just want them to contact you to discuss the fee increase. If you want certain results from your letter, make sure to ask for what you want as clearly as you can.
7. Your contact details
When you’ve given your client all the information that they need to know about the fee increase, make sure to make an offer to chat if they want to discuss it. Providing the different ways that they can contact you, such as your personal phone number and email, will show them that you value their time to discuss this change as well as them as a client. Talking to you can make a world of difference to their decision to stay or go, so give them chance to talk to you personally if they need reassurance.
8. Flatter the client
Just like you began your price increase letter, you always want to end it with your client feeling valued and appreciated. Just a simple "it's been great to work with you and I hope our working relationship continues" can really go a long way. How you make the client feel will stay with them much longer than anything else, so make the right impact in your letter.
What if my clients can't afford my new rates?
This is a common question that we get asked and we have two things to say about it.
1. This happens way less frequently than you'd expect.
Your clients know you, like you, and are, hopefully, really happy with your service. It's a lot of hassle to find, choose and move to a new provider so most clients would rather a fee increase to stay with you than go through that.
2. Usually the clients who can't afford your new rates are worth losing
The clients who are not willing to pay you what you are worth, are worth losing. For the clients who simply can't afford your rates, while it can be scary, it's worth losing them too in the long run. To grow your firm sustainably, you need to increase your fees and you need clients who are a good fit for where you want to go. If you keep clients who pay you too little, this will do more damage to your growth than if you lose them completely.
What if it isn't the right time to increase my fees?
"It's not the right time" is the second most common reason that accountants give for not raising their fees when they should. Typically, it tends to go back to the fear of losing clients again.
For example, I've heard this a lot now due to the pandemic and the recession: "It's the wrong time as so many businesses are struggling, no one is going to accept paying more." While this may be the case for some, this is just not true for most of your clients. If anything, during the past year, clients have needed extra help and support from their accountants. Many clients want to keep this level of service moving forward and most of them will be willing to pay for it.
Instead of worrying about whether it's the right time for your clients, think instead about whether it's the right time for you. Here are a few situations that require you to raise your rates:
- The costs of doing business have increased.
- You were underselling yourself so you want to align your prices with your competition.
- To ease stress and resentment due to overworking.
- You want to get rid of your low-fee or nitpicky clients.
- New personal/business goals.
- You have more work than you can handle.
- To move from time-based pricing to value-based pricing.
- Your skills have improved and you're offering a higher quality of service.
- You are targeting a new audience who do business at a higher price point.
You should be constantly reviewing your rates, services, and competition to identify when your practice will benefit from a fee increase. Make sure to make a habit of this so you know when it's the right time for you.
Don't be afraid to increase your prices
Writing a price increase letter to clients may be scary, but if you include all of these 8 elements in there, you can be sure that it will go down much more smoothly. Not to mention, the immediate impact it will have on your bottom line!
Just remember to follow up with a phone call after a few days to make sure that your clients understand exactly what is happening and how it impacts them. You'll be surprised by the number of clients who stay with you!
Need more help with your price increase letter? Download our letter template to implement a fee increase successfully and keep the clients that you want!
How our Growth Specialists can help you
It is not uncommon for accountants to struggle with increasing their fees, especially when they are concerned about how their clients will react. However, this daunting conversation is necessary if you want to maintain and increase the profitability of your accountancy practice!
As a member of the AGC, you will have the support you need to overcome these challenges and build the confidence to charge what you are worth. One of our key focus areas is to help our members develop the courage to increase their fees and ensure they are being fairly compensated for the services they provide.
See below some testimonials from our members who we have helped with pricing.
