How Can You Successfully Communicate a Price Increase?

Introducing a price increase is rarely just a communication exercise.

The moment a customer challenges the increase, asks you to reconsider it or wants something in return, you may be at the start of a negotiation.

Even when there is a clear business case for an increase, customers may challenge it, delay accepting it or simply say no. How you prepare for that conversation - and how you respond when challenged - can have a significant impact on both the commercial outcome and the ongoing relationship.

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1. Plan your position before communicating it

Before deciding how to communicate a price increase, be clear about the outcome you want to achieve.

Start by considering the balance of power between you and the other side.

What would happen if they said no? What alternatives do they genuinely have? How quickly could they implement one, and at what cost? What would losing their business mean to you and what precedent might this outcome set with this customer - or others?

Then define your negotiating position.

What increase are you seeking? What is the rationale behind it? How much flexibility, if any, do you have and where are your limits?

Be clear about which elements of your position are fixed and where, if anywhere, you have room to move.

Also identify other variables that may have value to either side and could potentially form part of a trade. These might include:

• volume

• contract duration

• payment terms

• scope

• service levels

• implementation timing

• forecasting commitments

• earlier agreement

• additional customer commitments

Consider how these variables might be combined into different packages if price becomes negotiable.

The important thing is to make these decisions before the other side pushes back.

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2. Decide how the message should be delivered

Not every price increase should be communicated in the same way.

For a relatively small or contractual increase, written notification may be perfectly appropriate. For a significant increase involving an important customer relationship, a conversation may be more effective.

Consider the size of the change, the nature of the relationship, the consequences of delay and the likely reaction of the other side.

If significant resistance is likely, simply emailing the increase and waiting for a response may give you less control over what happens next.

Once you have decided how to deliver the message refine it, rehearse it. Deliver it to a colleague and get their feedback.

Can you explain your position clearly? Can you support it if challenged? Can you answer the obvious questions the customer is likely to ask?

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3. Be clear, specific and credible

Ambiguous language can unintentionally invite negotiation - reducing impact and momentum before the other side has even responded.

Consider the difference between:

“We’re looking for something around a 6% increase.”

and:

“Our price will increase by 6.2% from 1 November.”

The first potentially signals flexibility. The second communicates a clear position.

Phrases such as “around”, “in the region of”, “ideally” or “very difficult” may sound harmless, but they can indicate that movement is available.

Your message should therefore be concise, specific and supported by credible evidence where appropriate.

There is another important discipline here:

Once you have communicated your position, invite a response and stop talking.

Don't start offering alternatives or movement simply because silence feels uncomfortable.

Let the other side respond first.

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4. Understand the pushback before responding to it

Before responding, clarify and summarise their position. Make sure you understand the pushback fully before deciding what to do next.

Suppose the customer says:

“We can't accept that increase.”

One of the most common mistakes is to immediately assume that the problem is the size of the price increase.

It may be - but it might also be something entirely different.

Perhaps the timing causes a problem. Their budget may already have been agreed. The person you are speaking to may not have sufficient authority.

Perhaps they have concerns about scope, service, contract length, payment terms or the precedent that accepting the increase could create elsewhere.

Until you understand their problem, you don't know what you are trying to solve.

Useful questions might include:

“Which part of the proposal causes you the greatest difficulty?”

“What would need to change for this to become workable?”

“Apart from price, is there anything else preventing you from agreeing?”

Explore first, negotiate second - it will cost you less.

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5. If you move, trade rather than concede

Sometimes movement will be appropriate, but that doesn’t mean simply reducing the increase.

If you have planned properly, you should already have identified other variables that could be used in a trade.

Rather than:

“Okay, we'll reduce the increase.”

you might say:

“If you can extend the agreement to three years and move to annual payment in advance, then we could consider reducing the proposed increase.”

The distinction is important.

A concession gives something away. A trade makes movement conditional on receiving value in return.

This allows you to move the conversation away from a simple argument about price and towards an agreement that creates value for both sides.

A price increase is more than a communication exercise.

Customers are unlikely to welcome paying more, so some pushback should be expected.

The objective isn't necessarily to eliminate that resistance. It is to manage the conversation effectively when it happens.

In summary:

• Prepare your position and identify potential trading variables.

• Choose how to communicate the increase.

• Be clear, specific and credible.

• Understand the real reason for any pushback before you negotiate.

• If movement becomes necessary, trade rather than simply concede.

The aim is not to make a price increase painless. It is to make sure that when resistance comes, you understand it before reacting to it - and that any movement you make buys something of value in return.

Handled well, a difficult pricing conversation can still produce a commercially sustainable agreement while protecting an important business relationship.

Practise delivering price increases, pressure-test your strategy and receive immediate feedback using LIVE in the Cawdor Companion.

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