A good price increase letter to customers states the current price and the new price, the exact date the change applies, a short honest reason, every option the customer has (including any cheaper plan), how to cancel without penalty, and who to contact. Send it at least 30 days ahead for monthly plans, before renewal for annual plans, and 30 to 60 days ahead for business customers.
Key takeaways
- Six things go in every notice: old and new price, date, reason, every option, how to cancel, and a contact.
- Give at least 30 days' notice on monthly plans and apply new prices at renewal for annual plans.
- Put any cheaper or legacy plan in the email itself. That's the lesson of the ACCC's Microsoft case.
- Work out break-even churn before you send. A 12% rise loses money only if about 11% of customers leave because of it.
- In Australia there's no single legal notice period; your contract and unfair contract terms rules decide. Check with your adviser.
When I was writing The Subscription Playbook, I noticed something odd on Dropbox's upgrade page.
It didn't say 2 TB. It said 2,000 GB.
Same amount of storage. But 2,000 GB feels bigger. Very clever, Dropbox.
I'm not telling you to play number games in a price increase letter. Quite the opposite. My point is that how you say it changes how people feel about it. And nowhere is that truer than the email telling customers they'll pay more.
Write it badly and a fair, overdue price rise looks like a grab. Write it well and you give every customer a clear, fair choice.
Here are six templates for the situations you're most likely to face. Before you use any of them, work out how many customers you could lose and still come out ahead. The full playbook is in how to raise prices without losing customers.
The six things every price increase notice needs
- The old price and the new price, side by side (including GST for Australian consumers).
- The exact date the new price applies, and the first bill at that price.
- A short, true reason.
- Every option: keep the plan, switch plans, move to a cheaper or legacy plan, prepay, pause or cancel.
- How to cancel, with a link, and confirmation there's no penalty for leaving because of the change.
- A real contact who can answer questions.
Number four is where businesses get into trouble. In October 2025 the ACCC took Microsoft to court, alleging it told Australian Microsoft 365 subscribers they could accept a higher price with Copilot or cancel, without clearly mentioning a cheaper Classic plan. The case was before the court as at October 2026. If a cheaper option exists, it goes in the email. The Microsoft case study has the detail.
Template 1: Monthly subscription, 30 days' notice
Subject: Your [Plan name] price is changing on [Date]
Hi [First name],
On [Date], the price of [Plan name] will go from A$[Old price] to A$[New price] a month (including GST). Your first bill at the new price will be on [Billing date].
Why: [One or two honest sentences, e.g. "Our costs have risen and we've added X and Y this year."]
Your options
- Stay on [Plan name] at A$[New price]: no action needed.
- Move to [Cheaper plan] at A$[Price]: [Link]
- Switch to annual billing and pay A$[Annual price] for 12 months: [Link]
- Cancel before [Date] with no penalty: [Cancel link]
Questions? Reply to this email and [Name] will help.
Thank you for being a customer.
[Your name]
Template 2: Annual plan, new price at renewal
Subject: Your renewal on [Renewal date]: new price for next year
Hi [First name],
Your annual [Plan name] renews on [Renewal date]. Your current price of A$[Old price] stays in place until then.
From your renewal, the price will be A$[New price] a year (including GST). [Reason in one sentence.]
This year you [usage or value highlight].
Your options before [Renewal date]
- Renew at the new price: no action needed.
- Change to [Other plan] at A$[Price]: [Link]
- Switch to monthly billing at A$[Monthly price]: [Link]
- Cancel so you're not charged: [Cancel link]
[Your name]
Prepaid customers keep the price they paid for. Full stop.
Template 3: Grandfathered (existing customers keep their price)
Subject: Our prices are changing, but yours isn't
Hi [First name],
From [Date], new customers will pay A$[New price] a month for [Plan name].
As a thank-you for being with us since [Start date], you'll keep your current price of A$[Old price] [for as long as you stay on this plan / until (Date)].
You don't need to do anything.
[Your name]
This is what Planet Fitness did in 2024 when it raised its US Classic membership from $10 to $15, its first rise in 26 years: the new price applied to new members. The Planet Fitness case study shows how. If you grandfather "until a date," that date needs its own notice later.
Template 4: Price rise with new value (and a legacy plan)
Subject: New in [Plan name]: [Feature], and a new price from [Date]
Hi [First name],
We've added [Feature] to [Plan name]. It [one sentence on what it does for the customer, in their words].
Because of this, [Plan name] will move from A$[Old price] to A$[New price] a month (including GST) from [Date].
Don't need [Feature]? You can keep everything you have today, without it, on [Plan name] Classic at A$[Old price]: [Link]
Your options
- Keep [Plan name] with [Feature] at A$[New price]: no action needed.
- Switch to [Plan name] Classic at A$[Old price]: [Link]
- Cancel before [Date] with no penalty: [Cancel link]
[Your name]
Model the rise before you send the email
The free Price Increase Simulator shows your MRR impact and the break-even churn for any price change.
Template 5: Letter to business clients (60 days)
Use this for small business subscriptions, retainers, or any service business with regular clients.
Subject: Updated pricing from [Date]
Dear [First name],
I'm writing to let you know that from [Date], our [service / plan / hourly rate] for [Company name] will change from A$[Old price] to A$[New price] [per month / per hour] (excluding GST).
[Reason: rising wage and supplier costs, new capabilities, or both. Two sentences, plain and true.]
We'd like to make the change as easy as possible:
- If you'd like to lock in the current price, you can prepay [12 months / a block of hours] at today's rate before [Date].
- If a smaller package suits you better, [Package] is A$[Price]: we can switch you anytime.
- If you'd prefer to end our agreement, you can do so before [Date] without any penalty.
I'd be happy to talk it through. You can reach me on [Phone] or book a time here: [Link].
Thank you for your continued trust.
[Your name]
[Title], [Business name]
Template 6: Seven-day reminder
Subject: Reminder: your new price starts on [Date]
Hi [First name],
Just a reminder that from [Date], [Plan name] will be A$[New price] a [month/year] (including GST).
Want to change plans or cancel first? [Link]
[Your name]
Before you hit send
Work out your break-even churn: the share of customers you could lose before the rise costs you money.
Break-even churn = 1 − (Old price ÷ New price)
On a rise from A$49 to A$55, that's about 10.9%. If fewer than about 11% of customers leave because of the change, you're ahead, and most of the gain is profit.
In Australia there's no single legal notice period for price rises as at October 2026. Your contract decides, but a term that lets you raise prices without a penalty-free exit may be unfair. From 1 July 2027, regulations may also require notices when prices change. The details are in raising subscription prices in Australia. This is general information; check your terms with your adviser.
What to do next
- Model the rise in the Price Increase Simulator. For a predictable annual rhythm, see how Xero raises prices each July.
- Pick the template that fits: rise, grandfather, or new value with a legacy plan.
- Brief your support team with the options and a one-line reason.
- Send, then track replies, plan changes and cancellations for 60 days.
For annual customers, pair the notice with your renewal reminder emails.
Free Subscription Profit Review
Australian business owners can book a free 30-minute review with a BPAG Accountants adviser. An honest conversation about:
- whether a subscription model could work for your business
- how recurring revenue could cover your fixed costs each month
- how it could lift what your business is worth
No cost, no obligation. General information only until we understand your situation.
Frequently asked questions
Should I apologize in a price increase letter?
No. An apology suggests you've done something wrong, and it invites customers to push back. Be respectful and clear instead: state the change, give the reason briefly, thank them, and show their options. A calm, confident tone tells customers the decision is considered and fair, which is what makes most of them stay.
What's the best day to send a price increase email?
Send it on a normal working day when your team is available to answer replies, not on a Friday afternoon or before a holiday. Avoid sending it the same week as a service problem or outage. For annual customers, the best moment is often alongside the renewal reminder, about 30 days before renewal, when they're already thinking about the next year.
Should I tell customers why prices are going up?
Yes, in a sentence or two, and only if the reason is true. Rising costs, new features and better support are all fair reasons. Don't invent a cause or blame a tax that isn't changing your price, because a false reason can be misleading conduct. Customers accept honest reasons far more readily than vague ones like 'to serve you better'.
How do I handle customers who reply angry?
Reply quickly and personally, acknowledge the frustration, restate the options and offer the one that best fits them, such as a cheaper plan, annual billing or a short delay. Don't argue. If they want to cancel, process it immediately and confirm it in writing. Track the objections, because they tell you whether the price or the value story needs work.
Can I use these templates for a non-subscription business?
Yes. Template 5 is written as a letter that works for trades, accountants, agencies, cafes supplying wholesale and other service businesses. Replace the plan language with your service or rate card, give your regular clients 30 to 60 days' notice, and offer a fixed-price option or prepayment at the old rate if you want to soften the change.
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Robert Coorey, MBA
Robert is the author of The Subscription Playbook and Feed a Starving Crowd and a Director at BPAG Accountants in Sydney. More about Robert.
Sources
- ACCC, Contracts guidance for business (unfair contract terms, price variation example)
- ACCC media release, Microsoft in court for allegedly misleading millions of Australians over Microsoft 365 subscriptions (27 Oct 2025)
- CBS News, Planet Fitness raises membership fee for first time since 1998 (2024)
- Xero Blog, New changes to Xero's plans in Australia from July (1 May 2024)
- The Subscription Playbook, Robert Coorey (2022), Chapters 3 and 9
Facts and prices checked 27 October 2026. Spotted something out of date? Tell us.