- What is the letter actually for?
- What do both letters have to contain?
- What must never appear in either?
- How do the two letters differ?
- The two letters
- The annual letter
- The correction letter
- What changes for a pass-through or a structural change?
- How do you handle the replies?
You have agreed the number, you have segmented the book, and your commercial team has been briefed. Now somebody has to write the thing, and it is four in the afternoon, and the draft in front of you opens with a paragraph about challenging market conditions and rising input costs that could have been sent by any supplier to any customer in any year since 1974.
That paragraph is doing real damage and it is the default because nobody has ever been shown a better version. The decisions about which increase to run, how much notice to give and who delivers it are covered in the field guide. This is about the artifact itself: the actual words, in two drafted versions you can adapt.
Before the drafting rules, one thing worth settling: who signs it. The letter should come from the person the customer already deals with, not from a central pricing address and not from the chief executive. A letter signed by somebody the recipient has never met reads as a corporate action rather than a commercial decision, and corporate actions are the ones buyers escalate rather than absorb.
The exception is a change that genuinely applies to everyone with no variation, such as a published surcharge, where a central notice is appropriate and a personalized one would imply negotiability that does not exist.
What is the letter actually for?
To create a dated, unambiguous record of a change the customer has already been told about. It is an administrative instrument, not a persuasive one, and the moment it starts trying to persuade it becomes negotiable.
That reframing solves most drafting problems. An administrative document states what is changing, when, and what the recipient should do. It does not argue, it does not apologize, and it does not open a discussion, because the discussion happened on the phone last week.
There is a second purpose that is easy to miss and worth designing for. The letter is the document your customer’s buyer forwards internally to justify accepting the change. It will be read by their manager, possibly by their finance function, and by whoever maintains their cost model. Write it so that forwarding it makes the buyer look organized rather than outmanoeuvred, and you have recruited them rather than beaten them.
That single consideration explains most of the drafting rules below. Specific scope, a clear date and a stated action are all things that help the recipient do their job. Vague context and a justification paragraph help nobody and read, in a forwarded thread, like a supplier trying to talk its way past something.
Watch a related video: Contribution Margin vs P&L: The $4M Mistake.
What do both letters have to contain?
Five elements, in roughly this order: the change, the effective date, the scope, what to do before the date, and a named person to contact. Anything that is not one of those five is decoration and most of it is harmful.
The effective date belongs in the first two sentences, because it is the only piece of information the recipient has to act on. A letter that buries the date under two paragraphs of context will be read as evasive even when it is not.
Scope means precisely which products, which sites and which order types are affected, and whether anything is excluded. Vagueness here generates a fortnight of clarification emails that consume more of your commercial team’s time than the increase is worth.
The action item is the last-time buy window. Telling a customer they can place an order at current pricing before the effective date costs you almost nothing, gives them something concrete to report internally, and converts the letter from a demand into a notice.
Keep the whole thing under two hundred words wherever possible. A short letter reads as routine, and routine is the impression you are trying to create. A long letter reads as a case being made, and a case being made is a case that can be rebutted. In my experience the length of a price increase letter is inversely correlated with how well the increase holds.
Attach the detail rather than embedding it. A price file, a schedule of affected items, an index table if relevant. The letter states what is happening and the attachment answers what exactly, which keeps the body short without withholding anything.
Keep the elements in that order too, not just present. The natural instinct is to build toward the announcement, establishing context first and arriving at the number in the third paragraph. That structure works in persuasive writing and fails here, because a recipient scanning for the date and the scope will not find them and will read the delay as deliberate.
What must never appear in either?
Four things, and the first one is in almost every draft I have been shown. An apology, a cost justification, a hedge, and a request for understanding.
The apology is the worst of them. Opening with regret or reluctance signals that you consider the increase questionable, and a buyer whose job includes reducing cost will read that as an invitation. If you are not comfortable with the number, the problem is the number rather than the wording.
The cost justification is the second and it is a longer-term trap. Explaining the increase by reference to your input costs concedes that your cost is the correct basis for your price, which means every future efficiency you achieve becomes something the customer is entitled to. The exception is a genuine pass-through against a published index, where the index is the entire point.
The hedge is any phrasing that implies the change might not happen: we are planning to, we anticipate, we may need to. Either it is happening or it is not.
And the request for understanding invites a reply that begins with the word unfortunately.
An apology in the first line invites the negotiation you were trying to avoid. If you are not comfortable with the number, the problem is the number, not the wording.
There is a fifth thing to avoid that is subtler than the other four: comparative language about the market. Sentences noting that competitors have also raised prices, or that the increase is below the industry average, invite the recipient to go and check. Sometimes they will find you are wrong, and always they will have been prompted to look at what your competitors are charging, which is not a thought you wanted to plant.
Two further omissions worth enforcing. Do not include a phone number and an invitation to call if you are not resourced to handle the volume, because an unanswered invitation is worse than none. And do not include an effective date you are not certain your own systems can honour. A letter announcing new pricing from the first of the month, followed by three weeks of invoices at the old rate, destroys the credibility of everything that follows it.
How do the two letters differ?
An annual letter should be unremarkable and a correction letter should be specific, and confusing the two is the most expensive drafting error available. The annual letter says this happens every year and here is this year’s number. The correction letter says one thing about your account is wrong and we are fixing it.
They differ because the recipient’s question differs. On an annual increase the buyer wants to know whether they are being treated like everybody else, and the answer that satisfies them is yes. On a correction they want to know why them, and the only answer that works is a true and specific one.
There is a practical consequence of that difference. The annual letter can be drafted centrally and personalized lightly, because its content genuinely is the same for everyone. The correction letter has to be drafted per account, because the specific original circumstance differs in every case and the specificity is the whole mechanism. Budget the time accordingly: twenty corrections is twenty pieces of writing, not one template and twenty mail merges.
The two letters
Both drafts below are written to be adapted rather than copied. Replace the bracketed items, keep the structure and the order, and resist the urge to add a warming paragraph at the top.
One difference that is easy to get backwards: the annual letter can go to many recipients simultaneously, and the correction letter must not. A correction is a single conversation with a single account, and sending several on the same day creates the possibility that two recipients compare notes and find different numbers with different explanations. Space them, and let the account owner sequence their own.
The pass-through notice is worth writing once and keeping, because it will be used repeatedly and it is almost entirely formulaic. Name the index, the baseline, the current reading, the resulting adjustment, the effective date and the review condition. Six facts, one paragraph, no argument. A pass-through that requires persuasion has not been set up properly in the underlying agreement.
Both drafts below assume you are sending to a named individual who is expecting it. If you genuinely do not have a named contact at an account, that gap is a finding in itself and it should be closed before the letter goes anywhere, because a price increase addressed to an accounts payable inbox is a price increase nobody has agreed to.
The annual letter
Unremarkable by design. This letter should read like a document that gets sent every year, because that is exactly the impression you want to create, and if this is your first one it is worth saying so explicitly.
Subject: Pricing effective [date]
Dear [name],
Following our conversation last week, this confirms that [company] pricing will be revised effective [date]. The revision affects [product families or all catalogue items] and averages [x] percent across the range, with individual items varying by [range].
Orders received before [date] will be invoiced at current pricing, including scheduled releases against existing blanket orders placed before that date. Your updated price file is attached.
[Name], your account manager, will walk through the item-level detail at your convenience and can be reached at [contact]. If any item on the list is critical to a programme you are quoting, tell us this month and we will look at it.
Thank you for your business.
Four things that draft is doing. It references the prior conversation in the first line, which establishes that this is a confirmation rather than news. It puts the date and the scope in the first paragraph. It grants the last-time buy without being asked. And the final invitation is narrow and specific rather than a general offer to discuss, which is the difference between a controlled exception process and an open negotiation.
If this is genuinely the first annual increase your business has run, add one sentence establishing the cadence: from this year we will review pricing annually, effective each [month]. That sentence costs you nothing now and makes next year’s letter dramatically easier, because the second one lands as a routine event rather than as a second surprise.
The last-time buy line is worth keeping even if you expect it to be used heavily, and businesses frequently cut it for exactly that reason. The pull-forward costs you one period of the increase on whatever volume they bring forward. What it buys is a letter that arrives as a notice with an option attached rather than as a demand, and the difference in how the account responds is worth considerably more than a few weeks of margin on one order.
The correction letter
Specific by necessity. This one names the thing being fixed, because the recipient will otherwise work out that their number differs from the market’s and conclude you were dishonest about it.
Subject: [Product or account] pricing effective [date]
Dear [name],
As discussed on [date], we are correcting the pricing on [specific items or account] effective [date]. The current pricing was set in [year] under [specific circumstance: a volume commitment, a launch arrangement, a freight allowance] and has not been revised since, while the [specification, order profile, service level] has changed substantially.
The corrected price for [item] is [number], an increase of [x] percent. This brings the item into line with equivalent products across our customer base. No other items on your account are affected.
Orders received before [date] will be invoiced at current pricing. If moving to [standard alternative] would work for your application, that option remains available at [price], and [name] can arrange samples this month.
[Name] is available at [contact] to walk through the detail.
Three things that draft is doing that the annual letter does not. It names the specific original circumstance, which is the only thing that makes this feel like a correction rather than a targeting. It states explicitly that nothing else is affected, which pre-empts the fear that this is the first of several. And it offers a product alternative, which converts a price conversation into a specification conversation, where you are on much better ground.
The correction letter names the year and the circumstance. Without that specificity the recipient concludes they were singled out, and they are not wrong to.
Be careful with the phrase in line with equivalent products. It is doing important work, and it must be true. If the corrected price would still sit below what comparable accounts pay, say that instead, because it is a stronger statement and it is verifiable. If the corrected price would sit above, do not use the line at all, and reconsider the number.
Note what the correction letter does not do. It does not describe the original arrangement as a mistake by a named person, it does not characterize the customer as having benefited unfairly, and it does not express regret. It states what was set, when, under what circumstance, and what is changing. That tone is achievable and it is the difference between a conversation about a price and a conversation about blame.
What changes for a pass-through or a structural change?
A pass-through inverts the cost-justification rule and a structural change needs far more runway. Both are variations on the annual letter rather than separate documents.
In a pass-through, name the index, the baseline value, the current value and the resulting adjustment, because the published reference is the entire justification and hiding it defeats the purpose. State the removal condition in the same letter: this adjustment will be reviewed when the index returns below [value]. A pass-through with no stated removal condition is the thing that eventually becomes an argument.
A structural change, such as a minimum order quantity or a small-order fee, needs the longest notice of any of the four types, because the customer usually has to change their own ordering behaviour to respond. Explain the mechanism rather than the reason, give the threshold plainly, and show one worked example of an order below and above it. The worked example does more than a page of explanation.
A structural change also benefits from an explicit statement of what is not changing. A small-order fee announcement that says unit pricing is unaffected removes the most likely misreading before it happens, and misreadings on structural changes generate more inbound than any other type because the mechanism itself is unfamiliar.
Both drafts also assume the conversation already happened, which is the load-bearing assumption in this entire article. If it did not, no wording will rescue the letter, and the right move is to delay the send by a week rather than to soften the language to compensate.
One last variation worth having ready. If an account is receiving both an annual increase and a correction in the same year, do not combine them into one letter and do not send them in the same month. Combining them guarantees the recipient reads the total as the annual number and concludes it is wildly out of line with the market. Send the annual with everyone else, let it settle for a quarter, and run the correction separately with its own explanation.
How do you handle the replies?
Route every one of them to the account owner within a day, and answer nothing centrally beyond confirming receipt. The letter went out from a person; the replies come back to that person.
Expect three categories. Clarification questions, which are the majority and should be answered in a day because a slow answer reads as evasion. Last-time buy requests, which you should say yes to without negotiation because you already offered. And pushback, which belongs in a conversation rather than an email thread, because written negotiation compresses badly and produces positions neither side can move from.
The one thing not to do is send a second letter. A follow-up clarifying or softening the first one tells every recipient that the position moves under pressure, and you will have taught that lesson to the accounts that did not push as well as the ones that did.
About the Stagnation Assassin
Todd Hagopian is a Fortune 500 transformation executive who has generated $3B+ shareholder value across five turnarounds at Berkshire Hathaway, Illinois Tool Works, and Whirlpool. He is VP of Product Strategy and Marketing. Known as The Stagnation Assassin, he is the author of two published books: The Unfair Advantage: Weaponizing the Hypomanic Toolbox and Stagnation Assassin: The Anti-Consultant Manifesto. His blog is published in 15+ languages and read by operators worldwide. Bring him to your stage via his speaking page or connect with him on LinkedIn. His newest book is 10-Minute Transformation (February 23, 2027).