The Diary Comes Before the Letter: A Price-Rise Plan for Your Twenty Largest Accounts

There is a particular kind of paralysis that sets in when an owner-manager knows prices must move. The costing spreadsheet has been revisited three times, the margin has been quietly eroding for eighteen months, and still the letter sits unwritten in a drafts folder. The reason is rarely laziness. It is that the letter feels like the first move in a negotiation, when in fact it should be the last step in an operational sequence that began months earlier.

Treating a price rise as an operations project rather than a sales conversation changes the order of work. It means the diary, the contract file and the account plan are consulted before a single sentence is drafted. What follows is a practical route through that sequence for a business with roughly twenty accounts that matter more than the rest.

Start with the contract file, not the calculator

Before any figure is chosen, establish what each of the twenty agreements actually permits. In practice the twenty will divide into four groups, and each demands different handling.

• Rolling agreements with a fixed notice period. Thirty, sixty or ninety days' written notice is typical. These are the accounts where timing is entirely within your control, provided you diarise the notice date rather than discovering it a week late.
• Fixed-term contracts with a renewal date. The increase can only take effect at renewal, or through a variation clause. Work backwards from the renewal date and start the conversation a full quarter before it.
• Contracts with an indexation clause. If the agreement references CPI or RPI, the rise may be almost automatic — but only if the clause is invoked correctly and on time. Read the wording closely; some clauses require written notice even where the mechanism is pre-agreed.
• Handshake arrangements with no written terms. The most exposed group, and the one where a written increase is most likely to be read as a change of relationship. These need a conversation before a letter.

A single spreadsheet with columns for notice period, contract end date, indexation clause, revenue in the last twelve months and gross margin is sufficient. Without it, the exercise becomes guesswork dressed as strategy.

Choosing the number and proving it

A 3–5% increase is the range most owner-managers settle on, and for good reason: it is large enough to be worth the disruption and small enough to sit inside a customer's own tolerance for supplier drift. But the number should be defensible line by line rather than plucked from a benchmark.

Build a short schedule for each account showing what has moved since the price was last set. Wage costs, the April uprating of the National Living Wage, employer National Insurance contributions, energy and utilities, haulage, software subscriptions, insurance renewals. Then state, plainly, how much of that total increase you are absorbing and how much you are passing on. A customer who can see that you have carried two-thirds of the cost pressure is far less likely to negotiate hard.

Where a single account represents more than, say, a tenth of turnover, consider phasing the increase across two steps six months apart. The arithmetic is less tidy but the relationship risk falls considerably.

Working backwards from the notice date

Once notice periods are known, build a calendar in reverse. If ninety days' notice is required and you want the new pricing live from the start of the next financial year, the letter must be with the customer by early autumn. That in turn sets the date for the account-manager briefing, and the date for the internal pricing sign-off.

Two practical points are easily missed. First, notice clauses usually require a specific method of delivery — recorded post, email to a named contact, or a formal variation notice. A friendly email to the wrong address may not constitute valid notice. Second, the person who owns the relationship should hear the news by telephone before the letter arrives. A letter that lands cold reads as an ultimatum; a letter that confirms a conversation already had reads as administration.

What the letter should and should not say

The letter itself should be short and mercifully free of apology. Four elements carry the weight: the new price, the effective date, the reason in one sentence, and a named contact for questions. Resist the urge to over-explain. A two-page justification invites a two-page negotiation.

Avoid language that frames the rise as a reflection of your difficulties. Customers buy outcomes, not sympathy. "Our cost base has risen and we are passing on part of it" is honest; "we are struggling and need this increase to survive" hands the other side an argument they will use later.

The follow-up call

The call matters more than the letter. Brief whoever makes it with three answers: why now, what has changed since the last price, and what flexibility exists. That last point should be decided in advance and held in reserve — a longer notice period, a slightly smaller step in year one, an added service that costs you little and is worth something to them. Flexibility offered spontaneously looks like weakness; flexibility offered in response to a genuine concern looks like partnership.

Expect the "why now?" question in some form, and prepare a plain answer. Something along the lines of: costs on this account have risen by around a certain figure over the past two years and we have absorbed most of it; this increase brings the price back to where the margin was in a prior year, not beyond it. Specific, unemotional, and difficult to argue with.

Grandfathering, deliberately

There will be two customers — usually long-standing, usually reliable payers, often the ones who send work at short notice — for whom a full increase would create disproportionate friction. Offering them a six-month delay, or half the increase, is a legitimate use of discretion provided two conditions are met: it is decided before the campaign rather than conceded under pressure, and it is documented so that it does not quietly become permanent.

Afterwards, count

Six weeks after the effective date, check three things: that the invoicing system has actually been updated for every account, that no customer has been invoiced at the old rate by accident, and that the accounts lost are fewer than the arithmetic assumed. Most price rises lose fewer customers than the owner feared and recover more margin than forecast. The value of the exercise is not only the revenue — it is the contract file, now accurate, and a calendar that will make the next increase routine.