MSP Price Increase Letter Template: Raise Rates and Re-Scope the Agreement
A price increase letter is the last step of a pricing decision. Send it before the decision is made and the client ends up making it for you.
Most MSPs set January rate changes in the fourth quarter. The owner picks a number, someone drafts a letter, and the account lead finds out about it when a client forwards the email with one line: "Can we talk?"
That call goes better when the account lead already knows three things: what kind of increase this is, what the agreement allows, and what the client gets for the new number. This guide gives you a way to answer those first, then a letter template, a short QBR talk track, and answers to the pushback you will actually hear.
It is written for the vCIO or account lead who owns the client relationship, and it doubles as the brief you hand the owner before anyone hits send.
This is not legal advice. Your master services agreement decides how much notice you owe and whether price can change mid-term. If the agreement is vague, have counsel read the letter before it goes out.
Decide what kind of increase you are making
"We're raising prices" covers at least four different changes. Each one needs a different letter, and mixing them in one paragraph is how a reasonable increase starts to look like a grab.
| Type of change | When it fits | What the letter has to say | Where it goes wrong |
|---|---|---|---|
| Contractual escalator | The agreement already allows an annual adjustment, often tied to a named price index | Which clause applies, the index or cap it references, the new rate, and the effective date | Applying it without reading the clause, or using a different index than the one written |
| Annual rate reset | Your labor, tooling, or insurance costs rose and the agreement allows repricing at renewal | The new rate, the effective date, and a plain reason | A vague "rising costs" line with nothing behind it |
| Vendor pass-through | A licensing or tool vendor raised its price and your agreement passes those costs through | Which product changed, the old and new unit cost, and how many units the client has | Burying a vendor change inside your own rate change so the client cannot tell them apart |
| Re-scope | The client's environment grew, or you are moving them to a different package | What is changing in scope, what the new price covers, and what is no longer included | Calling a scope change a price increase, so the client hears "same service, more money" |
If one client needs more than one row, send each change on its own line in the same letter. The client should be able to point at every dollar and say where it came from.
For the vendor side, the Microsoft 365 July 2026 price increase guide covers how to re-quote a licensing change without absorbing it.
Pre-send checklist
Run this per client before the letter is drafted. It goes fast when your agreement and billing records are in order. If it drags, that is a finding in itself.
CLIENT: ____________________ ACCOUNT LEAD: ____________ EFFECTIVE DATE: ________
Agreement
[ ] Agreement located and current version confirmed
[ ] Notice period for price changes: ____ days
[ ] Escalator clause present? Y / N Index or cap named: ____________
[ ] Price can change mid-term? Y / N Or only at renewal: ________
[ ] Required notice method (email, letter, portal, named contact): ____________
Numbers
[ ] Current monthly recurring amount: $________
[ ] New monthly recurring amount: $________
[ ] Vendor pass-through items listed separately (product, old unit cost, new unit cost, qty)
[ ] Seat, device, or site counts match what you actually manage today
[ ] Anything you manage that is not billed (shadow devices, extra sites, "temporary" favors)
People
[ ] Who receives the letter (economic buyer, not only the day-to-day contact)
[ ] Who signs or approves on the client side
[ ] Who on your side takes the follow-up call
Timing
[ ] Letter date that satisfies the notice period: ________
[ ] Next QBR or review date: ________
[ ] Any open incident, outage, or escalation that should be resolved first
Two items on that list do most of the work.
Counts that match reality. If the client is billed for 40 users and you manage 52 accounts, your price problem may be a billing problem. Fix the count first. A count correction and a rate change are different conversations, and the client deserves to see both clearly. The per-user vs per-device pricing guide can help you decide which unit belongs in the agreement.
The open incident. A rate letter that lands the week after an outage reads as a bill for the outage. If something is still open, close it, write up what happened, and send the letter after.
Work the notice period backward
Start from the effective date and count back. Example: if you want new rates on January 1 and the agreement requires 60 days of written notice, the letter has to reach the client by November 2. If the agreement says 90 days, that deadline was October 3, so those clients are looking at a later effective date.
Add buffer for the clients who need a conversation before they accept. Owners do not like signing in the last week of December, and neither do you.
If your renewals are scattered across the year, a single January letter may not fit every agreement. The MSP renewal calendar template helps you see which clients renew when, so each increase lines up with a date the agreement allows.
The MSP price increase letter template
Keep it short. The letter announces a decision and points to a conversation. It should not argue the case in five paragraphs.
Subject: [Client name] service rate update effective [effective date]
Hi [first name],
Starting [effective date], your monthly managed services rate will change
from $[current amount] to $[new amount].
What is changing
- [Managed services rate]: $[old] to $[new] per [user / device / month]
- [Vendor item, if any]: [vendor] changed its price from $[old unit cost]
to $[new unit cost] per [unit]. You have [qty], so this line moves from
$[old line total] to $[new line total].
- [Scope change, if any]: [what is added or removed]
Why
[One or two plain sentences. Example: "Our labor and security tooling costs
went up this year, and we have kept your rate flat since [year]." Or: "Your
team grew from [x] to [y] users since we last set this price."]
What stays the same
[Coverage hours, response commitments, the services they rely on most.]
This change follows section [section number] of our agreement dated
[agreement date]. Nothing else in the agreement changes.
I would like to walk through this with you at our next review on [date], or
sooner if that is easier. If you want to look at a different service level
or scope before the new rate starts, we can do that too.
[Your name]
[Title]
[Phone]
A few notes on the fill-ins:
- Keep the "Why" honest and specific. If the reason is that you underpriced them three years ago, you can say so: "When we set this rate in [year], we priced it below what this level of service costs us to deliver." Clients respect that more than a vague reference to the economy.
- Leave out percentages unless they help. "From $4,200 to $4,500" is easier to approve than "a 7.1% adjustment." The client pays dollars.
- Offer the scope option on purpose. It gives a budget-constrained client a real path besides leaving. It also gives you a reason to re-quote an agreement that drifted.
- Send from a person. A rate change from a no-reply billing address tells the client nobody wants to discuss it.
QBR talk track
If the increase lands near a review, raise it in the meeting before the letter arrives. One paragraph is enough:
"Before we get into the roadmap, one housekeeping item. Starting [date], your monthly rate goes from $[old] to $[new]. Part of that is [vendor] raising its price on [product], which we pass through at cost. The rest is our rate, which we have held since [year]. You will get the letter this week with the details. If the number is a problem, the roadmap is where we can talk about scope, so let's keep that in mind as we go through it."
Then move on. The roadmap that follows is the evidence for the number, so let it do the arguing. If your reviews need more structure, the MSP QBR template covers the agenda.
Answers to the pushback you will hear
"Why now?" Point to the specific reason in the letter: the vendor change, the user growth, the years at the same rate. If you cannot name one, the increase is not ready to send.
"We haven't had any problems." That is usually the service working. Show what happened that the client did not see: patched vulnerabilities, blocked sign-in attempts, the backup restore you tested, tickets closed before anyone noticed. Use your own PSA, RMM, and security reports. Do not invent a number to make the point.
"Can you hold the price for another year?" Decide this before the call, per client. If the answer is no, offer the scope option instead: "We can keep the total close to where it is if we change what is covered. Here is what that would look like." If the answer is yes for a strategic account, put the hold in writing with an end date, so next year's letter is not a surprise.
Some clients will leave. If a client's only reason for staying was a below-cost rate, that is information the owner should have had earlier. The MSP pricing math guide helps you check which accounts are actually covering their cost to serve.
Tie the new rate to a re-scope
The cleanest increases come with a refreshed scope. The client sees what they are paying for today, what changed since the last agreement, and what the new number covers. The ugly ones are a new number on an old scope that nobody has read since onboarding.
That means the price increase season doubles as a scope review:
- Pull current seat, device, and site counts against what the agreement says.
- List what you actually deliver that the agreement does not mention.
- Decide, per item, whether it moves into scope at a price, becomes a separate project or add-on, or stops.
- Send the client a quote for the new agreement, with the scope, assumptions, and exclusions written down, alongside the letter.
Scopable's quoting workflow is built for that last step. You start from the client and opportunity, write versioned scope sections with assumptions and exclusions, add catalog products, labor, and recurring items, and check totals and margin context before you send a public quote link or PDF for e-signature. The sent version stays frozen, so next year's increase starts from the scope the client actually approved.
To build this year's re-scoped agreements from a client record instead of last year's spreadsheet, start Scopable for free.
