The impact of tariffs on your business costs can feel like an elephant in the room when discussing pricing with your clients. Yet, it’s not something you should ignore.
While tariffs and their related effects are ever evolving, being transparent about the current situation builds trust and helps clients understand cost fluctuations you may be experiencing.
According to Wunderkind’s survey in April, 91% of consumers are aware tariffs are causing price shifts and economic uncertainty. It is also affecting their loyalty as 54% said they’ll switch brands if a better price comes along.
Why You Should Address Tariffs with Clients
Talking about money can be a tricky subject, but proactively addressing any price changes helps build your credibility with your client base. Instead of shying away from the subject, being up front and honest with customers establishes more of a partnership relationship.
Tackling the subject head-on also prevents clients from dealing with sticker shock. They can know that they may experience delays or price increases.
Even if none of your pricing is changing, tell your customers that. Leaving them in the dark does you no favors. If left wondering, some may begin preemptively price shopping for a cheaper alternative. Assuring clients their bills aren’t going to rise can foster goodwill and peace of mind.
Messaging Effectively
When addressing tariffs, work to educate your clients instead of alarming them. Use simple, straightforward language to explain what specific items have been impacted, such as irrigation parts or hardscaping materials. Emphasize that these price increases are due to global economic forces, not personal preferences.
Stress to your clients your commitment to providing quality service while staying within their budget. Empathize with them while outlining how you plan to move forward, such as sourcing more domestic products.
If you send out newsletters or email communications to your customer base, utilizing subject lines with these phrases below can boost your open rates and address any uncertainty your clients may have.
- No Surprises
- Rate Lock
- Budget Protection
- Smart Spending
- Price Stability
- Affordable Options
Lead with the benefits you provide in these emails and be transparent about your pricing.
When having individual conversations with design/build clients, let them know early on during the estimating phase the current volatility of pricing. You can also include in your proposals and contracts which elements are subject to market price changes if you are unable to absorb certain increases.
You can also present cost-saving alternatives or financing to customers who have budget limitations. Encourage an open dialogue so customers can ask questions about any concerns they have with pricing.
What to Avoid
Stick to the facts when discussing tariffs. Sharing your opinion on the trade policies can land you in hot water, no matter what side you take.
Monitor the current tariff policies and their impact on your costs closely so you don’t have to spring price changes on customers late in the game. Even if certain tariffs have only been threatened, keep your clients up to date on possible increases so they’re aware of possible changes.
When explaining the results of certain tariffs on your pricing, don’t get too in the weeds with economic jargon. Focus on the bottom line and what it means for them specifically.
Don’t forget to highlight the value of your services and how you will strive for exceptional results, even in a changing economy.
