 How is your prairie-based small to mid-size company managing pricing and customer relationships through this trade war? Upward pressure on supply prices will ultimately mean needing to gauge carefully how much of those price increases can be passed on to customers in order to protect your bottom line. This will be trickier in some industries than in others depending on how price sensitive your customers are with your product or service, the level of competitiveness in the industry, how deep your competitors’ pockets are to weather potential losses, and what alternatives customers can turn to rather than accepting a higher price from your company or your competitors. A good tool to evaluate this is a Porter’s Five Forces analysis, which evaluates the competitive threats in the industry. Check your customer contracts and terms & conditions to ensure it’s clear that, if a customer purchases your product or service after tariffs are imposed in their country, the customer will have to pay them. Let customers know you are closely tracking supplier prices in order to give them some advance notice of any pricing increases they may see. If possible, don’t surprise your customers with sudden price increases. Aim to give them a certain amount of warning so they can plan accordingly in their business or family household. This shows you care about their cash flow, survival and wellbeing, and it will help maintain and even strengthen relationships with them, which will serve your business now and beyond the trade-war. In higher-ticket relationships, stay in touch with customers in order to understand how they are doing such that you can become aware of any risks to your receivables and/or sales volumes. For lower priced product or service relationships, monitor information about the balance sheet health of your customers on aggregate. You may want to check your customers’ creditworthiness to gauge their cash flow health. Continue to communicate the value and uniqueness of your product or services. While prices are important to customers of all kinds, the value of your offerings are just as important, if not more so. Reinforcing the difference you make for customers, and how your offerings are unique and valuable, addressing your core customers' key pain points, needs and wants, will increase your chances of retaining the business even if or when you have to increase prices. Continue marketing and selling aggressively to keep growing the business, and to replace customers who go elsewhere. Communicate regularly and frequently with customers. Clarity and consistency are critical. Empathy, caring and doing the right thing will go a long way to maintaining and strengthening these relationships through the trade war and beyond. For other ways to navigate these challenging times with confidence, get the free complete Trade-War Success Guide for Small to Mid-Size Companies below. If you are a prairie CEO who wants to grow a thriving company through these turbulent times, more quickly, more easily and with less stress and headache, please contact me here.
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