Ask the CFO June 17 2025: Tariffs, Pricing, and the Power of Picking Up the Phone

Let’s talk tariffs.

If you’re like most companies I work with, you’re staring down unclear rules, surprise charges on invoices, and vendors shrugging when you ask what’s going on. Right now, one of my clients is dealing with a 25% tariff—originally aimed at China—but it’s hitting their steel imports from Mexico. We’re asking basic questions like: Do we keep buying from Mexico and eat the tariff, or just shift sourcing to the U.S.? No one’s giving clear answers.

The bottom line? You can’t wait for perfect information. The market’s moving too fast.

Instead, focus on what you can control—your pricing strategies, your vendor relationships, and above all, your communication with customers. That’s what this month’s Ask the CFO was all about.

We’re All in This Tariff Mess Together

Here’s the good news: your customers are probably facing the same cost pressures you are. They’re dealing with tariffs, rising freight costs, changing demand, and unpredictable timelines. That gives you an opportunity—if you talk to them.

Have real conversations with your key accounts. Don’t hide the ball. Walk them through what’s changing, what you’re seeing in the market, and how it might impact pricing or delivery.

And let me be clear: communication doesn’t have to mean a formal letter. Sometimes it’s better to skip the boilerplate and just pick up the phone. Customers appreciate being treated like partners, not line items.

Build Pricing Discipline into Your Business

Tariffs or not, every company should have a structured approach to price reviews. One of the best habits I’ve seen is setting annual pricing increases on a consistent schedule. For example:

• Communicate pricing updates every November

• Apply new pricing every January 1

• Keep it simple, honest, and proactive

Don’t wait for a crisis. Build the rhythm into your operations. And if your freight goes up 3X like it did for many in 2021–2022? You can always layer in mid-year updates. Just be transparent and logical.

As I said during the session: “Most clients won’t be shocked. They’re dealing with the same stuff.”

Contracts Are Tools—Use Them

If you’re signing long-term contracts and not baking in escalation clauses for commodities like steel, copper, or oil—you’re setting yourself up to lose money.

A simple clause tied to market indexes (like the PPI) can give you leverage when costs spike. And yes, clients may ask for a downside clause in return. That’s part of the deal. You protect both sides.

I’ve done this before, especially in construction-related projects or equipment sales that run 12–24 months. Don’t skip it.

Sharing the Pain = Keeping the Customer

Sometimes a pricing update alone won’t cut it. When costs jump, get creative. Ask: How can we share the burden?

Maybe you:

• Offer to take on partial inventory holding costs

• Adjust delivery schedules to fit their cash flow

• Split the cost difference on materials

• Add value in ways that reduce their total landed cost

One client of mine realized their customer didn’t need weekly shipments—they just needed two months’ worth on hand. So we restructured the delivery terms and took pressure off both sides.

You’re not just selling a product. You’re solving a problem. Act like it.

Know Where You Sit in Their Supply Chain

Something else to think about: not every line item matters equally to your customer.

One of my clients sells electrical components. For some of their customers, they’re only 2% of the final product’s cost. If that’s the case, a 25% increase might mean a jump from $20 to $25. Not ideal—but not a dealbreaker either.

Don’t trigger a customer freak-out over something they won’t even notice. But if you’re a big chunk of their spend, get ready for scrutiny. Know your position, and adjust accordingly.

Get Your Sales Team Talking

Your salespeople need to be in frequent, value-based conversations with your top 20% of customers—the ones who drive 80% of your revenue. Not just pitching, but listening. Asking:

• What’s changing in their business?

• Where are their pressures coming from?

• What do they actually need from you right now?

That’s how you stay relevant, retain trust, and uncover ways to add value—without racing to the bottom on price.

Final Thought: Get Back to Basics

We’ve been here before. I think back to 2008–2009 when I was in a completely commoditized business—selling PVC conveyor belts. Even then, we held onto most of our customers by listening and adjusting. Some shifted from premium to value products, and we pivoted right along with them.

It’s the same playbook now:

• Communicate clearly
• Review pricing regularly
• Protect your margins with smart contracts
• Talk to customers like partners
• Adapt when the market shifts

None of this is rocket science. But doing it consistently? That’s the hard part—and the part that pays off.

Until next time,
Lowell