How to Talk About Tariffs With Your Customers
The imposition of tariffs by the American government on different regions like China, Canada, and the European Union has widespread ramifications for businesses in the United States. These tariffs and their trickle-down effect are likely to impact the pricing involved in your business dealings and, subsequently, the rates you charge to your customers. But how do you explain these changes to them?
Explain the Background
If you're having a talk with customers about tariff effects, it's important to understand what is happening in your industry and why. Familiarize yourself with the motivations and events that have led to the tariff imposition. Make sure you synthesize the direct impacts on your specific business as well. For example, in the manufacturing sector, steel and aluminum were one of the earlier commodities targeted in this trade war. If your company uses or sells steel or aluminum, be ready with an explanation of your price increases. Don't just say, "It's the tariffs," without providing your customers with tangible details.
Have a Conversation
You’ll want to spend time with valued customers and give a personal explanation. The more time you can take to talk, answer questions, and address concerns personally, the better off you'll be. The worst thing you can do is adjust your pricing without notice or an explanation. No one wants to be kept in the dark with financial changes, so prepare for both a conversation as well as a written statement.
Prepare a Letter
In addition to having a personalized talk, if you haven't done so already, you should also provide something on the record, like a letter that you can send in an email and post to your website. This statement is something you can use either as the groundwork for a conversation or as a follow-up to one, but ideally, you will provide both to your customer. Your letter should be personalized and to the point. Here’s a sample letter to work from:
We’re happy to report that we enjoyed [X amount] of revenue with you last month, and look forward to continued success in the future. [Personalize a few lines to the specific client by talking about their business, their interests, your history, and so on.]
We're making some changes that we hope will raise the bar on our services and yield even better results. Your business is important to us, and we need to continually improve our operations and stay abreast of economic developments to make sure we remain competitive.
In keeping with this strategy and in light of tariffs imposed on [X], we'll be changing the rates on some of our products/services [Choose which is relevant and elaborate you wish] to ensure that as the market evolves, we are ready to help you stay ahead of competitors. To see the changes, you can find updated prices and packages here [Link to your website and/or list them within the letter].
We understand that you're likely to want clarification or more details, and we're more than happy to provide them. We are always available for questions and concerns, so please reach out here [Email or phone number]. We look forward to hearing from you and furthering a productive relationship.
Trade wars affect businesses at all levels, but they don't last forever. In the meantime, however, if you want to make sure you know what's happening and how it will affect your business, we're here for you. Reach out to your GJM team to start the discussion.
Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting services and provides comprehensive services including assurance, business advisory, tax, risk advisory, healthcare management and outsourced accounting. The Firm’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities.