Shift Your Perspective To Engineer Your Success
"Price is what you pay, value is what you get." — Warren Buffett
Over the summer, a CEO of a $45M manufacturing company I met shared his most pressing challenge: steel tariffs had driven raw material costs up 22% in just six months.
His largest customer, representing 35% of revenue, announced they would trigger a vendor review if prices rose more than 3%. To make matters worse, a major competitor had agreed to absorb the full cost to maintain market share.
What started as a casual chat turned into four napkins of strategy notes, all landing on “defensive pricing”, balancing the urge to set prices to protect market share and customers rather than pursue profit.
How do businesses shift from defensive price increases to a proactive value repositioning strategy?
You cannot predict the future. But you can ask the right questions about your business to help you see what is possible and build systems that keep it steady and moving forward.
Price pressure is inevitable in volatile markets, but how you respond determines whether you protect your margins or erode them. Instead of reacting with short-term fixes, the real opportunity is in reframing the challenge as a test of strategy, resilience, and relationship strength.
Differentiate With Proof: Identify and document the outcomes you deliver that competitors cannot replicate.
Engineer Better Margins: You cannot out-price every cost increase, but you can offset them through efficiency. Use technology to lower unit costs, gain productivity, and cut non-value-added expenses.
Prioritize Profitable Relationships: Economic pressure reveals who values you. In a shrinking market, being a profitable #2 beats being an unprofitable #1. Know which customers drive true profitability and focus there.
Remember the questions and answers we discussed in our previous newsletter? Refer back to them as you continue to shift your perspective and come up with strategic solutions.
Reframe The Question To Redefine The Outcome
Avoid asking, "How do we raise prices without losing our biggest customer?"
Instead, try to reframe the problem by asking, “What could guarantee my business’s failure, and how can I prepare for the fallout sooner rather than later?”
Reframing the question pulls focus away from the negative to help you think about what you need to do to succeed. Then, walk through these top 3 actions that most often lead to business failure:
Failing to act at all: You hope the tariffs will go away and the customer will change their mind. But this can lead to continued margin erosion and a weaker financial position.
Absorbing all costs: You commit to the idea that you must be the low-cost provider. This move could lead to a race to the bottom, cripple profitability, and ding your reputation as a long-term partner.
Losing the core customer without a plan: Your customers become angry with price increases and leave before you have the chance to diversify your revenue stream.
The goal is to avoid these outcomes at all costs. Reframing the questions you want to ask shifts the conversation from a single, narrow problem to a broader strategy.
Shift From Survival Mode To Strategic Solutions
In my conversation with the manufacturing CEO, we shifted from risk control to proactive planning by asking:
What's the 3-year plan? Right now, the focus is on the next six months. Zoom out to explore what your company needs to look like in 3 years to be a market leader.
Is the current customer relationship sustainable long term? If customers are unwilling to share in the burden of cost increases, what does that say about the future of your partnerships?
What investments do you need to make today that will make your company more resilient in the future? Consider changes in technology, operational excellence, or new products that could impact your business or industry.
This perspective encourages business owners to make decisions that serve the company's long-term health rather than its short-term survival.
The Next Decade Belongs To Its Builders
Strong companies 3 years from now will be the ones that used uncertain moments like these to build a more robust, efficient, and valuable business. Do not wait for tariffs to disappear, absorb all costs, or risk losing your biggest customer without a diversification plan. Think ahead with Tamika Tyson and maximize your investment.