Contractor's Corner: Using Tariff Talk to Boost Business
In today’s political climate, it may be tempting for businesses to remain silently neutral in commenting on current events. However, the conversation around tariffs and the impact on the flooring industry was growing too loud to ignore. Manufacturers and service partners contacted us seeking a conversation on how to communicate this news objectively to our market.
It is no secret that these recent fees will make doing business more complicated. The uncertainty and potential for future increase affects our ability to budget projects that may still be months or years out from completion. Our business focus has always been service; therefore, we strive to be there for customers to help them make choices by providing them with accurate information.
The best plan of action was to get ahead of it and communicate with our customers right away. Taking early action turned out to be a great advantage when the tariffs were swiftly enacted. We simply continued the dialog already started with our customers.
A couple weeks prior to the announcement, we used our software system to add an automatic disclaimer to all our pricing proposal letters informing customers of the potential impact. We informed them of the types of products being considered and the potential tariff percentages.
As soon as we heard about the proposed percentages, we sent an email to all our customers notifying them of more specific information. This proactive step allowed us to connect with all of our contacts who may or may not have recently received a proposal from us. We were able to provide them with greater detail about what types of products would be affected and what the proposed increases would be.
After the tariffs were officially confirmed, we sent another email newsletter to all our customers providing them with even more information. We provided them with the press release from The Office of the United States Trade Representative (USTR), and the most important dates to know regarding the increase, September 24, 2018, and January 1, 2019, when the tariff will increase from 10% to 25%. We gave them links to the government’s list of thousands of products affected. Through our email marketing program, we could see the links of product lists were of specific interest to hundreds of our contacts. We also got great follow up questions from customers which helped us educate ourselves. For example, several of our customers asked about commodities like yarn being used in carpet manufacturing. After inquiring, we were able to report major mills are using yarn manufactured in the United States.
We are happy to provide our clients all of this information. We believe transparency builds trust and makes us the “go-to” flooring contractor for many Chicago general contractors. Our goal was to be a partner with our customers in the overall construction market.
One of our biggest concerns was communicating that pricing could be affected for products that had already been purchased and were enroute to the U.S. Material arriving after the activation date would be subject to tariffs the moment it hit U.S. soil, regardless of purchase date. No flooring contractor wants to go back to his or her customer and hit them with an unexpected price increase.
Because we had maintained the communication up front, the reception to this news was mostly positive from the general contractor community. They appreciated the heads up. In some cases, this was their first notification of this tariff, which will certainly affect their business from many other trades in addition to flooring.
During this time, we feel it is equally important to maintain good relationships with our manufacturers. Just as our customers have grown to expect transparency from us, we want the same from our vendors. Letting them know that we are their ally in making sure customers know this tariff was imposed upon them is the first step.
Communicating with our local reps is key to make sure we stay informed about alternate product offerings. We would never recommend against a manufacturer because of a decision that was beyond their control. We hope this continued mutual respect will create an environment in which vendors will share information as they receive it. We want to remain up to date on the specific challenges they are facing and how they individually plan to respond to the tariff increases.
We are also here to reassure clients that there are plenty of product options out there that are exempt from these increases. Many manufacturers have competitively priced lines of products made here in the U.S. or countries not affected by the tariffs. If a customer needs help finding alternate products for their project, we are easily able to assist them.
Today we are in the information age, where customers more and more expect detailed information so that they are able to make their own choices. They care about the facts, and it our duty to adapt to this market by empowering clients to make informed decisions that will benefit both parties. From end users to general contractors, flooring contractors to manufacturers, we are all affected by the tariffs. Having an open conversation about this market change is essential if we want to maintain strong lasting relationships.