Rising Tariffs, Fiercer Competition: How to Raise Prices Without Losing Customers

Key Takeaways

• Price wars drain profits—instead, track competitors, identify market gaps, and prepare strategically to avoid a price spiral.

• Your unique value proposition is your shield against price competition—even commodity products can differentiate with the right approach.

• Consistent, compelling communication of your benefits across all touchpoints transforms price shoppers into loyal value customers.

Price wars hurt your bottom line. With new tariffs driving up costs across supply chains and increasing consolidation in many sectors, the fighting could get fiercer.  Don't play the price war game. Change it.

Take these 3 steps now to be ready when things get real.

 Step 1. Keep Tabs on Your Competitors

Don’t panic, prepare.

You're likely tracking key metrics on your digital platforms. (If you're not already tracking competitors, it's time to start.) But don't forget mystery shopping, undercover research, and boots-on-the-ground reconnaissance. Start a spreadsheet.

Weekly or even daily tracking and trend analysis is a good use of resources in this 'lag-spike' economy, especially as new tariffs reshape cost structures across industries. Without access to competitors' strategies, it's difficult to find a balance between offering discounts and maintaining profitability. Information is power.

Step 2. Polish Your Value Proposition

You can’t win a price war, but you can win a value game.

Consumers today are obsessed with deals. They snag coupons and trade down, particularly as tariff-driven inflation affects household budgets. But here's what they're really hunting for: value.

 How easy is it to swap your product or service for competitors? A discount only matters when products are nearly identical.

Don't be identical.

When you deliver a difference that consumers value, you’re no longer competing on price. (In case you’re interested, economists call this “elasticity of substitution.”)

"But I sell a commodity! Customers can buy it anywhere."

So do Dasani, Morton Salt, and Domino Sugar – Yet they all used differentiation to claim a dominant market share. If you're selling a commodity, that's on you. Here's how to discover what makes you special:

1. Think about your loyal customers - or better -ask them - what keeps them coming back when cheaper options are available.

2. Where is the gap in the market? You started this business for a reason – was it because you could fill a customer need no one else was?

3. No loyal customers? The reason you started the business no longer exists? It’s time to get creative.

Now pull up that competitive analysis you just did. Add a couple of columns. Scour their websites. Look at the language they use -- how do they differentiate themselves? Look for taglines and repeated phrases or promises.

 If they, too, see themselves as a commodity, that's your opportunity. What CAN you offer that customers value - that competitors don't? (This may not be easy. I do it for a living, and sometimes it takes a while before something clicks.)

Focus on benefits that resonate most with your target audience—whether it’s superior quality, emotional connection, or convenience. A strong UVP clearly communicates what sets your product apart and why it’s worth paying for.

Even in a tough economy, customers show fierce loyalty when they perceive a difference in value -- physical or especially emotional. The key is making that value impossible to miss, so now:

Step 3 Blast out Your Benefits

Your UVP Is only as powerful as Its reach

I’ve never worked with a company that didn’t have or couldn’t develop a profitable, unique value proposition (UVP).  I’ve worked with plenty that kept it under wraps.

In an era of rising costs from tariffs, your communication should acknowledge consumer concerns while emphasizing the enduring value your product delivers despite industry-wide price pressures.

So take the time to sharpen your value proposition. When it’s clear and compelling, showcase it across all customer touchpoints—your website, app, listings, and even signage. Consistency is key. Ensure your UVP is consistently communicated across all customer-facing channels using the same language.

Don’t stop there. Choose marketing tactics that do double duty – tactics that showcase your UVP in both the message and the delivery vehicle, like these brands did.

• Red Bull wasn't first to market. Jolt, launched by Coke, was there first, but Red Bull used X-treme sports sponsorship to support its "for high-energy lifestyles" UVP.

• Toms broke into a crowded shoe market with its "One for One" cause-related marketing strategy.

• Chiquita turned bananas into a brand. One of the first to brand produce - simple blue stickers promised, "This seal outside means the best inside." When really, It was - just another banana.

• I’ll throw in Avocados From Mexico because I’m proud of the work we did to take them from a tiny player to share leader. From flash mobs to memes, the versatile avocado UVP gained enough traction to make 'avocado toast' a household name (and a meme in its own right).

Remember: price shoppers become value shoppers when you show them something worth paying for.

Maryanne Conlin is an award-winning, classically trained marketer and founder of NeuroD Marketing. She's worked with leading Fortune 500 brands and helped over 500 clients build their businesses strategically for sustainable growth. An expert speaker and writer on targeting & positioning, she runs workshops and teaches internationally.

Contact me to learn how to optimize your marketing strategies in an economic downturn.