If there’s one thing that’s certain in business, it’s uncertainty. Economic changes, policy shifts, and market fluctuations can send waves through any industry, and the ability to adapt is what separates those who struggle from those who thrive. So, how can you position your business for success in uncertain times? Let’s break it down.
Tariffs and Supply Chain Disruptions
One of the biggest headlines making waves in the business world is tariffs — especially those targeting imports from China, Canada, and Mexico. Integrators rely heavily on imported goods or equipment with components that originate in these countries. Any price hikes on these goods will trickle down the supply chain, potentially increasing costs for dealers, installers, and, ultimately, homeowners.
But before you panic about a huge tariff on imported goods, let’s clarify something: a 60% tariff, for example, does not mean retail prices will rise by 60%. The tariff applies to the raw cost of manufacturing, not the full retail or wholesale price. Manufacturers, distributors, and dealers absorb part of the increase, so the final impact on customers is often less dramatic than headlines suggest.
Here is how to handle tariff-driven cost increases:
- Take immediate action
- Update all software systems as soon as new prices are confirmed.
- Revise all outstanding proposals to reflect the latest pricing before sending them to clients.
- Use the urgency of price changes as a motivator for customers to finalize purchasing decisions.
- For signed contracts, give clients two options
- Pre-purchase Equipment — Pay now to lock in today’s pricing and secure materials before further increases.
- Variable Pricing — Communicate why prices might vary going forward due to the current circumstances. Reinforce that price changes are beyond your control, but your goal is to provide fair and sustainable pricing while maintaining quality service.
- Future-proofing contracts, incorporate a Price Adjustment clause
- Ensure contracts and Terms & Conditions explicitly state that pricing is subject to change due to external factors.
- Make pricing policies transparent: Instead of burying these terms in the fine print, proactively discuss potential price adjustments with customers before signing contracts.
- On long-term projects, where equipment purchases may be months or years away, consider these strategies
- Provide an initial quote only for rough-in and trim phases.
- Offer a separate quote for systems and equipment when they are ready to be ordered, ensuring pricing reflects current market rates. This approach minimizes financial risk but may require adjustments to sales pipeline management.
Labor and Immigration
Immigration policy is another factor that could significantly impact the home services sector. Skilled labor — especially in construction trades — relies heavily on an immigrant workforce in many parts of the country. When policy changes create fear or uncertainty, workers may leave job sites, causing labor shortages and driving wages higher.
Here is how to navigate labor shortages:
- Invest in Training and Development — If skilled labor becomes harder to find, training and retaining your current workforce becomes even more critical.
- Diversify Your Labor Pool — Explore partnerships with trade schools and apprenticeship programs to bring in new talent.
- Streamline Operations for Efficiency — If labor becomes more expensive, improving job-site efficiency can help offset the cost. This could include better scheduling, automation, or investing in smarter project management tools.
- Adjust Labor Pricing Accordingly — As labor costs rise, adjust your bill rate to protect margins.
- Understand Local Policy Changes — State-level policies can differ from federal mandates. Stay informed on regulations affecting employment in your area.
The Psychology of Pricing
When economic uncertainty hits, many business owners make the same knee-jerk reaction: they lower prices to stay competitive. There is no reward for being the second cheapest guy in the marketplace, so don’t race to zero with everyone else.
Competing on price alone erodes margins, exhausts teams, and ultimately attracts the wrong customers — those who are price-sensitive rather than value-driven. In uncertain times, don’t cut prices — strengthen your differentiation and trust instead.
Here is how to price with confidence in any economy:
- Focus on Bundled Pricing Over Line Items
- Customers don’t want to feel nickel-and-dimed. By presenting packaged solutions, you reinforce the idea that they’re investing in an outcome — not just a list of parts.
- Think about luxury car sales — you don’t buy a BMW by picking out every individual component. You choose a model, a package, and an experience.
- Use the Power of Numbers to Influence Perception
- Studies show that seemingly random numbers (e.g., $9847 instead of $10,000) make pricing appear more researched and intentional, reducing negotiation.
- Pricing in increments of “7” (e.g., $97, $17,487) often performs better than round numbers, triggering a subconscious sense of value.
- Position Yourself in the “High-Price, High-Differentiation” Category
- In luxury home services, the goal should be to command higher prices, not apologize for them.
- Clients with high expectations don’t necessarily want the cheapest provider — they want the best. If you can communicate that you’re the best through trust, competency, and results, pricing objections will fade.
Play the Long Game
Uncertain times can cause overreactions, but the businesses that succeed are the ones that keep a steady hand on the wheel. The most successful custom integrators understand that every economic shift — whether tariffs, labor shortages, or inflation — creates both challenges and opportunities.
During strong economic cycles, maximize your margins and build a financial cushion for downturns. When uncertainty arises, focus on communicating value, maintaining efficiency, and staying adaptable rather than racing to the bottom on price.
Related: Leveraging FUD For the Win
The key is recognizing that clients don’t just buy a product or service — they buy confidence. Confidence that their investment is worthwhile. Confidence that they’ve chosen the right expert. Confidence that their project will be executed flawlessly, regardless of external challenges.
If you can provide that confidence, you’ll not only survive uncertainty — you’ll thrive in it.
This article was inspired by The Flywheel Effect podcast, where Brent Sonnek-Schmelz and Matt Bernath break down the realities of running a business in today’s unpredictable world. If you found this valuable, be sure to check out the podcast for more deep dives into pricing strategies, leadership, and navigating the luxury home services industry with confidence.
