When tariffs hit, the first instinct of many companies is to pass the cost downstream to the consumer. It's the fastest and easiest approach to balance the books, but also the most damaging in the long run. Automatically passing increased costs to consumers is a short-term fix that could erode brand trust, customer retention, and ultimately weaken your competitiveness. This is where revenue growth management plays a critical role in helping businesses navigate such pressures without defaulting to price hikes.
Across 2025, household goods giants like Procter & Gamble, Colgate‑Palmolive, Kraft Heinz, Adidas, and even luxury brands such as Hermès, LVMH (Louis Vuitton, Dior), and Chanel have started raising U.S. prices to offset new tariffs. Procter & Gamble will apply mid-single-digit hikes to roughly 25% of its U.S. portfolio starting in August, citing tariff costs totaling about $1 billion for fiscal 2026.
How are consumers reacting? Well, they are increasingly trading down, delaying non‑essential purchases, and expecting much greater pricing transparency. Surveys indicate 72% of consumers have already changed their habits due to rising costs, with 91% wanting brands to explain why prices went up, and 48% specifically interested in disclosures related to tariffs.
In this article, we’ll argue that raising prices should be reserved as a nuclear option, not a default strategy. Instead, you’ll see how Syren is helping its client avoid this trap and navigate tariff pressures without compromising margins or customer relationships.
Why Passing Costs Can Harm Your Business
Price Increases Affect Demand
Even a slight increase in price can reduce sales volumes and encourage customers to switch to competitors. In fact, a recent article on Kiplinger also suggests to consumers what can be done if prices rise due to tariffs they say, “Change brands. Consider buying from different brands with lower prices. Store brands often offer a lower-cost alternative, especially as name brands like P&G start to increase prices.”
Diminishes Trust
Regularly raising prices can damage customer retention, especially if they sense the increases are reactionary, not strategic.
Operational Whiplash
Finished goods pricing can't realistically keep up with the volatility of global input costs, and businesses can't relabel products or change price points every month in response to changing tariffs or commodity prices.
What Do Smart Enterprises Do?
Syren’s Co-founder and CGO, Sankar Mamidela, shares his insights on why increasing consumer-end prices is the last approach he suggests to his clients. To avoid blanket price hikes, enterprises must find new value across product design, operations, commercial terms, and supply chain strategy.
While sharing his revenue growth management strategies, he also stated : “There is no one-size-fits-all strategy for any enterprise because each business requires unique strategies that can help in avoiding passing cost to the customer.”
The following seven strategies form part of a broader revenue growth management strategies that Syren follows:
1. Pack Architecture Adjustments
One of our CPG clients optimized their product pack size across high-selling SKUs, reducing packaging costs by up to 6% and avoiding any change in consumer price. This approach involved adjusting pack sizes or formats in different ways to maintain their price points while protecting profitability. This is known as “shrinkflation” or “bundling”.
2. Mix Optimization of Products
Many portfolios have long tails of low margin, underperforming SKUs. Rationalizing the mix, by delisting unprofitable items or focusing on higher-contribution products, improves profitability without needing to increase prices across the board.
3. Production and Vendor Efficiency
Renegotiating vendor contracts, consolidating vendors, and exploring alternate sourcing locations are powerful levers to pull. The CPG client was sourcing packaging materials from three vendors with varying lead times and costs. By implementing our advanced digital control tower, Optima CT, they got a centralized view of their suppliers and consolidated volume with the best-performing supplier, negotiated better terms, and reduced unit costs significantly.
4. Optimize Promotions and Marketing Spend
Most brands spend heavily on trade promotions, yet only 40% of those promotions are effective or margin-dilutive. The smart choice is to review every promotional dollar and ask,
- Is this promotion driving real incremental sales?
- Could the same results be achieved through smarter targeting?
- Does this marketing expenditure subsidize price sensitivity or build long-term loyalty?
One Syren client, facing sharp margin pressure, evaluated all ongoing trade promotions using performance metrics. Campaigns with poor ROI were restructured or removed. Investments were redirected to digital campaigns with higher conversion and better targeting, saving costs without affecting topline.
5. Calibrate Trade Terms and Incentives
Enterprises can also work with distributors and retail partners to adjust trade terms. This might include short-term promotional support, sales incentives, price-pack adjustments, or shifting focus to private-label alternatives with better trade margins.
6. Differentiated Pricing by Segment or Channel
A one-size-fits-all price hike rarely works; instead, an enterprise can differentiate pricing models by customer segment, geography, or even sales channel. For example, an online marketplace might support dynamic pricing, while B2B contracts might be renegotiated on volume.
Optimize Supply Chain Nodes and Flows
Optimizing where and how products are made and moved can lead to significant cost savings. Enterprises are re-evaluating manufacturing locations, DC footprints, and logistics partners to reduce exposure to tariff-heavy routes and volatile shipping lanes.
For instance, our client used Syren’s network modeling tools to simulate production shifts and multi-node fulfillment options. By rerouting a portion of finished goods through alternate ports and moving partial manufacturing closer to end markets, they achieved 10% in transportation costs.
Conclusion
Navigating tariffs with the right approach and strategies is a measure of the ethics and robustness of an enterprise. The easy way out is not always the best out, and that is where most enterprises make mistakes.
Syren’s solutions are aligned to these strategies with our proven frameworks for our clients that are scalable and can be customized to your unique requirements. If you have considered passing costs to the customers with the disruptive tariffs, let us build you the right strategy.
