10 Questions RGM and Pricing Teams Should Plan for When Facing Tariff Pressure

Introduction

Tariffs reshape cost structures overnight. What used to be a straightforward margin calculation now requires constant recalibration. Cost increases must be weighed against demand impact, competitor moves, and channel pressure and in this environment, data-driven pricing decisions are not optional; they’re essential. 

Historical models struggle during tariff shocks, which is why we advocate testing with fresh consumer input and then simulating outcomes before you go to market. 

How can pricing teams decide which tariff-driven costs to pass through without losing demand? Tariffs are unpredictable. Your pricing strategy should not be.

Across categories, many list prices still miss the mark. As we reference in our materials, a significant share of market prices are not aligned with what customers will actually pay, which is exactly why WtP-led simulation matters during tariff shocks. 

At PriceBeam, our research consistently shows that the best response to tariff-driven pricing challenges lies in continuously monitoring willingness-to-pay (WtP) across regions and segments, and validating pricing strategies before they reach the market. 

In this article, we’ve taken a slightly different route, drawing from our extensive blog library, we’ve put together ten practical questions every pricing or RGM team should ask when operating in a tariff-driven environment. Each question is backed by an article from our blog, that goes beyond concepts and show what happens in practice. 

You’ll also find links to relevant webinars where these topics are discussed in more depth. It’s a practical, resource-rich way to explore the key challenges teams face, let’s begin!

Q1. What happens if we pass tariff costs straight to customers? 

Passing on 100% of tariff costs can trigger significant revenue losses if not aligned with real consumer WtP. In a case highlighted in our article Impact of Tariffs on Prices and Consumer Willingness-to-Pay, a demand curve showed that shifting the price upward due to full tariff pass-through led to a projected 20% revenue drop. The loss came from exceeding the peak of the revenue-maximizing price point, which was uncovered through a WtP study. While the 20% revenue decline is used as an illustrative simulation outcome, the underlying principle is well established in PriceBeam’s tariff-related analysis. Similar patterns have been observed in numerous studies where small deviations from the revenue-maximizing price point led to rapid volume loss. This example is representative of how simulation-based studies reveal the risk of over‑transferring costs without testing.

‣ Takeaway: Passing on tariffs without testing first can cost more than absorbing them. 

🎥 Webinar: Pricing in a Crisis: Tariffs, War, Inflation & Consumer Shifts.  

Q2. How fast can Willingness-to-Pay shift during trade volatility? 

WtP can drift up to 20% within a year, depending on economic and market conditions.

As discussed in the article Willingness-to-Pay Drift: The Hidden Risk in Your Pricing Strategy, we had found that nearly half of brands are priced above consumers’ current WtP. This drift can stem from inflation, consumer income changes, or new competitor offerings, any of which may accelerate under tariff pressure. To stay aligned, the answer for pricing teams relies on monitoring this drift continuously. WtP studies conducted on a recurring basis (e.g. quarterly or biannually) will give businesses time to detect early shifts and re-align pricing before volume is affected. 

‣ Takeaway: Pricing decisions based on outdated assumptions are the biggest risk in tariff-driven markets. 

🎥 Webinar: Mastering Willingness-to-Pay: Turning Consumer Feedback into Pricing Strategy

Q3. Which customer segments are most resilient to tariff-driven increases? 

High-value and brand-loyal segments tend to tolerate price increases better than price-sensitive or value-driven shoppers. In the same Willingness-to-Pay Drift article mentioned above, we outline how WtP varies by demographic, occasion, or region. A one-size-fits-all increase can penalize high-value segments while underpricing premium opportunities. In this scenario, segmentation is key, a Willingness-to-Pay Study enables pricing teams to uncover variations in price elasticity by region, channel, and consumer type, and helps isolate which audiences can absorb price increases and which cannot. 

‣ Takeaway: Targeted pricing beats one-size-fits-all tariff responses. 

🎥 Webinar: Direct-to-Consumer Pricing Insights: How to Generate Deeper Insights about Consumers to Drive Sales 

 Q4. Can you raise prices in all categories after a tariff increase? 

No. Commoditized or price-sensitive categories require a different strategy than niche or premium lines. In PriceBeam’s blog Tariff Pressures and Pricing Precision, we show the example of a FMCG brand that increased prices by 15% across its entire portfolio without testing consumer response. The example reflects a composite pattern observed across several client projects rather than a single published case. It’s meant to illustrate how uniform price actions create mixed results, premium lines tend to sustain demand, while entry-level SKUs face immediate resistance. To manage this, businesses can run WtP studies across product lines and then restructure pricing by category and also turn to Price Pack Architecture (PPA) to rethink formats, allowing more flexible pricing across tiers. 

‣ Takeaway: Uniform price hikes create margin leaks where price elasticity varies. 

🎥 Webinar: Winning Price Pack Architecture in North America: Balancing Affordability and Margin. 

 Q5. How should teams validate tariff pricing before going live? 

We recommend running simulations to test pricing scenarios before any market implementation. As described in Stop Guessing, Start Testing with Test-Driven Price Optimization (TDPO), this method allows companies to model how consumers are likely to respond to price changes before those adjustments reach the market. An example shown in one of our studies, outlined how a CPG brand tested scenarios ranging from full pass-through to repackaging and discovered that partial absorption combined with promotional tweaks delivered the best outcome. The CPG example is based on patterns observed across PriceBeam test‑driven projects, and the principle remains consistent: Combining WtP studies with scenario simulation provides a disciplined way to quantify price elasticity before exposure to market pressure. To get there, the best way forward is to apply a WtP Study, as it allows simulations of different price levels across segments. This approach removes guesswork and avoids revenue shocks. 

Through virtual testing environments, businesses can experiment with different price points without real-world consequences, reducing uncertainty and maximizing revenue potential. This method offers a structured approach to refining pricing strategies by testing different price points in a controlled environment, minimizing financial risks and improving decision-making.

‣ Takeaway: Test first, correct early, don’t guess. 

🎥 Webinar: Test-Driven Price Optimization (TDPO)

 Q6. What role does messaging play in tariff price acceptance? 

How you explain price changes, can be as critical as the price itself. Our article on What Tariffs Mean for Your Pricing, we showed a case of a premium food brand that tested multiple price explanations, one highlighting government tariffs, the other focusing on internal cost increases. Markets responded very differently, with tariff-transparency outperforming vague reasoning in some regions. A one-size-fits-all response is rarely effective, making it essential to assess different pricing scenarios and adapt accordingly. When pricing teams use WtP studies, they can include messaging variations as part of the test, and this helps validate not only the acceptable price point, but also the most effective narrative to support it.

‣ Takeaway: Never assume a single message will work everywhere. Test both the price and the story behind it. 

Q7. How can we spot a collapse in Pricing Power before it hits revenue? 

The earliest signs of pricing risk don’t show up in volume, they show up in WtP. Our work through Staying on Top of Consumer Willingness-to-Pay, outlines how WtP studies help teams identify when price tolerance is weakening, often weeks or months before volume suffers. These insights allow timely adjustments to pack, promo, or communication strategies, while there’s still room to act. In volatile environments, quarterly WtP tracking creates a cadence for detecting subtle shifts in price perception. Without it, you risk learning about pricing power loss only after customers, or retailers have already moved on.

‣ Takeaway: Pricing power doesn’t vanish overnight, but if you’re not tracking it, you’ll only see the aftermath. 

🎥 Webinar: When Customers and Consumers Change: Tracking Pricing Power in a Fluid World. 

Q8. What competitive responses should we expect after tariffs? 

Some competitors will raise prices; others will absorb costs to gain share. Tariffs cause second-order pricing effects. In 2018 the US washer tariff was followed by price hikes on un-tariffed dryers as the market reset expectations. As we analyzed in What Tariffs Mean for Your Pricing in a Tariff-Driven Economy, the U.S. washing machine tariffs in 2018 led to 8-50% price hikes. Interestingly, even brands unaffected by tariffs raised their prices, while some absorbed costs to grab market share. To prepare for scenarios like this, WtP studies is the best way to model possible competitive reactions. Benchmarking competitors' perceived value and price thresholds can shape your optimal move. 

‣ Takeaway: Don’t assume competitors will behave rationally. 

 Q9. Where do price tiers or bundles help absorb tariffs? 

Bundles and tiered pricing can reduce price sensitivity and maintain value perception. Our article The Role of Price Pack Architecture in Competitive Markets explains in detail how pack formats help brands respond to external pricing pressure. Another example we use in the article was the case of a beverage brand that reduced pack size in low-WtP markets, while offering bonus packs in premium tiers. The beverage example is an aggregated illustration drawn from multiple category studies, capturing how brands use PPA to manage price perceptions. Whether through reducing size in price‑sensitive markets or adding value in premium ones, the strategy underlines how PPA provides both pricing flexibility and psychological balance during cost volatility.

‣ Takeaway: Smart format changes can defend value in sensitive segments. 

🎥 Webinar: Price Pack Architecture (PPA) 2.0

 Q10. How do we keep pricing aligned with fast-moving tariff impacts? 

As the final question, we conclude that only continuous WtP tracking can keep pace with changing trade policy and consumer sentiment. As global trade policies evolve, tariffs continue to reshape cost structures and consumer sentiment and staying aligned means moving beyond static pricing reviews toward continuous insight. As discussed in Revenue Growth & Price Optimization in 2025: What’s Hot and What’s Not, leading companies are shifting to test-driven and data-led pricing methods, using tools that simulate market reactions before changes go live. The most effective approach combines one-time pricing studies with ongoing tracking, creating a roadmap that adjusts as markets, costs, and perceptions shift. To achieve this, the best way forward is to combine the one-off Pricing Power Snapshot with the ongoing Pricing Power Tracker. This creates a pricing roadmap that adjusts with market dynamics. 

 ‣Takeaway: What worked last quarter might fail today. Track. Adjust. Repeat. 

🎥 Webinar: Pricing Power: From Theory to Practical Application. 

Conclusion 

Tariffs create pricing challenges, but businesses that take a data-driven approach can successfully navigate these shifts. Understanding how consumers react to price changes and leveraging advanced pricing insights are essential for maintaining profitability in a tariff-driven market. By assessing the impact of tariffs, segmenting the market based on willingness-to-pay, and using test-driven pricing models, businesses can make informed decisions that maximize revenue while minimizing risk. Pricing is not just about covering costs, it’s about strategically positioning products in a way that balances profitability and consumer demand.