Turn inflation into an opportunity for strategic price adjustments.
The economy is a roller coaster right now. You have to buckle up, or you’ll go flying. Price changes are a touchy subject, and you might not even want to go there. But stop and think about how your expenses have changed because of inflation. Has the cost of labor gone up? What about raw materials? Is it getting more expensive to ship items? Adjusting your prices now could be a useful way to offset your business’s cost increases.
So, where do you start? Keep a few things in mind to maximize the positive impact for your business and minimize disruption for customers.
Research your price potential and targets.
Take steps to ensure that your changes will make sense and are competitive. What are competitors doing with their prices? Don’t overshoot and miss your target. Work with your accounting services partner to verify that your strategy is in line with the industry.
Adjust discounts and promotions.
Your business will have to carefully give and take to satisfy all sides. That might mean limiting activities and promotions that strain the supply chain. For instance, adding surcharges for small order quantities can offset fuel and labor costs so you can maintain service levels. Or maybe you offer cheaper shipping and provide better customer service to stay ahead of fallout over price increases.
Differentiate revenue channels.
“Don’t put all your eggs in one basket.” If you’re going through an adjustment period with your business, who says you can’t expand your horizons a little? Get customers excited with new products and services—and revenue opportunities—that can elevate your business despite inflation.
Keep it simple.
If the idea is to generate a little bit more cash flow, you don’t need to build the next big thing. Instead, stick to the basics and create something that takes minimal effort to maintain and excites current or new customers. Need a few ideas?
Create an online course or e-book.
Launch an app.
A little extra revenue provides a cushion. And while times of economic instability aren’t the best to go all out, you do have opportunities to grow. Talk it over with your accounting services partner and brainstorm options to bring in more cash.
Prioritize customer loyalty.
Don’t forget the people who got you where you are today. Let’s say you’ve used the same brand of milk since childhood. The brand just raised its prices, but you keep buying because it's what you know and love. Customer loyalty is powerful because it helps keep your revenue consistent, even if you raise your prices.
Spend less and give more.
Honing in on loyalty and retention helps you spend less to draw in new customers—such as on advertising—and instead spend more on satisfying existing customers. And there are so many ways to do this:
Add value with perks such as discounted shipping or freebies for purchases above a certain amount.
Leverage rewards and let customers earn benefits via points programs or virtual stamp cards.
Get customer feedback through surveys and even by paying attention to social media to go the extra mile to meet their needs.
Loyal customers keep your lights on, so give them good reasons to keep coming back. As you work with your accounting services partner to adjust for inflation, get creative to entice your biggest advocates.
Collaborate for best results.
You need to put the right people in charge of managing prices for inflation, and that means talking to individuals who understand how the changes could impact different elements of your business. In addition to collaborating with an accounting services partner, consider putting together a team of cross-functional decision makers to manage price increases.
Test and train.
The “council” you assemble can test the waters with different pricing adjustments. Here, they can look closely at and listen to consumer responses. If possible, implement creative pricing strategies, such as subscription-based orders, to keep prices down and maintain customer trust. Again, you don’t want to lose loyalty, so the team needs to tread lightly to increase prices without damaging relationships. Along the way, remember to stay objective, relying on data and market conditions. This journey can teach your team a lot, positioning them to use what they learn to train others and adjust future prices.
Ease your inflation anxiety.
Inflation doesn’t have to be this big, hairy monster for you or your customers. You just need to take a breath and put your strategy hat on. How can you turn this challenge into an opportunity to refine your pricing or revenue channels—all while keeping customers No. 1?
Trust an accounting services partner such as Ignite Spot to stay on level ground. We’ll help you organize your pricing structure moving forward. Check out our accounting and bookkeeping services to see how.