Apr 27

Apr 27 What To Do with Value Perception During Times of Inflation

The adage when it comes to building your business is to solve problems, not sell products. The greater the problem you solve, the higher the fee you can charge. So, what happens during times of inflation?

In the past 3 months we have seen consumer prices jump by 2.1 percent putting the annual inflation rate at 5.1%, the highest it has been since the introduction of GST back in the 2000’s.

It goes without saying that purse strings are already being pulled and consumer perception about what is happening in the marketplace is much more severe than perhaps the actual reality of increasing costs. However, in a sales process, perception is a large portion of the play and if you are not aware of the game you are going to be cut from the list.

Here’s the rules of the game:

Review your product ecosystem - analyse in detail your current offering, and pay close attention to product market fit. What worked a few years ago may no longer be as attractive. Consumer preferences have changed. Consider what else you can squeeze in to your product/service offering to add additional value without a massive cost to you. Then communicate this clearly to both customers and prospects.
Get uncomfortable with price rises - work out what you would be comfortable proposing as a price rise, then increase it! (After doing step 1 first!!).
Shore up partnerships - Partnerships and community will be more essential than ever before. Having referral partners and building out a community of people who rave about your products and services (this includes your team!!) will form a strong foundation for ensuring that certainty around value is first thing your potential customers ingest rather than the cost.
Review your value chain so you can understand where price increases may impact you. Are these increases likely to be transitory and so it may be reasonable to hold your prices if there is a strategic advantage? Or are they more likely to be permanent and therefore will require you to increase your prices sooner than later? Understanding the impacts of inflation on your value chain will allow your customer communication to be clearer around why it is or maybe necessary to increase your pricing.

The road ahead may be a little unsteady, but by taking a proactive approach and adapting your business model, your marketing strategy and your communication with clients, referral partners and teams you can ensure you are playing to win.

One key point you should be continually monitoring during this time is the unit economics in your business.