Bad news first: things are expensive. According to the Bureau of Labor Statistics, the Consumer Price Index, which measures the average price of different items, has increased about 8% for all items since April of last year. Although some are predicting that the worst may be behind us, that doesn't mean that things aren't going to stay expensive for the foreseeable future. What's more, even if prices do begin to decline over the next few months, there's no telling how quickly they'll drop.
The stresses that this creates for wage earners and other consumers are easy to understand–higher utility payments, more expensive fuel, pricier groceries and so on. Yet, businesses, especially small businesses, aren't exempt from the pressures of inflation. As such, marketers need to consider ways to keep their customers loyal during times of rising prices.
Now for the good news: there are actually quite a few things you can do to curb losses associated with inflation.
Strategies for Inflation
Pepsi Co. is one company that has seen the writing on the wall when it comes to rising prices. Niamh Carroll, in an article for Marketing Week, profiles some of the ways that Pepsi is retaining their customers during these trying times. Carroll quotes Pepsi's chairman and CEO, who lays out the company's philosophy: " 'Our number one objective is to keep consumers with our brands,' said Ramon Laguarta, chairman and CEO on a call with investors."
How are they doing this? The article states that Pepsi has a three-pronged strategy for ensuring customer retention: working with partners to cut costs and understand market conditions, shoring up company data and creating new products to keep their branding fresh.
For a company like Pepsi, which relies on retailers to sell their products, increasing collaboration with local sellers can identify healthy markets, which allow the company to minimize their price increases.
Greater data analysis, on the other hand, not only sheds light on stronger market sectors but also shows inefficiencies and redundancies in the company's budget. Plugging leaks in the company's budget goes a long way in making the company leaner and more efficient.
Finally, Pepsi plans to add a line of (the company's first) alcoholic beverages, called Hard Mountain Dew, in partnership with the Boston Beer Company. This new product will open up new markets for Pepsi, giving them a competitive edge over their rivals, whose product lines remain stagnant.
Inflation and You
Now, you might be thinking, that's great for a huge company like Pepsi, but my small business doesn't have the kind of resources they have. Well, you're not the only one who's thought that. A recent report from CNBC, which profiles the ways that small businesses have adapted to inflation, may offer some helpful tips.
In an effort to prevent loss of labor, one business owner gave her employees gas cards to help curb the increased fuel costs her workers incurred from commuting. Others took advantage of low rate non-profit issued loans and grants. Finally, some businesses are increasing the prices of their goods to prevent losses elsewhere in their company. Thankfully, as one business owner put it, "customers aren’t really complaining about the increase in prices, she said, since it’s happening across the board in the economy."
Although there may be some inescapable sacrifices that small businesses will need to make to stay viable during times of inflation, that doesn't mean your business is doomed to failure. Web and Marketing USA can help you create a new marketing plan for these austere times, identify your strongest markets and determine where you can cut costs without shredding your business operations. Click the REQUEST button below to schedule a free consultation.