With COVID making its way around the globe, it is no surprise that inflation has decided to rear its ugly head. Unfortunately, inflation affects every part of our lives. As the cost of goods sold continues to rise, so will our customers’ budget requirements, and with the somewhat sporadic breakdown in supply chains, demand has never been higher.
Those who planned for this by observing their environmental surroundings are better positioned to navigate the troubling waters that inflation can bring to a company. Although some are prepared for inflation, most are not. Here are some tactics to hedge your company against these uncertain times.
Take a Hard Look at Your Revenue Streams.
Unfortunately, I do not see this inflation going anywhere anytime soon; it could get much worse. There has never been a more appropriate time to evaluate the strength of your revenue streams. We all know the various ways to compete for our customers’ dollars; however, if you are competing on price during these uncertain times, you will be at the mercy of the market until interest rates begin to fall and customer budgets stop hemorrhaging.
Reduce Costs
Thankfully, we operate in a free-market economy where capitalism can work to create opportunities for all. Reducing costs is always a best practice but should inflation continue to rise, you will be hedged against any unforeseen obstacles that may lie ahead. Secure long-term contracts with your suppliers while preparing for the possibility of a workforce reduction should the economy enter into a recession.
Meet Customer Expectations
There are many ways to compete for our customers. Customer expectations have constantly been on the rise for the past 20 years. The companies who thrive through these economic times of uncertainty are the ones who can continuously exceed customer expectations.
If customer expectation management is new to your organization, consider highlighting how you take care of your employees in ways your customers may not see or how your customers can go above and beyond using your product or service. Also, consider implementing a customer loyalty program through the eyes of the customer. Loyal customers are a saving grace during times of economic downturns.