AFTER COVID-19, THE FORCE THAT DISRUPTED BUSINESS WAS INFLATION.
Companies that have consistently exhibited high performance are fully aware of the need to (re)invent themselves and / or to capture mercurial customer tastes and behavior as two corporate strategies. In every industry, especially necessities, high prices have beset consumers and both consumers and providers have been paying the price, literally and metaphorically. The Producer Price Index (PPI) rose consistently from June 2021 to April 2022.
Strategy Surgery & Consulting
recommends the following strategies
for helping companies adapt:
TRANSPARENCY
Acknowledging the price increases would show the customers that a company cares about their business and customer loyalty. In businesses that thrive on loyalty programs and referrals, such as the delivery service of Walgreens and Uber, transparency can buffer or even obviate the risk of attrition. That way, customers would know of the company’s honest intentions.
PRICING DIFFERENTIALLY
Companies can experiment with price elasticity of different products or services. Loyal customers might become less likely to buy in cases of price increases in luxury or high-ticket items whereas higher prices might not depress demand for necessary products.
Another factor is the brand. Some brands can afford to charge higher prices because of the brand equity.
A third factor is how much an industry utilizes dynamic pricing. Customers can cope less or decline higher prices than normal in such sectors as tourism and hospitality.
whereas they can tolerate higher prices for basic commodities.
EXPERIMENTING WITH PRODUCT CONFIGURATIONS OR BUNDLES:
Many companies, especially retailers and restaurants, have experience with product bundles. This can be a complimentary product in a bundle. Some retailers charge a delivery fee so they can start including discounts on select products. Grub Hub includes a free trip to a convenience store, such as a 7-11. Inflation would be a great strategic opportunity, instead of a threat, when companies utilize consumer data and invest in dynamic capabilities.
WHAT GIVES IMPETUS TO THAT POINT ARE RECENT SURVEYS:
Notwithstanding the importance corporations give to analytics, corporations still do not fully utilize such intelligence. A PWC survey revealed that only 39% of Chief Marketing Officers plan on focusing on marketing analytics and business intelligence in the form of data post-COVID. During inflation, the pressure mounts on the C-Suite to be innovative and such statistics show how little the marketing teams, much less the C-Suite, is already acting on them.
