fbpx

‘ADAPT OR DIE’: Key Inflationary Strategies

07 June 2022

In times of high inflation, how do we go about the growth management strategy in business? Simply raising prices amid inflation has the potential to hurt customer relationships. The following video will provide you with some insight in putting a proper approach in place following a model called ADAPT.

A – Adjust discounting and promotions and maximise non-price levers like fees for rushed delivery or less-than-minimum order quantities. As a business, you need to carefully look at what kind of discounts are happening. You also want to leverage on some non-price levers. It’s not advisable to increase the price without first understanding the mix.

D – Develop the art and science of price management. I know it might sound very commonsensical, but you have to splice and slice your customer segments, or your products, or category segments, and test out the price sensitivity before deciding on price increase or maintain the price. Be smart about it and have more in-depth study and segmentation to implement the right kind of price strategy.

A – Accelerate decision making and communication tenfold. Things are shifting very quickly. What used to happen over a year is now running its cycle in months. You have to accelerate your decision making and communicate. Not just communication with your clients and customers, but also internally. Sales and marketing and customer service team have to be very aligned. They need to understand why we are taking certain decisions or how they need to stop discounting, or what’s acceptable or not acceptable so that we are completely on top of the game as a team.

P – Plan options beyond pricing such as changing packaging / product features, adjusting assortments, reducing SKU complexity. Just a few days back, I was ordering some stuff online. It’s a10 or 15-minute grocery delivery. And I could see that they have reduced the SKUs and they are constantly changing the assortment. And it’s really interesting to note. Where can we reduce complexity? Where can we make things simpler and better and really focus on our 80/20? That’s what makes you different from someone who’s just hurdling into the situation, like pausing and thinking what I need to focus on.

T – Track execution relentlessly by using real-time data and analytics. You need to know your numbers. Business speaks in numbers. It doesn’t speak English, Mandarin, or other language. It is a numbers game. Work with your team closely. Look at your numbers. That has to be a higher discipline as far as your numbers, margins, sales are concerned. You want to be on top of your numbers. Review your monthly or quarterly figures, look at all the publicly available information, track what fluctuations are happening.

Key takeaways

Simply raising prices amid inflation has the potential to hurt customer relationships. There will be an impact in the medium or long term when customers have better options. So, don’t just rush into it. There has to be a proper approach in place.

Opportunity exists to forge a deeper partnership with customers, helping address their pain points while preserving margins through smart strategies. Trying to understand what’s going on, and, therefore, how you can be more transparent, and work alongside them, where you’re protecting your margins, and you’re forming those loyal relationships here with them. Because not everybody approaches these situations like that. So, if you can be more sensible and more mature in understanding what else you could do to help them can go a long way.

With everyone suffering from the blanket cost inflation, huge opportunity exists to grow by being proactive in prospecting and converting new business through sharp value propositions. Could you be looking at alternative suppliers, people are looking for people who can help them with deliveries or material at the right price. It’s about the overall value proposition. Seriously, you should be completely on top of your game saying how do we prospect and convert? How do we gain customers? And then at the same time, making sure that you’re on top of your margins. You know what supplies are coming to you with, if it’s a fair price increase, work in collaboration. If somebody is not being genuine, you know how to pre-empt it. This is to make sure your procurement, supply management and sales management are in top order.

There are no comments yet.

Leave a comment:

Close