Talking about rising costs!
The past few years have been a struggle for everyone, from businesses, suppliers and to customers. The impact a global shutdown has had, has not only affected the ways we do business but the price of the services and products that we supply. Having to increase prices after a two-year period, amid the rising inflation, is not ideal to anyone along the product chain. It is how to effectively implement these price increases, while keeping the trust of your customer that may become the biggest hardship going forward.
It then becomes more about building those strong relationships with your customers instead of just increasing the prices and hope everything eventually returns to some sort of normality. Working together to mitigate these inevitable changes could stop a negative result in turnover and margin. It becomes about having to rebuild trust with your customer, to ensure that all parties can come out the other end without suffering too much damage to their pocket.
Hopefully many of you reading this saw this as a potential problem and planned for this outcome. Although probably not on the scale we are seeing now, as only the pessimistic could have seen a two year plus global shutdown. Those of you who didn’t foresee such a seismic change in how businesses will operate in this New World, it may be time to start looking at how you can reduce the impact to your customer as much as possible without putting your own business at risk.
Apart from looking purely at your bottom line, can the price increases actually improve the service you give your customers? Or are their other ways in which to cut costs to try and minimise the impact on your customer, and stakeholders? It becomes about identifying the areas that won’t have a serious knock-on effect to your customers. It will not be too late to enact these changes to benefit both you and your customers.
Building on how we have had to cope in the past few years, we should have been adept at crisis management and how it effects our day to day. Keeping those customer relationships is as important now as at any time. Cutting costs to accommodate for the crisis should not come at the cost of the customer experience. It is about strengthening those relationships, and by keeping those relationships at a high could see growth as you come out of the crisis.
Not only will businesses change as we move into this new normal, the customer will also change with it. They will change how they want to interact with your business, the level of care, and how quick they may be to turn off from your business should that service not be satisfactory.
Because of this trends from customers may change. If they see that you are raising prices, there may be a small amount that will sympathise with the rise in process. There may be more that turn away from your business if they see it as unwarranted, or profiteering, especially if they see that your competitors have not raised prices, or not raised them at the same rate.
Be honest with your customers and employees to meet targets
There are a number of ways, that may be easy wins, that could ensure that you not only look at what matters most to your customer, but to ensure your bottom line doesn’t drop to an unmanageable amount.
It becomes about personalisation and humanisation, and understanding the individual needs of your customers. It is about treating them as people, and not just numbers. Be honest with your customers and employees to meet targets, that may have to include price hikes. Being upfront and honest will go along way, and will help explain the mitigation around any price increases. Adapt your customer service if needs be, in order to improve your customer experience, and optimise costs. Understand your customers financial reality. We are all in the same boat with this. Think about your chain, and how everyone can help everyone else to increase costs.
Think about your strategy, can you justify any price increase by thinking about how you market your service/product. Can you offer that little bit extra to your customer, that may not seem much at the time, but could mean everything to them, ensuring that that relationship remains strong.
The bottom line, in order to mitigate a possible rise in prices, is to fully understand your customer, and make sure the relationships are as strong, if not stronger than they were before the global pandemic.