How Will Your Customers Deal With Inflation?

Your costs are going up, so you want to cut costs and raise revenue.

Your customer’s costs are going up, so your customer wants to cut costs and raise revenue.

Some will be able to pass increased costs to their customers. Others have locked in contracts with little ability to raise prices. Some are seeing such rapid increases in costs, especially labor costs, that they cannot pass cost increases along fast enough, so they are looking for radical increases in productivity.

The key is to understand your customer’s pricing leverage and determine how you can help them.

The one common thing everyone will do is scrutinize every expense, every fee, every product, every service they buy. 

Customers will be deciding if they are getting great value, are getting a great experience, if they should upgrade or downgrade, or if there are better alternatives, including eliminating the spending.

When everything is all about growth, the focus is on net new customers.

When the growth belt tightens, the focus shifts to keeping existing customers.

A customer-centric strategy is more critical now than ever. 

I like to ask the following two questions when I meet with new prospects to understand how they view being customer-focused:

1. Are you driving solid outcomes for your customers? Which ones and how are you measuring them?
2. Are you delivering outstanding experiences in every interaction with them? How do you know for sure?

One way to determine the answer to those two questions is to ask another - could you pass along price increases now to your customers without losing them?

How would that conversation sound?

Would you be able to definitively prove your case that your offering is delivering value and is worth a price increase?

Are you so great to work with that they would not change even if the price increased?

The next level of value-adding for salespeople and their companies is to help customers keep their customers and even raise their prices.

Another way is to lower their costs of customer acquisition and retention. 

Helping them attract and retain employees is a corollary to the above but an increasingly important one.

Knowing your target customer’s business is a given for marketers and salespeople.

Knowing how to help them navigate an uncertain world, adapt to new pricing realities, and make the changes necessary to succeed are the differentiating factors for winning companies today.