Last month inflation hit an almost four-decade high, mainly driven by growing energy costs, more expensive vehicles, rising rents and items you buy for everyday shopping.
Inflation reduces the purchasing power of money since more money is needed to buy the same items. Therefore, high inflation rates mean that unless income increases at the same rate, people are worse off. This leads to lower levels of consumer spending and a fall in sales for businesses.
In 2021 we experienced the following commodity price changes:
- Coffee +87%
- Lumber +57%
- Gasoline +57%
- Heating Oil +50
- WTI crude +48%
- Natural Gas +40%
- Cotton +40%
- Sugar +33%
- Aluminum +30%
Starting at manufacturers, using any of these commodities causes a domino effect of increasing prices down to the consumers. Most restaurants, hotels, housing, tourism, fashion, retail and any other form of business that needs interaction between people have suffered because of this. Of course, lock-downs also didn’t help.
But not all faced such a downfall: online retail, workspace solutions, supermarkets, digital entertainment, and medical/pharma businesses have done well. During strong inflation, there are always winners and losers.
What does that mean for business leaders? They thought they were in control of everything, but through the pandemic, everything that was “normal” went away in an instant. On top of all that the economy is experiencing inflation. If they are at the wrong end of the stick, they are looking for survival. Inflation can disrupt their business planning; They are hesitant to make big moves or their reserves to invest have dried up. So they are looking for ideas to reduce costs or gain quick income.
How can you help your customer or prospect with:
- Finding cost reductions they initially did not see?
- Growth opportunities for additional income that doesn’t break the bank?
- Driving customer loyalty in ways they initially didn’t think of?
- Increasing profit margins while maintaining their customer base?
- Digitalizing their business?
- Improving better customer experience?
- Improve their online ratings?
- Penetrate markets in a way they didn’t think was possible?
Selling is helping, and Trusted Advisors know this well. That is how you make a difference. So think like your customer, see the world from their perspective and put your strategic hat on. Your Business Acumen supersedes your Sales Acumen. Inflation is a friend of the pandemic. In these times, your customers and prospects need a different friend who can help beat inflation.
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