PeakValue's first blog post had to be about the topic du jour "inflation"

It's not just egg prices that have recently skyrocketed, consumers are facing increasingly higher costs across a whole basket of items including car repair costs due to inflation, a dormant phenomenon that had not been at the top of the economic/business news for a few decades--at least in the US, I should say. The last time inflation was this high, the world had much fewer millennials than it does today and Gen Z did not yet exist.

Today, all of us, regardless of the generation we belong to, face the implications of lower monetary power as prices go up. If you are reading this blog post, it is likely that this inescapable reality hits us on two fronts, as the consumers shopping for good deals on eggs or repairing our cars, but also as business leaders fighting to maintain margins at the levels they were in what now seems to be a distant world of economic stability. Now, with the backdrop of a pandemic, a war, and a supply chain crisis, what can you still do to maintain your profitability?

If costs are going up, another variable in the profitability equation must give in. Yes... Pricing. Pricing is the lever to pull, but how to do it? Not that simple.

I have so far provided you with many questions and no answers. So let's do that, and since this is a blog post...

Here are three things you can do during inflationary times:

1) Raise prices

2) Raise prices

3) Raise prices

Apologies. I know, I played you. But... It is not just about raising prices, it is about how to raise prices and keep volume unchanged, and ultimately how to maintain the same levels of profitability. So now that we have covered all variables in the profitability equation, let's try this again...

Here are three ways to remain profitable during inflationary times

1) Understand your product competitiveness levels and set price accordingly

2) Collect competitive data and raise prices oriented by the latest market dynamics

3) Review your existing discounting policies and tighten discounts to existing customers

This list is far from being exhaustive, but I consider this a good tactical starting point. As you can see point #3 is not quite about raising the list price per se, but to remove some incentives to improve margins from rising costs. It is true, also, that for any organization, the simpler approach would be to raise prices to specific rates that offset the impacts of inflation and hope for the best. But we all know that this approach can have serious consequences ranging from unhappy customers to market share erosion. So let's not consider that okay?

I plan to keep these blog posts bite-sized and I shall return to cover each of the three suggestions above in more detail in subsequent blog posts. Stay Tuned and thank you for visiting our site :)

Chris