No matter the sector, the talk has been the same – how can we ride out the current inflation? In times of inflation, money’s purchasing power wanes, causing prices of goods and services to rise. Essentially, inflation weakens the power of the dollar.
Rising inflation often goes hand-in-hand with the possibility of a recession. According to the Wall Street Journal, “[economists] have dramatically raised the probability of a recession, now putting it at 44% in the next 12 months, a level usually seen only on the brink of or during actual recessions.”
To complicate matters, businesses aren’t only managing inflation. They’re also navigating supply-chain and workforce issues. A survey by Goldman Sachs found that 91% of small business owners see these trends hurting their businesses. The U.S. Chamber of Commerce and MetLife found that 85% of small business owners are concerned about inflation, an 11% jump from last quarter. A third of those owners ranked inflation as their top concern.
However, a survey by Gartner revealed that despite inflation, CMOs appear optimistic. Ewan McIntyre, chief of research and vice president analyst in the Gartner for Marketing Leaders practice, stated that, “the majority of CMOs surveyed feel inflationary pressures hitting their business and their customers will have a positive impact on their strategy and investment in the year ahead.”
With circumstances like these, it is important for companies to get creative with their marketing approach and consider best practices for navigating inflation.
A critical first step is understanding your company’s market position. Before implementing new or revised marketing strategies, take some time to understand the current situation and how it might affect your objectives. This may include understanding the differences between the CPI (Consumer Price Index) and the PPI (Production Price Index), as well as the main factors behind inflation.
It is essential to analyze your profit margins and costs. First, get a detailed view of spending. Your business can leverage accounting software to ensure visibility into all expenses. Be aware of how your profits differ based on the products and services you sell. Remember to include your own time.
These steps can help marketing decision-makers plan a new approach. They might revise corporate messaging, explore transparency and consider new networking or sales opportunities.
Revising corporate messaging can help better differentiate your company from competitors. Perhaps your business is now a lower-cost option within your industry. This poses the perfect opportunity to market yourself as more cost-effective for customers.
To maintain its perception of value, consider nurturing your brand’s emotional and rational stories. Remember, branding touches more than just consumer products. Keep in mind, too, that your target audience is not just the end consumer. When telling your brand’s story, consider all of your collaborators, employees, suppliers and other stakeholders.
Transparency and shared narratives have been persistent themes in marketing communications. However, brands rarely talk to consumers about inflation and its attendant price increases. It may be a bold move to explore transparency in this way and set your brand apart. It’s also a refreshingly honest way to win and keep the trust of your consumers.
Marketers might also consider exploring new networking or sales opportunities that will secure more leads. This could include tailored or targeted drip campaigns and newsletters that allow the brand to engage with its audiences in a more personal and consistent way.
Marketing teams can also evaluate opportunities to speak or attend industry trade shows now that they are in-person again. These events can build thought leadership and allow spokespeople to meet face-to-face with current or potential customers.
Some companies might not need to make changes at all, but it’s wise to check in on business health, objectives and customer satisfaction.
Inflations are temporary. In this challenging time, you can continue growing your business by making adjustments and remaining agile. Don’t be afraid to get creative!