The major characteristic of a bad economy is an economy with high inflation rate.
Let’s understand a few techniques to grow your business with inflation.
Investopedia defines inflation as a sustained increase in the general level of prices for goods and services.
All over the world, inflation has become a ‘viral disease’ that is gaining momentum in its torment in many countries. Here are a few facts about inflation:
• It’s a global problem
• It can never stop
• It could fluctuate but will always be on the increase
• It can be very advantageous for a good business person and could destroy a bad business person
• Inflation causes a lot of economic hazards
A bad economy can help young brands become popular easily and grow market share. Likewise, it could help known brands maintain customer loyalty and increase their market share. How?
Inflation comes with a trend and involves every player in the production/distribution chain. For instance, when price of raw materials go up, price of production goes up, manufacturers increase their price of supply, wholesalers are next, and retailers are next, then the final consumers complain the price of goods have increased. In some cases, inflation is caused when some players in the distribution chain choose to hoard products that are of necessity, thereby shortening the supply and increasing the demand.
Whatever the cause of inflation, you can use it to your advantage. Here’s how;
In a bad economy, people want to spend less and get more, that is, they want more value for their money. You can leverage on this.
You, as a new brand in the market, having to compete with established brands can manipulate inflation in your favor. This strategy is adaptable if you’re not profit oriented but value oriented.
When business starts going bad for most companies, they cut down their expenses beginning with advert budget, laying off some staffs etc. Often times, this isn’t the best solution.
When business is going down, that’s when you should spend more. Spend more on adverts and sales promotion and not otherwise else your products become less visible in the market.
Now my question is; ‘how do you intend to revive your sales when you’re no longer advertising or running promos’? Don’t cut down on advert cost.
The next step is either to maintain your price, offer more sales promotions or use coupons/price slashes. Of course, this will mean lesser profit but more market share, loyalty and patronage. This means you make your profit based on quantity and not quality of sales. Of course, this strategy cannot work for all brands, but will definitely work for most upcoming brands. The most important point here is to never reduce your quality, but rather increase advert and PR regardless of inflation. By so doing, you will later on increase your price, and by then you’d have created loyal customers.
Leverage on digital marketing, it’s cheaper and more effective
When you offer people more value for their money, they become addicted to your service.
Another strategy if you have an already established market and your product is of necessity, could be to hoard your products and when demand increases, you distribute the product with a sales promo that will pose as a threat to your competition and not only will your customers be happy to have your products back, even the marketers would be happy to sell a now available high demand product on promo.
Smart investors also like inflation because it’s usually the best time to invest. Take real estate for instance, the value never reduces but rather increases when the economy is bad, likewise, failing prominent businesses are more likely to sell shares/ownership during down-times.
Though times of hyper-inflation might be the worst time to purchase some goods from the international market, but sometimes it’s also a good time to find local merchants desperate to make some money in a bad economy.
Please note; I’m not advising you to take advantage of people, I’m only advising you to understand the times and increase your financial IQ.
I’ll reference the men of Issachar in the bible who understood the times. You can rule your