Five actions to stay on top of inflation
Underlying the business wasn’t already top and now the inflation is coming on top.
Chambers of commerce, bank economists and credit rating data specialists all acknowledge there are more bankruptcies coming up. The main reason is inflation because of higher personnel and purchase costs and the inability to ask a higher price.
What can you do to strength your business against inflation?
- Create a unique value proposition. For one of our clients we worked on a proposition that truly fulfilled the customer needs. Furthermore this offering set them apart from competition. As a result the company maintains healthy margins on its products and services.
- Build strategic customer relationships and partnerships. Work together on really helping the end customer. Through intensive collaboration you will achieve process and product improvements. This for example will lead to cost benefits and will strengthen the long-term relationship.
- Analyze your customer base by applying a margin calculation per customer. We encountered SMEs that did not know the real margin per customer. Because not all costs were allocated in a proper way. For example, we concluded at one company that by stopping to serve certain customers we increased profits.
- Implement procurement excellence processes. One company we helped always bought from their regular supplier and in the end always accepted the cost increase. We made sure to have two suppliers and were in contact with a possible third supplier. After that you make sure you pay what is right.
- Continuously improve operations. By optimizing, clarifying and digitizing certain process steps you better serve your customers with less effort. This can for instance offset rising labor costs. Our approach is to increase employee engagement by being transparent on the objectives and work together on operational excellence.