Impact of Inflation and Financial Concerns on your Business

December 13, 2023

All businesses, big and small, are grappling with the effects of inflation on our economy.  This month our Round Tables tackled this timely topic and answered questions such as, “Are you going to raise your prices?  Are your customers able or willing to pay more for your services?  As your customers cut costs, is your business one of the relevant businesses they will keep?

Below are the notes from our December Round Tables, with solutions for business leaders.

Focus on the Top 20% of Customers.

One business leader in our All Time Zones Round Table has focused his attention on supporting and communicating with the top 20% of his clientele.  By doing so, his income has increased, his phone is ringing more, and he is receiving more referrals.  He is combating inflation by getting more instead of cutting.  This model is working for him.

Add Value

One Kalamazoo Round Table business leader is in the beauty industry and recently had to increase prices to keep up with inflation.  She asks her staff, “How can we add value with necessary price increases?”  In her industry, there are so many things to add value, a scalp massage, or an added discount on a product for sale.  She always stretches her team on how they are going to add value when they are increasing their pricing.

Pass through Costs to Reduce Customer Costs

One leader’s company was making significant media buys in automotive news.  He decided, as his client was looking at budgets for 2024, to forgo his agency markup on media buys.  Instead, he billed them as a pass-through cost.  He received a thank-you from both the president and the CEO of the organization, which he appreciated.  His company is retaining this client for 2024.

Communicate All Services Provided

Year-end wrap-up.  One Oxford business owner communicates all services her team has provided, billable and non-billable.  At the end of the year, her company communicates with clients and reviews goals set last year, in addition to, and included in that wrap-up are all the services that they have provided.  They put it in a framework of, ‘This is what you have accomplished this year.”  On the other side of it, they list all the services that they have provided.  It reminds clients of what they did for them throughout the year because customers forget.

Great value at low cost:  One Holland business owner details all services provided on a project so that when another company comes along trying to win their customer’s business, they understand the value his company brings. He has been communicating all the intangible work that people don’t see.   Customers do not understand much about what you are doing unless you tell them.

They do quarterly reports on every project they manage and include all the tasks they have done for their customer.  Then, if another company comes along, they understand what they are paying you for.  Your competitors will keep coming after your customers, they will be able to come back and say, “We trust you, look at all you do.”  Keep reminding your clients of your value at a great price.

Should you ‘fire’ a customer?

One business leader’s client puts their business out to bid each year and his company is considering dropping the client.  Sometimes you need to look at customers and say your expectations are unreasonable.  You are not sharing the burden of this societal issue (inflation).

Praying is key

One Oxford Business leader says that prayer is such a huge part of their business.  We pray for employees, for clients.  We pray: “Lord you know who is out there.  We don’t need business with everybody.  You know the people and the lives you want us to touch for your Kingdom.  Lead us to those people and we trust you will give us the creativity, and what we need to give them success.”

Upcoming Events

Please mark your calendar for our Kalamazoo Leadership Breakfast Social with Scott McFarland, CEO of Honor Credit Union on Friday, February 16 at 8:00 am at the Kalamazoo Country Club.

Please join us for our 11th Annual Leadership Summit on Friday, March 15 from 8:00 am – 12:00 pm at the Bloomfield Open Hunt Club.  More details to come!