A Few Ways to Keep Customers During Times of Inflation

The dreaded word: inflation

In the last few months, inflation has affected consumers' lives from gas stations to online shopping. It’s not much of a surprise with supply chain issues arising from the pandemic compounded with shortages from the conflict in Ukraine.

Drawing from basic laws of demand, the less there is of something, the higher its price will be. This explains many of the issues in our current economy, as prices for just about everything seem to be rising with no end in sight. But higher costs are not the only concern businesses face: with tighter wallets, customers become choosier, meaning a positive memorable shopping experience is more important than ever. 

Consumers bear a large part of the burden with increasing prices, making access to routine as well luxury goods nearly impossible at times. But still, producers, and specifically e-commerce brands, are impacted by the current crisis. The challenge is to navigate how to run a profitable business while keeping customers happy when production costs seem to be growing every day.

So, how can you balance rising costs while maintaining a positive consumer experience? Find our advice below!

Raise prices? Lower production costs? The dilemma

A common response to inflation is to raise prices accordingly. This is, of course, a risky endeavor: customers don’t always have the funds to follow even if they wish to stay loyal to your brand. On the other hand, raw materials are getting more expensive (and scarce!) and your margins are thinning. Sometimes, increasing retail cost is the only way to stay afloat.

Another option is to look for cheaper manufacturers to maintain your production costs, albeit with a possible lower quality. The risk here is to disappoint your current clients and turn them away. Another thing to consider is the disruption to your production processes and how you will be able to manage them.

Both approaches have their strengths and their weaknesses - what matters is what makes the most sense for your brand.                

Be transparent!

Whatever you decide to do, be honest with your customers. While the news is filled with stories of shortages and ever increasing prices, some consumers don’t realize the true impact this has on businesses. All they see is that their expenses have risen.

So be clear with them! What were your options? Which one did you pick? Why did you pick it? While you can’t do much about the negative impact it has on your clients, you can at least make sure they feel listened to and consulted. This can only strengthen their loyalty towards you and, while they may not be able to stay with you now, you’ll be first in their mind when their wallet allows. You can find a great example with this article by Asphalte!

"To keep a customer demands as much skill as to win one."

^{– American Proverb}

Through all of this, make sure they have the best experience

Your customer has stuck with you despite changes - now’s the time to ensure they don’t regret this decision. Make sure they have a seamless experience from landing on your website to receiving their order. A disappointing experience (bad website UI, poor visibility on shipping, unexpected delay) is likely to turn them away. After all, they can’t spend as much money so why waste it on a parcel that was 5 days late with no warning?

In conclusion?

The world is in crisis and facing it head on is paramount to keeping your business in good health. The good news is that there are solutions - many brands have already adapted to fit these new circumstances. The key is to find what you can afford and what will work for you. In any case, surround yourself with partners who will support you and keep your head high - you’ll get through it.