As a CPG business owner, you know that every penny counts. But we live in especially challenging times with skyrocketing inflation. Rising prices in raw materials, transportation, and labor have made it hard for any business to stay afloat. The marketing and lead generation experts at Zumvu discuss a few tips and tricks to help your CPG business make ends meet — and even flourish — in the face of inflation!
Making the most of your supply chain is non-negotiable when facing an obstacle like rising transportation costs. It’s essential to find ways to reduce freight costs, whether it’s shifting to more cost-effective modes of transportation or consolidating shipments. Negotiate with your suppliers to get better deals, and keep exploring new partnerships to discover situations that work better for your business.
Inflation makes it tempting to increase your prices significantly, but understand that this could have a negative impact on your sales volume. Sometimes you can control your expenses by focusing on eliminating waste and improving operational efficiency. Ensuring your team is cross-trained, digitizing your supply chain, and outsourcing non-core functions are a few ways to accomplish this.
Without customers, your business is nothing. And although they may be tightening their belts through a tough economy, they will still need many of your products, so focus your efforts on ensuring that they – and new potential customers – choose your company to supply them with what they need. Work with a company like Zumvu that has a strong track record with SEO strategies, marketing, lead generation, and customer management to increase your customer base.
Choosing the right invoicing software for your CPG business is crucial, but with so many different options, it’s hard to know which one is best for you. The good news is that there are several free invoicing packages with powerful features that can make your invoicing process easier and more efficient. Some programs include features like automatic billing, online payment processing tools, invoice templates, and more.
Further, certain software provides customer support in case you need help getting started or troubleshooting an issue. Choosing the right free invoicing software is critical to running a successful business, so take time to research your options and find the best fit!
A customer data platform (CDP) is a powerful tool for growing a CPG business, even in an unpredictable economy. Leveraging a CDP can help you identify and reach new customers, develop personalized campaigns to increase sales, and track customers' behaviors over time.
CDPs also let you create highly targeted marketing campaigns with collected data to ensure they’re cost-effective and drive the maximum ROI. How? By utilizing a single customer view (SCV) that is created through the data you gather. If you’re interested in making the most of your data, then this option deserves a look.
Inflation has caused the cost of inputs to go up. To avoid denting your profits, you might consider slight adjustments to your pricing to cover the rising expenses.
This is easier for larger companies with large customer bases, but small businesses must be cautious so they don’t lose their existing customers. Consider analyzing the effect of price adjustments, and if you choose to increase, make sure it’s within reasonable limits.
Keeping track of your finances is especially vital during inflation. You can use a data analytics tool to monitor your expenses and identify the areas where you can cut costs. Reviewing your sales data will also help you identify low-margin products and determine whether they’re worth keeping in your lineup.
It’s not a secret that inflation impacts different sectors differently. Consider diversifying your business into other sectors that aren’t so prone to inflationary impact. Even diversifying your business a little bit can provide a cushion for your company as you navigate fluctuations in the economy.
Consumers become more cost-conscious during inflationary periods, meaning you must focus on building customer loyalty. Putting more attention on customer service and providing high-quality products or services is the most effective way to achieve this. Engage with your customers regularly, send personalized emails, and offer promotions or discounts to retain their business.
As challenging as it is to operate a business with high inflation, you can survive and thrive with the right strategies. By optimizing your supply chain, controlling expenses, getting a CDP, and following the other tips above, you can stay ahead of inflation and come out stronger on the other side.
Remember that small steps can make a big difference, and every bit helps when it comes to navigating difficult economic times. Keep persevering and making moves!
