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Beating Inflation: An Agile, Concrete and Effective Corporate Guide
Is unabated inflation the new normal? Inflation is back and here to stay. For companies, this means that the world in which they do business has fundamentally changed. This book examines inflation from multiple perspectives and offers actions and strategies for companies to cope with and manage it to ensure their survival. For businesses and consumers, it is not a question of eliminating inflation, but how to cope with it in order to suffer as little damage as possible. This includes not just price management, but also sales, finance, purchasing, cost management along with digitalization and innovation activities in equal measure. It also requires corporate cultural change, which if managed fast and successfully, the prospects of defeating inflation and thus ensuring the survival of the company are good.
190 pages, Kindle Edition
Published November 10, 2022
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Displaying 1 - 5 of 5 reviews
January 10, 2023
It is an amazing book that is full of insights and easy to read. All the topics are explained very well. It provides a step-by step guide to tackle inflation with various approaches. It clearly explains what is the responsibility of each department in an organization to minimize the effects of inflation. A highly relevant book in current times especially for managers, executives and business owners.
February 1, 2023
Most managers today have no experience coping with inflation. It cuts across finance, purchasing, supply chain, costs, production, and human resources. And the sales force must push through larger and more frequent price increases. The author points out that only about one-third of companies have significant pricing power, allowing them to more easily deal with inflation. Moreover, on average, only about 50% of cost increases are passed through to customers.
The book has a lot of good advice and strategies to deal with inflation. The most salient is to focus on value-to-customer, and creating more value, as well as communicating that value rather than blaming increased costs (your customers don’t really care about your overhead rising). Innovation is key as well. He advises to avoid “naive pricing methods” such as cost-plus because it neglects value and customer’s willingness to pay.
Another excellent point is that any particular business should not rely on the general consumer price index. Consider that energy and food are the sectors where inflation is felt the most, but your business might not be in that sector. Don’t use “averages,” which these indexes are, to make management and pricing decisions.
It's more advisable to implement smaller price increases more frequently than one large price increase at a longer interval.
The author points out: “There are three profit drivers: Price, sales volume, and cost. Two of the three profit drivers are negatively impacted by inflation.” Price is the only one that can compensate for inflation’s effects.
Other strategies: innovation; improved value communication; increasing services (education, analysis, mini studies, etc.); improving sales team communication of value; improve brand image (long term strategy). Shrinkflation, reducing the package sizes. Shift to performance-based pricing where you share risk with customer (TIP clause).
Reference prices are disrupted during times of inflation (gas prices at the pump a good example), and consumers are use to more pricing threshold breaches.
Price signaling is important. If competitors follow with increases, less damage from potential price wars. Price leaders have this ability, such as Michelin. Don’t underestimate your pricing power, sacrifices profit. Low prices cannot compensate for bad customer reviews.
Consumers use “mental accounting” and either more or less depending on the account: food, vacation, hobby, car, gifts. For example, after COVID-19 lockdowns people spent more in restaurants and on vacations, not as price sensitive as before.
Freemium models are hit hard by inflation since pirce increases only apply to the paid version. Either increase the value of the premium version or decrease the value of the freemium offering.
I have some quibbles with the author’s economic analysis, such as labeling COVID-19 and the Ukraine war as black swans. They are not black swans as they were totally predictable, just not the timing. 9/11 was a black swan, not a virus.
Also, his “eternally valid equation of pricing”: Value = pretium = price, meaning value and price must always be balanced. Huh? Value and price are not equal, otherwise no transaction takes place. Price is how buyer and seller divide the value, and a transaction only takes place because buyer and seller disagree about the value! Both sides profit, so how can value = price?
I’m also not as convinced that inflation is here to stay. Time will tell. I would suggest the author read Superabundance to learn a new way of measuring real prices—that is, Time Prices, which dwarf the impact of inflation for everyone’s betterment. All said, if you're in a B2B or B2C pricing role, this is an excellent primer of the things you should consider when confronted with inflation.
The book has a lot of good advice and strategies to deal with inflation. The most salient is to focus on value-to-customer, and creating more value, as well as communicating that value rather than blaming increased costs (your customers don’t really care about your overhead rising). Innovation is key as well. He advises to avoid “naive pricing methods” such as cost-plus because it neglects value and customer’s willingness to pay.
Another excellent point is that any particular business should not rely on the general consumer price index. Consider that energy and food are the sectors where inflation is felt the most, but your business might not be in that sector. Don’t use “averages,” which these indexes are, to make management and pricing decisions.
It's more advisable to implement smaller price increases more frequently than one large price increase at a longer interval.
The author points out: “There are three profit drivers: Price, sales volume, and cost. Two of the three profit drivers are negatively impacted by inflation.” Price is the only one that can compensate for inflation’s effects.
Other strategies: innovation; improved value communication; increasing services (education, analysis, mini studies, etc.); improving sales team communication of value; improve brand image (long term strategy). Shrinkflation, reducing the package sizes. Shift to performance-based pricing where you share risk with customer (TIP clause).
Reference prices are disrupted during times of inflation (gas prices at the pump a good example), and consumers are use to more pricing threshold breaches.
Price signaling is important. If competitors follow with increases, less damage from potential price wars. Price leaders have this ability, such as Michelin. Don’t underestimate your pricing power, sacrifices profit. Low prices cannot compensate for bad customer reviews.
Consumers use “mental accounting” and either more or less depending on the account: food, vacation, hobby, car, gifts. For example, after COVID-19 lockdowns people spent more in restaurants and on vacations, not as price sensitive as before.
Freemium models are hit hard by inflation since pirce increases only apply to the paid version. Either increase the value of the premium version or decrease the value of the freemium offering.
I have some quibbles with the author’s economic analysis, such as labeling COVID-19 and the Ukraine war as black swans. They are not black swans as they were totally predictable, just not the timing. 9/11 was a black swan, not a virus.
Also, his “eternally valid equation of pricing”: Value = pretium = price, meaning value and price must always be balanced. Huh? Value and price are not equal, otherwise no transaction takes place. Price is how buyer and seller divide the value, and a transaction only takes place because buyer and seller disagree about the value! Both sides profit, so how can value = price?
I’m also not as convinced that inflation is here to stay. Time will tell. I would suggest the author read Superabundance to learn a new way of measuring real prices—that is, Time Prices, which dwarf the impact of inflation for everyone’s betterment. All said, if you're in a B2B or B2C pricing role, this is an excellent primer of the things you should consider when confronted with inflation.
May 15, 2023
"Beating Inflation" is a timely and informative book that addresses the challenges faced by business operators in inflationary climates. The author emphasizes that inflationary periods often catch everyone by surprise, making it essential for managers to change their business strategies. One crucial aspect highlighted in the book is the importance of price optimization during inflation. The author argues that leaders must fully understand the mechanics of profit to effectively manage their businesses in inflationary times.
In the book, the author emphasizes the need for companies to communicate value when prices are rising. It becomes imperative for businesses to demonstrate the worth of their products or services to customers, ensuring they perceive the value despite the increasing prices. Additionally, the book highlights the delicate balancing act of determining the proper price increase. Managers must carefully consider various factors to strike the right balance between profitability and customer satisfaction.
The author also emphasizes the importance of assertiveness in responding to inflationary pressures. Managers are encouraged to be proactive and take decisive actions to mitigate the impact of inflation on their businesses. This assertiveness is crucial in adapting to the changing economic landscape and ensuring the long-term success of the company.
Overall, "Beating Inflation" provides valuable insights and practical advice for navigating inflationary climates. It serves as a guide for managers, offering strategies to optimize pricing, communicate value, and respond assertively to inflationary pressures. With its timely focus on the challenges posed by inflation, this book is an essential resource for any business leader seeking to thrive in a rapidly changing economic environment.
In the book, the author emphasizes the need for companies to communicate value when prices are rising. It becomes imperative for businesses to demonstrate the worth of their products or services to customers, ensuring they perceive the value despite the increasing prices. Additionally, the book highlights the delicate balancing act of determining the proper price increase. Managers must carefully consider various factors to strike the right balance between profitability and customer satisfaction.
The author also emphasizes the importance of assertiveness in responding to inflationary pressures. Managers are encouraged to be proactive and take decisive actions to mitigate the impact of inflation on their businesses. This assertiveness is crucial in adapting to the changing economic landscape and ensuring the long-term success of the company.
Overall, "Beating Inflation" provides valuable insights and practical advice for navigating inflationary climates. It serves as a guide for managers, offering strategies to optimize pricing, communicate value, and respond assertively to inflationary pressures. With its timely focus on the challenges posed by inflation, this book is an essential resource for any business leader seeking to thrive in a rapidly changing economic environment.
January 12, 2023
Excellent book, I would highly recommend it! Inflation is coming back and most managers have never experienced dealing with high inflation, this book provides some good tools.
The book is exactly what it says it is: an agile, concrete and effective guide to beat inflation.
Covers a lot of topics in a concise way: 1 topic = 2-3 paragraphs in average. Too many times have I read management books that could have been 1 chapter or worst a single page. This book is the opposite. You discover many interesting topics in a short amount of time.
Very well written combined with interesting stories.
The book is exactly what it says it is: an agile, concrete and effective guide to beat inflation.
Covers a lot of topics in a concise way: 1 topic = 2-3 paragraphs in average. Too many times have I read management books that could have been 1 chapter or worst a single page. This book is the opposite. You discover many interesting topics in a short amount of time.
Very well written combined with interesting stories.
January 17, 2023
I received this book over the holidays, and it’s terrific. It demystifies and explains inflation (the confluence of events right now is unprecedented) and shares how each functional group in business can address what’s ahead. The authors have a great POV since pricing is one of the first elements to contemplate when inflation strikes. The tips and models are tremendous and relevant. The book is going to be required reading for our work team!
Displaying 1 - 5 of 5 reviews