The pressure on sales organizations continues to grow as they are forced to fight on multiple fronts at once. The ongoing global crises and rising inflation are leaving their mark on even some of the most resilient brands.
Due to supply problems, rising prices for raw materials and energy, etc., many companies are forced to increase their prices, sometimes significantly. These price increases are already leading to a noticeable reluctance to buy or a shift to cheaper alternatives in many consumer areas. People are taking a closer look.
Price increases are already a major challenge for many companies in “normal times”. Many shy away from them or are simply inadequately prepared for them. Experience has shown that price increases usually do not lead to volume decreases, despite management theories to the contrary – sometimes they even have the opposite effect.
Brand strength has its limits where companies see environment as a given
Brand strength and emotional attachment to a brand, a product or a service reach their limits where people either have to act more cautiously collectively or simply have to save money. In some companies today, we see sales declines of 10-30 % – and this applies in particular to the higher-value offerings in a category. On the other hand, it must be said that there are also many companies that defy these developments and achieve outstanding results. After all, many things are home-made and can therefore be changed from within – despite all external influences. Some explain – others act!
Certainly, it is important to keep the brand and the offering attractive and present. Currently, however, this is far from sufficient. But what should a brand manufacturer do now? This much can be said in advance: there is no miracle or patent solution here, as it affects everyone equally and simultaneously: the raw material producers, the brand manufacturers and the consumers. The latter carry the new price tickets at the end of the entire chainand must then decide in which brand systems and for which goods and services – and also in which qualities – they will spend their hard-earned money in the future.
Facts & figures first still applies
What we can do, however, is to take a closer look at what is hidden in the figures. The major developments often conceal a great deal of detailed information that provides valuable pointers for improving business results in a timely manner. Together with Controlling, the developments must be continuously processed and analyzed, observed, understood and questioned even more precisely – according to products, sales channels and sales partners.
Which parts of the product range are particularly affected? Where do we see developments that are encouraging? Where are there good examples among our retail partners? What have we tried out that works? Weekly or monthly reports – depending on the situation – ensure that both positive and negative developments are identified in good time. Now, existing competencies alone must be used and coordinated. They must regularly sit down together, assess the situation, promote and support each other, and agree on the next steps.
Now salespeople need to be even closer to their customers
In addition, more customer proximity is now needed. Many sales organizations, but also the retail partners, are busy with the price increases. This often leaves little room and little will for discussions on optimizing our joint business. In addition, one is often glad to be out of the line of fire.
Conclusion
There is no patent remedy, because every case is different. What is important is that management does not get lost in the confusion of the big picture, but continuously assesses the situation on the basis of hard facts and on-site observations at the POS. Facts and figures first! This applies more than ever. All in all, it takes a lot of consistency, flexibility, perseverance and courage.
