Leading Through Inflation by Ram Charan & Geri Willigan

Author:Ram Charan & Geri Willigan [Charan, Ram & Willigan, Geri]
Language: eng
Format: epub
Publisher: Ideapress Publishing
Published: 2023-02-24T20:00:00+00:00

BEWARE OF SALES FORCE FATIGUE

Let’s assume you’re ahead of the curve and have been repricing quickly and frequently. Your sales force will be delivering most of those increases to the customer. So now you have to face a different inflation-driven challenge: sales force fatigue. Running a legacy repricing process faster and faster will exhaust your team.

Automating price adjustments, perhaps for a select segment of customers, will relieve the pressure. As one manager put it, “People who do a small amount of business with us can be just as mean as big accounts.” A solution at his company was to use dynamic pricing for small accounts and free up salespeople to negotiate with the bigger ones.

There is such a thing as price fatigue as well. This inflationary period is just getting started, and already we’ve seen cost increases work their way through the value chain. As every player in the chain tries to preserve his or her nominal dollars or percentage profit, higher prices work their way from one link in the chain to the next, moving relentlessly toward the consumer and end user. At some point, the end user can’t absorb it and seeks an alternative or does without. This won’t happen in every category, but it will surely happen in some.

Regardless of where you are in the chain, when price increases hit a dead end they become your problem. You should have three lines of pursuit: search for ways to reduce costs not just within your four walls but across the value chain, create new kinds of value, and help customers do the same. Chapters five and six will give you ideas how.

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