It’s tough out there right now, isn’t it? Inflation is well above the Bank of England’s 2% target. This year, in September, prices in the UK rose by 3.8%.
Even in the U.S., inflation has returned to the 3% level. The cost of living for US consumers jumped last month, marking the most rapid pace of price growth since January.
Globally, the rising prices and cost of living are making people more cautious with what they purchase. Households are tightening budgets, and businesses are feeling the pressure as operating expenses, from raw materials to employee wages, continue to climb.
For businesses, the challenge isn’t just surviving but maintaining profitability and growth in a climate where every dollar is stretched thinner. The good news is that you can keep your business thriving even in times of high inflation.
Here are a few strategies that can help you navigate inflationary times while keeping your customers and your bottom line happy.
#1 Adjust Pricing But Do It Thoughtfully
When costs rise, adjusting your prices is necessary. If you don’t, rising expenses will erase your profit. Many companies rely on cost-plus pricing. This method simply adds a consistent markup to your total costs. This makes sure your foundational expenses are covered.
Instead of the simple cost-plus model, shift to value-based pricing. This pricing model determines the cost based on what the customer thinks it’s worth. Your price should reflect the value the customer feels they are getting.
Apple is an excellent example. It prices its products based on its ecosystems’ value. The base iPhone 17 had a minimal 3% price bump, but the more advanced Pro and Ultra models were priced 6% to 8% higher. This tiered strategy clearly targets customers who prioritize features and capability over strict cost savings.
If you must raise prices, communication is everything. Your price change must be transparent and respectful. Give your customers advance notice of the change. This shows you value their business and respect their budgets.
#2 Expand into New Markets
High inflation in one region doesn’t mean it’s the same story everywhere. Sometimes, expanding into new markets can offset the challenges inflation brings to your current one.
Look to regions where inflation is lower, or where demand for your products remains strong. Thanks to digital tools, international e-commerce and global supply chains are more accessible than ever. You could sell online to customers across the world and open new revenue streams.
One strong opportunity lies in the UK. “It has a high-income economy and a very high human development index rating, ranking 14th in the world,” notes Remote, a global HR and payroll platform.
So, despite the challenges, the UK remains a sophisticated, digitally-enabled market where demand persists. In 2023, UK online spending reached £8.2 billion in March alone. That reflects continued consumer activity even amid inflation pressures.
The International Monetary Fund further predicts that it will be the second-fastest-growing G7 economy this year. That makes the country a promising target for expansion. Businesses in the US can take a cue and consider it as their next target market.
For a successful expansion, you’ll need to hire local talent. Remote adds that UK workers are legally entitled to a minimum charter of employment rights. These include paid holidays and breaks, and limits on working hours.
Navigating these as a US-based employer can be overwhelming. Use Employer of Record, or EOR services in UK, instead. They can help you hire workers in the UK. They also handle payroll, contracts, benefits, and compliance, so you can focus on growing your market presence.
#3 Promote High-Margin Items Aggressively
Not all sales are equally profitable when costs are rising. To protect your profit margins, focus on the products that bring in the most money.
Prioritize items with the highest reliable profit margins. While you should follow market trends, don’t ignore your timeless bestsellers. These items often have dependable margins and strong existing demand.
Feature high-margin items prominently in your advertising, email newsletters, and social media posts. Highlight their benefits and showcase customer testimonials to drive sales. The goal is to shift customer attention toward products that protect your profitability.
Use urgency tactics to drive quick action. Leverage the “Fear of Missing Out” (FOMO). Run limited-time clearance sales to push quick volume. This tactic gets high-margin products moving fast.
You can partner with niche influencers to boost your reach. Find people who already talk to your target customers. This partnership maximizes your return on investment.
You could also try creative, low-cost stunts. This is called guerrilla marketing. Stenciling messages onto sidewalks or projection mapping are examples. These stunts generate buzz without a massive budget.
Resilience is Your Superpower
Navigating high inflation feels like navigating a maze. The pressure is real, but these smart moves will help you not just survive, but potentially thrive.
Just like a runner needs fuel to finish a marathon, your business depends on profitability and lasting customer relationships to power long-term growth.
Inflation often rewards adaptability. Companies that stay flexible, analyze data regularly, and keep customers at the center of every decision tend to come out stronger. Adapt now, and you will be among the ones celebrating growth when the storm passes.
