There’s never been a time when everything was hunky-dory in every sector, category, or industry, all at once. Certainly, there are periods with no significant hiccups for the vast majority. But still, there’s always a pricing crisis playing out somewhere in the broader marketplace.
Right now, certain sectors are scrambling because petroleum prices have been on the rise. In other parts of the marketplace, the threat/reality of tariffs on steel and aluminum are driving overnight step-changes in material costs. And some sectors are even being hammered by both of these dynamics at the same time!
Responding to the needs of our subscribers, we recently conducted a webinar entitled, “How to Avoid Pricing Panic”. In this webinar (now available on-demand) we explore a number of effective strategies and tactics for when the “stuff” hits the fan and you find yourself in scramble mode.
But beyond dealing with the immediate problems, we also discuss how these types of crises can actually present some opportunities…
For example, you could use the crisis as cover while you correct downside outliers and realign underpriced segments. Or you could leverage the situation to finally introduce that new pricing structure you’ve been contemplating. And while it might seem a bit counterintuitive, the crisis actually presents the perfect opportunity to implement the “DefCon” approach we explain in the webinar.
In a nutshell, the DefCon approach is about defining and documenting your actions in response to something disruptive happening in your market. It’s like developing emergency protocols around certain market conditions—so your company isn’t thrown into chaos trying to figure out what to do and when to do it.
You know what some of these “out of left field” disruptions look like in your industry. Over the years, your company has probably experienced many of them before. And while you can’t pinpoint exactly when, you can safely bet that these things will happen again at some point.
So you can plan for them. And by predefining your company’s actions in response to these types of anticipated market disruptions, you’re able to move much faster while still being very smart about what you’re doing.
Material costs have jumped by 19% overnight? Execute the DefCon 2 protocols. Your main competitor is taken offline by an earthquake on the other side of the planet? Execute the DefCon 5 protocols. Demand is tanking due to a sector-specific financial hiccup? Execute the DefCon 4 protocols.
No chaos. No hair on fire. No analysis paralysis or overreaction. Just thoughtful actions, executed very quickly.
But as beneficial as this DefCon approach can be, management may not actually see the need for it when conditions are normal or steady-state. Sadly, it’s just human nature to put off crisis planning until the crisis is looming large.
So if you’re currently dealing with one of these disruptive situations in your business, it presents a great opportunity to push the DefCon approach. Because the pain is clear and present, management will be far more receptive than they might be otherwise. And while the approach may not eliminate the chaos this time around, it’ll certainly make your life easier when the next “market meteor” strikes.
How to Avoid Pricing Panic
How should you respond when something disruptive happens in your market? How do you avoid overreaction? How do you balance speedy action with smart action? And how do you prepare for the next disruption?
Avoiding the Top 10 Pricing Mistakes
You're going to make mistakes. But if you can avoid the biggest mistakes, you're definitely rigging the game in your favor. In this on-demand webinar, learn about the top 10 mistakes that other pricing groups have made along the way.
Survival Strategies for Raising Prices
In this on-demand training seminar, learn why some B2B companies struggle with price increases while others are able to do it with far less pain and angst. What are leading companies doing differently to execute price increases with far less risk, conflict, and uncertainty?