Inflation. You Should Do This…
You’ve probably noticed that things have been costing more.
We sure noticed as we did (and are still doing) our recent home remodeling. Contractors were costing more. Materials costing more. Heck…. even the whole house cost over $100K more than it did a couple years ago! (Good thing we sold our previous home sky-high, too, to make up for it).
Food definitely is costing more. I’m seeing increases in prices on services. It is pretty much across the board.
This is inflation.
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It is the result of stupid central bank and government policies. Creating a bunch of money out of thin air, racking up massive debts. And when you insert a ton of new dollars into the system when the goods/services stay the same, the result is inflation.
But, this is not an economics discussion.
It is a practical one.
What do we do about it? In our personal lives and our businesses?
If you don’t act, inflation is a massive tax. The worse kind, too, because it doesn’t feel like a tax. In fact, it is easy to just get annoyed at businesses raising their prices. But, it isn’t their fault. This is not the fault of any economic system, either. It is the result of bad central planning and a flawed monetary system which is rigged for governments and bankers.
The thing to do is to look for and implement ways to increase your value and, hence, raise your prices.
The dollars are worth less, so you have to charge more dollars to make the economics work.
If you don’t raise your prices, then you’re actually taking a big pay cut. And eventually that is going to bite you in the butt.
Unfortunately, a lot of people are afraid to do this. And I know the feeling… trust me.
Will people stop buying because they perceive the price is too high? Will they get annoyed at you because you’re raising prices?
First, raising your prices is basically you just following suit with a lot of other businesses right now. So, you definitely wouldn’t be alone in doing so. You can even just explain to people about the higher cost of living, higher cost of doing business, etc.
But, a lot of price has to do with perception, too.
When you raise your prices even just because of inflation, it FEELS more expensive to people even when it might not actually be.
The answer is to, of course, review your offer.
How can you increase the value of your offer?
How can you offer more value?
How could you tweak what you’re selling to better hone in on solving people’s EXACT problems? Your offer is always more valuable to people the more you make it clear that you’re going to solve their exact concern.
In other words…
This is a classic marketing issue. An issue of product/market fit.
In this case, the market will have shifted a bit due to issues outside of your control. Price perceptions are shifting because the currency we use to exchange with is becoming less valuable and with increasing speed.
So, sometimes you have to adjust the product to fit the market.
In some cases, you’ve seen businesses just… offer less. You’ve certainly seen it with some food packages where the packages just contain a little less product but the price stays the same. I’m not a fan of that approach, but it is one way to adjust to a new product/market fit.
But, you can also tweak the product itself. Add some things while removing others. Better focus it. Perhaps adjust the positioning a bit.
However you need to do this, it isn’t something to ignore.
Inflation is changing the value of money. This is going to result in higher price tags on things. It will take more currency to get the same stuff we were buying before.
It will cost more to live. The ONLY way to accommodate that is to simultaneously make more money.
If you run a business, look for ways to increase your income and raise your prices. If you have a job, look for ways to make yourself more valuable or even seek a raise if possible. You can also seek out other types of gigs with higher perceived value.
But, don’t ignore it. Inflation is a massive tax. We can complain and cast blame all we want for it, but we still have to adjust to the reality. Might as well look at it as an opportunity.