I have said for a long time that this “recovery” is establishing a new normal. The good ole days are gone. Clients don’t love you even if they once did.
Today it’s about price. There is a lot of pressure on price. The price pressure is not going away, ever. Extreme price pressure is a new reality that many businesses have not faced. You’d better do it soon because failure to respond to this pressure is going to sink a few ships.
You’ve got a choice. You can do what most businesses will do in spite of it being a rather poor course. You can cut cost and chase price. Get rid of your talent, close facilities, pull back. Chase falling prices by cutting costs.
Do that and the results will be as depicted above. Sales? Well, sales might go up and they might keep falling. That’s a crap shot. I can say the strategy leads to collapse. You can’t cut your way to bigger, better or stronger. Cut the rations in the lifeboat and everybody gets just a little weaker.
Or, you can do something amazing. You can look for ways to off-set cost to your customers without cutting your price. Can you change packaging to reduce shipping cost? Can you reduce waste by using less “filler”? Can you help your customer make your product go further? Can you add service that in turn adds value?
You can do all of those things if you choose to make the effort. Every business can fight price pressure without adding stress, harming moral or killing margins. And you can increase sales.
You have to choose that path. You can’t “dabble”. You’re all in or not in. So what’s it going to be? Cut and hope to survive or think and thrive?