Inflation is painful, for firms, customers, employees, and society. But careful study of periods of “hyperinflation” point to ways that firms can adapt. In particular, companies need to think about how to change prices regularly and cheaply — because constant price changes can ultimately be very, very expensive. And they should consider how to communicate those price changes to customers. Providing clarity and predictability can increase consumer trust, and help firms in the long run.
As inflation soars to its highest rates in 40 years, it’s critical that businesses have a strategy to respond to fluctuating costs and prices. Pricing during today’s inflation is particularly challenging because people are exhausted and emotionally fatigued from dealing with extreme uncertainty created by the ongoing pandemic, the war in Ukraine, and fears of recession.
These stressors affect the fabric of markets and society — amplifying frustration with…
This article was written by Mark E. Bergen and originally published on hbr.org