Shipping On High Freight Costs

Covid, inflation, and supply chain experts project another year of continued price hikes for 2022. Action this 1 opportunity for HUGE success. Consider:

1. In-person retail will continue lagging in 2022- amplifying pressures on overburdened freight/shipping/logistics providers.

2. Order fulfillment will remain delayed due to Covid – reducing operational capacities and slowing production/efficiency.

3. Increased operating costs exacerbate reduced production/efficiency…further inflaming costs.

4. Increased labor shortages/disruptions add further backlog to the already burdened supply chain.

5. Inflation will add pressure and urgency, leading to further price increases.

However, when oriented correctly, these challenges deliver incredible opportunities for YOU. Here’s how:

Simply passing these price increases to customers through transparent communication is the business equivalent of treading water. Hopefully, customers accept the increases based on shifting market conditions…despite no improvement in value exchange. In this case, success is holding your financial position. 

However, when these costs/operations return to normal, you’ll struggle to maintain pricing directly tied to/substantiated by (now reduced) freight/transport costs.  

But…if you position the ‘increase’ as a ‘service/value-exchange increase’ that’s a completely different narrative. Simply add freight increases into an even larger price increase – labeled as a service/product/warranty value driver. 

If you can differentiate your product/service price increases and validate the increase with a positive value exchange, you’ve successfully unlocked a long-term profit driver while also improving your short-term situation.

You will never have a better opportunity than NOW to rethink your service, product extensions, revenue sources, and value-adds you deliver to customers. It’s time to renegotiate your value exchange. Ask yourself:

What expanded role can YOU play for YOUR customers?

1. Lateral Opportunities: What’s just out of scope currently from operations, product, or support? Can you reach it with a price increase and help better fulfill customer needs?

2. Team Alignment: Ground-level teams are adept at identifying close-in customer service opportunities. Change starts with internal stakeholders and can help evolve your offer.

For expert help on Price and Offer Optimization, please contact us for a free consultation!


ABOUT THE AUTHOR Joe Murphy is the Director of Marketing & Business Development at Revenue Management Labs. Revenue Management Labs help companies develop and execute practical solutions to maximize long-term revenue and profitability. Connect with Joe at [email protected]

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