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Inflation Is Forcing B2B CEOs to Rethink Pricing

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Inflation Is Forcing B2B CEOs to Rethink Pricing

Boston Consulting Group,

5 min read
3 take-aways
Audio & text

What's inside?

Inflation doesn’t have to be a crisis, but it will require quick decision-making, strategy and better conversations with customers.

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Editorial Rating

8

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Recommendation

If you think there’s nothing good about inflation (and you could be forgiven for thinking that) then you’re not seeing the silver lining in the current situation. Finally, B2B pricing practices are taking center stage in boardrooms around the world, and the subject might finally get the attention it deserves. It’s not your grandpa’s business world anymore, and pricing needs to be as dynamic as the volatility that surrounds you and your company. This report from the Boston Consulting Group offers guidelines to help your company navigate B2B inflation.

Summary

Pricing practices need an overhaul, and current input-cost inflation should provide the impetus.

B2B leaders report that they haven’t seen inflation this bad in 30 years, and the stats back them up. The US producer price index found that intermediate demand processed goods have risen 24.4%, the biggest jump since 1974. The IMF’s All Commodity Price Index has increased by 49% in 2021. Supply chain issues are a major culprit, and it’s still unclear whether inflation is close to reaching its zenith. Traditional B2B pricing practices are ill-equipped to manage this kind of volatility.

The extreme inflation presents an opportunity for leaders to make changes to pricing practices. A failure to do so will mean a sharp decline in profits. 

Best pricing practices...

About the Authors

Joël Hazan, David Langkamp, Matthew Kropp, Jonas Stein, Camille Brégé and Lionnel Bourgouin are professionals with the Boston Consulting Group.

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