It's companies with the strongest relationships with their end consumers that win in an increasingly competitive market. It's not enough to just understand your consumers. You need to develop a two-way relationship with them, which is what builds real loyalty
- About this video
Adapting to an inflationary market doesn’t require large investments. Learn about consumer engagement, pricing, analytics, and leveraging volatility.
Oliver Wyman Takes On Series
In this video series, energy and natural resources experts share their take on how businesses can harness risk, turn climate intent into action, and lead in the age of acceleration.
In recent years, we've witnessed unprecedented volatility, such as COVID, global conflicts, supply chain disruptions, and rapid inflation. The degree and rate of change is only accelerating, and market stability is likely never coming back. This means that paths for growth have become more challenging and less certain, so executives need to rethink traditional approaches to growth.
My name is Jessica Stansbury and I'm a partner in Oliver Wyman's Energy and Natural Resources Practice with a focus on pricing, sales, and marketing. In my nearly 20 years at OW, I've supported chemical and industrial companies in commercial excellence transformations to achieve their revenue growth and margin expansion goals. I bring an owner-operator mindset to my work, which stems from an opportunity that I had early in my career to take on an interim management role at a client. Ever since, driving tangible top-line results has been a cornerstone of my work.
So why don't traditional approaches to growth work in volatile markets? Because they typically rely on multi-year project timelines, large investments, or big bet innovations. None of these characteristics fit well with a dynamic market where customer preferences are rapidly evolving. Combined with today's macroeconomic uncertainty, it's clear why executives now need to think differently about growth.
Here are my five tips that I give my clients for growth in volatile times.
First, it all starts with the consumer: It's companies with the strongest relationships with their end consumers that win in an increasingly competitive market. It's not enough to just understand your consumers. You need to develop a two-way relationship with them which is what builds real loyalty. Today, there are more data sources, channels and touch points that can be harnessed to build this two-way engagement, personalize the shopping experience and influence purchasing behavior in ways that benefit both the company and the consumer. Consumer loyalty is the strongest shield you can build against volatility.
Second, embrace pricing as a growth driver. Many of my clients overlook pricing as a growth driver when, in fact, pricing typically has a larger and quicker impact than volume growth. Many companies fall into the trap of viewing their offer as commoditized and, therefore, believing that they have no pricing power. But, even when a product is largely commoditized, the overall offer - including things like technical service, reliability, or account relationship – should be clearly differentiated. Articulate your differentiated value story and invest in dynamic pricing and value selling capabilities to exploit it.
Third, be agile and fail fast. To thrive in a rapidly evolving market, adopt a test-and-learn mindset. Seek to run many small, quick experiments before making big decisions. Instill a discipline around measurement and feedback in order to be able to learn and adjust quickly. Foster a culture of agility through incentivizing speed and rewarding failure – As long as it comes with learning.
Fourth, harness the power of advanced analytics. Basic performance reporting will only get you so far. To combat uncertainty, you need a real-time analytics foundation that enables drill downs into root causes of trends and even anticipates them before they happen. We recently built a Control Center for a client that harnesses machine learning predictive analytics to give advanced warning on things like whether next quarter’s forecast is falling behind budget, which customers are most likely to churn, or whether inflation or deflation is likely to happen next. The more you know about how you're doing, the better you can prepare for what is ahead.
Fifth, turn volatility into a competitive advantage. Instead of viewing volatility as a threat, look for opportunities to convert uncertainties in the market into competitive advantages. Do your customers want more stability in their pricing? Charge a fee to lock in a stable rate or get commitments to guaranteed volume. Are you uncertain on how new technologies like generative AI will impact your business? Start experimenting with these technologies now so that you learn how to leverage them before your competitors do.
You might notice that none of these tips require large investments or long lead-times. Adapting to a volatile market requires taking lots of small steps quickly. The biggest risk is standing still, or worse, falling behind while waiting for a multi-year project to be completed while the market moves on. The benefit to my clients from building more agility into their commercial strategies is enormous, and I'm excited to be a part of it.
I'm Jessica Stansbury, and this is my take on growth in volatile times.
This transcript has been edited for clarity