Did you know that Burger King* reduced the number of chicken nuggets in the $4.49 meal earlier this year from 10 to 8? Also, Dominoes reduced the number of wings in its $7.99 meal from 10 to 8 in January this year. Why did Burger King and Dominoes do this? The answer is Shrinkflation.
We are undoubtedly living in an inflationary period, and many financial challenges are associated with the current economic climate. PandaDoc recently launched a podcast that offers some tangible advice for dealing with inflation.
The podcast will teach you how Shrinkflation can help your business push through a challenging economic climate. The podcast is from our Customer Engagement Lab, hosted by PandaDoc’s Senior Content Marketing Manager, Travis Tyler.
Travis discusses the topic of Shrinkflation with small business expert Gene Marks. They discuss how Shrinkflation works and its relation to inflation. Travis and Gene discuss valuable lessons that small and medium-sized businesses can learn from their larger counterparts during periods of economic uncertainty. The pair discuss everything from re-evaluating business costs to understanding the impact on profit margins before increasing prices for existing customers.
Let’s review the concept of Shrinkflation and why it matters, as discussed in the podcast.
What is Shrinkflation & Why Does it Matter?
If this is the first time you have heard of Shrinkflation, you’re not alone.
Travis and Gene provide an excellent summary of Shrinkflation, defining it as a time when a business reduces the product or service they offer while still charging the same price.
Here are some examples to further round out that definition:
- Selling a bag of chips with fewer chips than usual
- Providing smaller shampoo bottles in hotel showers
- Reducing the amount of toilet paper on a roll
An interesting piece of Shrinkflation is that you may not notice its effects. After all, we don’t typically count the chips in a bag or measure the amount of toilet paper on a roll. However, while you may not notice the effects, you will be affected somehow.
Can Shrinkflation Help My Business?
Naturally, the current economic climate raises the question – how will we get through it? Travis and Gene have a few suggestions.
Here are a few potential ideas I took from the podcast:
- Take away 24/7 chat support for a certain subscription-tier
- Eliminate a feature that is available with a specific subscription-tier
- Taco Tuesday (yes, Taco Tuesday may have to go for a season)
It’s important to know that anything you try can be looked at as a test. You may discover that a method the company tries does not work.
Also, companies need to test what works for their current customers and prospects. You may choose to use a different method for each demographic.
Recap & What’s Next
Don’t forget to check out the full podcast about the current inflationary period and strategies small and medium-based businesses can use to push through it.
Next week will feature a podcast from our Customer Engagement Lab that highlights three steps to speed up the sales cycle. You don’t want to miss it!
What strategies are you and your business using to get through the current economic climate?
Join in the conversation below!
*From toilet paper to candy bars, companies hide rising costs by shrinking the size of everyday products. Here’s what that looks like. (2022, August 25). Business Insider. Retrieved September 23, 2022, from https://www.businessinsider.com/shrinkflation-grocery-stores-pringles-cereal-candy-bars-chocolate-toilet-paper-cadbury-2021-7?international=true&r=US&IR=T
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