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Five strategies to stay competitive as a B2B company in times of rising production costs

Rising production costs are a reality you have to deal with as a B2B marketer, often as a result of increases in wages. The increase in costs challenges you to revise the prices of your services or products. But how do you stay competitive in the market despite these price increases? In this article, we will show you options to manage this challenge.

Understanding what rising production costs mean for your business

The impact of rising production costs on business costs and pricing

Whether it is costs for labor or materials, production cost increases can lead to higher operating costs, which can ultimately result in higher prices for your products or services. If you don't manage this carefully, it can affect your competitive position in the marketplace.

Highlighting the Value Proposition

The Power of Value Over Price

While you may be forced to raise your prices, this does not mean that your customers will automatically look for cheaper options. What really matters is the value you offer. You can convince your customers to buy from you by highlighting the unique value of your products or services.

How do you do this? Start by identifying the specific benefits and features of your products or services that set them, and you, apart from the competition. What are the results your customers can expect when they choose your company? Perhaps you offer exceptional customer service, unique features or proven results.

Communicate this value clearly in your marketing materials, sales calls and customer interactions. Show your customers that they’re not just paying for a product or service, but for a solution that can improve their bottom line.

 Develop competitive strategies 

Staying competitive despite rising production costs: five strategies for success.

There are several strategies you can use to stay competitive despite rising costs. Here are some strategies to consider:

  1. Bundle your offerings. Consider bundling your products or services into packages. This can provide better value to your customers and can help justify higher prices. 
  2. Commit to long-term relationships with your customers. In acquisition, the value of the customer is the purchase value of his or her first transaction. This is the business equivalent of looking only at price – the literal profit of a one-time sale. Customer retention, on the other hand, measures the customer lifetime value (CLV) of each individual, or the potential net gain over the time he or she is involved with the brand. Just as customers have evolved to value relationships over price, companies must begin to evaluate lifetime value over transactional value. You can also offer discounts for long-term contracts or bulk orders. This can help stabilize your revenue stream and give you time to move toward a CLV concept with your customers.
  3. Improve your quality and service. If your prices are higher, make sure your products and services are superior too. Invest in improving the quality of your products and the effectiveness of your services. Offer excellent customer service and support and position yourself as a “premier” partner.
  4. Differentiate yourself with unique value propositions. Perhaps you offer special features, technology, or benefits that your competitors cannot match. Emphasize these in your marketing and sales conversations. But above all, remember that relationship benefits show more differentiation potential in key supplier relationships than cost considerations.
  5. Expand your service offerings and consider an OPEX model. Consider offering more services around your products and shifting from a CAPEX (capital expenditure) to an OPEX (operational expenditure) model. This can attract customers who prefer to pay for ongoing service rather than one-time purchases, and it can help you generate a steady revenue stream.

You don't have to go it alone

A B2B marketing agency like Living Stone can play a crucial role in implementing and communicating these strategies.  Here’s how:   

  1. Bundle your offerings – Living Stone can help develop effective communication strategies to present these bundled offers to customers and maximize their perceived value.
  2. Commit to long-term customer relationships – we can provide tools and strategies to manage and strengthen customer relationships. This can range from customer satisfaction surveys to personalized marketing communications to customer loyalty programs.
  3. Improve your quality and service – we can help communicate improvements in the quality of products and services to your customers. We can also collect customer feedback to guide future improvements and work to build a brand image that stands for quality and excellent service.
  4. Differentiate yourself with unique value propositions – we identify unique value propositions and develop communication strategies to effectively present them to customers and prospects. This might include creating marketing materials that highlight these unique benefits, or developing a go-2-market strategy to disseminate these messages.
  5. Expand your service offering and consider an OPEX model – we advise on the best ways to present an expanded service offering to customers, and we help communicate the advantages of an OPEX model over a CAPEX model. This might include developing marketing materials to present these new services and the OPEX model, or developing a go-2-market strategy to spread these messages.

Clearly, a B2B marketing agency can play a key role in helping companies navigate the challenges of rising production costs and remain competitive in the marketplace. By working closely with organizations, these agencies can provide valuable insights and strategies that can lead to long-term success. 

Don't focus on rising production costs

Rising costs for production can be a challenge for B2B marketers in mid-sized companies. It leads to higher costs and prices, which affects your competitive position. By emphasizing your value proposition and developing strategies to remain competitive, you can overcome this challenge.

Remember that price is only one factor in your customer's decision making. Value is just as important, if not more important. Show your clients that the value you offer justifies the higher price, and you will be able to grow and remain successful despite the challenges of rising production costs.  

A B2B marketing agency like Living Stone can get you started and guide you in rolling out competitive strategies that safeguard or even strengthen your market position.



1. This article provides some relevant references of studies on the subject: Strategic Bundling of Products and Prices: A New Synthesis for Marketing, Stefan Stremersch and Gerard J. Tellis, Journal of Marketing, Volume 66, Issue 1, Jan 2000. Online: 

2. See also: Customer Retention Is King: The Future Of Retention Marketing, Jerry Jao, online at 

3. Homburg, C., Wilczek, H., & Hahn, A. (2014). Looking beyond the Horizon: How to Approach the Customers' Customers in Business-to-Business Markets. Journal of Marketing, 78(5), 58-77. This article provides an interesting roadmap for a B2B supplier to implement indirect customer marketing. 

4. Value-Based Differentiation in Business Relationships: Gaining and Sustaining Key Supplier Status. Wolfgang Ulaga and Andreas Eggert, Journal of Marketing Vol. 70, No. 1 (Jan., 2006), pp. 119-136. This research examines opportunities for differentiation through value creation in business-to-business relationships. Results suggest that relationship benefits exhibit stronger differentiation potential in key supplier relationships than cost considerations. The authors identify service support and personal interaction as key differentiators, followed by a supplier's know-how and its ability to improve a customer's time-to-market. Product quality and delivery performance, along with acquisition costs and operating expenses, show moderate potential to help a company achieve and maintain key supplier status. Finally, price has the weakest differentiation potential. 

5. An interesting article around pricing in B2B can be found here: "The Secret to B2B Pricing in a Digital World. The tools are getting better, but they're no substitute for strong pricing capabilities." By David Burns and Justin Murphy, August 01, 2018, online at: It includes a section on "New pricing models continue to disrupt industries," specifically the shift from a CAPEX to OPEX model.


Anne-Mie Vansteelant
Anne-Mie Vansteelant
COO | Managing Partner at Living Stone

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