It’s not been an easy last few years – that’s for sure. In our Loyalty Penalty article last year, we predicted archive costs to increase by 10% this year. Based on the recent announcement by Restore to its customers, it looks like we were wrong. In fact, Restore customers have just been informed of a minimum increase of 11.1% on all services from 1st January – Happy New Year!
Iron Mountain: Praying for inflation
While these numbers are unparalleled, we await to see what the other players in the market will do. However, we do suspect that they will, as often is the case, ‘follow the leader’: Iron Mountain.
You may recall that it was the CEO of Iron Mountain – William Meaney – who last September told investors he’s been ‘praying for inflation’. This was, he said, because hiking prices is ‘good for business’, due to it benefitting the company’s bottom line. This startling honesty (or slip of the tongue, as some would say) has shone a spotlight on the problems many firms and businesses around the globe have with records management.
Meaney essentially admitted that raising prices more than covered the company’s increase in costs while adding to the firm’s profit margin. However, the Iron Mountain CEO wasn’t alone in making his stark statement. Meaney’s reasoning was also supported by his Chief Financial Officer Barry Hytinen, who said inflation was a ‘net positive’ for the company. ‘We have a high gross margin business, so it naturally expands the margins of the business,’ Hytinen said.
This brazen and open prioritisation of profit over customers isn’t welcome and, ultimately, is a net negative for those loyal customers that feel as if they can’t change providers. There’s no doubt that change is needed.
The stats
The recent financial performance of both Iron Mountain and Restore echoes this sentiment with both businesses reporting increased earnings: 12% for Iron Mountain and 36% for Restore. See for yourself! You can find Iron Mountain’s latest published results here and Restore’s here.
Loyalty costs
So – what can we glean from these statistics and the unambiguous statements from those high up in the industry? It’s simple: loyalty pays.
Firms often stay put with their records management companies, with unnecessary jargon and relinquished control making changing services seem convoluted and complex. From an Elless Solutions perspective, we can categorically say that this is not the case. Changing providers can be genuinely transformative for firms, providing them with extra savings they didn’t even realise they could make.
It’s time for something different
No industry stays the same forever and record management is no different. It’s time for firms to embrace new modes of record management, making the leap to entirely online services and identifying key ways to save money. That’s where we come in.
At Elless Solutions, we’re all about shaking up the records management industry and providing our clients with a fuss-free, inexpensive and deeply beneficial service. With all our experience, we have an answer to these ever-increasing archiving costs. Please don’t hesitate to get in contact with us to see how we could help transform your records management processes. There’s no time like the present.
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