As the digital world of records management continues to spin out ever-more flexible, cost-efficient solutions to attract new customers looking to streamline expenses and elevate operations – behind the scenes, loyal customers are increasingly finding themselves being shelved; collecting dust for their loyalty.
The question is: why? We take a look at the ‘loyalty penalty’ good customers are paying today – and champion why loyalty should be handled like royalty when it comes to records management.
Rewind to 1997, and you may have heard the faint sound of early internet dial-up amidst the churning of printers, photocopiers and fax machines. Offices were very much still paper-based affairs (and arguably, so too were the office walls).
Companies contended with physical boxes of archived documents and records management providers who could handle their storage. They worked hand-in-glove to provide solutions at affordable rates with annual reviews and negotiations.
Fast-forward to 2022, and you may find the odd fax machine in an IT cupboard. Today’s businesses are increasingly paperless – and records management has become a digital affair. You’ll also find an increase in the Retail price Index (RPI) from the Office of National Statistics of a staggering 218% between September 1997 and 2022 for box storage and archiving.
Why is this important? Well, for the majority of archive providers, charges increase annually by RPI, so existing clients would expect a 10% increase when they receive their next annual review.
This is certainly true for loyal clients who’ve stood the test of time with their long-standing providers. But for new clients, it’s quite the opposite.
Where the former expect favourable pricing and cost efficiencies for their tenure and business, it’s the latter who are typically receiving it – leaving long-standing customers wondering why they’re being penalised for their loyalty.
Here’s what’s causing the gap and creating a ‘Loyalty Penalty’ that’s seeing good customers get a bad deal.
Digital vs. Physical storage
As businesses continue to digitise their operations, there’s simply less paper for storing and archiving. Historic ‘paper-driven’ processes such as bank loan applications are now fully digital. Combine that with a global pandemic shifting businesses to hybrid working, and there’s simply less business to go around for physical storage suppliers.
The resulting pressure to win new clients has forced prices down in the marketplace to attract new clients. Loyal clients already locked into agreements find themselves watching from the sidelines as the fluttering of deal-dancing continues in earnest.
Risk & compliance
Increased cross-sector regulation has made businesses more aware of what records need storing, and what can be destroyed. As a result, customers are generally far more proactive in destroying their own records on-site.
The knock-on effect? Less for providers to handle and a subsequent decline in revenue. Again, this puts more pressure on suppliers to win new business with – yep, you guessed it – more attractive pricing.
Pressure from owners
Over the past 25 years, the archive storage market has changed dramatically. From international takeovers with the likes of Hays and Iron Mountain, to spending spree acquisitions from notable big hitters including Restore and OASIS – the latter of which undertook over 50 acquisitions in the UK alone – there’s undeniably been a major consolidation in the UK market.
With fewer suppliers, the economic assumption would suggest a price increase. However, with shareholder pressures to increase profits coupled with a falling market, providers are delivering products with little differentiation. The only place they can compete is then on price – but only for new clients.
Switching Supplier Complexity
In 1997, it was a tricky affair to change a bank account. Today, there’s ‘U-Switch’. The exact opposite has happened in the archive storage market. Today, virtually all providers have introduced ‘termination charges’ or ‘perm out charges’, making it complex and costly to switch suppliers.
These ‘handcuffs’ keep loyal customers paying higher prices than new customers, as they find it expensive to move
So, what’s the solution? Just how do loyal customers unlock themselves from the shackles of unappreciative suppliers and join the deal-dancing being afforded to attract new customers?
At Elless, we know it’s about being brave. It’s about knowing where to look. It’s about asking the right questions of your storage provider. It’s about expecting better and driving for more.
We know what it takes to do that because we’re already working with businesses to champion their loyalty, re-establish the right partnerships and save them money.
Want to find out how we can help you? Send us a copy of your latest invoice and we’ll not only tell you how big your Loyalty Penalty is – we’ll help you solve it.
Get in touch with the Elless team today.
Reader Interactions