We have typically increased wages ahead of inflation and have had no choice but to pass this onto our customers
Etienne Greeff, CEO, Flow Communications
Vendor CEOs have been vocal about the need to raise prices and have advised channel partners to do the same. Looking at both the products and services you offer, how critical is the situation for your business?
We have experienced huge wage inflation as we know that there is huge financial pressure on our employees. This is especially acute for the more junior members of staff. We have typically increased wages ahead of inflation and have had no choice but to pass this onto our customers.
To what extent do you expect to absorb recent/ongoing cost increases around headcount and hardware/software prices, at least in the short term?
We have absorbed most of the price increases but are a commercial business after all. Our biggest cost by a wide margin is our staff cost so there isn't a lot of room for manoeuvre. As an executive team we have voluntarily deferred a significant portion of our wages to ease the situation.
What's the right approach…should price rises be done in one go, or in stages, for instance, and to what extent will your strategy vary when it comes to consultancy, managed services and product resale?
From a price increase point of view we have reduced margin on product. With service we have looked at individual customers but believe that it is best to only do increases infrequently rather than death by a thousand cuts.
HPE's CEO recently described HPE as a ‘market leader' when it comes to price rises. Is it better to lead or follow?
Not sure if I want to be known as market leader in price increases. I spend more time worrying about our own customers and staff than benchmarking against industry. These issues matter to staff and customers and should not be PR fodder.
When dealing with big increases in your overheads and the price of the products you carry, what's your top tip for protecting margins while - at the same time - keeping customers happy?
I would concentrate on the areas where you truly add value and re look at your service and asks which parts are not used or valuable. In times of recession efficiency is king and only the fittest will survive .
To raise or not to raise? Where does Core's CCO Rye Austin stand on the subject? See next page for more...
