The CEOs of HPE and IBM said last week that it was right to raise prices in light of rising labor and supply chain costs, and advised partners to do the same (see here and here).

But how are some of the UK’s leading channel partners approaching this thorny subject?

The weak pound, combined with supply chain and economic issues, has prompted some suppliers to raise their UK list prices from this month (by around 5-15 per cent in some cases, according to some comments). And wage inflation and skills shortages are piling even more costs on firms in our sector, especially those with a service bent.

But to what extent and how quickly should these cost and price increases be passed on to customers?

Here we ask the leaders of eight UK channel partners to get the inside scoop on their strategy.

“We must abstain at least until the New Year”

Ricky Segal, CEO of Transputec

Supplier CEOs have been vocal about the need to raise prices and advised channel partners to do the same. Looking at the products and services you offer, how critical is the situation for your business?

I don’t agree with the US CEO’s suggestion that we start raising prices. This may be good for the US, but it is counterproductive for the UK. Of course we all want to raise prices, but I think it’s a bit early and we should hold off until at least the New Year. It would be wrong to raise prices now and further destabilize an already unstable market by triggering a deep recession that will lead to higher unemployment to increase the misery of working people.

To what extent do you expect to absorb recent/current cost increases around personnel and hardware/software prices, at least in the short term?

Our board is unanimous in this decision. We plan not to raise prices, monitoring the situation until the New Year. However, we are redoubling our efforts to talk to all our staff about market conditions, improving their job security against the turbulent times ahead. We plan to help those who are most vulnerable with financial support, while resisting general demands for wage increases.

What’s the right approach…should price increases be all at once or in stages, for example, and to what extent will your strategy vary when it comes to consulting, managed services and reselling products?

There is no single solution that can handle the different parts of the business. Our business can be divided into three main categories: hardware/software, managed service contracts and professional services. Price increases for managed service contracts will be the most challenging because they are all unique, some with different inflationary increase provisions and different renewal anniversaries. Our customers are in the same boat, they don’t want to pay more and pass the increases down the chain.

We will take a longer-term view on professional services and resist increases and monitor the situation through the fourth quarter. Hardware and software prices are likely to be passed on to customers as suppliers increase their prices to us. I suspect that margins will decrease initially due to increased competition and the possibility of abortions on some costs.

HPE’s CEO recently described HPE as a “market leader” when it comes to price increases. Is it better to lead or to follow?

disagree Running a price increase fee may be fine for some but not for us. Transputec values ​​the loyalty of its staff and customers over the short-term decline in profits. We are a sensible company by nature and that has served us well over the past 35 years.

When dealing with large increases in your overhead and the cost of the products you carry, what’s your best tip for protecting margins while keeping customers happy?

    • Overcommunicate with your staff and help when needed.
    • First address the individual needs of the most vulnerable. Personalize the support you offer to each person in need.
    • Reduce waste in your organization.
    • Improve operational efficiency
    • Maintain loyalty and share the pain with your staff and customers

“Saying you’re the market leader when it comes to raising prices sounds like the dumbest statement ever.” Which UK affiliate leader said that? See next page for more…

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