The General Session at Lexmark’s 2013 dealer meeting.
Last month Lexmark hosted a dealer meeting in Lexington, KY. The two-day event with the theme, “Bridge Beyond,” was a non-stop educational experience for attendees bordering on information overload, albeit in a good way for the 125+ Lexmark dealers in attendance. There was plenty of information about trends, new initiatives, strategies, products, and solutions presented at the General Session and the various breakout sessions. Here’s my Top 10 take homes from the event.
Solutions, solutions, solutions – If I had a dollar for every time I heard the word “solutions” during my two days in Lexington, well, to be honest, I’d have a lot of dollars. Solutions signify a change at Lexmark. As Ron Binkauskas, vice president & GM, North American imaging solutions and services, noted in the General Session, “We are no longer a printer company, we’re a solutions company.”
Mike Johnson, vice president North American Business Channels & SMB, underscored those words by talking about how this transformation into a solutions company will be one of Lexmark’s key success factors and that Lexmark wants to take dealers along on that ride. “We want you to make that transformation with us,” he said. “We want to transform you with more areas to go into the account with solutions and have pricing power.”
Lexmark values dealer feedback – Lexmark has never been shy about soliciting their dealers for advice, ensuring that they can more effectively work together going forward. The message from Lexmark executives was loud and clear at every corner of the event and that’s that they want and value dealer feedback. That’s not idle talk either. While attending some of the breakout sessions I noticed Lexmark personnel listening to their dealers and taking notes. You don’t see that at other OEM dealer meetings. As Binkauskas told dealers in the General Session, “It’s about your feedback, I don’t want you to hold back, I want you to share insights with us as to what’s going to work, what’s not going to work…”
Lexmark is outspending the competition in the percentage of money devoted to R&D – One interesting nugget of information I left Lexington with was that as part of their commitment to innovation, Lexmark is the leader in money reinvested to bring new technology to market. According to Brock Saladin, vice president & general manager Global Channel Sales & Marketing, compared to the competition, Lexmark spends 10 percent on R&D to bring new products, new solutions, and new services to market in order to differentiate and bring value to customers.
Lexmark’s worldwide BSD channel is growing as is its hardware revenues – On a worldwide basis Lexmark reports that it has grown its BSD partners by more than 650 worldwide while hardware revenue growth is exceeding the market at just under 40 percent. At the same time, in the large workgroup space, a space critical to Lexmark and its dealers because it drives supplies sales and service opportunities, grew by 19 percent.
The time is right to embrace A4 – It shouldn’t come as an surprise that Lexmark is bullish on A4, still that message was emphasized throughout the event and was one of the take homes for Kurt Snouffer, president of Office Concepts in Fort Wayne, IN. “A4 has arrived, no question about it, we’re seeing a lot of activity there, but it’s not enough to just go out and market A4,” he acknowledges. “That can be death by a thousand cuts for any dealer that falls into that game. The takeaway is A4 is here, but you better be bundling A4 with customizable solutions. That’s going to give us stickiness into the accounts and also give us the repeating revenues at the margins we need to survive.”
Smart MFPs – In keeping with the solutions theme, Lexmark emphasized the need for dealers to embrace the smart MFP. “Smart MFPs are the core to our success and key to total solution delivery,” said Saladin. “A game-changing dealer that seizes on this trend that knows how to deliver device-based solutions [will find the Smart MFP] allows him to create new revenue streams by implementing both professional services as well as asset management tools. To wrap all of that around this managed services agreement, we think this creates a position of strength and differentiation in the marketplace.”
New and improved programs for 2013 – Johnson outlined Lexmark’s initiatives for 2013, some the result of input from dealers on Lexmark’s Advisory Board. Those include quarterly purchase incentives, which enable dealers to add dollars to their program by selling down-the-street business with Lexmark and a new solutions program that provides incentives to dealers who sell Lexmark solutions. According to Johnson 50 dealers have already signed up for the program. The goal is to raise that total to 100 by the end of June. In addition, Lexmark Add to that a National Service Program that will allow dealers to provide service to some of Lexmark’s larger accounts.
New products, etc. – According to Johnson, Lexmark’s top-selling product the past couple years has been the XS463, an entry level mono MPF. Based on the success of that product, dealers have asked Lexmark for a color version and the result is the XC2132. Johnson revealed that the reception by dealers to this product has been off charts. He also expects the XC2132 to further drive Lexmark’s color leadership in the A4 market. As a result of dealer feedback, Johnson announced that as of July 1, the XS795/798 Series, originally introduced last summer, will now ship with starter cartridges back in the box, something that Lexmark had removed from the units when they were first introduced. “We truly try to listen to our dealer network and Advisory Board on the input you give us and now we just need you to go out and sell this product. This is a flagship product for us and we need you to get behind this product as we move forward,” noted Johnson.
Lexmark is growing its solutions portfolio – Lexmark has made eight acquisitions across a variety of areas over the past few years that encompass such solutions as enterprise content management, workflow, intelligent capture, medical imaging content, and video. “These acquisitions allow Lexmark to offer end-to-end solutions for the entire life cycle of content,” observed Sean Endicott, senior manager North American Channel Business Development. “Our solutions portfolio allows you to tell that end to end story.”
Lexmark wants to go wider and deeper with their dealer network – Emphasizing again that Lexmark values dealer feedback, Johnson reported that Lexmark ranks #1 in the sweet spot of the A4 MFP market, but that they’re not satisfied with this current advantage. “We want to make this lead larger. This shows we’re winning and having success. We want to go wider and deeper, and usually when people talk wider and deeper, they’re talking about going wider and deeper with their customers. We want to go wider and deeper with you our dealer network and get more wallet share of the dealers we’re in. We want to earn that right to have more of your business.”
