There are two distinct approaches to MPS and they don’t mix well. In accounts with fewer than 30 total devices, copier and print centric devices, selling an outsourced version of MPS is detrimental. An outsourced MPS program involves a company putting the laser printers under a contract that includes toner cartridges and service, usually based on a cost-per-image (CPI).
The issue with a small account is that there is not a lot of opportunity to change devices so the quarterly business review (QBR) becomes very static and is usually handled by a lower level person in your account. Since there isn’t a lot of change in the contract at term your customer has a commodity: They know they spend $XXX per month and in their minds that monthly fee is for the support of their printers. They end up pricing out your contract and next thing you know your margins are reduced substantially or you lose your customer.
With these smaller accounts it is critical to conduct an upfront study, also called an assessment, that focuses on how the company uses their print and copy devices and configuring their output fleet to match their actual paper needs. This usually results in an immediate move to a balanced deployment, where paper requirements are matched to devices, including A3 MFPs and A4 MFPs as well as single function printers (SFP), some color enabled. Through this balanced deployment there is usually significant cost savings, which is the value proposition in smaller accounts.
The smaller account sale is almost always sold to the business owner or CFO since it involves changes to how end users print and this “C-level” involvement is required to support that change.
In larger accounts, those with 75 or more print devices, a balanced deployment at the onset of the agreement becomes detrimental due to the fact that the changes touch so many people that the decision maker doesn’t want to deal with the political and cultural change. Keep in mind that you will rarely find a “C-level” person in a large account that cares enough about print that they will champion the initiative. In a company with 75+ devices you will have a minimum of 300 employees and this CEO or CFO will have “bigger fish to fry” than their print infrastructure.
Nevertheless, a 75-device company will result in a $2,500 per month range aftermarket agreement with outsourced MPS , so it is a nice customer. In comparison, you’d need to sell about 20 copiers to gain that same aftermarket revenue.
The great thing with large accounts is that there is a lot of change in their print environment. Even at the low end, 75 devices, and a five-year refresh cycle 13 devices are being replaced each year. Add in copiers at an 8:1 ratio and you have 9 – 10 copier devices to add to your base. Scale that up to a 150 device account and you have quite a bit of new equipment opportunity.
In these accounts the QBR becomes the primary event to refresh devices and gain share of wallet. The balanced deployment happens over time rather than at the onset of the contract.
The consistent change in the print environment results in a new contract being written as major refresh takes place and effectively turns your contract into a perpetual three year agreement. The customer benefits from consistent improvements to their fleet that are culturally and politically acceptable and you benefit from having a long-term contract where you make a fair profit for your consulting on the print environment.
Deploying the wrong approach with MPS will result in a low close ratio and low margins so make sure you understand and can execute on both approaches.
