MPS advocates and early adopters discuss lessons learned about marketing MPS over the years.
MPS has now been around long enough now for it to possess an established a track record within the document imaging industry. Indeed, there’s a wealth of dealers offering MPS to their customers, some doing well, others stumbling and fumbling, but trying to get a handle on it just the same.
Kevin Morris, OneDoc
We thought it would be interesting to connect with a few dealers who are doing it well along with some of the leading advocates of the MPS movement to get their perspectives on how the market, MPS offerings, and the perception of MPS has changed over the past several years as well as lessons learned marketing MPS.
Even though the industry has been marketing, promoting, and dishing about MPS for a number of years now, Kevin Morris, president, OneDOC Managed Print Services, LLC in Oklahoma City, OK, contends that most [customers] still don’t know what MPS is. That’s a good lesson for anyone marketing MPS.
“That’s the reality from a client perspective,” he says. “From a provider perspective, just about everybody in the industry is involved in it. MPS has definitely changed from the perspective of increased competition, especially in the enterprise market. Everybody is in that market and there’s a lot of companies that don’t really provide MPS calling it MPS. It’s just re-labeled service and supplies agreements.”
Morris has been knee deep in the MPS world since 2002, and whether it’s been OneDOC, the company he founded in 2009; OneSource Document Management, the company he founded in 2003, or Print, Inc., where he served as a MPS consultant from 2002-2003, the organizations he’s been involved with have been on a mission to do things differently than everybody else.
“As far as our company, we’re not a whole lot different than we were back then as far as how we attack our market,” says Morris. “It’s just a different perspective.”
Nathan Maust, ASI Business Solutions
When it comes to dealers who offer MPS programs, Morris doesn’t think that’s changed all that much.
“It’s just another way of marketing a whole bunch of equipment.”
Nathan Maust, a major account executive with ASI Business Solutions in Dallas, TX, knows MPS and he’s seen some changes in regards to market perception since 2004.
“There are a lot of companies from an end user perspective that were burned by MPS engagements, so when you approach them from a break-fix, toner, auto fulfillment [perspective] it’s a message they’ve heard millions of times and they’ve become resistant to it.”
That’s one of the reasons that ASI’s approach to MPS is not a device centric, page-focused managed print offering, but focused more on intelligent print management, print governance, and addressing end user printing behaviors.
“That’s a message the market is much more responsive to,” states Maust.
Pat Russell, ImageNet Consulting
Pat Russell, President and CEO of ImageNet Consulting, sees the improvement in the software offerings as being the most positive change.
“Ultimately our goals are the same, and that’s managing the print environment for our customers. The change has been more with the software piece that goes with it, such as uniFlow, PaperCut, etc. PaperCut seems to be getting a lot of traction [recently] because it’s very reasonably priced and easy to install. I would say that’s been the biggest change in the 10 years we’ve been offering [MPS] — more efficiencies around the software solutions.”
“The biggest change the market has seen is the massive commoditization of MPS,” opines Christian Pepper, director of marketing and business intelligence at LMI Solutions.
Christian Pepper, LMI
When Pepper first started making presentations on managed print he’d ask resellers how much they charged for a monochrome print. He discovered the average price was about 2.5 cents per page. Fast forward a few years later and the average price had dropped to about a penny per page or 8 mils.
“There are many MPS providers taking on monochrome fleets and charging a half a cent per page for supplies and service,” observes Pepper. “That’s the most dramatic change.”
“When I started almost 13 years ago there was great promise about all that MPS could do, but it only delivered on two [things],” states West McDonald, vice president of business development, Print Audit. “One was billing per page and the second was auto toner fulfillment.”
Where MPS and MPS providers have faltered are automated service management and providing customers with quarterly reviews. That may be why there’s less than a 30 percent customer retention rate for dealers offering MPS, according to estimates from Photizo Group analyst Ken Stewart.
West McDonald, Print Audit
“In other words, 70 percent or higher are going to do it and then leave,” says McDonald.
What’s the problem?
“We haven’t done enough work on delivering on the promise we made in the first place,” responds McDonald. “Second, the world has changed. Fifteen, sixteen years is a long time, especially when technology is involved.”
He explains that the original concept for MPS was built around limited technology and focused around the devices.
“Now we live in a world of micro-manufacturing and cars that park themselves and every device under the sun is monitored and managed in this Internet of things,” observes McDonald. “But MPS hasn’t evolved to catch up to that. The market for managing people’s print is still there, but based on the [original] model we built for MPS, its days are limited.”
Ken Stewart, Photizo
“The more things change, the more things remain the same,” states Photizo’s Ken Stewart. “MPS hasn’t changed much in terms of its original value proposition, but regardless of how the industry is messaging and morphing the offering, I don’t think customers are receiving it. The technology providers have matured and the offerings have become more streamlined, but it’s a race to the bottom.”
Even for customers who understand MPS, Stewart says what Photizo is seeing from the many providers, whether they be the OEMs or the dealer channel, is that each simply wraps their own bow around the same package.
“There’s so many variations of how people define MPS it can be hard to compare all the programs in the market,” concurs Sarah Custer, director of service and solutions sales for Supplies Network. “When you look under the hood there are a lot of differences on how operational elements are executed. If anything the bar is raising and there’s less room for someone just manually billing for clicks at the end of the month [and marketing that as MPS].”
Sarah Custer, Supplies Network
Custer has found buyers to be more educated about MPS than in the past. Another change, at least for those with a working knowledge of MPS, is that customers are looking for what Custer describes as a more operational sophistication in their engagement such as an online portal that provides a snapshot of the environment including device level detail and critical information such as when supplies are being shipped and needed service and maintenance information.
“We have seen a lot of change with MPS over the last several years,” says Lindsay Bohon, vice president sales, GreatAmerica Financial Services Corp. “When MPS came into the market it was exciting, it was innovative, and the initial hype led to a flurry of sales and marketing tactics.”
It wasn’t long before resellers became disillusioned and frustrated for a number of reasons, the least of which were a lack of sales incentives, compensation discrepancies, and revenues that were less than initially expected.
“Now we’ve seen it plateau and those who have honed in, added solutions and different strategic [options] to their MPS offerings have become successful,” says Bohon. “The MPSA has recognized the change in the MPS model by redefining their definition of MPS and the change includes adding business processes and information as a more integral part of the definition.” (See sidebar for the MPSA’s definition of MPS.)
Devon Thompson, PrintFleet
Devon Thompson, manager, customer experience with PrintFleet, has been with the company for seven years and has followed the evolution of PrintFleet’s product line from a program that took a basic snapshot of a print environment to where the product is today, providing resellers with true automation and a focus on data analytics.
“That’s one of the biggest changes,” states Thompson. “Another major change I saw was the transition of resellers moving from ‘simply’ box selling to providing a solution, and truly understanding how they are bringing efficiencies with these tools/solutions for their customers.”
She’s also witnessed PrintFleet shift from providing simple integrations with partners to being truly connected to those partners.
“The partnerships are so much more robust, not only with our partners in the industry but encouraging our customers to have any number of partners to create their ideal solution.”
Mitch Filby, First Rock Consulting
Mitchell Filby, managing director of First Rock Consulting and author of Rest in Print: from office printing to the rise in managed services, finds that everything regarding MPS has changed during the past several years.
“End customers, especially in the medium to large enterprise markets are now searching and looking for Managed Print Service providers and most believe that a MPS solution is what they need to assist them gain added value and cost savings and operational efficiency. That was not the case 5 to 10 years ago. The market perception of MPS has now become a reality and the level of maturity of MPS has increased significantly over the last three to four years. This maturity is at both ends of the scale—the customer and the provider—both have refined and matured their view of what MPS should be and what it is.”
Driving this change in perception within the target markets are C-level executives.
“The majority of CIO’s and CFO’s and Chief Procurement Officers (CPO) understand the value proposition to some point about the MPS offering,” says Filby. “MPS in many ways looks like, smells like, tastes like, and on the surface is represented like other Managed Services offerings the client has purchased or invested in before. In some way customers adopted MPS faster than most providers understood it. They were clearer (mainly CIO’s) what they wanted to achieve from MPS. The customer wanted a way to move from a transaction play that was led by a manufacturer or was dominated by a certain technology footprint. They wanted a provider that managed their environment regardless of the logo on the box. They just wanted to pay or be charged for the outcome that they desired or expected.”
Bill Melo, Toshiba
“When we first started our offering around 2004 it was an immature market, the term MPS wasn’t coined or popularized yet, and most importantly for several years we were educating customers about what this even was, why it made sense, and what value they got out of it, and how it would work from a Toshiba perspective,” recalls Bill Melo, chief marketing executive, Toshiba America Business Solutions/Toshiba Global Commerce Solutions. “Amazingly, even though [dealers] went out and repaired MFPs every day doing the same thing for printers seemed bizarre to them as comical as that might seem these days.”
He acknowledges that MPS was initially a vendor driven market for several years.
“The good part was you got to educate your customer and be a consultant to them and there were a lot fewer competitors in those days, and the pricing was more the functionality of the value you could create rather than 10 people bidding on a deal,” says Melo.
The other change he’s witnessed regarding the perception of MPS is that many customers are familiar with MPS and have already had some experience with it whether that experience was good, bad or indifferent.
“It is unfortunately becoming more of a commodity than it used to be although there are still a lot of moving parts, still a lot to execute, and still to some degree it can be consultative, and that’s a big difference over the past couple of years,” observes Melo. “When we first started, we were making stuff as we went along. We got to take some of the early arrows and make some mistakes but along the way we got a lot of good experience and now it’s kind of a ‘machine’ for us.”
Perhaps the biggest lesson OneDOC’s Morris has learned, even if it’s something he had a strong inkling about back in the early days, was showing the customer what made his organization’s offering different from everyone else’s.
“There’s a reason it’s called ‘Managed,’” he says. “A lot of our competitors don’t really manage anything. We do. We go in and look at workflow, how they move information from Point A to Point B, how they create, distribute, and store documents. We try to show people ways to reduce their document output. The typical dealer wants to put as many pages under contract as humanly possible. We don’t look at it from that perspective. We try to do what’s truly best for the client. When we go into companies we tell them up front, we don’t warehouse equipment because we don’t know what your needs are. A lot of my competitors, regardless of your need, are going to try to sell you what’s in their warehouse.”
Another lesson Morris has learned over the years is the credibility that comes from industry accreditations, such as the CompTIA Managed Print Trustmark.
“There are probably only 100 dealers nationwide who have that CompTIA Trustmark,” reports Morris.
“The biggest thing we learned is that it’s not the same as servicing copiers,” adds ASI’s Maust. “There are a lot more processes, a lot more moving parts, inventory management both at ASI and the end client level, and more importantly much more process driven engagement.”
He explains that there’s a lot more analysis and reporting required in order to make MPS a profitable and valuable engagement.
“When we first got into MPS, it was more like here’s a cost per page for all these given printers and let’s roll with it and see how it goes,” says Maust. “Now it’s our MDOM (Measure, Design, Optimize, Manage) process that’s become critical for treating every client engagement as a managed process and as a managed service.”
For ASI it’s all about better defining the process and bringing more detail in terms of reporting to its clients.
“[That’s something] a lot of dealers talk about, but here at ASI that’s actually a measured process and something sales people are held accountable on and something where we continue to get measured feedback from our clients in terms of ‘I never had this kind of visibility or accountability with any other company I’ve worked with in this space.’ Our technology review process is really our secret sauce in client engagements.”
One of the biggest lessons that Print Audit’s McDonald has learned from dealers who have been successful at marketing MPS is that they do a good job with assessments.
“[They’re] not just walking around the floor and looking at printers,” he says.
Another lesson is that successful MPS dealers make sure they’re providing their customers with quarterly business reviews.
“Those two things alone, understanding what the solution should be in the first place and then following up once a quarter to make sure they’re on track are the biggest lessons I’ve learned watching some of the most successful companies offering managed print,” says McDonald.
He cites a third element and that’s a vendor neutral proposition where the dealer supports multiple brands of MFPs and printers within their MPS offering.
“If those three things are done correctly they’ll be able to increase their win rates from 30 percent to 70 percent,” opines McDonald. “A lot of it is filtering out those opportunities on the front end which aren’t opportunities. They’re also getting better at closing accounts they might have lost because they understand what they’re looking for, and they’re following up with [customers] and measuring against what they promised.”
“Every situation can be different,” cautions ImageNet’s Russell. “What may be a great solution for one business may not be the same solution for another. There’s not really a one-size-fits-all for any organization. Sure there are some commonalities, but we need to make sure we’re not just interrupting somebody’s business. We’re making sure the business is more efficient.”
Russell continues, “For some customers, decentralization of print is a better fit. For other customers, consolidation is a better fit. There’s a big difference between managing services and billing for a click, and providing technology solutions to improve our clients’ bottom line. We’re not just there to collect a meter and bill you for it every month.”
“One of the biggest lessons when it comes to marketing MPS is to not assume that you know everything,” opines LMI’s Pepper.
He cites an LMI specific lesson as an example. Early on LMI Founder Gary Willert couldn’t understand why people would outsource managed print to a third party, giving up that opportunity to be sticky with a customer and managing their print for an extended period of time. By listening to its customers LMI learned the reasons why they should do that.
“Because we are the consumable manufacturer and infrastructure provider, we are better equipped to manage the risk associated with MPS,” says Pepper. “This provided [dealers with] a predictable margin and enabled them to take on customers outside of their geographical area of service coverage.”
“When I work with successful providers, coming from a provider myself who was successful, it starts with the messaging and the story we tell—an articulate story where we explain to them what they can expect to experience,” states Photizo’s Stewart.
It’s important in Stewart’s opinion to understand what you are and what you aren’t when it comes to marketing MPS. It’s also essential to be operationally efficient depending on what type of customer you’re targeting.
“As we see that demarcation of the market—high-value providers that serve fewer customers but provide higher-value solutions and are more consultative versus those that just offer higher-volume solutions,” explains Stewart. “I still see a lot of providers in the middle and the waters are not quite hot enough to cook them just yet, but give them a few years and it will be.”
In the early days of Supplies Network’s MPS program West McDonald (funny how that name keeps popping up whenever MPS is mentioned), then with another company that Supplies Network was partnering with, used to say, ‘When you see one network…you’ve seen ONE network’. Experience has demonstrated every environment is truly unique.
That lesson has been instrumental in Supplies Network’s approach to the market.
“We’ve learned that we are dealing with so many different sets of expectations at the reseller and the end user level we had to build a flexible and adaptable program that allows many variations while still keeping that operational structure to allow them to scale while accommodating all environments,” states Custer. “It turns out all end users have some unique need specific to their environment.”
Another lesson Supplies Network has learned in terms of supplies replenishment is that, surprise, surprise, printers lie.
“You think everything is going great in terms of monitoring the device and when they need a supply, but there are tons of anomalies that can occur at the model level even down to the level of firmware that’s installed on a printer where you can get erroneous readings and faults for replenishment,” reveals Custer. “You have to understand each and every model that you’re managing.”
Lindsay Bohon, GreatAmerica Financials
“I look back at the market share lead we could have had in this space had we really gone all in [at the beginning] because a lot of our competitors didn’t start doing this until five or six years later,” says Toshiba’s Melo. “We’d have had a pretty significant share of the market if we had gone at it as much as we are now.”
The top three lessons GreatAmerica has learned about MPS surround compensation, the importance of properly analyzing the customer’s environment, and the importance of quarterly business reviews.
“Compensation plans always becomes top of mind whenever you think about any new program that a dealer is bringing to market—ensuring that it’s driving the long-term service revenue for MPS and most important, tying in the short-term hardware goals,” contends Bohon. “That depends on [the dealer’s] go-to-market strategy—whether it’s that land grab approach or rip and replace. The various ways MPS are offered to the market demands different compensation models.”
Honing in on the analysis, Bohon says that’s critical before finalizing a service agreement, particularly getting a handle on all the devices in that environment and being aware of whether they’re overused or underutilized as well as the toner costs.
Like some of her peers, Bohon emphasizes the importance of quarterly business reviews.
“Going in and being in front of that customer, reporting and communicating on not only the service value you’re bringing to that environment, but also the device replacements needs that are going on to ensure efficiency metrics are met.”
“The biggest lesson is understanding how truly important and invaluable the data we collect is,” says PrintFleet’s Thompson. “It’s become the core focus for PrintFleet and what our software program is built around.”
This has enabled new partnerships with the likes of IBM and Photizo in regards to Predictive Analytics as well as PrintFleet’s new relationship with MWAI.
“For us it’s focusing on the data and on the partnerships that’s going to drive more value for our customers with the product,” adds Thompson.
The other lesson that PrintFleet has learned from working with resellers is that they want the program to be a fix all, press the button, and it’s done.
“There’s a lot of heavy lifting and a lot of work that has to be done, truly understanding how you’re going to differentiate yourself in the marketplace,” observes Thompson. “What value are you going to drive? Are you going to use a basic MPS program or are there other initiatives you’re going to try besides the software program it enables? That’s what we see dealers struggle with and where we can help them based on what we’ve learned over the past 10 years.”
Not to go all negative, but one of the many lessons that Filby has learned over the years is that some MPS providers still don’t get it.
“Maybe it’s about managing the reward and recognition, but this will ultimately impact your business and you will lose market share, which in this industry is still one of the key ingredients to future sustainability,” acknowledges Filby. “We still see MPS providers focused on the solution (products) not the client’s problem or what the client is trying to achieve. This becomes evident in the client’s eye very fast.”
He’s also learned that MPS clients have become adept at sitting back and watching the different MPS providers slug it out in a race to the bottom.
“This ultimately results in the customer winning and other providers knocking themselves out of contention,” says Filby. “Ultimately, the provider winning the opportunity does this at a much lower rate than they would have it there was limited competition. On this point we may be seeing less experienced sales people come in and ratchet the service cost down to either win the business or hurt the opposition. Maybe this points to a more assertive sales style from a hardened and competitive industry. Either way, the customer likes the end outcome. Why wouldn’t they?”
Perhaps the biggest and most optimistic lesson Filby has learned is that MPS still has a long way to go, which is exciting for the industry and the customer.
“There is still an enormous opportunity for both the customer and provider,” concludes Filby.
MPSA Definition of MPS
“The active management and optimization of business processes related to documents and information, including input and output devices.”
This is an update from the past definition: “The active management and optimization of document output devices and related business processes.”
