The office imaging landscape is flush with dealers who have attempted to make a go of it with MPS but have either given up in frustration or become disenchanted, no longer devoting the time and effort necessary to make this a successful component of their business.
But it doesn’t have to be that way. At least that’s the opinion of some of the industry’s biggest proponents of MPS. Those folks have been around, seen plenty of failures and a few successes, and have been gracious enough to share their thoughts as to what a dealer needs to do to jumpstart their MPS business.
If you ask Tom Callinan of Strategy Development what dealers ought to do, he starts with an attitude adjustment.
“Many dealers have a negative belief now that they can’t do MPS or it’s unprofitable because they never took the time to do it correctly,” he says. “The GFI Digital’s, MOM’s, and Marco’s of the world are examples of copier companies that have done a good job with MPS,” contends Callinan. “But most have not because A, they looked at MPS as the red-headed step child, and B, they viewed it as another copier sale. If it’s a red-headed stepchild, they just told the reps, when you’re selling the copier, get the printers too. There’s no logic on pricing, just get the printers.”
“But how much service revenue can a dealer collect on two little printers?” questions Callinan. “Or they led with equipment and didn’t get the sale.”
Now what can they do to jumpstart their MPS business? “They’d have to totally forget everything they’ve done wrong over the past five or six years and totally reset,” he says. “The opportunity is there, but that’s what they have to do.”
No wonder there’s an opportunity for companies with turnkey MPS programs like Supplies Network. “We used to spend the first few years teaching resellers how to do managed print, now 95 percent of all new business we have is with guys who tried it, struggled and now are open to understanding how to improve their business model and get back to selling again,” reports Doug Johnson of Supplies Network.
Operationally, the problem he finds with most dealers who are struggling is they didn’t know how to service the account once they brought it on.
“Much of the industry focuses on sales and most of the training is on sales, and that’s valid and a great place to put the effort, but once those deals are sold, now you have to manage them and all the things that go with that,” says Johnson. “There’s ongoing client management for replenishment of supplies, people calling wanting to know where’s my toner or my printer needs to be fixed. If they’re not well prepared, well structured, and well organized to manage MPS engagements, most of that becomes reactive for the reseller and overloads their system.”
Johnson points out that dealers and resellers have grown up in a reactive world; a customer needs toner, they call, they need break fix service, they call. And those are all billable items. “But in MPS your revenue is fixed on a page basis and if you don’t automate and streamline and proactively manage those environments those same resources become inundated and don’t get anywhere.”
Supplies Network can help dealers and resellers become operationally efficient.
“We have a number of services they can buy a la carte, and pick and choose where they’ve got gaps, or where it’s reactive and they want to be proactive, or where it’s manual and they want to automate,” notes Johnson. And of course for the reseller that says it’s too complicated to manage, they buy our cost per image program where we sell them a six decimal cost per image by model and they mark it up and put it in their environment.”
Gary Willert of LMI Solutions emphasizes education and training, areas that LMI has been focused on of late, especially with the release of Peak Performance 2.0, an upgrade to its online training offering. This training is geared towards sales reps and focuses on how to sell MPS and react to objections as well as how to target vertical markets.
He acknowledges there are many dealers trying to sell MPS who aren’t as engaged in the process as they should be. “What we encourage them to do is go through all of our materials and get as prepared as you can with your sales reps. We’ve got TCO that will calculate a cost per page so you’re not going to get hurt. They just need the confidence to go out there and win some deals.”
Another strategy for jumpstarting an MPS business is an issue that’s been addressed over and over again at industry conferences—a commitment to selling MPS from the top down within the dealership.
“It’s not just saying you’re going to do it, but putting a structure in place and having someone spearhead the program,” recommends Willert. “If no one is really focusing on it, BTA dealer channel type dealers are going to gravitate towards what got them there to begin with and that’s selling boxes.”
Incenting reps to sell MPS is another valid strategy. “Some of the more successful dealers require their copier reps meet a quota for MPS engagements,” states Willert. “If they want to hit their numbers they can sell all the copiers in the world, but if they don’t hit their MPS numbers they’re not going to get their quota and that’s going to affect their pocketbooks. That’s a good incentive to get reps engaged.”
Mention MPS around Sarah Henderson, director, MPS operations for West Point Products, and you’re going to get an earful whether you like it or not. She identifies three success criteria, which serve as a foundation for jumpstarting an MPS program: someone in senior management who is championing the MPS program, training in the MPS sales process, and a business plan with a timeline associated with it such as only offering MPS in certain circumstances or leading with MPS in certain types of accounts.
Another strategy to get things back on track is partnering with an experienced MPS provider, such as West Point Products. However, this may necessitate an attitude adjustment on the part of the reseller.
“Many dealers want to control every aspect of a managed print services program and where they get bogged down is in the operational delivery and some of the steps in the process,” says Henderson. “If that’s something holding them back from being more successful, they need to reevaluate what they need to focus on and what other company has a solution that could be more effective for them.”
Henderson acknowledges that dealers are good at selling and building customer relationships, but stumble in other areas. “If I’m really good at selling solutions, but not so good on the back end and day to day management of the deals, is there someone to help me with that? If that’s bogging you down and costing you money there’s people who can do that for you.”
At the top of Henderson’s bag of tricks is West Point’s Axess, a flexible MPS program. “If they employ service technicians and want to deploy their own service techs, our program allows them to do that. Or if they don’t employ service techs, we can dispatch one for them. They need to decide which model they’re most comfortable with.”
West McDonald, a consultant with FocusMPS, recommends moving away from a cost per page discussion. “One’s a program and the other is a fulfillment mechanism,” opines McDonald.
He offers an interesting take on what it takes to be better at selling MPS. “Most dealers are looking for an infusion of energy, but what they’re really lacking is additional solutions layers in their MPS programs.”
That means helping customers reduce print volumes or proactively helping them convert color output into monochrome to reduce expenses. A good example of how to do the latter is using software that sets rules so that if a user is going to print an e-mail or a Web page it automatically defaults to black & white.
“Emphasizing a solutions/services led offering is a good way to get away from the cost per page conversation and how MPS will save you money,” states McDonald.
But how does one get started down that path if they haven’t been there before? Here’s where McDonald recommends gateway solutions. “It’s like gateway drugs, start light then move up; the easiest is secure release printing available from companies like PaperCut, Ringdale, or Pharos.”
Once the gateway solution like one of these is installed the minimum volume reduction he’s seen in customer locations is 20 percent. “More typical is 25-30 percent and that’s from wasted pages the customer shouldn’t be printing in the first place,” adds McDonald.
McDonald isn’t surprised that people are still stumbling and fumbling with MPS despite all the educational opportunities in the market. The proof is in the numbers and he references studies from HP and Xerox that place the percentage of customers under MPS contracts somewhere between 11 and 13 percent depending on whose study you’re looking at. Either way, that’s a huge amount of customers not with the program, which means MPS providers aren’t doing a very good job of getting across the value proposition.
It goes back to what he said earlier with talking about cost per page and 30 percent savings. “The standard stuff you spit out when you go into an office to get a deal,” says McDonald. “The minute customers hear, ‘I’m going to save you money,’ it’s ‘yeah, you and every other vendor I’ve dealt with over the years.’”
Mike Lamothe, founder of ODC, an organization that provides dealers and OEMs with strategic support in MPS and MDS, feels that there’s a lack of maturity among dealers when it comes to MPS. “Not that it’s a bad thing. There’s a subset of dealers doing very well, but it’s a much larger group that are now realizing we better get into this and where do I get the right info to help us?”
Even though he feels that most dealers realize they need to have a program in place, a lot are doing what he calls “quasi MPS.” Those are the folks that could use a jumpstart.
One reason why some dealers have stumbled with MPS in Lamothe’s opinion is the lack of an ERP system. “You start offering MPS, and you’re offering a CPC on a printer program and you’re not able to track costs, then you find out a year and a half in you’re losing money on a number of deals. The sophistication of ERP systems will allow you to manage all aspects of the business more effectively.”
ODC recently entered into a partnership with FMaudit and Lamothe points out that their technology ties into an ERP system so you can connect between those two backend applications on an assessment, resulting in an automated assessment process. “We’ve upgraded our assessment process and software to do a surface level assessment in 15 minutes. We also have a long form assessment that will take as long as required. We have to understand the level of sophistication in order for our business to offer a more systematic solution and connect it internally so the internal processes allow us to manage the business more effectively.”
Lamothe adds that if a reseller wants to enhance what they’re doing in MPS, they’d better understand costs and profits. BTA had a stat out a few years ago that 50 percent of dealers that initially started in MPS are no longer offering it because they were losing money. “They had no software in place, no sales strategy, they didn’t train their sales reps, and they didn’t have an internal MPS champion,” laments Lamothe.
ODC now offers MPS in a Tablet to support sales reps when they get in front of the customer. “We can close more of that business and then our assessment tool continues to evolve, and what we’re doing is building in automation to simplify and speed up the process without losing any of the content that’s necessary,” says Lamothe.
A definitive authority on MPS and an advocate of education is Greg Walters, president of the Managed Print Services Association (MPSA). He suggests membership in MPSA, which provides an opportunity for dealers, resellers, and MPS program providers to network with each other.
“It’s a two-way street and sounds cliché, but you get out whatever you put in,” states Walters about membership in MPSA. “As an all volunteer non-profit association it’s the members who get on committees and become part of the dialog. There’s a lot of synergies that occur in the dialog. They see how others have defined MPS in their likeness and can feel better about their particular definition. Your mindshare is with other folks in the same boat. There’s no agenda where you’re going to walk into a meeting and somebody is going to try and sell you their program.”
But their experiences might help you jumpstart your MPS business.
