If there’s one thing that purveyors of production print equipment relish, it’s the opportunity to furnish services and supplies. The profit from the initial sale can be lucrative, depending on the machine in question and your definition of lucrative. But higher margins can be realized from the myriad substrates that follow.
It also offers a prime opportunity to follow through with complete workflow offerings, be they finishing equipment or in-line/off-line printing embellishments. On the latter count, spot UV, specialty inks, foiling and embossing solutions can transform digital output into value pieces of artistic quality, ideal for signage, packaging, marketing and any other number of applications. Finding that right client—a commercial shop, in-plant/CRD or marketing specialist can open dealers up to an endless parade of possibilities.
We’re really talking about two different things here, but taken as a whole, it paints a value proposition picture for dealers to consider. As we continue this month’s State of the Industry report on production print, our dealer panelists discuss their aftermarket approach.
There’s a philosophy within the halls of Cincinnati-based Prosource that reminds team members that “Sales get the first unit and service gets the next one.” That underscores the importance of the tech service department, and Prosource helps put its crew in a position to have success courtesy of its in-house training center, notes Matt Heister, the company’s director of production print.
“Our team is continually learning and developing to ensure they are equipped to best support our customers on the front lines,” he said. “Maintaining that high level of customer satisfaction that we value is a must to continue to have growth opportunities within our customer base.”
Prosource’s infrastructure is also built to produce positive results. The dealer maintains a significant cache of parts and supplies in its local offices to mitigate downtime. The same can be said for the dealer’s partners for finishing and embellishment products.
Off-line finishing gear is complemented by embellishment solutions that Prosource carries, from Konica Minolta’s AccurioShine to Xerox’s clear and metallic inks. “[This] means our customer can achieve even more with their Prosource production equipment,” Heister added.
Cultivating Success
Maintaining quality service support is paramount for dealers, particularly in accounts where there’s an opportunity to introduce other offerings into a deal. Rick Salcedo, president and CEO of Aston, Pennsylvania-based KDI Office Technology, notes it ensures not just customer satisfaction but can also be a gateway to additional sales and long-term relationships.
“From a supplies and service standpoint, the continuous need for consumables and maintenance offers substantial opportunities,” Salcedo said. “Our clients rely on us for reliable and cost-effective supplies, which helps to drive recurring revenue and strengthen our customer relationships.”
KDI also goes deep in the offline finishing catalog via binding, trimming and embellishment solutions that add an exclamation point to printed materials. “By providing these adjacent finishing and embellishment options, we enable our clients to streamline their operations and enhance the quality of their output, making us a comprehensive partner in their production print needs,” he added.
The optimal path to driving significant growth and profitability can be found by focusing on supplies and services that add value, bolster client satisfaction and align with current market trends, according to James Loffler, president of Loffler Companies in St. Louis Park, Minnesota. On the finishing end, his companies offers near-line equipment.
“By offering specialty products, comprehensive support, and innovative services, dealers can differentiate themselves, build stronger customer relationships, and create new revenue streams,” he said.
Coached Techs
With the expansion of its industrial print product line, Edwards Business Systems and Virginia Business Systems saw the importance of ensuring its dedicated techs received the necessary additional service training. Mike Horvath, corporate director of industrial print and regional sales, notes the techs continuously engage in virtual and on-site training with the dealer’s manufacturers, attaining the necessary certifications.
“Capturing new revenue streams without relying solely on manufacturer service support has been beneficial,” he noted. “We also work with select third-party manufacturers for offline equipment needs.”
Lauren Hanna, vice president of sales for Cleveland-based Blue Technologies, sees the supplies and service component as being a lucrative opportunity, depending upon the vertical a provider is addressing. Production print lacks that “race to the bottom” mentality, and without a lot of competitors (at least in her region) the objective centers on demonstrating the value of what the client is printing.
“If you can show them the ROI, what they can get back out of it, it can be quite lucrative because you’re seeing new supplies get added into your offering,” she said. “In the large-format and label world, you’re not on a cost-per-page program. It involves more supplies than just CMYK toner and label materials, not to mention the various finishing equipment and components such as printheads.”
Hanna loves to read studies that dive into the psychology of print. “There are studies that show if you use a higher quality of paper, customers will pay their invoices quicker,” she said. “How can we use different media to grab people’s attention? It’s important to add a little flair at a minimum of cost.”
Client Shielding
It’s vital to be able to offer supplies, service and finishing equipment that locks a client into one provider, notes Joe Blatchford, CEO of Image 2000. While it’s not necessary that a dealer can service the full range of finishing equipment, the dealer at least needs to have a resource for it. Even then, not covering all contingencies can lead down a slippery slope.
“You always want to control your customer,” Blatchford said. “The minute you start bringing outside people or vendors into it, then it becomes a different animal. You’re opening yourself up to someone else who can do it all.”
From a profitability standpoint, it behooves dealers to understand all areas of a production deal. Variables including the use of large sheets and area coverage of the intended documents to be printed can positively or negatively impact the profitability of each transaction, notes Dave Alfredo, vice president production, United Business Technologies of Gaithersburg, Maryland.
On the production back end, the dealer enlists a variety of sources to complete the end-to-end solution. “UBT works with various third-party post-printing finishing partners to provide complete solutions to meet customer needs in conjunction with their production print devices,” he said.
