Last week we published the first part in a two-part series on the pitfalls of MPS. We began by noting that MPS has been around long enough to identify the many pitfalls that can prevent a dealer from being successful. Some of the pitfalls have been learned firsthand others by watching others fail. We asked successful MPS dealers and MPS advocates from the document imaging industry to share with us the biggest pitfalls they’ve seen or experienced over the course of their careers. This is the continuation and concluding part of that series.
Lindsay Bohon, vice president sales, GreatAmerica Financial Services Corp., identifies one of the biggest pitfalls as not having a clear picture of the devices being taken under contract.
Lindsay Bohon
“That certainly demands a lot of expense on the dealer either up front or over time,” she says. “And the thing that plays off that too is the inability to replace devices. When you think about efficiencies in the environment and when you’re going in with a low payment to secure that service agreement you are having to service equipment that’s extremely costly. From a vendor’s perspective trying to move that customer from a service-only contract, replacing hardware, and raising that monthly payment is a very difficult move. Often or not, that inability to get the customer to move or change equipment is not an easy task and ends up costing the customer more money.”
She adds that for those dealers doing more of a rip and replace or even a hybrid approach where they’re committing up front on cost savings, where they can save a customer ‘X percent today’ to win the deal then they’re finding out that is maybe all they can save and they’re cutting into the gross profit they could have had on the deal.
One of the pitfalls so many in the industry witness is not hiring for the right skill set. “We all know that MPS has a much longer sales cycle. The down the street MFP sales rep that is used to turning deals on a quicker pace, MPS takes a longer time to turn over. [That’s why it’s important that] the compensation marries up with the long-term initiatives for the company.”
Mitch Filby
Mitchell Filby, managing director of First Rock Consulting and author of “Rest in Print: from office printing to the rise in managed services,” will be one of the first consultants to tell you that there are no quick wins in the MPS business.
“MPS can be fraught with danger if you don’t plan and implement internally first,” he opines. “Building the right processes first, then testing these processes will ensure more learning than you can ever imagine. This is where you’ll learn the phrase ‘more ways to skin a cat’ again.”
He also cautions against placing current clients in a buying cycle if you go to them with an offer that does not meet their expectations or is limited in what it provides.
“Your MPS may have the adverse effect than you expect,” states Filby. “Current clients are the best place to start, but be careful in your approach to MPS with them. Baby steps may work better.”
Another pitfall he’s witnessed is a failure to understand the challenges of managing the basics internally first, notably support for devices and supplies. “How you will bill this to the client and how will this be recognized internally?” asks Filby.
Another pitfall is assuming that MPS is simple just because it looks like it should be simple.
“It isn’t,” emphasizes Filby.
Not doing one’s due diligence when selecting a MPS partner is another pitfall.
“Pick your partners well,” observes Filby. “For example, you may need a different mix of partners that provide you the best leverage/advantage /differentiation going to market. It could be a strong A4 brand, and a different A3 brand, or one brand that is complimentary in both.”
The biggest pitfall that dealers offering MPS for the first time encounter, according to West McDonald, vice president of business development, Print Audit, is that it’s much harder than they originally expected it to be.
“It’s different enough from a traditional supply and service model so there’s more moving parts and more expertise is required,” he says. “Another pitfall is people aren’t aware of just how many dealers offer managed print or say they do. It’s an ocean of people saying they provide ‘Managed Print Services’ simply because they can build in cost per page.”
That also leads to a misunderstanding of the number of opportunities available to them.
West McDonald
“More and more I’m talking to sales reps that are going into accounts that already have an MPS contract in place and they don’t know how to deal with that,” says McDonald. “They just automatically walk away from it. They don’t realize they can manage the print stream, meaning how efficiently are they printing, are they printing color where they should be are they duplexing the way they need to, are they printing things competitively that could be better served by some kind of digital form?’”
This goes back to McDonald’s comment about dealers thinking that MPS is simpler than it is.
“If they want to get into it they better raise their game because there are so many players professing to do it. And customers, unfortunately, aren’t able to filter through the noise.”
Ken Stewart
Ken Stewart, an analyst with Photizo Group reports that the biggest pitfall a dealer getting into MPS for the first time is thinking that it’s the same business as they’re used to.
“They don’t understand they’re part of the bigger picture,” he says. “Guys come in and think print is the end all be all—it’s just one small part of a strategy to manage a business portfolio. These guys get tiresome to deal with when that’s all they talk about. I don’t think customers take that seriously.”
The second pitfall is spewing acronyms while not understanding the context.
“In general they don’t pass the smell test when talking with line managers or C-level executives and come off trying to be something they’re not,” says Stewart.
“Many resellers we speak to believe that a copier rep can become a good Managed Print Services rep and it’s proved out that’s not the case,” opines Christian Pepper, director of marketing and business intelligence at LMI Solutions. “A copier rep is a totally different animal than a MPS rep. They’re very much hardware driven and their mentality is to go into an account and replace hardware with their hardware.”
Another pitfall is not having a compensation plan that rewards MPS specialists.
“The compensation plan needs to include an element of winning the business and an element of managing that client’s expectations and their expectations to realize savings and workflow improvements,” says Pepper.
Christian Pepper
Coincidentally, the most commonly downloaded call to action on LMI’s website is its MPS compensation guide.
Pepper also emphasizes the importance of keeping one’s website up to date.
“A lot of companies put up information on their websites in 2010 or 2011 about Managed Print and their entire organization and then forgot about it,” he says. “That’s out of date and that’s a big mistake in the Managed Print area and with a lot of businesses in general. You can’t just update your website once every few years. It can’t be just a one-way piece of glass that people can look into your business. If you’re marketing your content and it’s out of date and irrelevant and working against you. If your website is not up to date with the latest content and the tools and services you offer, then you’re better off taking that content down then leaving it up.”
For Supplies Network’s Sarah Custer, there’s really two major buckets, sales and operations and each can each have its own pitfalls.
Sarah Custer
“From a sales standpoint where I see resellers struggle is when they’re not willing to dedicate at least one person internally to understand the sales process of MPS,” she says. “It’s a lot different than a transactional sale and the selling cycle is very different. There has to be somebody who is operationally educated but sales savvy. It takes a special individual to deliver that well. The resellers who are doing the best job have those solutions sales type folks and are dedicated to finding the right sales team.”
Another pitfall are the operational challenges that can occur from time to time.
“Finding either an internal team or partner who can make sure there are strong operational processes and procedures are critical to ensure profitability. Without operational discipline a lot of money can be lost,” emphasizes Custer. “If the reseller is not paying close attention to how they’re delivering that MPS engagement something they thought would be really profitable can turn out to be negative in a flash.”
Devon Thompson
Devon Thompson, manager customer experience at PrintFleet identifies a pitfall common to many early MPS adopters and that’s a failure to drive what amounts to a significant organizational change, from the top down. “There needs to be someone to champion the transition and really lead the charge,” she says. “If it’s not coming from that level it’s very likely the program won’t get off the ground. We’ve worked with resellers who bring on an MPS Specialist and others who suggest their sales team also use MPS as an add-on. The sales team needs to be incented – it’s always been the ‘what’s in it for me?’ mentality.”
A lack of training is another potential pitfall.
“Software training is a must and ensuring you have a knowledgeable individual managing the tools and the success of the automated processes,” contends Thompson. “Additionally, PrintFleet is a tool that enables our customers to add value to their already successful business. The tool shouldn’t be what they’re selling. They need to continue to focus on their differentiators. However, it does help to ensure you choose the tool you want enabling your program.”
