Word play of the day: let’s take a look at reoccur and recur. They sound alike and are frequently used interchangeably. As your handy dictionary points out, the general meaning is “to happen or appear again.” The lone difference is in the frequency of each.
Let’s use an example. The neighbor’s dog bites you on a Monday, nips you again on Wednesday, then take a chunk out of your leg three months later. This is a reoccurring event—repeated without rhyme or reason, and most importantly, unscheduled and unpredictable. Now, let’s say the dog bites your ankle the second Tuesday of every month at 9 a.m. That’s recurring. It happens in a predictive manner, just like car payments, electric bills and alimony payments. Hopefully, you haven’t incurred all three expenses.
So what in the hell am I driving at? Other than the fact that you and your neighbor need to have a little conversation that may or may not include animal control, it’s a rather obvious analogy. As a dealer, your business thrives best with predictable revenue—more specifically, monthly recurring revenue (MRR)—maintaining frequency like a merry-go-round.
As we open this month’s look at hardware revenue opportunities that think outside the MFP box, we’ll see that while some offerings are largely one-and-done propositions, others have the propensity to provide at least reoccurring revenue if not a payment that you can set your watch by (Gen Z folks, don’t ask).
Finding Opportunities
There are always gateway sales that can lead to expanded business within an account. Take DocuGraphics in Charleston, South Carolina, which sells Verkada security cameras and access systems. While they don’t offer MRR, software licenses associated with cameras, access control devices and environmental sensors are sold with the system, notes CEO Thomas Fimian. These licenses can be sold/renewed in one-, three-, five- and 10-year increments.
Fimian noted how one installation brought about more work. “Incorporating the Verkada platform in your product offering does allow opportunities to learn more about the structure of the client’s network design and identify potential managed IT opportunities,” he said. “For example, adding over 80 cameras to the internal network required design, implementation and management of multiple new Ethernet switches to the network.”
Another dealer that has found prosperity with security cameras is Blue Technologies of Cleveland, which offers the MOBOTIX system through Konica Minolta. According to Lauren Hanna, vice president of sales, clients are charged a monthly support fee per camera, while also factoring in the complexity of the workflow.
“We’re always looking at how we can add an additional recurring revenue stream, especially since the world of clicks is mostly changing,” she said. “So with the camera, it’s nice that we have that base fee on this model per month.”
New Ground
Mailing equipment has proven to be a solid revenue generator for UTEC of Ann Arbor, Michigan. Folder/inserters from FP Mailing Solutions. That line came with the 2018 acquisition of Innovative Mailing Solutions, which had a client list with 1% crossover of business, meaning 99% did not engage UTEC for their MFP solutions. Cross-selling into those accounts, suffice to say, was the true MRR opportunity.
Still, Christine Liphardt, UTEC’s director of digital marketing, notes the folder/inserters pull their own weight in terms of bankable revenue. “The annuity revenue stream is consists of software, maintenance contracts, hardware maintenance and supplies for the mailing devices,” she said.
Not all hardware can directly spark ancillary inroads. Sam Stone, president of Stone’s Office Equipment, has had much success selling into accounts with Sharp’s AQUOS BOARD displays; however, they don’t have a great MRR. Still, the conversation with clients shouldn’t end there.
“Providing businesses with content management solutions will help them and make you more valuable,” Stone noted.
