Over the last couple of years, I’ve spent time with some of the best-known consultants and analysts in our industry, both in person and through attending the training and webinars they produce. In off-the-record comments, the most-common fear about the industry and financial models we know today is that they have a limited lifetime left. On a webinar recently, I asked the presenter what the changes he described would do to the service model we use today, and he said that things would be okay for the next four to five years.
There are several challenges facing service that are starting to impact our industry now, and they will continue to accelerate in the future. Let’s take a look at some of them and what we can do to protect our businesses.
Declining Print Volume
While there is generally fluctuation from year to year, the overall trend in printing is down in most segments of our industry. The only segment that shows real growth is in the high-volume and industrial print segments. This growth exists because the digital presses are taking output from the traditional offset market.
Billing Model Changes
The current cost-per-page contract is on its way out. Manufacturers and many dealers are switching to a flat monthly rate per machine, a concept known by several different names: Seat-Based Billing (SBB), One Rate, and Imaging Device as a Service (IDaaS). All of these are monthly flat-rate billing programs for devices and output, irrespective of volume.
Advent of Inkjet
In the November “Building My Business” webinar, hosted by the BTA and presented by Charles Brewer from Actionable Intelligence, he described the various vendors in our business and the mix of products they were selling. He noted that Canon, HP and Epson were all delivering high-speed, high-volume inkjet printers that target the mid-range color devices that are most dealers’ bread and butter.
In his presentation, he showed the introduction rate of new devices this year, 28 percent of which were color ink-jet devices, compared to 21 percent for new A3 color and mono devices combined.
I visited Print18 this year, and the one trend that stood out to me was that ink was omnipresent. Every major manufacturer had inkjet devices on display. These devices included very high-volume digital presses, wide-format devices and custom-embellishment devices. If they can make high-volume, high-quality inkjet presses, they can do the same with business-class machines.
Move from A3 to A4
One other trend identified by Brewer is the manufacturers’ shift in focus from A3 to A4 devices. All of the major manufacturers are increasing the lineup of A4 devices they offer. In the presentation he made, the number of new A3 models, both color and monochrome introduced this year totaled 41 percent of the new models introduced.
Consolidation
Another challenge is the continued consolidation of dealers in our industry. Marco, Pacific Office Automation, DEX, Visual Edge and Novatech are a few of the companies that are aggressively purchasing dealers. While being acquired may not negatively affect your company, if one of your competitors is acquired it will be a challenge for your dealership.
Preparing to Face the Future
None of these challenges mean you should throw in the towel. For dealers who prepare well and adapt to the changing environment, success is still possible.
Look for Adjacent Opportunities
Many dealerships are expanding their product portfolios to offer their existing clients more than just an MFP. As the dealership expands the sales portfolio, it is important that the service team does the same thing. Look for areas where your technicians’ skill set can be applied to solve client needs.
One area is network services and support. I worked with a dealer that is hugely successful, and while it’s a mid-sized dealer, the client is the largest cabling installer in its state. Installing those cables opened doors to other business with their clients.
Develop Team Skills
Start evaluating your team’s current skill set on an individual basis—what are the strengths and what are the challenges? What skills will they need if you expand your service portfolio? How can you help them develop the skills they need to expand their current capability?
Answering those questions provides areas on which to work. Start developing their skills to meet future opportunities. Today is a good day to start!
Work on efficiency
Focusing on the team’s skill set will help improve your current efficiency. When I talk about efficiency, I’m referencing the ability to cost-effectively provide the service your clients need. This is not about more calls per day or fewer parts—make sure that the equipment in the field performs well and work on driving more copies between calls.
You can also drive efficiency by ensuring that the right equipment is placed for the actual needs of the client. Too many times, dealers oversell equipment, which increases service costs.
Don’t Fear the Future
I don’t mean to sound negative when looking at the future of our industry, as that is not my intent. In our industry, we have great companies that will survive and thrive. I am concerned about the dealers that are clinging to old methods, metrics and models. The future is full of opportunities for those who are adaptable.
