So you want to add production print to your menu of products and services? Before you phone up (or email) your OEM representative, it might be good to take a step back. No, make that two steps.
Production print is…a tall task. We’re not talking removing King Arthur’s Excalibur from the stone, but it’s not promotional products, either. Chances are, the degree of difficulty in profiting from production print ranks somewhere near, or just below, managed IT. As diversifications go, it’s no walk in the park.
But as we close the book on September’s State of the Industry report on production print, our crackerjack panel of dealers have touched upon nearly all (if not all) of the considerations that other providers need to keep in mind before they launch into the offering. Forgive some redundancy; just consider repeat references as proof positive that these are universally accepted truths when it comes to the offering.
Production print is a diversification that requires a full top-down commitment to yield optimal results, notes Michael Horvath, corporate director of industrial print and regional sales manager for Edwards Business Systems of Bethlehem, Pennsylvania. It differs from most diversifications in that it should really be viewed as a cornerstone offering, with an investment in equipment and personnel to reflect it.
“Having the right team in place for both sales and service is essential, and there must be a strong focus on making it a core business initiative,” Horvath said. “Potential concerns include the many moving parts and increased supplies and service demands of industrial print equipment. Managing post-sale aftermarket revenue is key to maintaining a healthy bottom line.”
Familiar Territory
Success in production print has similarities with the journey to becoming proficient in managed IT, particularly the extended ramp-up time. Dave Alfredo, vice president of production for United Business Technologies of Gaithersburg, Maryland, notes the process begins with hiring experienced and knowledgeable production analysts to support the sales team.
“It takes years to truly understand the production business which is uniquely different than traditional office opportunities,” he said. “Clearly understand your costs and the numerous factors that can negatively impact profitability of a production sale. Find the vertical markets where you can offer expertise and value, and ones that can drive respectable post-sale gross margins.”
Rick Salcedo, president and CEO of KDI Office Technology in Aston, Pennsylvania, offers a five key variables to keep in mind when constructing an effective production print sales plan:
Invest in Technical Support: Both pre-sale and post-sale technical support are vital. Ensure your team is well-equipped to handle the technical complexities of production print equipment, from initial consultations to ongoing maintenance and support.
Ongoing Training: Significant and ongoing training is a must. Production print technology is constantly evolving, and staying updated with the latest advancements is essential for providing top-notch service and support.
Close OEM Partnerships: Work closely with your OEMs. They can provide valuable resources, training, and support to help you navigate the production print market. Strong OEM relationships can also lead to better leasing rates and access to the latest equipment.
Understand Your Market: Consider the specific needs of your target market. Assess whether there is sufficient demand for production print equipment in your area and whether you have the capacity to meet that demand effectively.
Avoid Underestimating Complexity: Production print equipment is more complex than standard MFPs. Avoid underestimating the level of expertise required to sell and service these machines. Ensure your team is prepared for the challenges that come with this segment.
“By considering these factors and avoiding common pitfalls, dealers can successfully expand into the production print market and provide valuable solutions to their customers,” he concluded.
It helps to be mindful of the pitfalls that can hamstring a production print initiative, notes James Loffler, president of Loffler Companies in St. Louis Park, Minnesota. They include underestimating costs, overlooking market research, neglecting training and support, and aligning with the wrong technology partner.
“Careful planning and thorough research are essential,” he said. “You must understand your specific market’s demand…and be prepared to make the significant investments in sales, support, training and service,” he said.
Preserve Profits
Understanding the production print beast can go a long way for dealers, according to Lauren Hanna, vice president of sales for Cleveland-based Blue Technologies. The contrasts with MFPs are stark: the service model is different. Ditto for sales, which carries with it the bonus of a long sales cycle.
“You need to protect your profits,” she said. “There’s a lot more sales support in this world. Many dealers I know have pre-sales and post-sales production support teams. Not all sales reps have the bandwidth to be experts in production and support, nor do I want them to be the experts. You need dedicated teams.”
There’s no understating the need to have service technicians fully trained before an account rep ever calls on a client for production opportunities. Joe Blatchford, CEO of Image 2000 in Valencia, California, notes production service requirements are the most urgent of all equipment. Clients may demand that you have techs on site within a couple hours. That also means having a part inventory that is stocked well.
“These clients can be very demanding,” he said. “That puts the onus on the dealer to be fully trained and stocked with parts. Having production specialists can make life a lot easier.”
Tom Hemmelgarn, senior vice president of sales for Cincinnati-based Prosource, places a lot of emphasis on planning prior to entering the market. Business plans should be mapped out for the short and long term. Target markets need to be analyzed, and the same holds true for knowing the competition. Growth strategies, comp plans, SLAs and the question of light production versus regular production should all be hammered out well in advance.
It’s not that production customers are unreasonable—Hemmelgarn points out that it’s just the nature of their line of work. “Be persistent and committed. Remember that your production print customers rely on their equipment to make money or meet deadlines,” he said. “If that equipment needs attention, it’s hours—not days—that count. Be prepared to support them with that in mind, with service, supplies, and workflow support.”
