Time for a Change

The only constant in my life as a Service Manager is the constant need for change. What worked before doesn’t necessarily work now. After 20 years of being a firm believer in using only OEM supplies I have become an educated buyer of compatible products. Compatibles are no longer an alternative, they are the product of choice for thousands of (formerly) traditional copier dealers who have shifted their selling and servicing to include print management and total solutions sales.

For those of you who have been selling supplies to resellers or end-users, your focus of who is buying your product may have changed. Your buying market has shifted. No longer is the end-user the primary buyer of the printer’s supplies. Many servicing dealers are now providing all parts, labor and supplies under the terms of a master print management or document solutions agreement. In many cases your new customer is the servicing organization that has the print management and/or solution service and supply agreement.

Over the past 10 years the digital convergence allowed the copier dealer to connect their equipment to the end-user’s network. It has been a natural extension to offer service agreements to their customer’s printer fleets. The offering of fleet management agreements is a fancy way to say the copier dealer will also provide all inclusive service and supplies on their customer’s copiers and printers. The concept of print management transfers all the burden of providing printer supplies to the servicing dealer.

With the constant decrease in CPC and print management pricing, servicing dealers have been forced to change their buying patterns. The use of compatibles supplies and parts has become a necessity. Serving dealers are attuned to evaluating and buying a vast array of products offered in the compatibles market. Copier dealers have been able to radically lower their cost of parts and supplies by using compatible on their copiers and printers covered under all inclusive agreements.

When these same dealers extended their servicing and selling into the printer world, buying compatibles was an easy, prudent, and economical decision. If there was a perceived service (copy quality) problem the end-user just called for free service that was covered under the full service and supply print management agreement. An educated service staff never mentioned the cause of the required service. It may or may not have anything to do with the compatible parts and supplies that are being used. The end-user never knew the difference.

Field service managers take their work very seriously. First call completion rates, parts cost and service call ratios per paid clicks are all part of the service manager’s equation of profitability. In today’s imaging industry, the majority of service mangers and many technicians are on some sort of profitability bonus program. Every unnecessary service call, parts return or substandard yield can have a direct effect on the service team’s take home pay. Accountability is supreme.

All OEM and compatibles products are continually being evaluated for ease of use, reliability, availability, consistency, yield and profitability. No longer is the end-user’s satisfaction the servicing dealer’s main concern. The eyes and wallets of an entire service department are judging the products that are being consumed each day. Make them happy and they will be loyal. Make them unhappy and they will no longer purchase your products. They will also be very vocal in warning their fellow service professionals not to buy from those that sold them the inferior products.

Statistically for each copier that is in a company, there are 5-15 printers. A traditional 10 million dollar a year copier dealership will have 2500-3500 copiers under their CPC agreements. That equals an instant base of 10,000 to 50,000 printers in the same buildings that contain the copiers that are already under a servicing agreement.

Surveys have shown each business printer makes an average of 3500 prints per month. That equals over 175,000,000 prints per month totaling over 2 billion prints per year on printers that are owned by companies that are already doing business with an established copier dealer.

Sellers of compatibles need to tap into the purchasing powerhouse of the 5,000+ independent copier dealers in the USA who are selling print management agreements. These dealers potentially control whose brand of laser and ink cartridges are going to be consumed. There are literally trillions of future prints that will need toner and ink that are going to be supplied by the copier dealer that is now providing print management.

In addition to the independent dealer market, there is another growing market. OEM manufacturers are actively purchasing formerly independently owned copier dealerships. Xerox, Toshiba, Ricoh, Sharp, Kyocera and Konica-Minolta have all purchased formerly privately owned copier dealerships. In many cases these newly purchased dealers were not authorized to sell the products of the OEM that has recently purchased them.

In most cases the OEM corporate owner encourages (or requires) the newly purchased dealer to minimize their buying relationship with the previously authorized OEM. The new OEM will do everything possible not to support the formerly authorized OEM manufacturer.

The newly purchased company is required to buy compatible products to use with the previously authorized OEM’s equipment. The savvy compatible wholesaler will actively solicit the OEM’s newly created need for non-OEM products.

Compatible sales reps should actively follow the press releases of OEMs who announce the purchases of formerly independent branches. The servicing dealer has become the compatible wholesaler’s best opportunity to increase their sales.

If you have a problem product, don’t market it to the service community. Word travels very quickly among service professionals. One troublesome compatible requiring a field service call will cost a service department’s budget in excess of $300 to correct.

A 100% warranty of product replacement has little value to the service manager who has to dispatch a field tech, pay for mileage expenses and replace the product (often with an OEM) to quickly remedy a field service problem.

Yield often is more important than print quality to the print management dealer that is selling a cost per print program. Most end-users want a readable copy with little or no background. The sharpness of the interior of an ‘e’ or ‘a’ is of little concern compared to getting an extra thousand prints out of a competitively priced compatible cartridge.

Color is the new hot product. Monochrome is still the number one product. A reliable black toner, sealed in the right cartridge and packaged safely, remains the bread and butter of the fleet management agreement. Color causes servicing headaches. Monochrome pays the bills. Most service managers pick and choose from several vendors, buying the products they trust.

Now is the time for the compatible wholesaler / reseller to actively solicit the cross-over copier / printer service providers. They are now purchasing the compatible products that are producing billions of prints. Compatibles are no longer the alternative. Compatibles are the product of choice. u


Ronelle Ingram, author of Service With A Smile, also teaches service seminars. She can be reached at ronellei@msn.com  or visit her website www.ronelleingram.com