WHY LEXMARK?

The World’s Second Best Known Printer Company
Is Looking For A Few Good Dealers

A recent press junket to Lexmark International’s worldwide headquarters in Lexington, Kentucky provided a compelling case for why this printer and MFP manufacturer is an increasingly good bet for independent dealers looking to add a second or third line to the mix.

This is a company that has historically been a little slow on the uptake when it comes to communicating with the office trade press, but that seems to be changing. In September, a select group of imaging industry press visited Lexington for a briefing that encompassed a wide range of topics, including a recap of the company’s history, its latest strategic initiatives, products, solutions, a tour of their product demo room, and an exclusive visit to the Lexmark test labs where testing of paper, devices, and evaluations of the interaction between end-users and devices takes place.

Lexmark by the Numbers

Before presenting a case for Lexmark as a viable OEM for the dealer channel, let’s look at the numbers. It’s been a tough year for many office equipment manufacturers and although it’s still too early for Lexmark executives to share details on this year’s performance, they did report 2008 revenues of $4.5 billion, down a bit from the previous year.

Worldwide the company has 13,000 employees and sales offices all around the world with product manufacturing taking place in China. SOHO and small business inkjet devices represent 44 percent of the company’s business while SMB and enterprise laser devices represent 56 percent. Within that 56 percent are single-function color and monochrome printers and color and monochrome MFPs, many of which are ideal products for the dealer channel.

Lexmark takes a vertical industry approach to the market, focusing on networked environments, mission-critical areas, environments where information must be distributed quickly and efficiently, integrated applications, and organizations that use a lot of paper. Still not convinced they’re a serious player? Consider that Lexmark’s clients include:

46 of the Top 50 retailers
83 of the Top 100 healthcare companies
76 of the Top 100 financial services enterprises
49 of the Top 50 pharmacies

Lexmark is also a dominant player in the public sector, so clearly they have a legacy of success and a certain amount of brand recognition in the marketplace.


Product Focus

It should come as no surprise to anyone that a company primarily known for single-function printers is making A4 printers and A4 MFPs a strategic focus. For dealers whose primary OEMs have been slow to climb aboard the A4 bandwagon, this is another reason for considering Lexmark.

Lexmark currently offers nine single-function monochrome printers, ranging from personal and small workgroup models, to medium workgroup, to large and departmental models. The company’s monochrome multifunction line also includes nine devices. In addition, Lexmark has seven color laser single-function printers and eight color multifunction devices in the line. What this translates to is a full menu of products across the product spectrum that can either compliment a dealer’s existing product line or is diverse enough to be a primary product line.

Understanding that the office equipment dealer has specific needs, Lexmark is making sure that its dealer channel has their own unique models. Those models offer unique device firmware and uniquely keyed toner/print cartridges (supplies on the dealer models won’t function in their commercial counterparts) with the hardware and supplies priced aggressively. These are more compelling reasons why Lexmark is worth a second look.

Lexmark certainly has their priorities straight when it comes to laser devices. Granted, many of those priorities are in synch with what many other manufacturers are doing in the industry, but they’d be remiss if they weren’t focusing on these areas. Those include security, sustainability, and an emphasis on solutions and making their devices easier to service. These may be familiar stories, but stories that are resonating with more customers just the same.

Similar to other OEMs’ focus , an initiative at Lexmark is to make the user interface on their devices simpler and more intuitive. The Lexmark graphical user interface, eTask, is compatible across their MFP product line, simple to understand, and easy to configure. It’s not designed as a graphical touch-screen representation of the hard buttons found on a device, but it is a 7-inch interface that allows users to print jobs in a more intuitive manner with easy access to the most used features and functions of the device. This translates into a demo-friendly interface for a dealer sales rep.
At press time, the interface can be found on the company’s latest MFPs as well as their new single-function color printer which was introduced October 6. A dealer version of that model should be available before the end of the year. Let’s take a closer look at the October 6 introduction.

The T656dne is a 55-ppm letter and 53-ppm A4 single-function monochrome printer with the aforementioned 7-inch touch screen interface. This model has a list price of $1,999. The dealer version is expected to have a higher, more dealer friendly price and special supplies that only work with that model.

The T656dne rounds out the Lexmark line of nine single-function monochrome printers from personal and small workgroup models to large, departmental systems. Lexmark is positioning this as a departmental device.

Lexmark’s BSD Program

Originally launched in Germany in 2005, Lexmark brought its Business Solutions Dealer (BSD) program to the U.S. in 2007. According to Neil Durnil, Senior Manager, North American Business Channel Development, the company is in recruiting mode in pretty much every market around the country. For independent dealers, this means that Lexmark wants you.
“There’s still a lot of white space out there,” adds Kevin Goffinet, Vice President and General Manager, Global SMB Sales and Marketing.

That’s good news for dealers looking to add another product line, particularly one that’s not over-distributed.

What’s in the BSD program for Lexmark other than the opportunity to grow its presence in the dealer channel? Well, according to Durnil, further penetration into the SMB end-user segment, an opportunity to increase page output via original supplies, and a force to drive A4 through the channel.

From a dealer perspective, Durnil says the BSD program offers dealers profitability, solutions differentiation, and an opportunity to capture all of their customers’ pages while becoming a total solutions provider.

Key components of the BSD program include access to Lexmark’s line of A4 and single-function printers along with unique BSD models with keyed cartridges.

With all these products to choose from, Lexmark is helping dealers narrow their options by honing in on 15 BSD models that are the most strategic for dealers to grow their business although dealers still have access to the entire Lexmark product line.

Those products span the product range from single-function monochrome printers to color MFPs. Plus many of these models have been honored with awards by the likes of Better Buys for Business, BLI, and BERTL.

Lexmark also provides dealers with hardware and supplies discounts, net up-front discounting, a demo program, the PrinterPerks rewards program, progressive quarterly volume incentive rebates, and a COOP program.

Solutions are another way that Lexmark is looking to differentiate itself. Altogether, dealers have access to more than 20 applications that can be deployed from a Web browser to the device. Document management, device management, card copy, forms on demand, scan-to-EMR, orders routing, and scan-to-HD are just some of those applications.

With any dealer-oriented program, support is a critical component and Lexmark offers this via a three-tiered training program, a dedicated sales rep, service rep training, solutions development, service development, marketing support and the requisite new dealer launch kit. Those components aren’t necessarily unique to the industry but they do underscore the company’s commitment and investment to successfully growing their dealer channel.

Focused on Growth

Speaking of growth, approximately 150 dealers currently participate in Lexmark’s BSD program and the company is looking to significantly grow that number.

According to Lexmark executives, the ideal dealer profile for the BSD program based on the dealers that have been recruited so far are medium- to large-sized dealers ($5 million plus in revenues), those who have a growth strategy, dealers with multiple locations, dealers who belong to a dealer association such as BTA, and dealers with a solid Web presence.

The big hurdle is getting dealers to recognize we’re in the game and not just in traditional IT channels,” adds Durnil.

Exclusivity is not part of the equation, although Goffinet reports that Lexmark likely won’t add coverage to a market unless they have an under-performing dealer in that market.

While dealers vent regularly about over distribution and direct competition from their primary manufacturers, those aren’t issues with Lexmark.

“Our history of never going direct is a good message for dealers,” says Goffinet. He notes that dealers view Lexmark as a brand that plays well in new areas they want to penetrate, most notably IT. One can’t overemphasize the impact that carrying a leading printer brand has with an IT decision maker.

“Some dealers say their primary brands don’t play well in a lot of those environments,” says Goffinet.

Lexmark’s does.

Case Closed

Early on in the presentation, executives spoke of Lexmark’s vision of “Customers for Life”. It’s safe to say that the company also has a vision of “Dealers for Life”. It will be interesting to see how its recruitment efforts pan out over the next 12-18 months and how successful those dealers who end up partnering with Lexmark are with the company’s products and solutions. If they’re not, it certainly won’t be for lack of technology, tools, and programs to make a mark in their markets.

Scott Cullen has been writing about the office equipment industry since 1986.