How to Make a Successful Transition to Managed Services

Trying to predict the future of technology and how long your solutions will be valuable is impossible. Still, as the owner of a company that sells and installs technology you must have a strong vision and understanding about where technology is headed. transitionSince you can’t predict it, your R&D has to empower your decision-making to help identify valuable and pertinent solutions that your customers want and need. If you’re lucky enough to find the path to differentiation before your competitors, you can enjoy higher profits and growth levels that few dealers do.

One might ask the question; how is it that some dealers find this path to success and others don’t? Successfully transitioning their business to managed services while others scream that that market has come and gone? Managed print and network services offer great value and can be solutions that help transition your business. It’s important to understand that, the more unsure the economy is, the more demand there is for outsourced services. You just have to reflect your values to the right people.

Whether it’s print or network services, those dealers who seem to find continual success have comprehensively reworked their business model from top to bottom. They’ve not cut the umbilical chord from the hardware manufacturer but have moved them from a “life line,” “end all be all” position, to a supporting role for the future success of their dealership. This transition ensures and protects their hardware sales for now, while simultaneously growing services and future products into the marketplace and customer base. This seems to be a fundamental difference between those who are successfully selling services and those who are not. The warning I have for you is that you can’t sit back and sell the same things the same way forever and not look for your transition point.

It doesn’t take a genius to understand that Millennials don’t use hard copy documents as their primary mode of communication. It won’t be tomorrow, but as they move into leadership positions, companies will lean on newer communication methods and less on print devices. That means somewhere in the future their lifecycle will end.

Dealers who are successful in transitioning their business realize that selling managed services has a play in getting them to the future. In the short term, they can differentiate their company and a managed service gives them high-value, strategic solutions to share with strategic level prospects. In the long term, there is nothing like contractual year after year inbound cash.

Successful dealers are completely convinced and dedicated to transitioning their business to managed services. In their eyes it’s NECESSARY for the survival of their business and they take it seriously. They implement extremely aggressive C-Level phone prospecting campaigns solely to seed their managed services sales pipeline. When I say aggressive, I mean 800 to 1,000 completed phone calls yielding no less than 10 QUALIFIED C-Level appointments per rep per month! It’s only until you conduct that many C-Level appointments will you be able to calculate your prospecting to appointment and appointment to revenue conversion ratios.

Rest assured, nothing interferes with their appointment generation process. In the beginning the conversion percentages may be low, but just like doing sit ups at the gym, at first it just hurts, but persistence pays off and soon they’ll start seeing that desired six-pack.

My observations share that closing 5 to 6 targeted managed service deals a year per rep can deliver as much, if not more, revenue than 20 to 30 MFP deals AND each of the service contracts typically nurtures additional and sometimes ongoing hardware and solution sales.

Another key maneuver of the best dealers is that they’ve completely defined how to introduce their values in the first appointment process. They know what they want to accomplish in this first time C-Level conversation and they teach this to their sales organization. It’s not about your company or how many years you’ve been in business; it’s a professional conference room presentation, where you share expert knowledge of the challenges your solution mitigates to a strategic non-technical leader. A 30-minute story that will probably last for an hour or more as your delivery of value triggers extreme interest and conversation. It’s a meeting where you effectively demonstrate that you completely understand their challenges in trying to improve cost controls and visibility around technology spending.

Not only does sales understand the purpose of the 1st appointment, they practice, train and role-play to masterfully deliver the full value of managed service solutions. This includes being absolutely prepared to handle all common objections. I can’t stress how seriously role-playing and critique improves your competitive advantage for selling to the C suite.

Even though many sales reps don’t have a business degree, they need to have a superior understanding of business. This is a big problem in our industry; our sales reps have been taught speeds and feeds’ selling for so long few can capture or hold the interest of a C-Level target with true business concerns. Elevate your sales team’s business knowledge and you will experience higher conversion results from your 1st appointment process. At that level of expertise, THEY WILL STAND OUT and that creates the differentiation that most dealers desire.

Will print hardware last another 30 years? Probably, but will it remain your cash cow for that entire period of time, probably not! For way too long we’ve relied on the manufacturers to deliver our future. It’s been very beneficial to lean on them as the R&D department, allowing us to focus on excellent execution of sales and service. But remember, they are a manufacturer of hardware, so their WIN is selling you hardware. That may or may not match with the trends of your industry at some time in the future.

We sell what they give us and hope that their advancements offer some differentiation and competitive advantage! Wake up! Only YOU are responsible for YOUR business’ future. Their success model is that they must move a lot of boxes every month forever! Your success model is that you sell your customers what is pertinent to the success of their business, which I truly believe is moving quickly beyond the print on paper. This is one of the reasons that manufacturers seek complementary software solutions and pull in strategic partners. These relationships always promote their box sales though. I don’t blame them; after all they are a manufacturer of hardware. Today, your relationship with your MFP manufacturer remains very valuable, but as you transition into the future, make sure your plan has your company leading your marketplace based on products and services your clients need vs. what your manufacturer says they need.

A simple example of this is demonstrated by reviewing the different points of view a manufacturer of print hardware and the end user client has regarding what successful optimization is, within an MPS contract.

The hardware manufacturer will always design an MPS contract to move as much hardware as possible and when any concerns are brought up by the customers, you can rest assured the answer is a new piece of hardware to replace the old. Their delivery is to tout the value that refreshing old devices ensures uptime and performance, which is good for the customer.

The client, however, views productivity and monthly cost as the thing to optimize which could mean that most of their current hardware works fine and instead of replacing it, it should be managed well, to its best performance level for cost savings and productivity gain. Do you hear the difference?

The disconnect with the refresh MPS model is that IF your company has excellent service capabilities why wouldn’t you be able to manage their existing fleet to a best performance level, which obviously produces a lower cost MPS program.

The manufacturer HAS TO TAKE THAT POSITION because they’re in the business of making boxes! But the dealer doesn’t and their allegiance should be with the client. Success and value from the client’s point of view is what wins and retains their trust.

The fact that you CAN manage their existing, very cumbersome and costly print fleet to their objectives has GREAT value to them and demonstrates a significant differentiation for your company when competing in MPS with anyone who is hardware centric. A strategic leader won’t see this as much as a print related program as much as a managed service that is complementing their key business objectives.

Dealers who grasp this philosophy are leading in their market. Help the client maximize their investment in technology and you’ll be unstoppable.

More and more dealers today are shifting the box from the primary purpose for doing business to just a contributing component of a services agreement. Those who are really doing well in the services space have come to realize that selling a contract where a client pays you a lot of money for a very long time, is a great thing, whether it includes a box or not.

In an previous article, I mentioned that our industry is trending toward a single comprehensive technology deliverable rolled up in a single monthly invoice in a long-term agreement. Think of the possibilities for differentiation and competitive advantage! Future success definitely includes managed technology services.

In order to have a successful future, you have to begin transitioning your business. Don’t wait for a manufacturer to tell you they’re dropping out of the hardware business, or scaling back hardware because they just purchased a giant service provider. Get in the game, become relevant and lead your marketplace.

Charles Lamb
About the Author
Charles Lamb is the President and CEO of Mps&it Sales Consulting. His firm delivers proven methodologies and processes that assist dealer principals seeking the shortest path to a successful transformation into the managed services space. He's created complementary solutions including Funnelmaker, Gatekeeper, and Shield IT services. His bootcamps demonstrate immediate results in raising the skill set of those wanting a foundation for selling managed service deliverables. For information on bootcamps, training, or consulting engagements call 888.823.0006, e-mail him at clamb@mpsandit.com, or visit www.mpsandit.com.