There is a vast array of opinions in the industry regarding how managed print services should be executed and what success really looks like. Companies from the MFP space, IT providers and service organizations are all looking to sell MPS programs.
Each of these company types has advantages and challenges that affect their ability to sell and deliver successful MPS programs. Some say the print hardware dealers should have the greatest advantage because their business model is closest to MPS. They already embrace the urgent demands for onsite service and supplies so it’s a short trip to expand the coverage to the entire fleet.
However, their business model doesn’t typically engage the C-level decision makers, so although they can deliver it successfully, getting a new MPS client can be difficult.
IT providers who manage client networks want into the MPS space too. Although they have that C-level relationship more often, their interaction with a client’s network is virtual and doesn’t require an onsite presence. While they may have the more desirable relationship, they’re missing the required hands-on print device expertise. Anyone who has been around MFPs and printers for any length of time knows that every make and model has its quirks.
Service organizations have many different profiles. Often, they’re folks who entered from the technical side. For instance, they might have started as technicians for someone else. Their profile seems to hover around one or two large clients, and they seldom possess the scalable-repeatable sales engine needed to drive growth. They are missing a senior-level relationship as well, and most of their business comes by referral.
Service organizations sell service; it’s what drives their revenue, so their target is a client that needs a lot of service. From what I’ve seen, they care less about hardware and strategy, and care more about there simply being a lot of required service.
Constantly Remind Clients of Your Values
No matter which type of MPS provider your company is, one of the biggest mistakes one can make is to allow your client to forget why they pay you each month. Whether it’s cost savings, overall productivity gains or process improvements, you have to professionally, continually remind your client of their “old” ways and results against your “new and improved” ways and benefits. I often hear about an MPS provider getting a call from a new CFO asking, “Why do we pay you $5,000 per month?” The CFO doesn’t realize that they pay $5,000 per month because they no longer pay $7,000 per month. Be engaged in your MPS contracts. When there is a change in senior management, get involved and make sure the outgoing management introduces and shares their reason for executing your contract.
No Profit/Low Profit Deals
Another big mistake I see is low profit/no profit MPS contracts. This happens more often than you might think. A medium-sized MPS client can take a sales rep out of commission for a month as the company on-boards the client. And it’s not just your sales reps: your admin and service teams, depending on your start date and SLA, may experience an enormous hit to business as usual.
You might ask why a dealer would execute a deal that provides no profit. My observation has been that few sales organizations can actually explain and/or build a proper cost model. They build everything on a monthly outbound cash flow analysis, which may, or may not, be a true reflection of the client’s actual costs.
When I ask dealers why they chose to write a low profit/no profit deal, I get a lot of answers. Mostly, they say they did it for the experience and because it brings with it new inbound cash. While I understand that motivation, few calculate the actual cost to their organization.
They think about “today’s” P & L and add the new inbound cash flow on top, but not the additional operating costs. When a contract takes up all of your resources, it can harm your reputation. Choose wisely: not every MPS deal should be won!
Solve the Entire Problem
Another common mistake is executing an MPS contract without providing full coverage for the existing fleet. What do I mean? Often ink jet and local laser printers are left out of an MPS agreement for any number of reasons. Often a sales rep forces the deal to close because of his or her quota requirements. Companies who REALLY DO MPS will LOVE IT when you leave portions of the fleet out of your agreement, because it leaves a GREAT entry point for competitors. Remember, gaining full visibility of all costs is part of your MPS program’s value. If you leave some of the fleet outside the program, you’ve created a target ripe for picking.
Your go-to market strategy for MPS must allow your sales organization to comfortably close MPS deals without having to align MPS to a hardware quota. Create a compensation program that accelerates MPS sales and remove any distraction that will slow or injure MPS growth.
Total Cost of Ownership
The terms TCO and crystal ball could be synonymous when talking about monthly print fleet cost projections. Dealers often ask me why their MPS deals slow or fail once they get to the proposal stage. They claim that the prospect doesn’t believe the costs proposed by their TCO tool. This doesn’t happen because the TCO tool isn’t working, it happens because the sales team didn’t share, up front, how to correctly build a cost model for MPS. You have to help the prospect understand all of the cost contributors associated with their print fleet. Most likely they will just expect to see their toner costs. Managing the entire fleet with hardware, service, supplies and labor costs is way more detailed than just clicking the proposal button on a TCO tool. You have to share the full benefits of your MPS program. Explain to them the following advantages:
- You keep your money in the bank and not in your supply closet.
- You extend the life of your print fleet.
- You improve office workflow – one single invoice per month.
- You eliminate buying processes and emergency orders.
- You keep IT focused on their core responsibilities.
Spend Your Money on Growth
Why is it that you can sell outsourcing but you don’t outsource yourself? There are amazing MPS backend services available to the dealer community. Don’t get distracted with owning every part of the process. Focus on growing your MPS contract portfolio and spend your money on the front end. I can’t believe the number of alerts some dealer’s process every day. Some pay two or three full time employees just to manage the DCA Alerts. That’s anywhere from $70,000 – $130,000 a year that could be put into sales and marketing towards attracting new MPS clients. Buy what you sell: you don’t have to do it all to beat the competition.
Some folks say that MPS is a commodity. I say, it is if you let it be. Executive teams are still meeting every quarter looking for the next great idea. MPS can be that idea. MPS can deliver cost savings, visibility and control. All you have to do is share its value with them.