As we dig deeper into the topic of smart office/future office opportunities for office technology dealers, the conversation invariably turns to post-sale revenue. Certainly, the opportunity to go wider and deeper with clients on MFP box alternatives can open the conversation to future opportunities, but if your company is selling interactive white boards or digital receptionists, does it really allow for post-sales service support revenue?
Let’s turn to our dealer panel for answers.
Impact of Lake Forest, Illinois, has utilized a managed services scenario, notes Mark Sengstock, director of enterprise solutions. But perhaps its greatest benefit is as a gateway offering in digital transformation.
“We have been able to offer these solutions similarly to a managed offering that, in most cases, builds a relationship with an organization,” he said. “It places you as the trusted advisor for digital transformation across a road map that might be years long. That is not a sale, it’s a mutually beneficial partnership.”
The Stickier, the Better
Robert Woodhull, marketing director for Woodhull LLC of Springboro, Ohio, notes the subscription-based model used by software companies has become more prevalent, enabling the “sticky” relationship with clients. Thus, recurring revenue has not been an issue for the dealership.
“We find it’s also the best margin area for us,” Woodhull notes. “We don’t have to keep as many parts on hand; there’s not a lot of overhead. There’s not the same expense involved (as an MFP) to keep the machine moving. But getting people to be comfortable with a subscription can be a challenge.”
LDI Color ToolBox of New York City has artificial intelligence/augmented reality tools on display in its showroom, courtesy of its partnership with VNTANA, which has placed a kiosk to showcase its hologram technology. Brian Gertler, senior vice president of LDI, notes it is too early to forecast the recurring revenue picture, but as is the case with most IT products, there is an expectation of ongoing maintenance, service and support.
“An undeniable value is our prospect and client recognition of LDI as a thought leader,” Gertler said. “LDI’s consistent ability to speak to emerging technologies provide the trust and credibility necessary to excel in today’s marketplace and establish long-lasting, strategic partnerships.”
When it comes to taking on new, nontraditional technologies, DOCUmation of San Antonio, Texas, ensures it can apply the level of exceptional service that clients have come to expect from the dealer. According to Hunter Woolfolk, co-president, that puts the onus on his company to partner with technology OEMs such as Ricoh who are trusted providers.
“There is a recurring revenue model, due to us packaging it as a service,” he said. “It’s just one more tool in our belt. We believe the future workplace is going to involve interactive technologies. We talk about ways for businesses to work smarter and Ricoh is providing us the technology to do that.
“We offer service either on its own or bundled. We do the service and have Ricoh supporting us on the back end, like we do with MFPs. That’s the benefit of having an IT division with strong technology personnel.”
Not all smart office/future office technologies lend themselves to post-sale margin in terms of service. Chelsey Bode, president of Pearson-Kelly Technology in Springfield, Missouri, notes many third-party products from Konica Minolta’s Workplace of the Future platform do not offer much in the way of margin. The dealer bundles some professional service hours for ongoing support and tries to bundle with other products as often as possible.
“However, we’re not really after all of the Workplace of the Future offerings for gross profit purposes,” she notes. “These offerings are used more as a marketing tool, helping reps open up dialogue with businesses that wouldn’t have talked to them before. Additionally, it gets prospects into our offices, and then it’s served the purpose for us.”