Keep it Coming: How Ancillary Products Can Fuel the MRR Machine

In the dealer sales rep world, nothing beats a sale. Unless it’s a bigger sale. And one that brings in monthly recurring revenue (MRR). That monthly splash is the heartbeat of a dealer; not all items in a company’s product and service revenue lend themselves to service opportunities, but a management/maintenance add-on is music to the ears (cue the image of Lucy VanPelt jingling her can with the five cents that Charlie Brown deposited for her psychological quackery services).

We introduce this month’s State of the Industry report on ancillary products and services at the dealer’s disposal, the so-called “hidden gems” that may not necessarily be a conversation starter, but can solve (or stave off) a challenge for the end-user. Leading off is the subject of MRR and how dealers can ensure that nothing within their product and service menu is a “set it and forget it” proposition.

Keven Ellison, AIS-Las Vegas

With the unique but burgeoning marketing-as-a-service space—fertile ground for clients that can no longer justify in-house marketing or can’t afford the luxury of staffing a point person—it is a subscription service that can yield a lucrative MRR for dealers that are so inclined. One such example is Advanced Imaging Solutions (AIS) of Las Vegas, which discovered the need with an education client and continues to build up its platform, notes Keven Ellison, vice president of marketing.

“It is billed as a monthly MRR and then an additional cost for special projects over and above the original plan,” he said. “Helping our businesses and their owners meet their goals through marketing it creates additional value to retain and enhance the current business relationship.”

Christopher Malatesta, IMR Digital

In a specialized area such as document conversion, IMR Digital—which was acquired by KDI Office Technology of Aston, Pennsylvania, in 2019—recurring revenue can be gleaned in a number of ways, according to Christopher Malatesta, senior sales executive. This includes the rental of physical storage and providing document retrieval services, monthly or quarterly projects, and document management software with licenses, updates and support.

Once the initial project ends, it really just marks the beginning of the relationship between IMR and its clients. “Once a customer has established a secure relationship with us, it becomes even easier to continue to do business together,” he said.

Board Approval

Erik Crane, CPI Technologies

Interactive whiteboards, one of the more popular off-the-grid offerings for many dealers, don’t allow for significant post-sale opportunities—manufacturer warranties cover much of the electronics and the units tend not to need constant attention from a service standpoint. According to Erik Crane, president and CEO of CPI Technologies in Springfield, Missouri, much of the MRR stems from the added software for content creation, which can be subscription-based.

The bigger picture, Crane advises, is the unit’s possibilities as a gateway offering. “It can solidify you within an account and open doors into accounts traditionally closed to you,” he said. “That can provide entry with solutions that provide recurring revenue.”

Chip Miceli, Pulse Technology

Chip Miceli, president and CEO of Schaumburg, Illinois-based Pulse Technology, which offers LED walls from Sharp and Watchfire, points out that many of these clients rely on the dealer for MFPs and a wealth of other solutions. In those cases, those end-users are already riding the MRR train.

“We have had a few LED customers who were not with us before, but by and large, this is an add-on,” he said.

In a specialized area such as AI and machine learning, where customers are attempting to leverage and harness the value of their data, having the ongoing expertise of a company such as Impact Networking of Lake Forest, Illinois, is essential for end-users to grow and evolve through tools such as Microsoft’s Power BI.

Fred Barrionuevo, Impact Networking

From the dealer’s standpoint, that opens the door to a wealth of ongoing revenue opportunities, according to Fred Barrionuevo, Impact’s emerging technology and AI team lead. The first is asset management, i.e., the reports and/or dashboard, as the client seeks to do more with its data. That becomes an ongoing proposition of maintaining and managing for Impact. The dealer also provides various tools to help end-users massage and format the data for reporting purposes, which also requires ongoing maintenance and support, along with troubleshooting.

Impact’s role is to help ensure clients are making the most of their data as it can be interpreted and leveraged toward improving their businesses. “I think most companies would prefer to have their staff just working on consuming and understanding the data that’s provided,” he said. “And for that reason, there’s another opportunity for managed services.”

Erik Cagle
About the Author
Erik Cagle is the editorial director of ENX Magazine. He is an author, writer and editor who spent 18 years covering the commercial printing industry.