When it comes to enjoying success in the MFP realm, dealers have the potential to be their own worst enemy. The highest-performing resellers rely on different value propositions beyond speeds and feeds, and price is certainly not one of them. With the bevy of non-channel purveyors seeking to undercut dealers, sometimes it’s necessary for dealers to recognize that certain customers are not a good fit for them.
Stressing a greater value, one in which the box is but one element, will always win the day. In this week’s State of the Industry report on A3/A4, we turned to our esteemed dealer panel for their thoughts on the greatest challenges confronting box sales.
The generational disconnect pitting print against digital is a real issue moving into the future, in the estimation of J.D. Sullivan, president of Image Matters in Knoxville, Tennessee. Print is not as ingrained in the thought process with Gen Z youngsters, who have known digital throughout life, particularly in the education process. Millennials also skew toward digital, only not as prominently, and with the Gen X workforce approaching retirement age, the erosion of print will continue.
AI is a wild card that poses more of a threat on the MNS side. “You can’t change a drum with AI, you can’t put toner in with it and you can’t walk a customer through a problem the way we’ve always done,” Sullivan said. “And while that may sound antiquated, there’s still so much market opportunity for us out here that we simply overlook, especially on the A4 side.”
The single-biggest threat doesn’t involve the competition, notes John Hastings, executive vice president, sales and service, for Loffler Companies in St. Louis Park, Minnesota. The greater challenges consist of commoditization in tandem with client apathy.
Hastings believes OEM-direct and online procurement models are a secondary threat, in additional to internal IT teams absorbing print decisions without lifecycle expertise. They also have to deal with short-tern pricing plays by low-service competitors.
The scourge of commoditization remains front and center. “When print is viewed as interchangeable, price-driven or ‘good enough,’ differentiation erodes,” he said. “Our defense is sustained value delivery, not transaction-based selling.”
Melissa Confalone, president of Fraser Advanced Information Systems in West Reading, Pennsylvania, notes that direct sales channels, IT providers and online purchasing all drive price transparency, thus device margins continue to shrink. Playing the pricing game is not a successful MO.
“The reality is, if you’re leading with price, you’ve already lost,” she stressed. “The dealers who stand out are the ones shifting the focus to value, helping clients address workflow inefficiencies, strengthen security and reduce total cost of ownership in ways that go far beyond the device itself.”
Some of the stiffest challenges on the A4 side are being offered by online retailers and large, consumer-focused outlets, notes Joe Blatchford, CEO of Image 2000 in Valencia, California. He points out these channels can sell devices at aggressive price points, often without the need for professional installation or ongoing service. As such, competing purely on price is a losing proposition.
On the A3 side, competing against the big boys can be daunting. “The competitive pressure tends to come from large megadealers with significant buying power,” Blatchford said. “Their ability to compete aggressively on pricing alone has created challenges for smaller and mid-sized dealers that don’t have access to the same cost structures.”
Matthew Salzano, vice president of Network Digital Office Systems in Fairfield, New Jersey, is aligned with his colleagues in identifying commoditization as public enemy number-one. The biggest problem, in his estimation, is the dealer that focuses on selling hardware in isolation.
“The ones that consistently win are those positioning A3 and A4 as part of a broader business solution, one that addresses security, efficiency and long-term cost control,” he said. “That shift in conversation is what protects margin and builds stronger client relationships.”
