For too long, the office technology industry has taken a device-centric view of meeting market demand. Dealers have evolved to MPS, vertical IT integration services and a host of new value-added solutions in recent years to enhance customer value and long-term profitability. But while most of the industry agrees on the importance of these solutions for the future, the average sale looks remarkably similar to five or six years ago.
As the world moves to a payment-driven model of product and service consumption, is there a way to capitalize on these behaviors to build unique, differentiated products that find wider adoption more quickly?
A Gap Between Talk and Action
The industry speaks of meeting client needs with total solutions ranging from security to hardware to managed print. But is that just talk? Often, a strategic shift to services and a stronger focus on higher-margin recurring revenue solutions are left to the back of PowerPoint presentations—if they’re presented at all.
In our survey of 700-plus office technology sales professionals, over 70% of office technology proposals are for devices, supplies and maintenance only. There appears to be a gap in where we want to go and what we’re doing. Interestingly, of the quotes that included value-added solutions beyond the standard lease package, not one included a payment option for those additional services.
Practice Solutions Selling
It’s easy to provide a quote for a customer’s request. It’s harder to question that request, understand the real need behind it and put it in the context of a company’s overall technology and document management needs. This requires a higher level of sales skill and commitment to finding real solutions. It also takes longer to build a solution in an environment where the demand for closed new business and getting a deal off the street immediately is stronger than ever.
But as with most things, the easy path is rarely the right one. In early 2021, a large dealer in the Southwest recognized this “quote and hope” behavior in the sales effort and the disconnect with its new suite of value-added solutions. In January, it made an investment in sales training and a new sales management model that more aggressively tracked the sales process. In doing this, it was able to clearly identify growth opportunities within its staff and prospect base. It also worked with its leasing provider to build unique payment-driven packages for these solutions that could be easily added to equipment acquisitions. Now, despite headwinds, it’s on pace for the second-best year in company history with all-time record growth in services that drive recurring revenue.
Solutions You Can Sell
To sell a complex technology solution, it’s critical to focus on the big-picture benefits of hardware, software and services working in concert, rather than getting bogged down in specs and features for any given part of the solution. But along with helping customers think bigger and more holistically about their technology needs, office technology dealers need to give them an affordable path to the integrated solutions that meet those needs.
A Northeast dealer recently discovered the value of this approach. It found the average messaging around MPS, production print and IT security was laden with industry jargon that most mid-sized companies wouldn’t have the expertise to understand. In late 2020, company leaders worked with internal marketing staff, the manufacturer’s marketing team and their leasing provider’s marketing organization to build a series of products that more clearly addressed simple needs. This led to the birth of a hybrid office transition solution as well as remote work technology and security solutions. These addressed the high-level needs of companies desperate for new solutions but unable to assemble the complex puzzle of how MPS, production print and security services could be deployed to solve problems. Additionally, knowing those solutions could be acquired for a simple monthly payment, the same way they’d acquired the hardware and maintenance over the years, made the sales process far simpler.
The result: a 145% increase in recurring revenue by May of 2021, despite an ongoing pandemic and other extraordinary challenges.
The Power of Payments
The monthly payment is a common thread among dealers shifting their culture to win with more powerful products. While the economy has roared back to life, budgets are still under stress. Supply chain and inflation concerns create pressure on cash reserves and cash flow, and they work against action on growth plans.
Building a successful, differentiated product offering that includes these value-added services requires a finance element. As you seek to improve your offering(s) and your sales process, engage your leasing provider proactively with a strategic conversation. The right provider can build the payment infrastructure while also helping you position, market and close new opportunities.
Change has long faced the office technology business. Now more than ever, it’s time to act on big ideas, execute on new strategic directions and bring more value to customers. So get out of the box, think bigger, and above all, start selling these broader solutions instead of simply talking about them.