I had the opportunity to attend two great events in October. The first was the Seat Based Billing Roadshow held Oct. 17 in Asheville, NC. The second event was the BTA Fall Colors meeting, also held in Asheville, NC on Oct. 18-19. One idea discussed at both meetings was the need for dealers to get “sticky.”
What Does it Mean to be Sticky?
For most of us, the concept of being sticky is not pleasant; we don’t want our hands, our face or our clothes to be sticky. In the context of business, being sticky is very important.
When we are discussing being sticky, we are talking about our ability to become essential to our clients. The stickier we are, the tighter and more enduring our relationship with them. We want our customers to be customers for life.
New customers are expensive and difficult to acquire. Too many times, we let our current customers slip out of our grasp; they leave for the promise of savings, or better service, or a variety of other reasons. For that reason, we need to find a way to get stickier, so that we can keep a grip on our customers.
How Do You Get Sticky?
So that begs the question, how do we get stickier? Both meetings provided information that helps dealers become sticky. The key concept is to provide more than one service for a client. Ideally, you would want to be able to provide multiple services for a client, so that replacing you is not as simple as wheeling in a new copier and unplugging yours.
Seat Based Billing (SBB) Roadshow
This was the second time I have had the privilege of attending one of these events. The event was presented and sponsored by GreatAmerica Financial, Print Audit, Clover Imaging and BEI Services.
The program started with an overview of the sales and marketing process for SBB. West McDonald of Print Audit presented this segment. During this presentation, he provided an overview of what SBB is, and how to market it.
The next segment, also handled by McDonald, outlined the assessment process and how to build a seat price. He also covered the specific contract language that protects a dealer in case the customer significantly changes the nature of their printing. McDonald also pointed out that their suite of software that is a blanket license for a dealer to install on as many devices as they need, lets them include a compelling value-added service to the client and will make it very difficult for the competition to upgrade their customers without having to add significant cost to the upgrade.
The following session was presented by Kim Louden from GreatAmerica Financial, and she went through more information on the contract specifics. She also compared the billing process that is used in an SBB environment, highlighting how it is simpler for the customer and more difficult for the competition. SBB simplifies the customer’s life by providing a single monthly bill that can be budgeted and does require the monthly meter readings. It makes it more difficult for the competition because they can’t see the details of what your company included or how you priced it.
Louden was followed by Aldo Spensieri from Clover Imaging. During his presentation, Spensieri helped the audience understand the variety of programs that Clover Imaging provides to its clients. Clover has the offerings to help a dealer that is new to either MPS or SBB become successful.
The final presentation was by Bud Karaky from BEI services. He discussed the fact that the vast majority of units in the field are not running enough volume to justify their placement. When equipment does not have the needed volume, the cost per page increases dramatically. Replacing A3 devices with A4 devices that have lower page and equipment pricing creates savings opportunities and increases dealer margins. He also demonstrated the BEI quote tool for use in building seat prices.
BTA Fall Colors
The Fall Colors event was held in Asheville, NC the following two days. One presentation, in particular, stressed the need to get “sticky” with customers. Hannah Erb from Collabrance, which is a GreatAmerica company, talked about the value of managed IT service to the dealer and a company.
For a dealer, managed IT is a significant opportunity and for clients in the SMB marketplace, it simplifies their life. During the presentation, Hannah described the impact of flooding in Des Moines, IA, on their company. During this 2008 flood, their headquarters was inundated with several feet of water in their offices.
Because they had a well thought-out disaster plan, none of their clients even knew that their offices were flooded. She made the point that this was one reason why most SMB clients need managed IT. Few have a disaster plan that could cope with that type of event, and even fewer have a plan that would work.
Most dealers don’t have the staff or equipment to provide the necessary services to their clients. However, there are several options available. She talked about three possible pathways to get into the managed IT business during her presentation: build buy or partner. Her presentation spanned two days, and she interviewed a Collabrance partner and discussed how the process went for them.
The first was to build out a department that could handle those responsibilities. This process is very expensive and time-consuming, with significant outlays before taking on your first client.
The second option is to buy an existing IT company. This option again requires a significant outlay for the purchase and would bring with it significant payroll obligations.
The third options would be to partner with a master managed service provider. Collabrance is one of several in the marketplace that will provide the ability to serve your client’s needs while not requiring the upfront capital and expertise needed.
A Winning Combination
By combining managed IT services, which is typically seat based, with SBB for their imaging devices, you start to be very sticky with the client. They are not going to want to have to replace all of the products you are providing. By providing all of this through a single bill, the competition will have no way to know the pricing of the various components.
Now is the time to get Sticky
The potential disruption to our industry is worrisome. With the advent of ink, the declining print volume in the office and constant price wars, the future of a dealer that only offers copiers and printers is bleak. The dealers that effectively get “sticky” with their clients by offering a single source for their electronics needs have a much better outlook. They will own their customers.