Managed-Print Pioneer Has Advice for Smoothing the Transition

When Laser’s Resource Inc. entered the managed-print market in 2003, it knew life would be different. But in those early, pioneering days it had no idea how big those changes would be. “We turned the whole company upside down to make the shift,” says Tom Senecal, president.

Fortunately, the lessons Senecal and others have learned over the last decade, and new tools for servicing managed-print accounts, are helping today’s print VARs make a much smoother transition.

Based in Grand Rapids, Mich., Laser’s Resource began as an aftermarket provider of a single-vendor’s printers and supplies. The majority of its sales were transactional rather than contractual, but Senecal soon realized that cost per printed page was quickly becoming the new model and decided that the company should begin offering managed print services. Laser’s Resource signed its first managed print agreement in January 2003 and has been in the business ever since.

But the move into managed print changed the face of the company. Prior to launching the managed print business, Laser’s Resource held an all-employee meeting in late 2002.
“We said we have to quit looking at how many printers our customers are buying and change the [thinking] to how many pages they were printing per month,” Senecal says. “We would start looking at pages, not printers and toners.”

The New Normal

To successfully provide managed print services to customers, Laser’s Resource had to make changes even as it continued to serve its current customers. “We began writing contracts and administering contracts—new events for us. Some people made the change and some didn’t,” Senecal says. “We completely turned over our sales force.”

Other key changes included implementing a new enterprise resource planning (ERP) system in 2003. The company deployed a product from Digital Gateway called e-automate, an integrated system that office equipment dealers can use to manage sales, service, purchasing, inventory, contracts and accounting.

The ERP system helps Laser’s Resource manage contracts and contract renewals billing based on actual meter readings, invoicing and other aspects of the managed print business.

Prior to using the system, the company relied on spreadsheets to manage customer accounts, and then mailed out invoices generated by an accounting system. “Using the system has helped us with both efficiency and projecting a more professional invoice and presence,” Senecal says.

In addition, the company had no way of easily managing customer accounts and determining whether a given customer was profitable for Laser’s Resource or not. By automating many processes, such as calculations on toner cartridges, and maintenance for customers, the ERP system enabled the company to keep close tabs on the growth of its managed print services business.

Payoff for Print Services

The profit margins with managed print are different from other margins of the business, Senecal says. “Moving from a transactional business to contractual has [meant] inherently higher margins due to the customer’s greater engagement,” he says.

Senecal says there are some things to watch out for with managed print that he wasn’t necessarily expecting. “One is taking over a fleet that’s very old,” he says. “In many cases, the customer resists change. You can always go in and refresh the fleet, but people want to keep what they have longer and sometimes that can lead to maintenance issues.”

Pricing is a key issue with managed print. “You have to really know what you’re doing with pricing, as you have to price contracts right,” Senecal says. “You also have to understand the product line and what it costs to maintain different types of fleets.”

Managed print resources such as Xerox PagePack® and Xerox eConcierge™ have helped Laser’s Resource in a huge way, Senecal says. So have the company’s other dealings with Xerox.

“One fundamental thing is that our relationship with Xerox is based on pages, just like it is with our customers,” Senecal says. “We buy pages from Xerox, mark them up, add value, then resell to clients. The margins are guaranteed.”

Senecal says Xerox, “has figured out the dealer engagement. The fulfillment is fully automated. PagePack takes care of the meter collection.”

The Xerox eConcierge offering from Xerox is also proving to be valuable. Laser’s Resource offers Xerox eConcierge as a solution to customers that are not looking to engage in full managed print services agreements. “We like the automated fulfillment and billing features,” Senecal says. “They give customers a chance to use Xerox’s automation, but in a non-contractual way.”