By linking MFP sales to cost-per-page services contracts, solution providers create “annuities” that lock in revenues and stop margin freefalls
New Business Models
But transformation requires a shift in thinking and upfront investment in training the sales and technical staffs. Strategies for making this shift depend on whether a solution provider is already selling printers or not.
Companies that currently offer printers and use a transactional model may need to rethink their business relationships with customers. Instead of reflexively cutting hardware prices to attract business, consider becoming a technology adviser that can help customers lower costs and increase efficiencies around business processes. That means asking more questions about each customer’s business, the challenges they face, and their strategies for becoming more competitive in their respective market.
Through conversations like these, one solution provider uncovered a trend among its customers around a growing interest in recycling and environmental best practices, Gillam says. “The solution provider said there is a huge interest among his customers about environmental solutions. So in the course of doing a printing-infrastructure assessment he talks about power consumption and waste associated with the consumables themselves,” Gillam says. “Solutions like Xerox solid ink generate 90 percent less waste than toner-based solutions, and we are finding that many of our resellers are saying that their customers are eager to have that conversation.”
For solution providers that don’t currently sell printing equipment, but offer managed services for other types of technologies, managed print services sold with document-management and workflow systems offer selling synergies with networking, security, and storage services, Gillam adds.
First Steps
Even though moving to managed print services and cost-per-page service contracts may require adjustments in existing business models, the transformation needn’t be painful. For example, one manageable first step is to simply begin up-selling printer customers to MFPs. An immediate payback is possible thanks to the large installed base of legacy single-function printers that are ripe for tech refresh. Pointing to this pent-up demand for modernization are recent growth rates in the MFP market that have topped 30 percent.
With the right sales approach, hardware replacements are only the beginning. “MFPs let VARs begin a discussion about increasing their customer’s productivity with a networked device,” Gillam explains. A handful of workgroup MFPs can replace dozens of standalone printers, fax machines, and scanners, which reduces maintenance and consumables costs, including power consumption.
Once customers warm to the advantages of networked MFPs, solution providers have an opening to discuss cost-per-page contracts and other high-margin solutions such as document-management and workflow applications, as well as bundles with other technology categories like storage arrays.
Vendors and distributors offer additional transformation help for solution providers. OEM programs like Xerox’s PagePack can jumpstart services efforts with financial incentives for resellers and tools for capturing ongoing cost-per-page revenues (see related story, “All Partner Programs Are Not Alike”).
Similarly, major wholesale distributors have created business units around managed-print services that solution providers can tap. Similarly, solution providers can take advantage of resources from managed services platform companies such as Do IT Smarter and N-able Technologies.
Looking Forward
Business transformation facilitated by MFPs and cost-per-page contracts may initially require flexibility and patience from change-oriented solution providers. But as the printing industry’s profits shrink and competition intensifies, transformation is essential for long-term success, Gillam says. But once solution providers begin the process of talking to their customers about business efficiency, security, and environmental concerns, they’re already well along the way in transforming themselves from box movers to trusted advisers.
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