The new business
plan for traditional copier and printer dealers is to acquire more
business in a declining market. Managed Print Service is often
presented as our industry’s savior. Getting a bigger portion of
the proverbial shrinking business pie requires a great deal of
optimism and creativity. However, revenue without profitability is
business suicide.
As a working service professional, MPS has added an additional
layer of challenges to the service department’s responsibilities.
MPS encourages our sales department to offer long-term maintenance
and supply responsibilities for equipment, that in many cases, our
service department is admittedly unqualified to identify, much
less service. Our field techs do not have certification,
knowledge, parts, manuals or supplies. Additionally, under most
MPS programs, there is no requirement to physically pre-inspect
the equipment before it is covered for service, parts and
supplies.
More than once I have feigned excitement when I have seen the
paperwork on a new 500 machine MPS deal. Sales is happy, our
controller is happy, our owner is happy. Service is reassured that
“You should be familiar with most of the equipment. We went ahead
and covered the shredders; there are only about a dozen of them. A
couple of the key managers have equipment in their homes that will
also be covered. We can deal with those when they need service.
The inkjets are not on the network. Can anyone here work on
microfiche?” Oh the joys of MPS.
The clerk or department that handles the administration of billing
for meter counts is often overwhelmed at the creation of each new
MPS agreement. Mystery machines, declining meter reads, unknown
locations, equipment counts that do not machine meter clicks, and
obsolete and first to market machines that are not in our database
all add to administrative trepidation of newly sold MPS
agreements.
Multiple item pricing (color, scans, email, copies, fax, prints,
two sided, oversized, plotters, etc.) or universal single click
pricing all adds to the complexity of each agreement. These may
include base up front, with overages billed monthly, quarterly, or
annually. It may be pay as you go, only billing for clicks made,
at the end of each designated billing period. There is nothing
simple or universal with selling, servicing and supplying MPS.
Well-run companies, who have mastered the art of selling and
servicing their CPC accounts, are already ahead of the curve. For
profitable CPC and MPS you must have a way to track and control
the usage and delivery of supplies. When you are charging mils or
pennies per click, uncontrolled sending of supplies can be very
costly.
Pre-determining which departments are responsible for sales,
service, supplies, administration and profitability will allow you
to predetermine what percentage of MPS revenue is allotted to each
of these departments. When you predetermine the work load and cost
factors, the sharing of the revenue can be more realistic.
MPS is not all gloom and doom. The consultants, seminar
presenters, software developers and writers are having a field
day. Everyone is looking to someone else for help. We seem to have
more MPS consultants than profitable MPS dealers. Most of these
consultants have never actually worked, owned or created a
dealership that successfully transitioned from being a traditional
copier dealer to a successful MPS dealer.
Those attending MPS / Document Solutions conferences, seminars,
and Webinars have found that most ‘educational’ sessions are
nothing more than an extended sales pitch for MPS monitoring
software products or future MPS consulting. Investing thousands of
dollars into MPS seminars, taught by someone who has never
actually successful transitioned into MPS, is not a guarantee of
success.
Those dealers that have successfully bridged the gap from copier
dealer to MPS Titan generally are keeping a very low profile. They
are busy making money and gaining clicks. They have no need to
share their success story with the competition. Well run companies
are going forward, successfully. Growth and profitability are
being created through MPS.
My personal observations on transitioning to MPS / document
management:
• MPS is easier to sell than to profitably manage
• MPS touches every area of your business
• A large machine base is helpful
• Technical knowledge of a large group of makes and models is
required
• Selling interactions with more departments and their managers is
necessary
• Return on investment must be proven
• Knowledge of business economics is more important than a good
ole boy relationship
• Multiple employees at the selling dealership are involved with
each transaction
• For smooth MPS start-ups, someone must take charge of the entire
process
• That someone must be detail-orientated and follow through on
dozens of details
• If you are not paying the sales rep to keep in close, ongoing
contact with the client, do not expect them to do so
• Most successful MPS dealerships are using a new sales commission
structure that pays the sales rep for long-term ownership of the
MPS client
• Each piece of equipment should have a minimum monthly click
charge
• Charge by the click – not copy, scan, print, fax, etc.
• Set all equipment click defaults to record real usage: 11X17,
8X14, two sided, scans
• Charge more for color than black
• Do not believe OEM’s cost statistics for your cost per click
• Profit, overhead and employee salaries are part of your cost of
each click
• Look to your current client base for MPS opportunities
• Approach the clients who know and trust your company for MPS
opportunities
• Most Independent dealers need 5 million MPS clicks per month to
achieve MPS profitability—this usually takes years, not months, to
accomplish
Every independent dealer is different. I do believe there are
several common denominators with successful MPS dealerships:
• They were successful dealers before they took on MPS.
• They already have superior policies, processes, management,
collections, billing procedures, management team, and checks and
balances in place. Success breeds success.
• They have a proven track record of having established successful
relationships with their clients.
• They have a method to successfully sell, service and provide
supplies for office equipment to their customers.
• Their clients trust them to have a strong first service call
completion rate, correct billing procedures, attentive sales rep
and a go-to contact person they can trust.
• A high percentage of their technical employees are OEM certified
on the equipment their dealership is authorized to sell and
service.
• They have a well run, profitable parts / warehouse department.
• They are involved in the community.
• Before taking on MPS, they had a current customer base of large
corporations having 100s of pieces of equipment.
• They have a long-term tenure of management, technical and
administrative staff.
There is no easy way to transition into MPS and Document
Management. However, success is becoming easier to accomplish. MPS
software is improving and dropping in price. Many wholesalers are
offering MPS support and management systems at minimal or no cost
to their resellers. There are free MPS Webinars offered on a daily
basis. Hundreds of dealers have successfully incorporated MPS into
their business. There is light at the end of the tunnel. The time
for Managed Print Services in now.
Ronelle Ingram,
author of Service With A Smile, also teaches service seminars. She
can be reached at
ronellei@msn.com
