I
remember back to the mid 1980s when our authorized OEM dealership
received our first color copier. The technical training class was
two weeks long, the copies were estimated to cost 45˘ a piece, and
the special paper had to be kept refrigerated. The first and only
color machine we bought resided in our demo room for 5 years. It
was never sold.
For the next 25 years, industry experts would dutifully declare
that this would be the year of color. Eventually, in the
mid-2000s, when the concept of enabled color copiers started to
sell, Managed Print Services also began to get a foothold. Many
dealers, who had foolishly sold both color and black clicks at the
same ridiculous low cost under an MPS agreement, quickly decided
the less color the client made the better. Enabled color copiers,
MFPs and color printers were quickly set to default to the
monochrome mode. Just as the color market was finally ready to
shine, the market had lost its luster. No more big push to color
if the dealer was footing the bill.
Fast forward to 2010. Even before the true potential of Managed
Print and Document Services has reached its peak, the gloom sayers
are raining on the MPS profit parade. Both the OEM and the
compatible manufacturers are anticipating a downward trend in
toner, ink and paper usage in the next couple of years.
We will not have a paperless office in my life time, but as the
implementation of MPS and Document Management continues to achieve
a decrease in print on paper, the inevitable is destined to
happen. However, the true reduction in use of toner and paper for
office printing is predicted to peak in 2014.
The copier and printer world has done it again. We have created a
product and commodity selling style that will reduce the amount of
equipment, supplies and profitability we previously achieved.
The copier industry has been trying to ruin itself for the past
twenty-five years. Every time a new marketing scheme is created,
our industry margins seem to be reduced. Leasing, Cost per Copy,
color, compatibles, open distribution, Internet sales, bundling,
Managed Print and Document Services have all been a part of the
race to win the sale by lowering the selling price. Now as the MPS
trend becomes a viable working business model, the fear of over
saturation and price based commodity type selling is on the
horizon.
The improved reliability of digital hardware and extended
preventive maintenance service schedules has greatly decreased the
need for consumable parts and service. Makers of high quality
compatible supplies and parts have reduced the amount of OEM after
market product purchases.
Reduced amounts of toner, parts, PM kits, paper, service and
hardware is required due to the overall reduction of print on
paper. Depending on whether you are on the buying or selling side
of the equation, the decrease in products being purchased will
affect most of us in one way or another.
For those who are actively involved with selling and servicing MPS
agreements, the reduction in cost of equipment, parts and supplies
has been equalized by the added expense of software, training,
system integrators, lengthy selling cycle and ongoing
communication requirements.
Additional inflationary increases in vehicle operation rates,
labor cost, health insurance premiums, state and federal tax
increases and the desire to make a profit increases your overhead
expenses. If the use of the products we sell continues to
diminish, it is imperative we find a new channel to supply the
revenue we need to keep our businesses prospering.
In addition to the printing reductions attributed to MPS, as each
baby boomer retires from the business world, the need for printing
on paper is significantly reduced. Generation Y and Z’s life
experiences have not required paper documentation of all written
matter. Having grown up with electronic communication, paper usage
will naturally decrease as this younger demographic continues to
integrate into the business world. The constant pressure to help
the earth be “Green and Sustainable” adds to the ecological
pressure to stop using the ink, toner and paper that are required
to produce images on paper.
There is still light at the beginning, middle and end of the
proverbial MPS selling cycle. The MPS and document management
cycle is just that, a cycle. It is part of the journey, not the
sole destination. When making your selling presentations to your
future and current clients, teach your employees to incorporate
future opportunities into their presentations.
Individualized, relationship selling should build on a platform of
ongoing knowledge of the client’s needs. The more your sales reps
know and understand your clients’ business procedures and company
culture, the greater your opportunity to understand and customize
the profitable products your company offers. By maximizing
customization you inhibit competition from commodity based selling
pressures.
The (former) copier industry is slowly approaching the tipping
point of having a majority of those selling office equipment
actively participating in the selling of Managed Print Services.
Despite all the MPS hoopla, ongoing polls and surveys register
that about 25%-35% of office equipment dealers are actively
engaged in profitable MPS offerings. The larger the dealer, the
greater the opportunity to have clients with a large enough
machine base to warrant MPS. A large majority of copier dealers
are still trying to figure out how to profitability sell, manage
and service MPS.
Many far sighted, formerly traditional copier dealers understand
that reducing paper centric workflow also reduces the number of
billable clicks. This directly reflects a loss of business to the
OEM and compatible makers of printer and copier supplies, parts
and paper. It will also lessen the need for new and refurbished
equipment.
It seems as if the better we do our job of selling MPS and
document management, the greater the reduction of the need for the
physical products we have sold in the past. Every image that is
scanned and electronically stored or transmitted reduces the need
for the products that were once the backbone of the copier
dealer’s business model.
The more we reduce print on paper, the greater our need to
diversify the products and services we offer. As we look beyond
the rush to MPS, use diversification as a springboard to expand
business opportunities. The more we know and understand our
client’s needs, the greater our opportunity is to increase our
business options.
Ronelle Ingram, author of Service With A Smile, also teaches
service seminars. She can be reached at
ronellei@msn.com
