SELLING QUALITY WITHIN MPS IT STARTED WITH A BUZZ Over the last few years our industry has been buzzing with Managed Print Services (MPS) and catch phrases associated with MPS such as Total Cost of Ownership, Printer Optimization and Activity Based Costs or Soft Costs. These concepts have been positioned as the fundamental reasons consumers choose MPS programs. My opinion, and I hope to capture some mindshare with this article, is that we may be overlooking the most critical fundamental reason consumers choose to do business and what we need to deliver in order to capture it, especially as an aftermarket. THE BASIC FUNDAMENTAL The most basic and proven fundamental that allows all of us to gain and retain customers is Customer Satisfaction. Customer Satisfaction creates loyalty and mitigates margin compression, but in many MPS engagements it is overlooked by virtue of how MPS is sold and what elements of the program are addressed. I’ve spoken to several of the major providers of MPS at both the wholesale and dealer levels. One element that is consistently not mentioned in MPS talk tracks is the quality of the actual consumable. In fact, in many cases sales people are being taught not to discuss the consumable and to focus on the all inclusive, headache free environment that MPS is or could be. This in theory would work if some sort of standardization existed in the aftermarket and the quality of the consumables was the same from one manufacturer to the next, but that is obviously not the case. Whether it’s maintenance kits or toner cartridges, there are varying levels of quality available in the aftermarket and MPS is ultimately another vehicle to sell these consumables and to capture the reoccurring revenue stream. STRATEGIC DANGER The danger is that in most cases, MPS selling strategies commoditize the consumables. Thus blurring the lines between high and low quality products and asking the consumer to focus on the CPP and efficiency gains. This in a way is taking our industry back 20 years to the days when all dealers assumed they were sourcing a quality product and selling it as such, only to experience a rude awakening when the calls of dissatisfied customers came pouring in. Some of us remember this all too well and we need to educate our way out of duplicating the damage that was done at the outset of our transactional business as we shift into MPS and solutions based selling. Think of the share the aftermarket would have seized from the OEM if we would have positioned a true, high quality alternative, as opposed to the low quality products that scarred our industry’s reputation. In fact, the OEMs have retrenched and propagated using the argument that although more expensive on the front end, the quality and consistency of their products will deliver a higher value as they bring their MPS programs to the market. They will deliver this same message at a CPP level. They are simply promising a higher level of Customer Satisfaction. THE ANALOGY I would like to turn the tables and position all of us as the consumers and give a practical analogy. Imagine that I propose to you a Cost Per Mile program for your vehicular needs. You wouldn’t have a set car payment or lease payment, instead you would get a monthly bill for each mile you drove, some months more, some months less, the car, all the maintenance, fuel, and break fix is included in your CPM. Now ask yourself if you would sign on the dotted line without asking about the actual vehicle or if you would allow me to tell you not to worry about which vehicle I give you under the premise that it’s my service and parts costs should you have a problem. I’ll speak for myself and say that as a consumer, this would not fly for me. The convenience and the Cost Per Mile would not matter if I end up being stuck on the side of the road while I am on the way to making a major sales presentation; I would need to know if I’m getting a new car, certified pre-owned, or a rent-a-wreck. I would need to know the quality of service and the replacement parts, should they be needed. In most cases, consumers would not see a correlation between my analogy and their printing needs, but breaking down on the way to the presentation is the same as not being able to print the actual presentation while running out the door. Sure the MPS provider will send a technician in four hours or less or maybe overnight with a replacement cartridge or maintenance kit. But how will this disruption affect Customer Satisfaction? How many disruptions before your customer asks for OEM only, or asks to go back to transactional, or simply doesn’t renew their MPS contract? DUE DILIGENCE As a service or solutions provider, you should also consider what harm you can cause to your business if you don’t do your due diligence on the consumables’ quality or worse, just assume that quality is there. Not only do you risk the ability to retain customers, YOU are responsible for all the costs involved in servicing a customer; every service call and every cartridge that is thrown out prematurely, with little to no recourse through the three or four year contract. The worst part of it is that now you’re stuck, you built your cost based on a low price consumable, marked it up, and presented a CPP to your customer that is not sustainable. I have spoken to several providers that are in this predicament and it’s not pretty. They can’t insert a higher quality product in, so they are losing money while dealing with the servicing costs. At the same time, praying that they can renew the customer at a higher CPP so they can actually make some money back to dollar one. MPS SUCCESS A quality consumable is the linchpin to a successful MPS program and should not be ignored or hidden behind a CPP. Take the time to qualify quality partners on toners, parts, and service if you are outsourcing, as these are the elements that will allow you to earn a high level of Customer Satisfaction. Educate your sales people and your customers that there is a difference between MPS and Quality MPS. No different than there is a difference between a low quality toner cartridge and a high quality OEM alternative. Put yourself in the consumers’ shoes and ask yourself, knowing what you know about the varying level of quality in our industry. Would you sign an MPS agreement without knowing the quality of the consumables? Keep in mind that it’s our collective responsibility to educate consumers because if we don’t, they will find out the hard way, and it will likely be too late to make the quality pitch as we would have driven them back to the OEM. Gil Wazana is a 13-year-veteran of MSE and is currently the VP of sales for the Americas. He is responsible for managing the regional directors and for growing sales in the Americas. Wazana also interfaces with all of MSE’s strategic accounts and is an integral component of all MSE corporate initiatives and global strategies. Wazana began his career at MSE at the age of 18 and worked his way up through departments such as operations and customer service before joining the sales team as a junior rep. Wazana has since then been promoted from sales manager to regional director to his current position of VP of sales.