QualPath Goes Back to Basics to Better Sell Managed Print Just when you think you have it all figured out, you come to the realization that maybe you don't have everything figured out after all. That's the epiphany Kevin DeYoung, president of QualPath in Pompano Beach, Florida, had about the way his company was selling managed print services-an epiphany that's changed the way QualPath sells MPS. It's been about five years since QualPath shifted from a hardware-centric sales model to one focusing on services. By all accounts it's been a successful transition and the company has been an example for others in the industry. QualPath describes itself as an IT outsourcing firm and MPS provider. Its mission is to help clients implement strategies to reduce and manage their office document expenses, minimize equipment downtime, and improve employee productivity. Clearly at QualPath it's all about services. Despite seeing services revenue grow exponentially DeYoung had a feeling something important was missing-something the company lost sight of along the way to success in the services sector. Once DeYoung figured that out and added that piece back into the services puzzle, things began to change in a more positive way than ever before and in a way that may shake up many folks' notion of how to sell MPS. Kevin DeYoung - President of QualPath "One of the issues we began to discover is that you get to the point where you're proposing something and you're reducing burdens and saving organizations money and you're doing all of the right things, but they don't go with it," explains DeYoung. "And you're like, 'What the heck happened here?'" What happened? "We forgot to sell," he responds. "We forgot the basics of solutions selling. We got so wrapped up in this model of collecting data and doing due diligence we forgot why they would want to do it in the first place." What DeYoung realized is that MPS is much more than simply reducing an organization's expenses. "That detracts from what the effort should be and that is to deliver a solution to an organization that makes it better," he says. "I don't think you make an organization better by just reducing their spending. You might make their profits a little better or relieve burdens, but it's not always evident to them." What has to be evident is the value that QualPath can provide. That comes from discovering exactly what that organization wants to accomplish. "If they say 'We just want to save money,' we'd say 'Why don't you just go out and buy cheaper toners? You can always find cheaper toners,'" notes DeYoung. "We then began to realize if that is the only agenda on the docket for a prospective client, then we can't provide value." By focusing on what an organization wants to accomplish DeYoung feels the services provider can now focus on providing a solution. "That was the big thing we learned in 2011," states DeYoung. What DeYoung also discovered is that there is a parallel sales cycle occurring at the same time as the traditional MPS sales cycle. And that cycle is more sales oriented than functional. "The beautiful part of MPS and why I advocate for the solution is it's one of those rare examples in the office technology space where you can do something that's a win-win if you do it right. That organization will truly be better as a result of that solution and your organization will be better as a result of providing that solution." The fundamental shift taking place at QualPath is going back to the basics. "It's almost like old is new," says DeYoung. "When I first entered this industry I learned the Xerox way of solutions selling. We forgot about it because of the technological evolution the industry went through. It was one profound technological revolution after another and it almost became where the technology sold itself based on the scaling nature of the technological development. Through that journey we forgot to sell." Once DeYoung realized that, QualPath started selling again and lo and behold hardware placements started soaring. That may come as a surprise to some since under what many in the industry consider a true MPS model, it's logical to assume hardware placements are decreasing. But that's not what's going on at QualPath. "Our hardware placements have gone off the wall," he reports. "That was never the premise. I'm a planner and it's about building a service base, and recurring revenue and taking care of clients so we walked away from the hardware-centric model. What I did not expect as we worked the stages of MPS with our current clients and started to move into optimization and built trust with our clients, all of a sudden it just seemed like a natural consequence and hardware sales just exploded." Growing hardware placements in an MPS world has got to be good news for the OEMs, especially in light of what they'd been hearing from the MPS consulting world. "They want their providers to sell more and if they were to hang in there with organizations like mine they'd realize that hardware output growth is a natural consequence of the stages," states DeYoung. QualPath's numbers validate this new approach. Less than two years ago, new sales were nearly 70 percent contractual revenue with the remaining 30 percent hardware revenue. Today it's nearly a 50/50 blend. Again that seems contradictory to some MPS models. "If I'm looking at an organization that's in year one with MPS versus an organization like ours, the financial metrics and revenue distribution is different based on where an organization is in its evolution and its time line," maintains DeYoung. "The longer a pure MPS organization is doing it their hardware revenue is going to go up." Bringing hardware back into the equation requires somewhat of a reverse cultural change in an organization like QualPath. "I had a sales rep in my office last month," reports DeYoung, "and we're working with a prospective client and he says, 'I've got a great solution, they're spending $4,000 a month, we can save them 20 percent.' And I'm like, 'Do you have anything else?' He says, "That's enough, we're going to save them 20 percent,' and I'm going, 'It's only 20 percent, it's only $800 a month, only $9,600 a year.'" DeYoung continues, "That's peanuts to these people unless you can associate your solution with the high-level company drivers and make it meaningful to an officer in the organization. Otherwise it's going to be dead on arrival." The challenge he says is remembering what QualPath learned on the way to MPS success. "This is what we forgot-a solution has to speak to an organization's overall goals and drivers," contends DeYoung. "It has to be more than just saving money. That's one of the problems occurring with this particular sales model. Many organizations are going out there, particularly the BTA channel which is very pencil-sell oriented, and saying, 'You're spending this much and I'll save you this much,' and they forgot that this represents a change for a prospective client in their transactional methodology." Change is difficult and many organizations would be content to let things be rather than rock the boat. "So you have to give them a reason and more than 'I'm saving you 20 percent,'" says DeYoung. "It's got to link to that company's high-level strategies or perhaps growth, or higher worker productivity or sustainability and it has to be real and not BS." How did he figure out how to present that to a client or prospective client? "It goes down to that first fundamental sales cycle which is fairly data driven and collecting that is what people struggle with," he responds. "Once you get beyond that and you think you're doing it right and you're failing, you have to ask yourself, 'Why is it not working?' Then you study, go to conferences, read articles and go back to your roots and realize you forgot why anybody would want to change in the first place. Then you go back to the drawing board and realize when you're meeting with the C-level individuals or the people that make decisions you have to build backwards and ask about the goals for their organization and what are the key issues their organization is facing right now and what are their plans to attack them? Also, what are their competitive challenges and how are they addressing them?" While focusing on the top levels of an organization are important to get that original buy in, DeYoung feels it's important to drill down lower to get a better look at what really is happening in that organization. When meeting with the CEO, CIO or CFO, the one thing DeYoung consistently hears is that they want to grow business and revenues, but there's more to it that. "The huge thing is you're doing your due diligence but nobody ever talks to the sales department of that organization or vice president of sales," says DeYoung. "By and large when you do that, here's what you'll inevitably hear, 'Our printers stink, many times we can't get proposals out there because the printers don't work or the color quality is bad or we run out of toner.'" Adds DeYoung, "You missed those things before and now you hear things like that and realize if this organization had better output on their print devices or consistent levels of toner or more uptime on their printers, the sales department could produce proposals in a more timely basis or go to trade shows with quality output or save money by not farming out the information and having to wait. That would be linked to the revenue and growth strategies of that organization. If you're not going to understand what the organization's agenda is you may never want to or desire to interview the stakeholders in that organization and help them solve their problems." Another example he offers is a company whose objective is to get 15 percent more output out of their current staff. "If you understand that and take a look at what burdens these people are experiencing internally as it relates to a solution you can provide and link that, it makes all the difference. Something that would have been presented before as, 'I'm going to save you 20 percent' is now irrelevant. It's like I'm going to help you grow your revenue by making sure we're attacking these particular challenges. I'm going to give you back 15 percent of your workers' time because we're going to alleviate a particular burden. If you link your solutions to a particular area, then they don't really care about saving 20 percent because the traction they'd get out of these other things this solution would deliver is far more than a spend save." DeYoung hesitates to toss around growth percentages or how ratios may shift in the coming year or even make predictions as to what's next for QualPath or even if he'll come up with his next bright idea. "I've been doing this long enough and realize it doesn't work like that," he says. "I believe a well-funded company grows organically. Certainly there will be growth. There will be a new epiphany. I don't know what that is. I didn't realize I would have one this year. We continue to get humble, learn, and get better as people in our organization evolve and mature and grow as professionals, and somewhere we come up with a new idea that's different than everybody else's." Scott Cullen has been writing about the office technology industry since 1986 and has written about many of the top stories of the year over the years.