Lexmark is targeting double-digit growth within the channel. Sammy Kinlaw, Vice President, Worldwide Channel and OEM Sales, spoke to PrintIT Reseller about reshaping the company’s channel programmes and go to market strategy in a bid to capture share within the growing SMB sector
PrintIT Reseller (PITR): You are just over a year into your tenure at Lexmark, why did you decide to join?
Sammy Kinlaw (SK): I joined the company from Lenovo where I led the Americas channels for 13 years. Leaving was not easy, but there were a couple of reasons why I joined Lexmark. When I looked at the baseline, everything related to product reviews was really favourable, but what I felt was missing was a strong channel direction. We had a great product offer but a go to market strategy that needed to be refined. I don’t think we had a consistent message on a worldwide platform of how we go to market and what were our steps for growth. So I decided to take on the task and 13 months later, the one constant has been change.
PITR: What has changed?
SK: Everything has changed – from programmes, to product offer, to coverage models worldwide. Last year, the company completed a refresh of over 90 per cent of its hardware – that only happens every four to five years in print. We have also introduced the Two Series line of printers and Lexmark Cloud Services (see page 18); enhanced the value story; doubled down on our security messaging and expanded coverage for the channel.
I’m not changing for the sake of changing, I’m changing because this is where the market is going and in order to achieve growth, you have to approach new partners and new end-users and promote our product lines in different ways. That doesn’t lessen focus on our heritage, it just opens up the aperture for a new world that Lexmark was not in before.
PITR: What growth are you targeting and what is your strategy?
SK: I did an initial analysis of the number of buying partners we had and what I quickly realised was that we were certainly within the 80/20 rule. We want to continue to grow with the partners we have, but this showed me very quickly that the number of buying partners needed to increase.
Lexmark currently has single-digit market share in Europe and we are looking to achieve double-digit growth year on year. It’s a marathon not a sprint and we’re making big bets on the channel to realise that goal. We are looking to realise a 20 per cent growth in the number of buying partners.
Product line expansion is key here. The launch of the Lexmark Two Series has doubled our addressable market. According to IDC, worldwide within the A4 space there were 30 million products sold in 2018, Lexmark’s previous product line competed in about a third of that market. Now, with the introduction of the Two Series, we have a place in two-thirds of that market.
I think it’s important to point out that while we’re talking about entry-level products, it doesn’t reduce our focus on value statement, so the reliability, the scalability, the security aspect of what made Lexmark products legendary and which allowed us to grow in the enterprise space, also resonates in the entry-level market.
With the Two Series we are effectively bringing enterprise scale strengths to a new line of printers designed for the SMB market. So the security features available in our mid-range and high-end products is the same exact security offering as in the Two Series. With security breaches prevalent today, any endpoint device that’s connected has vulnerabilities, which makes the need to offer end-users a secure print environment key – for a partner choosing which manufacturer to represent, that has to be a consideration.
PITR: How are you reshaping your offer to the channel to attract a new breed of partner?
SK: We need growth in this new addressable market, so primarily we are looking to attract partners focused on the growing part of the market which is SMB.
The first Two Series products – the single function Lexmark B2236dw and the multifunction Lexmark MB2236adw are now available, and this summer we will be launching new colour products to complement the mono offer. We are not simply dipping our toes in the water, this is about taking the power of the brand and the power of Lexmark into the SMB sector. These SMB focussed devices will enable us to recruit new partners and new end-users, and significantly grow.
Lexmark has established field coverage but what we’ve realised is that there are only limited partners you can touch with field and in today’s world with IT expansion and growth, we need to do things more efficiently. I recognised straightaway that we needed a larger inside coverage model focused on VARs and smaller partners. We needed a way in which to reach these new partners and in order to do this we launched a major inside sales coverage model globally, which will help our partners enormously.
The programme has already launched in the Americas and the European call centre opened on April 1.
Partners now have coverage that wasn’t previously available and net new partners will be brought into our community and on boarded with white glove treatment. By that I mean it’s like a concierge service, we’ll ensure our partner community understand what they’re buying; we’ll inform them about the product features, functions and benefits; how programmes work; how incentives work, how warranties work; provide them with access to enablement and training – all of the things a partner needs – we’re putting it on a silver platter and serving it to them.
It’s also important to point out that we own our technology, A4 patents and engineering, and because we own the A4 technology we’re first to understand efficiencies, market leadership, improvements in engineering etc. those are within our brand. Our R&D is in head office in Lexington and that makes us very nimble, we can give partners or large end-users feedback on an improvement or design request for example – that’s a strong advantage.
PITR: How can Lexmark help non traditional print resellers overcome some of the barriers to entry in the managed print services space?
SK: If we look at our partner community, we have partners who have traditionally focused on contracted pages and managed print deployments, that’s where Lexmark has excelled and we have a long history in that space. There is now a new breed of partners – established players in the IT space looking to managed print to deliver new revenue streams. It’s fair to say a barrier to entry is that MPS can be resource-intensive which has separated the historic BSD players versus the VAR community who are typically focused on delivering IT services.
My view is that partners should have an evolution – on both sides. We support that and we’re helping to change/remove the barriers to enter MPS. For example, we have just launched Lexmark Cloud Services, a suite of cloud solutions designed to help businesses remove the IT burden of managing their printing infrastructure, and help partners save time and money by managing their customers‘ devices remotely. We’re not charging partners for this, it’s a value statement for us. With Lexmark Cloud Services, partners who are new to the contracted pages space can easily update settings, reset the printer, check ink levels etc. and offer end-users a managed service. All of the analytics behind managing a device that weren’t available to partners before, are now – and that’s a huge benefit to the partner community.
It’s been received extremely well in the US, with many partners already signed up and managing thousands of devices with the service.
PITR: Lexmark is undoubtedly strong within the enterprise sector, how will that expertise translate into the SMB market?
SK: Lexmark’s heritage has traditionally been big business based on industry, so for example, banking, retail, manufacturing, pharmaceuticals and insurance.
So what we have done is to take a step back, to see our value in the enterprise space and look at how we unleash this value into the channel. We have teams of industry experts and we will shortly announce a new engagement model for the channel that will give partners access to these industry experts.
Within our direct business, we have years of experience solving pain points throughout the enterprise, our experts will have the ability to work with channel partners to help them address the pain points within their SME client base. We are geared to help partners win new business in vertical markets.
PITR: What distribution model have you established?
SK: We work with our distribution partners Midwich, Westcoast and Exertis for streamlined ordering and delivery. I’m a firm believer in distribution and we are focused on leveraging the power of distribution in a bigger way. My approach is to consider which players we can go bigger with and we’re looking at investments, programmes, what we have in stock, where we have it, and how much we have – across the board.
One major addition is a new streamlined pricing model. We have created the Lexmark GO Line suite of SMB printers. Any partner can now go to distribution, look up the GO Line and know it’s stocked, the list price is meaningful and, there’s additional monies available to partners who sell that product.