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Making money from print

Is the provision of consultancy services, including MPS, MDS and Managed Content Services (MCS), all that will matter in the future, or will there still be a place for more traditional hardware-led sales? If the latter, how will it be possible for resellers to stay profitable? Print IT Resellerasks a range of experts from the print and imaging sector for their thoughts.

Print IT Reseller asks a range of experts from the print and imaging sector for their thoughts.
Print IT Reseller asks a range of experts from the print and imaging sector for their thoughts.

Bernard Cassidy
Head of Marketing, Konica Minolta Business Solutions (UK) Ltd

“As a global manufacturer, hardware is critically important to our business, but we also understand that hardware alone doesn’t always deliver the business critical and production print devices, in many cases, provide end users with what they need in terms of print and document output and even a reduction in energy usage. But what a hardware-led sales approach doesn’t do is add real value to a customer’s business or deliver the margins that a dealer requires to achieve sustained growth.

“Margins on hardware are incredibly tight and that’s predominantly because simply selling printers as a transactional sale doesn’t offer enough business benefit to end users; it just provides a short-term gain.

“Today’s savvy resellers and OEMs pitch themselves as technology partners, not simply technology providers, and consultancy is absolutely the future for our industry. You can’t deliver tangible long-term businets benefits to end users, including cost savings, efficiency improvements and productivity gains, with hardware alone. It’s a mix of hardware, software and services that drives real cultural change, addresses mission critical business objectives and meets customers’ goals. It’s only by adopting a consultative approach that you can truly understand what the customer’s business really needs. “The delivery and provision of consultancy services provides a reseller with the information they need to align the hardware and software solutions and package these as a complete managed service that exactly meets individual customers’ needs now and in the future.

And it’s this approach that also provides an ongoing revenue stream for the dealer, ensuring their own business remains profitable.”

Gary Downey
Group Marketing Director, Balreed

“That’s a really interesting debate you’ve posed and it certainly gets you thinking. If the question is whether a full assessment and consulting service will become the de facto approach and every buyer will go down that route, I would say it is unlikely. It may be convenient for some vendors to become a factory for audits, but it is what the buyer needs in their decision-making process that should be considered first. It’s their level of knowledge, buying expertise and objectives that will define the sales approach.

“But I do think that consultative selling is increasingly important. There are reasons why the ability of a salesperson to assess, consult and advise is of value to the buyer, as well as to the provider, and for that reason it will have its place in the future. Price-led hardware sales people who add no value to a buyer will still have a place in the commodity end of the market, but with increasing online competition, these organisations will need to shape their operations, operating costs and their sales commissions to survive, just as we have seen happen in the retail marketplace.

“The solutions we provide, whether one device or 1000s of integrated systems, are a significant investment for the size of organisation purchasing them, so it isn’t usually a decision made without some thought by the buyer. But it depends on their level of knowledge, familiarity with the technology and objectives as to whether they buy on a commoditised best-price purchase basis or partner with a value-adding provider who acts as their trusted advisor. And it’s not necessarily true that the one or two device purchases are made on price, whilst the larger ones are more receptive to a consultative sale; it can just as easily be the other way around.

“If you draw the analogy of a big household purchase like a TV: some buyers are committed to a brand or a specific model/shape; they know what they are doing (or at least they think they do); will do their own research on the best price; decide whether the provider/service cover is a big issue for them; and go ahead and buy it. They will see no need for advice and no value in consultancy, and the chances are they will source online, as that channel, thanks to lower operating costs, will generally be cheapest. Or they will pay a small premium and buy via a retail store if they think the level of care in delivery and support is worth paying for. The key thing is that the buyer makes the purchase knowing what they want.

“Another household, understanding that technology has moved on, might be more open to exploring what is right for them, not just in terms of price but also functionality, sound quality etc..

These days there are lots of sources of information online, on TV, in mags etc., and most people will take a trip to a store or two to see things physically. During this assessment phase they are in the selling environment of the retail sales assistant and a good consultative approach, when a sales person takes the time to understand their needs, preferences, budget etc., could be sufficient to accelerate the purchasing decision and clinch a sale.

“Suggestions to enhance their
experience, such as better sound, Wi-Fi controls or whatever, could be added to the buyer’s must-have list, and a home visit to assess the space and develop the best TV system to fit may be agreed.

“The final purchase may be quite different to what this household set out to buy, but they will have got to a more informed position with the aid of that consultative approach. Many of us have enjoyed the experience of a good salesperson helping us to make a decision in this way. If they still haven’t made up their mind, they head home with all the knowledge they have gained, and then potentially adopt the knowing-buyer route as above!

“My point is: both households could be the same size and have the same budget; it comes down to whether they actually know what they require. The same is true in our market. As providers, we need to respond to the buyer. A strong consultative approach, with or without an assessment, may be sufficient to understand the buyer’s position and win that sale before it becomes a commodity sourcing purchase. As business owners we need to consider whether our business is set up to compete in that low- or zero-profit space and still be sustainable.”

Phil Jones
Managing Director, Brother

“The future has already been written when it comes to a more services-based print proposition, and all vendors are moving their business models and channel propositions towards this.

“It doesn’t mean the end of the transactional business by any means. However, it will begin to dilute as customer enlightenment and channel expertise grow. Availability, Convenience and Familiarity still rule when it comes to transactional business, so resellers should make sure they have it in stock, can deliver quickly, and add value to the transaction by layering on different up-sells and crosssells.”

Rob Attryde
Head of Marketing, KYOCERA Document Solutions UK Ltd

“I think the answer is yes, as there is still a long way to go in educating customers and prospects about the benefits of MPS, MDS and MCS. This means there will still be a large amount of traditional business out there to pick up for those organisations that do not have the time or the ability to set up and implement MPS, MDS and MCS.

“I also happen to think that app-based software for MFPs and printers will mean the transition will take longer as this will extend the functionality of the fleet of devices customers have already installed at a low-cost entry point.”

Norman Richardson
Director and General Manager,  Channels Group, Xerox UK

“Channel partners are constantly evolving to meet the needs of their customers.

We have seen a huge shift in behaviours over the last three years, moving away from hardware-centric sales to more consultancy-based services-led sales. However, hardware sales are still very important to most of our channel partner organisations.

“Managed Print Services (MPS) delivers significant benefits to customers and pulls through hardware sales, but where MPS is not relevant for customers, our partners are still able to offer a value-add approach, linking, and differentiating with, Xerox hardware and solutions and overlaying their own unique value proposition. There is also an opportunity with Xerox to deliver MPS-type values by delivering supplies-only MPS. Hardware also remains a core driver for our supplies business, with attachment rates improving when solutions and services are involved.”

Bruce Davie
Group Commercial Director, ZenOffice

“We sell printers from almost all OEMs as a catalogue purchase through our business supplies division, and that business will always be there. The margins aren’t great but it still generates a revenue stream and in the main is a commodity purchase that requires little input from us – we just leave customers to it. That’s the old way of doing things.

“It’s when delivering MPS, which we do as a Xerox solution, that consultancy comes into play. Here, we become ever more involved in the after-sales arena, following through and working with customers to ensure they benefit from improved productivity and better solutions.

“Today, business is more about being a trusted partner. We want repeat business from our clients and in order to get that they have to believe we have their interests at heart. That trust isn’t achievable simply by focussing on hardware-led, transactional sales. We firmly believe that in order to sustain and secure ongoing growth, we have to place ever more emphasis on consultancy and solutions-led services.”

Mark Garius
Managing Director, ASL Group

“There will always be a need for simple hardware sales and service provision. Customers aren’t all early adopters of MPS or MDS propositions and there will be a long tail of people who want a traditional copy and print solution.

“What they will all want is good, pro-active service, whether it’s for an allsinging, all-dancing MDS proposition or an MFD in an SME location. However, size is not always a good predictor of MPS/MDS adoption; some major corporations can be ‘trailing edge’ and some SMEs can be ‘leading edge’.

“We also see that paper usage is not declining, and some of us were around 30 years ago when it was said that the paperless office would soon be upon us! People are smarter and more considered about when and what to print, but the amount and speed of information being circulated have both gone up exponentially and so our customers print a smaller proportion of a bigger iceberg of data.

“Because of that, there will be life in traditional hardware and service sales for some time to come. That said, any smart

reseller will be addressing both ends of the spectrum so that they can deliver what the customer wants. Who are we to say ‘You must have a cloud-based MDS solution’ if today they just want a more cost-effective MFD? The customer is, of course, king.

We can advise and consult with our customers, but they are the final arbiters of when (and if) a ‘new’ technology/solution is right for them.

“Making traditional print/copy generate money is possible (a) by being a lot smarter about what you sell (long-term rather than quick-hit); (b) by servicing equipment/software intelligently (e.g. remote fix, preventative maintenance); (c) by managing, monitoring and providing supplies just-in-time; and (d) by being big enough to be very efficient, but not so big that you lose sight of the customer.”

Derrick Murphy
Managing Director, Reflex Digital Solutions

“The copy/print market has evolved over the years and it will continue to do so. We are all operating in a fast-moving market and standing still isn’t an option.

“Managed Print Services, Managed Document Services and Managed Content Services are not new; nor is a consultative sales approach. The names might have changed and the level of involvement with a customer’s business might have increased, but we’ve been delivering a consultative-led service in one form or another for many years.

“The paper-free office that was predicted to arrive some 30+ years ago has never materialised, and although there has been a reduction in the volume of paper used, the increase in the colour percentage has made up for potential turnover loss.

“What hasn’t changed over the years is good, old-fashioned customer

service. There is, and always will be, a place for well delivered customer service. The most important factor for the future success of companies within the print/copy industry is not MPS, MDS or MCS but the protection of colour print pricing.

Companies that have driven down prices are not sustainable in the long-term and hopefully, as things tend to go in cycles, the true value of service versus cost will return, even if there are a few casualties on the way.”

Alpesh Unalkat
Managing Director, Capita Managed Print

“Consultancy services are very important and will become more so for MPS, MDS and MCS opportunities, especially in medium-to-large enterprises. Consultancy is the mechanism for providers to deliver differentiated and integrated solutions, while making money and remaining profitable. The key here is that consultancy is most appropriate for medium-to-large organisations.

“However, for some organisations, especially those with low headcount (e.g. small businesses, retail outlets, GP surgeries etc.) traditional hardware sales will still be the most appropriate route to market. For businesses operating in this space, making money can be achieved through volume sales, while minimising the cost of sale. Consultancy services can be useful in these types of organisation but mainly to drive an integrated solution, e.g. hardware integrated with EDM or similar.”

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