Before we start, let’s agree to use the official version of The Copier Sales Dictionary definition of ‘solution’: 

so· lu· tion   /

[suh-loo-shuh n]

–noun

Anything you sell other than just copiers. My copier proposal was half the price and I still got crushed! They said that even though we have been their copier vendor for the last 10 years, going forward it was in their best interest to give their business to a more knowledgeable company that can provide more than just copy machines but actual solutions to their business objectives. 

—Related forms

so·lu·tion·al,

—Synonyms key, resolution.

At countless sales meetings you have stood in front of the sales force and extolled the virtues of selling solutions. You regurgitated words like “applying industry leading expertise to…”, “develop and deliver comprehensive, customer-focused…”, and other similar facades when explaining the importance of selling solutions.

You have read all the industry analyst reports complete with the pie charts and bar graphs of industry trends moving towards the solution sale. You tweaked the compensation plan with additional incentives when a solution sale is closed. When all of this did not provide the expected results, you designated some of the more tenured reps to focus solely on the solution sale and you bestowed the sacred title of “Specialist” on their new business card. But still, no sales.

Figuring it can’t be you, it’s got to be them, you looked outside the organization for the answer. Enter the sales trainers and the one-week boot camps.  This was successful.  Successful in taking your reps out of the field for a week and further losing momentum. You were then convinced that you just needed to find the right person and the right person did not exist in your company. Seeming like a good idea at the time, you hired that ex-IKON / ex-Xerox / or my personal favorite, ex-Kodak burnout retread, to carry the company flag. This surely will guarantee your solution sales.  But the only guarantee that occurred was the outrageous financial guarantee you contracted to pay this impaired fossil.  After all this effort your solutions sales have not increased. In fact, your overall sales are down from the year before because all the changes distracted the focus of the sales team.

The Stalled Solutions Sale

The actual reason for the stalled solution sales is very simple. Copier sales people have historically never had to create a compelling reason or unearth a compelling business reason for the customer to buy.

Prove it? Of the sales that were closed last year, the overwhelming majority were triggered by either a lease expiring, a lease close enough to buyout and keep the customers price about the same, a competitor’s proposal to your current customer, or the customer complaining about the copier and demanding a new one. We have relied on the lease expiration date and customer dissatisfaction to create the reason to buy.

Still disagree? You sure you’re not just in denial?  Answer this: What percentage of the sales last year involved upgrading a copier that was initially a cash purchase and was not leased?  I bet it is a very similar percentage of printer management sales closed last year. The idea is the same. The customer owns all the desktop printers. They are not on lease. There is no stated existence of a magical time when the customer is required to make a decision on the future of the printer fleet. They do not receive a monthly invoice summarizing all the associated costs and a reminder that the lease expires in three months.  The only reason a customer would choose to procure a printer management program is a compelling reason that bridges the gap to either move towards a more desirable state or move away from an undesirable one. Copier sales people do not have experience, skills, and many times the desire to build that bridge.

What about software document management programs? If your reps can not develop a compelling case for a customer to modify an existing process (how they currently buy desktop printers, service the printers and procure the associated consumables) why would it be difficult to understand why they cannot sell software document management programs? This type of program is an entirely new process for the customer. I cannot recall a single sales appointment when a prospect has said,

I am so glad you are here. You see Max, 5 out of the 10 people in the accounting department will be expiring in 6 months and I was hoping you had a combination of hardware, software, and professional services that could not only supplement their existing responsibilities but I was really hoping to accelerate the entire document workflow process in that department. Did you bring a brochure with you?

How can we fault the reps? Just because their skills on the miniature golf course have been up to par, we expect them to play golf.  Sure, both activities use putters, require keeping your head down, and use those stubby little pencils without erasers to record the score. Heck, even the 18^thhole is the same as it determines how soon you will play again: If you hit the ball through the blue fairy’s trap door you earn a free game compared to draining one from the cheap seats for an eagle. In either case you can’t wait to play again. We are placing unrealistic expectations, on the reps to embody the sophistication of orchestrating a solutions sales type transaction just because you said to do it. Dead man walking.

If you do not develop an alternative to honing the skill necessary,  the only chance you have of consistent solutions sales will be waiting for the phone to ring and listening to the exasperated caller complain that every time they walk up to their accounting department to submit an order, the department starts making funny squeaking sounds, begins streaking, and then turns red right before deciding to stop working completely.

Max Rosenthal is an analyst with Diversified Business Solutions, a BTA member company in San Diego, California. Diversified Business Solutions works with CFO’s of small- to medium-size businesses that are interested in accelerating the time to cash. He encourages your opinions and ideas and can be reached via e-mail or phone at 858.565.2737.

We continue our three part series on Managed Print Services: the Theory, the Tools, and the Targets. Today we will finish our series focusing upon the targets, or opportunities, which dealers predominantly focus.

As we turn towards the analysis of opportunities, it is important to note the MPS space contains a variety of strategies. The players in the space are coming from many different angels, but the underlying principal is that of “selling pages”. Overall, the theory is that a potential customer is spending money on output solutions; by managing those solutions and consolidating logistics the customer can pay less money while the MPS partner can maintain a healthy margin through economies of scale - a proverbial ”win-win” situation 

That is about as basic as it gets. From there, creativity is king and usually the market and/or situation will determine many of the variables of each engagement.

In conducting research for my company, I have recognized three general models that are present:

1. The consumables-based approach
2. The equipment-based approach
3. The hybrid approach

The consumables-based approach:

The name says most of it, but the goal here is to seed in transactional business with the eventual goal of reaping the benefit of hardware up-fits. Let’s say you are sourcing equipment and consumables (toner, ink, etc.). Partner A proposes they be allowed to help consolidate and lower costs. The methods are:

1. consolidate your approved vendor list
2. reduce the accounting headaches
3. reduce costs due to volume of business
4. no change to end-users habits (no additional training costs)
5. offer upgrade path for all hardware
6. maintain less on-hand inventory by ordering when you need.
7. possibly offer maintenance agreements on equipment.

This can be a positive improvement over unmanaged fleets of output devices and generally there are no capital expenditures required in the beginning. This allows the savings to be realized immediately.

However, there is generally no right-sizing ordevice-to-need analysis done outside of general recommendations to get rid of desktop inkjet printers in businesses. Additionally, the traditional MFP (copier) fleets are not rolled into these agreements, so there are still cost center silos.

Account management is generally compensated on transactional business, not the initial “take-down”.

The equipment-based approach:

Keep in mind we are not talking about just “slinging-boxes” here. This approach typically offsets the negatives of the consumable-based variation by offering right-sizing and/or device-to-need analysis. Additionally, service models are generally included withe Total Cost of Ownership (TCO) analysis to help offset some of the potentially negative aspects of offering only an equipment-based approach.

Additional benefits can be a standardized cost structure for both MFP (copier) and printer fleets, if the MPS Partner is worth their salt.

A very real negative to an equipment-based approach is generally the assertion that a customer’s equipment need to be replaced in order to gain a lower the advantages of a lower TCO model. At times this is not entirely bad, especially on aged output fleets. However, many customers have capitalized a good portion of the equipment they own and are stuck trying to depreciate it. By replacing everything outright they stand to take a fairly sizable hit to their balance sheet, in many situations.

This negative can be offset through financial tools like leasing, which allows the customer to gain the advantages of owning the equipment while sparing the up front hit to the balance sheet and maintain cash flow. Also, this helps to build in a technology refreshment program and allows mechanical break fix to be outsourced solely to the MPS Partner who was awarded the contract.

Some forethought is given to right-sizing, but additional equipment purchases are generally encouraged so there is a bit of a conflict of interest here to some degree.

Account management is generally compensated on the gross profit in the equipment sales, but does not share in the consumables revenue.

The hybrid approach:

This is where the true consultancy begins. The hybrid model always leads with assessment based activity in order to best understand the customer’s environment and workflows. This has all of the benefits of both the consumables- and the equipment-based approaches, as well as allowing the negatives to be almost completely offset in the hands of a skilled account manager or MPS Partner.

Imagine being able to replace those devices in need of up-fit and placing all devices under a centralized, outsourced servicing model all based upon actual usage, not projected averages. In other words, almost a pay as you go proposition.

The equipment being replaced can be immediately funded, and the lengthy business discussions regarding budget cycles and additional approvals for unscheduled equipment replacements can be avoided. Everyone can get back to their core business and not hassle with the details because the MPS partner is paid to focus on that which is core to their business - managing output devices.

Account management can be a mix of varying compensation plans. The focus here is to pay based upon generating long-term profit for the dealership and maintaining long-term, client-based relationships. These individuals or teams are not box-slingers or toner-junkies - they should be paid to manage the account.

Additionally,  you may find the development of separate teams to be worthwile, but integration between the ‘farmers’ and ‘hunters’ can be challenging.

The opportunity:

Before MPS became a well known trend, many dealers were focused on selling hardware and offering differing types of insurance plans, or simply selling residual consumables as a transactional component of the business; these strategies typically yielded limited levels of penetration into the customer account.

Equipment-based approaches were typically less penetrating because everyone needed a copier but they were a dime-a-dozen; Consumables-based approaches often missed the true value of being a consultant to the businesses they served.

The true opportunity of managed print services is staggering. With an estimated 4.6 trillion pages printed in U.S. businesses last year alone, estimates show only 3% of output fleets under any type of on-going management plan.

Customers do not want to manage output devices, but they are a necessary part of each and every business today. Everyone just wants the page to emerge, fresh and crisp, when they hit the print button. Those MPS partners that understand this core concept and respond with a comprehensive plan of action to help their clients re-focus upon their core business will realize healthy profits and a sustainable business is within reach. 

Update: Read the entire series.

Everyone that has been exposed to technology understands certain technologies die or become commodities. It is the way of progress, the way of humankind, to better ourselves and our experience.

For those of you regular readers, you all know I work for a company specializing in helping customers solve business challenges revolving around their documents. This wasn’t always the case. In the not so distant past, we sold typewriters, calculators, and duplicators (the predecessor to the copier). We even had service technicians that would repair calculators - if you can believe that!

Well, much like the typewriter before it, the traditional copier is standing on its last legs; if not soon to become extinct, then surely on its way to becoming a commodity.

With the advent of word processing technology and printing on demand, the need for duplicating documents has moved to a model of replicating the original from an electronic copy.

Well, Greg Walters has captured the essence of this in his blog entitled The Death of the Copier. Greg’s bio reads:

With over 20 years of providing business to business technology solutions I have had many opportunities to help my clients save money. From the 5.25 HD floppy, to Outdoor Wireless Mesh; from Corporate Identity Systems to Industrial Video production, I have been in nearly every type of business environment. It is my intent to always work with my clients as a partner, as an advisor and to do what is in my clients’ best interests. Managed Print Services is a “new” issue for most I.T. professionals when it comes to output devices yet MPS represents one of the most “revenue drains” in today’s business. This site is a place for me to share information and views relating to Managed Print Services, the impact of print systems in the organization, and Professional Selling as an Agent of Change.

An “Agent of Change”… that’s what I like to hear, and in reading Greg’s blog he is indeed that. An instigator of betterment, applying himself as a resource to help his clients improve their perspective on the business model so many cling to…

Take a moment, and check out Greg’s blog. There is also a link in the side bar.

Tonight we discuss “the renaissance of capture.” In a recent article in ImageSource titled Top 10 Industry Trends, authored by John Mancini, the President of AIIM, outlines what he believes to be the top 10 drivers within the DMS space… Let’s continue our discussion with the number 5 influencer in the DMS space this year:

5. The renaissance of capture.  As the market expands into mid-sized organizations, there is untold untapped opportunity in organizations still reliant on paper processes. The expanding use of multi-function devices as access points to document systems creates all sorts of opportunities for solution providers.  But solution providers need to get out of the mindset that this is still a hardware business or a hardware sale.  It ain’t.

Indeed their is a renaissance afoot. However, it is not just within the small realm of capturing documents. Paper-based documents are still a very cost-effective way to transport information from one place to another. The printed page is increasing at an estimated 11% per year with 2006 volumes at somewhere close to 3500 billion pages (courtesy of Gartner via Jim Salzer over at DocuAudit International). However, I have seen no supporting data to further determine if these are simply reproductions of documents already available online or original documents to process and capture (although I have my suspicions).

DMS was originally intended to help structure the mess of file rooms, desktop clutter, and bloated file servers where otherwise structured data might be used (e.g. databases). A logical person might think DMS would be a strong contender to help structure the data with the rampant production of documents abound in today’s business. However, with increased potency of line of business (LOB) systems and the ever rising availability of digital originals, one can’t help wonder if the need for paper-based capture may be waning. On the flip side of the coin, dealers selling DMS are wondering whether providing a repository for the documents will allow people to let loose the purse strings and encourage generous volumes of reprints.

No doubt there are companies with rampant paper processes, and every dealer is anxious to know whether the pain is enough for them to buy one of their solutions, whereas business owners who have not adopted a DMS are asking why they would buy something when they don’t see a problem…

If the dealer is attempting to position a piece of hardware as the solution rather than taking into account a customer’s need for an over-arching strategy, I disagree with the opinion that the expanding use of multi-function devices as access points provides an opportunity to the dealer. However, I do see that DMS will provide an opportunity for dealers to reap the rewards of tying their hardware to a compay’s DMS or LOB system using middleware packages.

My only caution would be that dealers don’t become tunnel visioned in the process. John is clear to state “it ain’t” a typical hardware sale. True enough… so why even go in talking about the hardware at all?

For those of you in the “copier dealer” channel (although I’m loath to use this term) you are probably wrestling with the realities of Document Management Systems (DMS). In a recent article in ImageSource titled Top 10 Industry Trends, authored by John Mancini, the President of AIIM.

In this article John outlines what he believes to be the top 10 drivers within the DMS space… Being in the business of documents, I found the article compelling.  Not surprisingly, taking the number 1 spot was the momentum SharePoint is garnering. John goes on to say:

1. The entry of Microsoft SharePoint as a serious player in the document and records infrastructure marketplace.  This is one of the most important developments in evangelizing these technologies that we have ever seen. Suppliers and consultants will debate what MOSS can do and what it can’t.  But it won’t matter; it will spread like kudzu through the end user community.

John could not be more dead on with this. With the advent of SharePoint 3.0, whether it be the enterprise or SMB offering, Microsoft has taken root in the document space. We use it daily for both an Intranet solution as well as for dashboarding and workflow. Microsoft has once again bundled a core offering into the OS; since it is free to get started, meets some entry needs for the SMB, and is extremely compatible with the predominant desktop OS and Office suites it is indeed “spread[ing] like kudzu” (John must’ve been to South Carolina recently)!

While this solution is great for “evangelizing” the DMS/CMS market, I have quickly discovered it is not a very good DMS solution. Don’t mistake the fact that it has some wonderful collaborative tools and is extremely solid in ad hoc workflow solutions. However, SharePoint offerings are not true DMS’s in and of themselves.

Education is a tough thing here because many people don’t understand why you wouldn’t want to store a document within a database, as part of the SQL table record. It took me seeing what happens when you hit your first 20,000 documents stored - or worse have a client hit 3,000,000 pages 3 years early!

The performance takes a huge hit, and backups are a nightmare simply because you are handling 1 huge file instead of incrementally dealing with each file as needed. Think about your entire customer base calling you on Monday morning demanding a service call! You’re service team would crumble.

In closing, SharePoint will give your dealership the opportunity to talk to more customers about DMS, but if you don’t get there first and have an education strategy for them - you are the one that will get schooled.

My suggestion is to partner or acquire talent that can bring SharePoint knowledge into your company. It’s a technology that has its place - so you can either learn to use it to your advantage or see how much longer selling copiers with Paperport will last…

Tomorrow we discuss the entry of “alternative” delivery systems… what does that even mean?