Salesforce Transition to Selling and Managing Print6 Jun, 2013 By: Kevin DeYoung, Qualpath
MPS as a business model is one of the rare solutions that presents a true "win-win." It’s a win for clients in that they are more efficient, have lowered their costs and have relieved internal burdens. It’s a win for providers as they have increased revenue and profits and found a new way to penetrate new accounts. In this article, the key elements of transitioning your sales team from a product-for-price channel to one that sells MPS will be addressed, including current team assessment, recruiting, compensation, ramping models, sales cycle guidance, and do's and don’ts with your current sales team. When properly transitioned, your sales channel can effectively offer MPS to benefit both clients and providers.
From an industry point of view hardware sales are not growing. This is evidenced by declining to flat revenues and increasing commoditization of the market. It requires less professional sales consultation to provide a hardware solution and clients are increasingly educated on what their requirements should be. Conversely service based revenue is growing and specifically Managed Print Services shows a tremendous growth opportunity for the future. Industry analysts continue to forecast growth rates on average of 38% through 2015.
A key element as a provider is to understand your definition of Managed Print Services. The Managed Print Services Association (MPSA) defines MPS as “the active management and optimization of document output devices and related business processes. Managed Print Service is not a click-charge, click charge with meter reading or a marketing sales program.”
The reason it is important to understand your definition of MPS is that there are many variants of the solution offered. One or all of these variants may fit your business model.
Some of the variants are:
- Toner Only
- Toner & Service
- Toner, Service & Hardware
- Toner, Service, Hardware & Other (Typically a form of Business Process Optimization via Electronic Document Management)
From these variants are different transactions methods:
- Cost per Print
- Minimum base from client on a number of prints they commit to
- Leasing involving new hardware, service and supplies
Each method has positive and negatives to them which impact revenue, profits, client retention, the value perceived by the client, competitive exposure, risk exposure to the provider, sales cycle length, infrastructural investment and the degree of specialization needed.
There are many different definitions of MPS. You can to talk to 5 different MPS Resellers and get 5 different models. The key is to decide how you wish to do MPS and that will decide who best sells it.
Keep in mind how MPS needs to be viewed. MPS is a service; it represents a transference of risk from the client to the provider (service, coverage area and cash); it is a more complex sale than hardware and toner and is best appreciated at an upper management level. Performed properly it is a mutually beneficial solution (provider and client), performed poorly it damages profits and may create greater not less burdens for the client.
Who would sell MPS? Keep in mind that vendors sell things, products for price, re-justify their existence for every sale are fully exposed to the competition, work within a defined buying process, transacted at lower managerial levels within their client organizations and are a low valued resource to the client.
Consultants understand corporate & individual objectives, perform due diligence, discover improvement areas, collaborate/develop solutions, define solutions in a cohesive strategy, develop a phased implementation strategy, track and report results, manage accounts to achieve desired results conduct regular account reviews and are a high resource value to management.
In reality, Service Sales are fundamentally different than Product Sales. Many desirable characteristics of a product sales rep are actually detrimental to service sales success. The transition from product to service sales is very difficult…fewer than 1 in 3 product reps will ever make a successful transition.
Do you have someone on your current sales team that can successfully sale MPS? Product for price sales representatives typically sells to mid or low level management, performs demo’s or trials, make commodity sales, work in a defined buying process and are hard closers. Successful MPS Sales Representatives are good at prospecting, sell at the C-Level, performs audits or assessments, make financial/operative/IT Sales, define solutions in a cohesive strategy, and most importantly provide a compelling business justification for the solution they are offering.
Other successful qualities for the successful MPS Representative are goal orientation, poise under pressure, take accountability for their actions, are able to work autonomously, are expressive and people oriented and are organized/diligent.
Define the qualities in the correct profile and measure if you have someone on your staff that has them. If you are still not sure I recommend personality testing for these traits. There are a variety of human resource based organizations that due this. These testing processes are very reliable.
If you have determined that you do not have a person like this in your company you must recruit. Recruiting sources available are many. Websites like Linkedin and Facebook. Competitors are a source although you may have to re-orient them to your company culture. Recruiters are good source but are expensive so you must be clear and the profile you desire. Referrals are the best source as they come from trusted colleagues. Advertising and resume searching is inefficient and require much filtering.
Our method once we have found candidates is to review their credentials. Have they sold services before in a business to business environment? What is their educational level? Do they stay with their employers or change jobs frequently? Is their represented record verifiable? Once we find candidates we first interview them on the phone, if we like the result establish an in person interview having them fill out a comprehensive job application. In this interview we evaluate their communication skills, professionalism, credibility, intelligence and presentation ability. We always call previous employers and desire to speak to their immediate supervisors. This is a heavy filtering process but worth it as it results in hiring the right person who will remain with your organization and be successful.
Compensating Your Reps
Compensation is an important issue and sales representatives will do what you pay them to do. So your compensation plan must position itself to successful MPS results. Traditional commodity plans pay on revenue and gross profit. They are typically configured to be commission only or salary plus commission. Perhaps some commission on service. Good MPS Plans are annuity based, pay on contracted pages or revenue, have lower hardware commissions, have bonus for overachievement and reconcile to your company’s desired financial objectives.
The sales model for MPS is different. Usually there is no existing contract in place and no predefined time line to make a decision. The sales cycle however is predictable based on pre-defined activities that need to occur for MPS Sales.
In order to develop a revenue objective for the MPS Salesperson, much will be determined by how they are compensated. Hardware sales are a part of MPS sales and should be a part of their quota. In order to discern how long it will take to reach full production you should create the production your organization desires and then back into the activities that your salesperson will need to do to achieve those objectives.
There are constants that must occur in the MPS Sales Cycle:
- Value Proposition with a C Level
- An audit or Assessment which involves other stakeholders
- A Current State review showing findings
- A proposal that presents a compelling business justification
- Proper on-boarding during initial engagement phase
- Ongoing account reviews to retain and expand relationship
- During this process there must be collaboration (important!)
The metrics for new MPS Salespeople vs. experienced ones are the following:
- New MPS Sales Reps:
- Value Propositions (Initial Appointments)
- Assessments (25% of Value Propositions)
- Current State Reviews (80% of Assessments)
- Proposals (80% of Current State Reviews)
- Contracts/Engagements (35% of Proposals)
- Experienced MPS Sales Reps:
- Value Propositions (Initial Appointments)
- Assessments (50 to 80% of Value Propositions)
- Current State Reviews (99% of Assessments)
- Proposals (99% of Current State Reviews)
- Contracts/Engagements (50% to 80% of Proposals)
Proper Assessments are important and should be comprehensive. Elimination of any one of these events lowers the probability of success. Always test for client collaboration and problems you know you can solve.
In summary, do your own due diligence on who will sell MPS. Don’t hire the person you like, hire the person who is best qualified. Thoroughly review candidates, do not eliminate steps in the hiring process. Do not assign your best product representative to sell MPS; why damage current revenues? Establish a compensation plan that ties to your financial objectives and a business plan that you constantly review. Always do reviews and be involved in the MPS Sales Activities to constantly test your plan and premise. Lastly be mindful of the events in the MPS Sales Process; they need to happen.
Kevin DeYoung is president of Qualpath. After graduating college he worked at Burroughs Corp. (now Unisys), selling fax machines. In 1986 he founded Ameritrend Corp., an Inc. 500 Company operating in the IT space. He later became president of Kodak’s Latin America division. In 2001 he started Qualpath, to focus on MPS; he also serves as the Vice President of the Managed Print Services Association. Visit http://www.qualpath.com for more information.