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Shedding Light on the Service Cost Variables of MPS

28 Mar, 2012 By: Sarah Henderson, West Point Products

The promised lure of the fortune that Managed Print Services programs can offer has resulted in explosive growth of programs across multiple channels.  But all too often, after a program steps into the spotlight, stage fright can inhibit the execution of services from performing in tune.  One of the key areas where MPS programs can struggle is service delivery.

In this article, I will shed light on three scenarios to demonstrate how service delivery decisions affect profitability.  It is my hope these examples will help dealers further understand alternate approaches and improve that the profitability of their MPS program.

#1 – How Deep is Your Service Talent?
Most early entrants into MPS were traditional copier dealers who directly employed service technicians.  These technicians were most likely certified on traditional copier lines and with limited exposure to printer lines.  MPS contacts often result in taking equipment under contract that includes a variety of printer models and brands. 

Dealer may decide they will service only specific models or brands.  This approach has been accomplished with a “rip and replace” upon the contract starting.  But the end user engagement where this is needed or accepted is not the norm.  Instead, a dealer may work to “retire” off brand devices. This can be accomplished at the time service is required or during quarterly business reviews.

Either way, the depth and experience of a dealer’s service staff has a big impact on your MPS program.  If a dealer’s technicians are not certified in printer lines, now is the time to consider investing in this training.  In addition, dealers should educate service staff on the cost models of servicing devices vs. placement of different equipment. For example, a new fuser and maintenance kit for an older model printer and associated labor costs may be more costly than placing a refurbished device with improved functionality for the end- and lower TCO for the dealer.  

MPS providers should also keep in mind which printer lines may not have the parts or compatible supplies available for dealers to control costs.  For example, avoid placing a brand new printer model to replace a device you quoted with compatible supplies.  In general, there is a lag time between a new printer model being released and the availability of compatible supplies.  In this example, a dealer may be forced to place more expensive supplies in the interim, and the profit margin will suffer on that output. 

Traditional copier dealerships also must remember to reverse their thinking when it comes to service calls; dispatching a technician on an MPS contracted end-user is not a new source of revenue, but rather and expense to the contract.  As the number of devices grows that a dealer is managing under MPS, a dealer should not feel the need to add additional technicians too quickly.  In general, printers do not require as many service calls as an MFP or copier.  If there are times where service calls spike, but are not consistent enough to add headcount, read on to determine other options and still meet the SLAs of your contracts.

#2 – You’re Flying Solo with Service
On the other end of the spectrum, the MPS team at West Point Products has assisted providers that have relied on one source or national provider company to be the dealer’s service staff.   These types of arrangements are either done with a contract between the dealership and the national service provider or through one of many OEM or national “turn-key” programs. 

While most of these providers can promise SLAs to meet your specifications, customer reviews can be mixed.  Some dealers express frustration when feeling they only have one choice for their service.  Other pain points with this model can be a dealer feeling “out of the loop” with their customer due to lack of communication from the service provider.  Others have shared technicians needing multiple onsite calls due to lack of triage or receiving higher than expected bills after the call is completed.

An option for dealers is to utilize a national service dispatch center that contracts with multiple providers, such as the Axess Service center offered by West Point Products.  This model ensures dealers receive the fastest response time, regardless of geography.  Regardless of the source, look to partner with providers who will provides consistent communication to dealers through the service call process to ensure a positive customer experience.

#3 – Pick a Backup Band
One of the key ways to help avoid unnecessary or extra service calls with MPS is to partner with a company that offers phone and/or web based triage.  This service can support dealer service technicians with support on printer lines they may not be as familiar with.  This triage approach can help dealer service staff grow their expertise with printer models and reduce time on calls.

This type of service can also be made available directly to the end user as well.  In this model dealers can expand their line of service with phone based triage and simply route those calls to an outside support team.  Depending on the dealer’s needs the phone may be answered either “Support Desk” with dealers name or associated with a branded national program such as Axess MPS.  With some business partners this service is a simple fee based structure or can be provided as a value adds when purchasing products, such as parts. 

Know Your Costs
All of the above scenarios are designed to help you best manage the delivery of service within your MPS contracts.  In general, when pricing contracts, a MPS provider is taking an average or their best guess on how much it will cost to service the equipment.  When it comes to copier lines, dealers often have enough experience or historical information to make an accurate service estimate over the course of the contract. 

Where MPS deals can start singing off-tune is when copier dealer start servicing printers.  Look for business partners who can offer you tools to assist with pricing, including service.  Look for the most accurate servicing data by device type, not just a fleet average.  This will not only help dealers on the front end of pricing contracts, but on the back-end to give dealers to have the room within the margin to take care of the customer.

Management of service within MPS is not always the show stopper topic at industry trade shows or a headline grabber.  But it is the costing and management that will ensure profitability for MPS program well after the curtain closes on each new deal.

Sarah Henderson is Director of MPS Operations for West Point Products. In this role, she plans, develops, and manages the implementation of MPS programs & key infrastructure tools in multiple channels in North America through the Axess program.  NOTE: Henderson is moderating an ITEX Expo Power Hour Session Panel: Pricing Print for Profitability, as well as co-presenting an ITEX Pre-conference sales workshop.  Pre-conference workshop: April 17;  Expo & Conference general show dates: April 18-19, 2012; The Mirage Hotel, Las Vegas, NV.

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