Still Getting Out of the Gate with MPS?28 Mar, 2012 By: Rob Gilbert
For those that deliberated longer before adopting a strategic MPS strategy, or are about to, many questions arise:
• What will my offering be to my customers?
• How can I differentiate myself in the market?
• Which tools are best to use?
• How will it affect the service department?
• How do I gauge profitability over the long term?
• Do I use a specialist or generalists?
• What about training?
• How do I collect information properly for billing?
These are just a few of the issues that dealerships have to contend with when assessing how they approach MPS. Equally important, though, is what type of dealership you have. Are you a:
• Copier or MFP dealer?
• Printer service / supplier dealer?
• Hybrid dealership?
What type of business model you currently have will ultimately help mold how you launch your program. Different types of dealerships focus on different core business principles or ways of operating, and look at revenue streams differently. For example, copier dealerships have some of the infrastructure already in place to support a CPC (Cost Per Copy) or CPP (Cost Per Print) business model because they already have billing mechanisms in place for service contracts on devices they sell. While some pieces may be lacking, the basic structure is there. Many printer service dealers, on the other hand, bill their services differently and may not have a back-billing system in place sufficient to account for or bill a CPC contract. There are several good options available with ERP systems and through leasing companies to help, but it is still a different way of looking at the process.
For these reasons and more, the dealer must make several decisions initially that will help them determine how to engage with MPS. At the beginning of this list is what type of auditing tool you will choose. Most auditing tools gather the same data sets of information during an audit. What sets them apart from each other is how they report and process the sets of information, and what you, as a dealer, do with the data. You can look at the information in two ways:
From the audit forward – collecting the audit data and creating a TCO (Total Cost of Ownership) and figuring out what to sell or provide service on as a result of the audit. (A good TCO solution is vital in this step)
From the audit backward – what the software can do for you to enhance your service offering and customer experience with the software.
Understanding which way to look at the information, what type of dealership you have, and what type of initial and long-term offering you will provide will help determine how to best use the audit data to your benefit. Dealers that already sell hardware and have a lease offering seem to be more capable of taking the audit information and trying to generate at least some sort of revenue upfront. Of course, proper training and the right set of CRM tools and tracking are essential as well. Hybrid dealers and printer dealers have a few more items to consider, as they are looking at an expansion of their billing mechanism, the possible addition of leasing, expanding their service offering to cover a wider range of assets, and possibly a hardware supplier. MPS for some of these dealers is a total revamping of their business model. For this reason, they tend to look at a total solution relative to the audit and audit tools backward in terms of customer support. Larger MFP and copier dealers also seem to gravitate to the total solution model, because they already have most of the correct processes in place to support it.
Hybrid and printer dealers also have to think about the issues that arise with customers who want a total CPP solution but who have several different copier vendors already in place. a decision must be made about whether or not to partner with a local company that can provide service on machines already in place, or select a national service provider that can bridge the gap until the dealer either takes on a line of equipment or moves to replace MFPs with printers. This also can lead to the question of what a CPP contract can and will include. Is it just printer service? If I don’t make it all-inclusive, will a competitor come in and take it away? Do I really need to offer hardware? Should I even bother with MPS at all?
One way to answer that question is by assessing your base of accounts. Have you lost any customers recently? Do you have all of the business from your existing customers? What incremental revenue could you realize by offering a more comprehensive solution? If you were buying more supplies, could you drive your costs down and increase profitability? Do you have 5-10 good clients that you could test now with an audit of their network? I think we all have areas in our businesses where we could become more profitable if we take the time to properly assess where we are, where our customers are, and how we can create the value-adds that solve problems for our customers, and go “deeper and wider” in our relationships.
Once your audit has been done, proper analysis of an existing print landscape must be completed. There are many tools available to help dealers create a TCO and a potential takeover strategy. The most successful dealerships will gain buy in from their prospect of the existing infrastructure costs, they will create some sort of floor plan to map out the existing landscape, identify problem areas of focus, outline an optimized environment, and provide a migration plan to the expected new environment that includes proper training and utilization of corporate devices.
It is also important to note that in today’s market, there has come a migration of Managed Services into the Managed Print Services environment. Dealers who are the most successful in the current climate have embraced Business Process Management solutions, and Electronic Content Management options in order to truly consult and solve business problems. MPS isn’t just about printers anymore. Awareness is at an all-time high regarding cost reduction and greater productivity and efficiency in the workplace. In truth, consultants are called upon to know about and understand many more facets of a client’s business, and it takes a cohesive team of professionals specializing in specific business processes to really create a complete solution.
There are many things to think about as you make your journey into the MPS business model. There are good resources available to assist you and give you the training and tools you need to win in your marketplace. Take the time to assess where you are, what model you think will work in the short-term and long-term, and position yourself for success.