Change Your Mindset: Seven Steps to move from a hardware focus to a solutions focus.18 Jun, 2004 By: Darrell Amy imageSource
Change Your Mindset: Seven Steps to move from a hardware focus to a solutions focus.
You’ve been steadfast in your view of the software solutions business for quite
some time now. And, guess what, you have been right all along. No matter if you
deem it a passing fad, the prescription to preserving profitability or too
the slightly modified words of the classic motivator James Allen: “As a dealer
thinketh, so he is.” You define the reality for your dealership. If you have
the mindset that you can’t handle the solutions business, you likely won’t. But
if you open your mind and believe you can be a leader in this promising future,
there is a very good possibility you will.
mindset does matter. Charting your course from pretending to be a solutions
reseller to actually building a profitable business model is dependent on
altering your outlook on the software issue. Below are seven key mindset
changes to be successful in the new solutions business.
A New Value Mindset: From Lower Costs to Higher Value
In the hardware world, we try to add value by providing systems that lower
costs. We pull out the calculator to show how our new lease service proposal is
more reasonably priced than their current expenses. The value equation
typically goes like this:
VALUE = BENEFITS – COSTS
no wonder that profit margins are eroding. With the solutions mindset the
value equation takes on a different look:
VALUE = RETURN / INVESTMENT
Skeptical? You should be. That’s because we have traditionally defined
benefits as convenience and productivity. The convenience of a document feeder,
automatic duplexing, booklet making and network printing is stale. Nice, even
Livermore, head of Hewlett-Packard’s services organization, sums it up this
way: “These days, building the best server isn’t enough. That’s the price of
entry.” The price of entry! Our fancy (even color enabled) MFPs may be
incredible, but they are only the price of entry.
Peters’ thought-provoking book, “Reimagine,” clarifies that assertion. In the
sixth chapter, “The Solutions Imperative,” he states, “Customers will try low
cost providers because the majority have not given them any clear reason not
to.” Does your dealership provide a customer reason to do anything more than
price shop for commoditized copiers?
solutions mindset redefines value and benefits in terms of issues that actually
matter to a business owner:
you begin to define value in terms of something that the business owner cares
about, you begin to command attention. It’s entirely different when your
proposal is viewed as a positive return instead of an additional cost.
Incidentally, the values of the business owner align perfectly with the values
of your sales staff. Your sales people care about:
while they may not be able to navigate every administrative function of your
software lineup, your sales people have a personal understanding of the same
issues facing a business owner. With some applications training, it’s not that
big of a leap for your sales staff to connect the dots between business issues
and solutions’ benefits.
A New Product Mindset: From Solutions as an Accessory to Hardware as an
The hardware mindset views solutions as an accessory to help sell hardware. The
solutions mindset views hardware as an accessory to help sell solutions.
Perry Company has served businesses since 1965 in northern Ohio, northeastern
Indiana and southeastern Michigan. Company leaders have recognized the fact
that the future is in the solutions business. The business’ Business Solutions
Group offers a full portfolio of document solutions. President Barry Clark
understands the shift: “We believe that software/support will become our core
business and that hardware will become a secondary component or enabler of our
core business. This is exactly the reverse of today's model.”
document solution solves a business problem by integrating knowledge, software
and hardware. In the solutions mindset, the value comes from the business
benefit of the total solution. The hardware and even the software are
accessories to solve the problem.
hardware-minded dealer approaches the solutions business by treating software as
another product, “We sell (insert software brand name here).” The
solutions-minded dealer says: “We help businesses run more profitably. To do
this, we apply our knowledge to understand your business and apply technology
(hardware and software) to optimize your information flow.” This is a different
mindset that makes a big difference.
A New Pricing Mindset: From Cost Plus to Value Minus
The hardware pricing mindset takes the cost of equipment and adds gross profit
(35 percent and dropping.) The solutions mindset analyzes the total value added
to the client by the solution and creates an investment based on a positive ROI
(60-100 percent and up).
Pricing solutions based on the hardware model of cost plus profit can end up
leaving incredible amounts of gross profit on the table. And, ironically, many
prospective clients will perceive an under priced solution as not being able to
handle their needs.
solutions mindset sets pricing based on the total value added by the bundle of
services, software and hardware. T.J. DeBello, vice president of sales and
marketing at Stargel Office Systems observes: “With software solutions bundled
with hardware, our sales representatives are focused on helping our clients see
a positive return on their investment and the true value in our services. This
revenue stream is a win for all parties involved. Our company enjoys higher
margins, the sales representative makes a larger commission, and our clients
have a vendor dedicated to improving every aspect of their company’s document
you set your pricing based on the value added, the extra effort can pay off
A New Service Mindset: From Clicks to Ticks
In the hardware world, the less time we spend at a client’s site, the more money
we make. Money comes from clicks. Profit comes from maintaining uptime on
hardware with as little manpower and parts as possible.
solutions mindset is totally opposite. Instead of billing for clicks, you bill
for the ticks—of the clock. In the solutions world, you are selling knowledge
and time. Logic follows that if you are selling time you want to make sure to
spend as much time as possible “helping” clients.
do clients define help in the solutions world? In the hardware mindset, help
means repairing busted machines. In the solutions mindset, help translates into
integrating and optimizing broken business processes.
Companies are more open than ever to outsourcing functions outside of their core
competency—especially if the function doesn’t merit a full-time employee. In
Little Rock, Arkansas, Standard Business Systems is selling network service and
software integration time blocks. Owner Richard Gulley is excited about the
growth in this profitable area.
“Things are really changing is our business,” he explained. “We have found that
our clients are open to looking to us for value added services like networking
and software integration. We are successfully selling time blocks. We see
this being a growing part of our business.”
Solutions-minded dealers charge for services. Often it starts by selling time
blocks to help small clients with their network problems. This should
transition into selling services to configure and integrate document solutions
into clients’ business systems to enhance workflows. These services add a
tremendous amount of value to your clients—value that they are willing to pay
A New Relationship Mindset: From Customer to Client
Customers buy products from vendors. Clients acquire advice from specialists.
Customer is transactional. Client is relational. Customer is low trust.
Client is high trust.
solutions-minded dealership erases the word customer from its vocabulary and
replaces it with client. You form relationships. You offer advice from your
area of specialty and you profit as you help your clients become successful.
Customers are at odds with vendors. They withhold information in order to
wrestle the vendor down to the lowest price. Shortsighted? Yes. But if
customers have not been given a reason to think that what you offer is more than
a commodity, can you blame them? You’d do the same thing. It’s up to you to
show your clients you have something more to offer.
Clients trust their advisors. They share information because they trust that
an advisor has their best interest at heart. Clients collaborate. As a
result, clients profit from the value that is added to their organizations by
the advice they receive.
role as an office solutions company is to understand the needs of our client
first and foremost,” commented Chris Black, president of R.K. Black, an Oklahoma
City-based solutions provider. “Otherwise, what we have to sell is
meaningless. Once we know what our client is trying to accomplish or solve, and
once we have demonstrated our willingness and ability to help in the journey,
then (and only then) do we have a basis for doing business. What we do after
that determines whether or not it will grow into a long-term relationship.”
Staples and Office Depot have customers. Accountants and attorneys have
clients. It’s a matter of mindset. Which do you want your dealership to have?
A New Success Standard: From Customer Satisfaction to Client Success
Satisfied customers are not enough. Satisfaction is expected. And as we are
seeing, people are less willing to pay a premium for satisfaction.
the solutions mindset, the measurement is client success. How has your
dealership added value to your clients? Find out. Quantify it. Write it down
in case studies and shout it from the mountaintops!
Sleepy referral letters from friendly, long-term customers heralding your
responsive service are sufficient. Don’t throw those letters away. But, they
are not enough. (Plus, everyone else in town has a book of these letters)
People don’t really care, excellent service is expected.
people care about is how you made a difference. Make sure to add some letters
and case studies with hard numbers of how you have positively impacted the
bottom line results for your clients. Show how you revolutionized a business
process. Demonstrate how you saved a substantial amount of money for a client
while dramatically improving their productivity.
A New Sales Model: From Hardware Configuration to Workflow Reengineering
The hardware sales mindset asks: “What is the least expensive machine I can put
in here to satisfy the customers’ needs and still end up slightly under their
previous lease payment?”
solutions sales mindset asks: “How can I improve the flow of information
through this client’s organization and what would the value of that improvement
Crane of Copy Products Inc., in Springfield, MO said: “The biggest difference
is that with a solutions sale, you must look at the customers’ entire operation
and how information and documents flow within that operation. It is important
to remember that documents are not always hardcopies, but electronic documents
such as emails or scanned pages are documents as well. You must find ways to
maximize the ROI and have improved efficiency ‘pay’ for the solution as soon as
may paraphrase again: “As a dealer thinketh, so he is!” Your mindset is
critical as you enter the solutions business. Are there things that are the
same? Of course there are. But if you approach this high value added business
without a different mindset in some key areas, you may miss out on the future.
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Darrell Amy is the President of Dealer Marketing
Systems. His organization adds value to dealers by helping them reposition in
the market as solutions providers through integrated solutions marketing and
sales training services. You can learn more at
www.dealermarketingsystems.com or reach him at
email@example.com or 501-626-4110.