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Growth Strategy for Independent Dealers: Production B/W

6 Feb, 2007 By: Ari Mellon imageSource

Growth Strategy for Independent Dealers: Production B/W

Controlling the production space with a strategy that includes management of
the customer’s equipment and mission critical documents will allow a dealer to
own the entire enterprise and watch high profit service revenues explode.


To understand how the production space has changed, lets first examine the
introduction of the Xerox Docutech in the 1980’s. The Docutech provided an
alternative to press dependent organizations with output speeds greater than one
hundred pages per minute. For the next 20 years,the Docutech was able to capture
significant placements and output,selling the lower cost of a digital product
over a press and pressman.

The introduction of the Heidelberg 9110 series in the late 1990’s offered
Xerox customers a choice, and Heidelberg sales rocketed replacing the Docutech.
The 9110 series offered a five foot paper path versus the three right turn,
twenty two foot paper path of the Docutech. Each of the 9110’s nine drawers were
air fed, which all but eliminated jamming.  At most, the Docutech had two air
fed drawers. If you track Heidelberg’s sales thru 2004,you will find aggressive
year over year growth, almost entirely at Xerox’s expense.

Fast forward to 2004; Xerox introduced their next generation production
device, Nuvera. There were two competing forces working against Xerox at this
time.  Xerox had an aging fleet of Docutechs in the field with no viable
replacement and Heidelberg had introduced an upgraded competitive production
engine in the 9110 and 9150. It was imperative for Xerox to have a strong market
strategy, which they did, and to have flawless execution on that strategy, which
I would argue did not occur.

In 2005, the first full year for the Nuvera, Heidelberg digital print
production sales began to slow and Xerox sales began to grow again. The primary
driver of the Heidelberg slowdown was the cost point of the Nuvera versus the
9110, at about half, while maintaining quality and improving finishing options.
This was an inflection point in the window of opportunity for the dealer. Xerox
had now made it acceptable for a Japanese produced, light production printer to
be sold in volume ranges that had previously been reserved for the heavy metal
9110 and Docutech’s.

What Xerox effectively did with the introduction of the Nuvera product was
segment the production space into three levels: Low, mid and high volume
production. In effect Xerox opened up 50 percent or more of the production space
to the dealer network. How did this happen? The consumer in the production space
had become accustomed to big ticket printers that produced high speed, press
quality black and white output. By introducing a Xerox device that looked like
every other vendor’s ninety page per minute light production printer and
positioning it to replace their own Docutech at a fraction of the price, Xerox
turned their own Docutech customers into an independent dealer’s prospect.


Today, the dealer network has as many options in the production space with
those companies that have dominated over the last few years: Xerox, IKON and
Danka. What these organizations have over the dealer network is a legacy base,
working knowledge of the space, and business plans to drive the revenue.  But
the dealer network has many options that can allow you to compete effectively in
the low to mid production space.

Because the space has changed, the big three have forced their production
specialists to concentrate on the higher volume, more complex sales, leaving
much of the low to mid production space vulnerable to your sales staff. The
Nuvera shifted the mid and low volume production space into the bailiwick of
general line sales reps, creating a significant opportunity for the dealer
community to compete on even footing. Instead of having your general line sales
representatives going against a seasoned production specialist, now it’s general
line versus general line. That is not to say that you should not invest in a
production specialist to support your sales force. The production space is more
technical than the departments your sales force sees everyday. The first thing
you should do is to evaluate the talent you have, and hopefully, identify
someone that is already engaged in solution selling. Start evaluating based on
competency with basic scan, advanced scan and departmental color. If you have
someone that can sell all three consistently, then you probably have someone
talented enough to be trained to sell effectively in the production space.
Promoting from within is core to moral, retention and providing your top
performer a sense of achievement.

“Examine the Profit in B/W production revenue”


After staffing and training, the most important step to sell production is
to determine a target. In either the K-12 or higher education environments, you
can find accessibility to the key contacts, and a less complex sale. Schools
tend to be engrained in the community and your local base can work in your favor
versus a Xerox or IKON. Even many small community colleges and K-12 systems have
a print shop with people dedicated to copy and print output. These print shops
are the most accessible production opportunities in our industry.

The hospital vertical is the most form intensive. This is due to compliance
regulations, primarily HIPAA.  Even today, most forms in a hospital are hard
copy.  Some problems with hard copy forms are version control, storage space,
cost and security. Another large area of opportunity in the hospital print shop
is web based submission software. This is relatively easy software to install
and allows any user on the internet or intranet to submit a copy or print job.
In addition, it allows for electronic cataloging of hard copy forms for print on
demand services.

With variable data and web based submission you have a high margin $50
thousand sale before you even get to the hardware!  You accomplish this by
solving at least three core business issues including reducing waste,version
control and space reduction. This is an example of how to penetrate a
competitive enterprise with a customer focused solution that differentiates you
as a solution provider.

“Once you start solving a company’s business problems, you go from a vendor
to a partner.”

I have provided examples of two vertical markets that provide a quick on ramp
to effectively selling in the production space. In each of the examples,
controlling the production environment allows you to control a major part of the
document flow throughout the enterprise and gain an opportunity to define a
strong business case. Once you start solving a company’s business problems, you
go from a vendor to a partner. You go from being on the outside of the budget to
being asked how to budget and what new technologies should be considered.  This
is the relationship you want with your customer and competency with production
products will get you there.

Ari Mellon is a senior consultant with Strategy Development, a management
consulting and advanced sales training firm (www.strategydevelopment.org) and
leads the Strategy Development Sales Institute.  From 2000 – 2006, Mellon was in
various sales leadership roles with IKON Office Solutions, including director of
field sales operations.  Mellon graduated from The University of Miami, and can
be contacted at mellon@strategydevelopment.org.

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