Making MPS Part of Your Business Model22 Mar, 2010 By: Jim Kahrs imageSource
Making MPS Part of Your Business Model
Unless you’ve been living under a rock for the last couple of years you’ve no doubt heard of MPS or Managed Print Services. Many are touting MPS as the most important initiative in the industry today. And the interest is indeed growing. However, more of these dealers should be succeeding in this important segment of the industry. It isn’t that you are “in MPS” it should be more like you know how to implement MPS successfully, and there are better means than others. For those of you that have been around for a while, you may recall similar fanfare surrounding the introduction of a few other industry changing or defining concepts.
There was cost per copy, better known as CPC. When this concept was first introduced it was described much the same way as MPS is today. “If you’re out there selling boxes you won’t survive.” Dealerships had to learn a new way of packaging, promoting, presenting and selling CPC, leasing companies had to learn how to administer these new programs, and customers had to be educated on the benefits. The transition of the industry took a few years with some dealerships catching on quickly and others being dragged along kicking and screaming. Those that made the transition smoothly cashed in with increased sales and profits.
Next came the introduction of color copying to the industry. Dealerships now had to figure out how to sell a new product that came with tremendous benefits but also a high price tag and a number of new challenges. Once again, there were dealerships that embraced the concept and drove the market, and others that watched from the sideline. Those that embraced color and adapted once again, cashed in as color system sales often came with higher gross profit margins and higher service revenues.
Then came the conversion from analog to digital technology. Though digital copiers could do all the same things as their analog predecessors and much more, they also had the ability to connect to the network. Once again dealerships needed to adjust. Besides having to learn how to service machines that were laser based instead of lens and mirror based, they had to learn about office networks and connecting these systems. Once again, those dealerships that embraced the change and organized their company accordingly, cashed in. They not only made additional revenue and profit on the sale of these systems but they captured additional revenue for service, and in some cases, sold network services as a totally new offering.
When you look at the landscape of the industry today, it’s easy to lose sight of this pattern. Our industry, like many others, has been evolving over time. The most successful dealerships have learned to embrace this evolution and move with it. But what separates the dealerships that lead the charge during these times of change from those that wait and follow along? Are they psychic, are they smarter than everyone else or do they have some secret playbook? No, they are in almost every case, more organized and proactive in their approach to the business and the changes at hand.
More Proactive MPS
How do you become more organized and proactive in MPS? Review these 5 steps and see how they relate to your success with MPS:
1. Be in the Know. Be on a constant quest for industry and business knowledge. In order to be proactive you need to know what is happening in the industry. There are plenty of opportunities to gain additional knowledge and insight. Good industry tradeshows and associations like ITEX and BTA offer education classes and training programs, while manufacturer meetings almost always include sessions on new trends. And there are consultants and other resources that can provide real insight. If you’re going to succeed with a MPS strategy, you need to gain the best knowledge to do so.
2. Train Everyone. This means training your entire staff, not just sales or service. Your entire team needs to be educated about MPS. This means investing the time and money needed to really get your team’s knowledge up to speed. The sales team needs to know what MPS really is (and many still don’t), how to identify prospects, how to present these solutions and how to navigate the sales cycle. The service team must know how to truly manage and service a fleet of printers and MFPs.
3. Get Organized. The most successful dealerships have a strong organizational a structure. Everyone understands what their roles are and what everyone else does. Furthermore, they can easily tell when each other is doing the job. At Prosperity Plus, we’ve had a lot of success getting dealerships to implement a tool called an Organizing Board. This tool organizes the company around the functions of the dealership, not the people. People change; they get promoted, change departments, or leave the company. The functions, on the other hand, do not change until you encounter industry changes like MPS. In my opinion, the single biggest factor preventing dealerships from realizing success with MPS is an inability to organize the company in all areas…for success with this new “product offering.” Success with MPS involves far more than simply selling and servicing the accounts; how you market and generally administer MPS will have a huge impact on your overall success.
4. Monitor and Drive Results. Now that you’ve set up a successful structure for MPS, the next step is to monitor the production of this new offering. It is quite common for dealerships to track production of their sales and service teams. Unfortunately, it is also common for new business units to fall outside the scope of this tracking. Applying this to MPS means identifying the actions that lead to success, then tracking and driving them. This could be as simple as tracking things like MPS appointments, audits and proposals, to tracking the number of print devices under contract and/or the revenue generated. With these tracking measures in place you’ll be able to see where you’re being successful and thus know what areas to build on.
5. Create Strong Incentives. The final recommendation in this brief overview is to build proper incentive and reward programs. For example, attempting to fit MPS into your current sales compensation plan will not lead to success. MPS requires a different approach and different compensation. Technicians that support MPS customers will also require different incentives and rewards. There are a number of different models to follow when building these plans so I’ll refer you back to step one; get the education you need to build compensation and tracking systems that will reward success.
Now to bring this full circle to the opening concept, for dealers that effectively manage this industry change, the future can be very bright. For those that choose to lag behind and ignore the trends, the future will be an unknown. If you follow the basics outlined above you’ll successfully navigate through the MPS challenge, and you’ll have a plan for meeting the next challenge that we will inevitably face down the road.
Jim Kahrs is the Founder and President of Prosperity Plus Management Consulting, Inc. He is also a speaker at ITEX 2010. He consults with companies in the office systems industry on improving organization structure and profits using the Hubbard Management System. Reach him at (631) 382-7762 or firstname.lastname@example.org.