Set Your Customers On Fire: What Forest Fires and Imaging Supply Dealers Have in Common6 Jun, 2007 By: Norman McConkey imageSource
Set Your Customers On Fire: What Forest Fires and Imaging Supply Dealers Have in Common
1988 was a terrible year for forest fires in Yellowstone National Park. Over
36 percent of the entire park was scorched by fires. After decades of attempting
to manage the park through aggressive fire suppression efforts, it was all laid
to waste in one summer. Through much scientific study on the events leading to
that apocalyptic fire, it was concluded that preventing the natural cycle of
forest fires to occurring actually did more damage than if they had simply let
nature take its course. Under the right circumstances, forest fires are needed
to prevent major, epic loses from occurring. So then, what does a forest fire
have to do with Print Management? Well, hold the thought for a minute…
Let’s think about why people make a decision for change. After all, if you
are trying to pitch an alternative plan to a customer, you are really preaching
change. Most customers today buy supplies, service, and hardware for the laser
imaging fleet the same way they have since 1984, when the first HP Laserjet IIs
started to appear. Buy a printer (75 percent of the time it is an HP Model) from
a VAR. When the printer runs out of toner, buy more. At some point an
aftermarket supply may be available for the device so you might try and sell
that instead of an OEM. When the printer breaks down, have it repaired. When
the device has served its useful life and repair becomes too expensive,
discard and start the process again. Sound pretty straightforward?
I imagine that’s how a customer sees it as well. It doesn’t seem like a
terribly flawed system. Trying to sell a print management program into this
environment will not likely meet success. If it ain’t broke, don’t fix it. Think
of yourself for a minute. Everyday, people are pitching something to you. If
they don’t articulate a need or a problem right away, chances are you will not
act. One of my favorite books on sales methodology is Strategic Selling by
Miller Heimann. The premise is simple; there are three buying modes: Even Keel,
Opportunity and Trouble. As a sales rep you must place people in a category. The
Even Keel won’t buy. They don’t think there’s a problem, so why change?
Opportunity is…well an opportunity. Usually you take people that are Even
Keel and move them to Opportunity mode. It sounds something like this: if we
swap out all these printers for MFPs and reduce your costs, your team will be so
happy. The boss will love you, yadda, yadda, yadda. Sales reps try to paint a
rosy picture of the future, based on a life with their product or solution.
Unfortunately these sales reps are not typically successful. For the same reason
infomercials are not all that successful. Opportunities hit you all the time. If
you acted on every one, you would go crazy. Worse still, most things you have
acted on based on opportunity seldom pan out. Food dehydrators or RightFax
Setting the Fire
Now, let’s talk about my favorite buying mode: Trouble mode. People have to
buy when they are in Trouble mode. Buying becomes an act of survival, either
career wise, or company wise. If I were on fire, I would pay a lot of money for
a fire extinguisher. If I were drowning, I would pay a lot of money for a life
jacket. Okay, Print Management is not that dramatic, but you can certainly do a
better job moving someone in Trouble mode than telling them that print
management is an opportunity. Let me offer an example. I recently visited a
customer with 47 printing devices. Their model was almost exactly as was
described earlier: "supplies a la carte." Although they described their process
as cumbersome, it was not a high priority for change to the IT team. At least
not until I set them on fire.
Here is how I described the fleet:
- You have 47 printing devices, 19 different models, from 5 vendors.
- Six different color devices requiring 24 separate supply SKUs.
- In total you require 37 different toner SKUs to support the device.
- Three of your color devices are in need of maintenance kits and as a
result, print quality is seriously degraded.
- One of your printers is an HP 4050. It is now printing 600 ppm, yet you
have 8 toners for it in your supply room, or 13 years worth of toner.
- You have 3 HP LJ 4 cartridges but we cannot find any HP LJ 4 printers.
- In all, you have an inventory of 193 cartridges, at an estimated cost of
$15,540. Some of that inventory is expired.
- The average age of the fleet is 5.6 years old.
- To keep the fleet this at an average age of 5.6 years, you will need to
purchase 9 new devices this year.
- Your newest device, a Lexmark T 644 is printing on average 2,000 pages per
month. It has a rated duty cycle of 280,000 ppm.
- An HP 8100 which has over 1 million pages is printing 25,000 pages per
month in accounting.
- Based on the page volumes & age of device, you’ll require 15 emergency
service calls in 12 months at $200 cost per call (labor plus parts).
In addition, we spoke to the purchasing department and asked them to describe
procurement. Apparently there were seven separate vendors for the printers: two
for service, three for supplies, and two for hardware purchases. To the
bewilderment of the CFO, the purchaser negotiated prices constantly with
vendors. He estimated 30 separate purchase orders per month to maintain the
fleet. I also pointed out some industry statistics:
- Office printing volumes are increasing 18 percent per year.
- Color printing (which costs 5x more) is increasing from 10 percent of
office volume to 40 percent of office volume in the next three years.
How did I do all of this? Well, first I did a scan of the office print
environment with a rapid assessment software tool. With the permission of the IT
team, I also walked around and looked for local devices, and looked at supply
cupboards etc. Most of the interpretation of this data was done through
experience. All of this information is readily available at your customer site,
and an experienced sales rep will know most of it, having been in the business
for a few years. Is this a unique site? Nothing I have quoted should sound
Let’s get back to forest fires. All of this information is potential fuel for
a fire. If you set the blaze and have the potential to control the burn, it can
be managed. If one day the flammable material is ignited by the company or
worse, a competitor, you risk being burned in the process. Although most
competent salespeople have the ability to set this controlled burn, it does
represent a change from their current sales process. They will need training,
company mandates and a process to accomplish this. There are some excellent
methodologies available for sales teams to perform such audits.
Controlling the Blaze
So, how does this change the landscape of the sale? I have not painted
opportunity here. I have moved straight into Trouble mode. The cost of doing
nothing, status quo, is no longer acceptable. What we are showing is that the
current "system" of "print management" is expensive, out of control, and getting
worse by the day. So, the customer is now on fire, but not so badly that they
cannot be saved. Now provide the fire extinguisher: Print Management.
"Mrs. Customer: here’s what we can do for you…" Office printing can suck
profit out of a company as fast as any other uncontrolled expense. At the end of
the day, the customer wants reliable, quality printing that is convenient and
affordable. A basic Print Management Program will ensure:
- A monthly bill based on usage (pages) on a flat fee, per page
- Customers no longer manage supplies inventory, or purchase supplies
- Service goes from break fix to proactive maintenance
- Hardware can be moved from Customer Owned to Leased and thus no longer
their responsibility to maintain
- Vendors can be consolidated
The proposal for Print Management must include an agreed upon estimate of the
current issues and costs, along with a proposal to migrate toward a managed
environment. It should capitalize on your unique abilities as a service
provider. It is of course much more involved than I can explain in 1000 words or
less. The purpose of this article is to ensure companies realize that strategies
in selling Print Management and Cost per Page Programs will fail unless they are
able to show customers the pain in their current approach to imaging. Often
people are afraid to show customers current shortcomings because in some
fashion, they are also part of the problem. Maybe you benefit when a customer
overbuys toner cartridges. Maybe your service department makes great revenue on
emergency repairs. In this, you must also see yourself the pain in your current
model. For these reasons, the fires you set onsite need to be controlled or else
you and your customers are in for a Yellowstone National Park 1988 scenario.