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Traversing the Workgroup MFP Minefield: The Customer Experience

15 Oct, 2003 By: Jake Wang imageSource

Traversing the Workgroup MFP Minefield: The Customer Experience

was the last time you solicited feedback from your customers on satisfaction? In
most industries the frequency of collecting customer experience data is quite
adequate, but in the workgroup MFP market I'm beginning to wonder if anyone's
asking or listening. Purchasing a mid-volume, copier-class color MFP is often
analogous to buying a used car. Throw in depreciation, market fragmentation,
inaccurate or missing information, time requirements necessary to collect
information, and poorly trained sales staff, and your customers are in for some

Why is
the workgroup MFP market so different than the rest of the technology equipment
market? The number-one reason is the distribution structure for which these
products are sold and maintained. Understanding this framework requires an
examination of three core areas: equipment pricing, customer needs assessment,
and consumables & maintenance costs. Short change any of these areas and
your customer could end up with a budget overrun, over or under capacity, or
long term sustainability issues.

a workgroup copier or color MFP is daunting for most organizations because of
the lack of information and the inherent difficulty in comparing products and
pricing. The current market makes price or print quality comparisons extremely
difficult as most dealers carry limited manufacturer lines and sales staffs that
have little knowledge of competitive offerings. To make matters worse, finding
the best street price requires spending countless hours with sales agents who
may or may not have your best interest at heart. TCO (Total Cost of Ownership)
and CPP (Cost Per Page) costs for self service consumables are virtually
impossible to find as few individuals know what consumable components are
required for a particular machine, let alone the yield and pricing. The average
small or medium business owner doesn't have time to call numerous dealers and
compare features, performance, and price, then create a cost analysis model to
compare volume and time effects.

recently performed a study that surveyed approximately a hundred dealers to
evaluate user experience and to collect pricing data on equipment, consumables,
and service agreement costs. The result: pricing variance between dealers of the
same manufacturer for equipment costs ran between 1% and an amazing 39%. This
variance is the difference between prices quoted by dealers for a single model.

data was collected for similarly configured machines with limited options to
create the concept of an average base platform MFP with networking capability.
The huge variation in dealer prices from the same manufacturer is a clear sign
that the workgroup MFP market is characterized by chaotic pricing and
information. The large disparity can be explained by a number of possible
reasons: misinformation, quality of sales staff, size of organization, control
of manufacturer pricing directives, incentives, and inventory levels.

tools employed by many organizations used to estimate costs of operation, are
woefully lacking in real world pricing data. Sales agents routinely quote
average CPP figures that are created from thin air. Needs assessments by sales
agents are often based on monthly volume estimates. However, monthly estimates
aren't perfect and are just the beginning of the data points necessary to create
an accurate cost benefit model. A complete TCO analysis that accounts for
capital costs, consumables costs, finishing labor, media costs and maintenance
costs, is necessary to provide the customer breadth and depth to make an
informed decision. Overselling customers seems rampant as a number of dealers
surveyed supported the notion that 90% of SOHO (Single Office Home Office),
corporate and medium sized business owners over-purchased capacity when buying a
workgroup color copier. This overselling is a disservice to customers and
prevents true value-added solution selling.

and maintenance costs (long term costs) are by far the most confusing for
average users to understand. Most sales agents are either unwilling or unable to
disclose these costs or are directed by management to push service contracts,
which are the de facto standard in the industry. The service contract can be a
strong value if a business is too small with inadequate IT staff necessary to
maintain equipment or if print volumes are too low to generate cost savings.
Analyzing the difference between self sourced consumable CPPs and maintenance
service contract CPPs for a number of products in the same performance band
between six manufacturers found a cost delta of one cent to eight cents a copy
for color prints. This delta measured the pricing variance between prices
collected for the same product between multiple dealers. Multiplying this Delta
by monthly page volumes in the tens of thousands could mean a savings of
thousands of dollars a month for your clients. Remember that the delta discussed
here is for machines with similar print speeds and capabilities; expanding the
universe to include a cost comparison for inkjets and color lasers increases the
possible delta by as a much as four times. Providing this type of cost-based
analysis to customers should be a priority for any workgroup MFP manufacturer or

The key
to connecting with customers is enabling them to make their own decisions based
on independent data that supports your marketing message. Instead of adding to
the confusion that is so pervasive, clearly present information that allows easy
analysis of specifications and pricing of equipment and services. Provide tools
that reduce the time necessary to make decisions including specification
matrices, cost, and return on equity analysis. Monitor industry competitiveness
through real world data collected from your distributors and solicit customer
satisfaction feedback in order to compete on both price and service. Finally,
understand your competitive advantage and clearly articulate your brand message
to customers. Customers are looking for simplicity, clarity and value. Can you
provide it?

- - -

Wang is a senior analyst for ARS' Multifunction Printers division. For more
information on the workgroup MFP pricing study or upcoming workgroup MFP
services, contact ARS at 858.551.0008 or visit ARS on the web at www.ars1.com.

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