In an e-mail dated December, 9 to the Global leadership team, Michael Shea announced that Paul Schulman has decided to leave Global effective December 31.
Paul was one of Global’s most visible leaders as President and COO and in his previous position as SVP of Business Development. Paul was well known and respected in both the dealer community as well as within Global. I know his leadership will be missed at Global.
I got to know Paul on a dealer trip almost 15 years back. He is engaging, intelligent, and passionate about the business. The announcement stated that Paul left because “(he) decided his work at Global is now accomplished.” I hope that is true and that we are not seeing the second iteration of the IKON story where politics and egos became the determinant of who stayed and who goes.
Tom Johnson led a great “build-up” as he called it; he let the successful entrepreneurs, and eventually professional management, run their business and quickly weeded out the unsuccessful players. It never appeared that politics had any influence on Tom’s decisions—performance did. Tom made Global the envy of the industry and made his shareholders and investors a phenomenal ROI. Paul Schulman thrived in this environment. As president of IKON NYC I competed against Paul’s company, Carr Business, and I can tell you he was a strong but honest competitor that grew year after year.
I am confident that Paul will use his leadership skills and business acumen to lead another successful venture. I enjoyed the time that Paul spent making the copier industry a better place and wish him continued success.
Wednesday, December 16, 2009
Tuesday, December 8, 2009
MPS: The 30% Catastrophe
Many commentators in the MPS space like to talk about the 30% savings companies receive through an MPS agreement. I guess it helps them sell research, advance the theory of displacing printers with departmental MFDs, or helps the weak sales person generate some commission and retain his (her) job for a period.
But I have to ask a simple question, what is the rational to deliberately taking 30% of the revenue out of our industry? Overcapacity and technological improvements are already creating year on year decreases in hardware and aftermarket pricing and A4 is replacing A3 at a lower unit selling price. Those environmental changes should easily drive 10% of revenue per year out of our industry. Over the last two years units sales have decrease by more than 30%; they are gone and probably will never come back. Now we are all going to join in a concerted effort to drive an additional 30% of revenue out of the imaging space? Let’s all go to the jungle and drink some Jim Jones juice!
You can read my blog post from September titled: MPS: Growth Strategy or Harbinger of a Smaller Pie on the topic that MPS is not new revenue, simply a revenue shift from transactional to contractual. We are not generating new industry revenue with MPS; different players are capturing the revenue, which is good for those MPS providers in the short term.
As the industry leading MPS consulting firm we have been advocating for companies to adopt an MPS strategy for the past four years. Nevertheless, when you do launch your MPS strategy there is no reason to lead with a value proposition of saving a company 30%. Managing copiers, printers, scanners, and fax units is not a core competency for most companies; it is a nuisance area. Tying up valuable IT employees to remove misfeeds, install maintenance kits, or replace feed tires irritates CIO’s and IT directors who do not have enough resources to devote to their more mission critical projects like business intelligence, security, virtualization, and unified communications. Therein lies the value proposition—you build a business case for outsourcing.
I led a $225 million outsourcing business and that was simply the services revenue; there was an additional $60 million or so in equipment sold into the facilities management (FM) accounts. A portion of that $225 M was “fleet management” agreements. There are industry commentators who want to tell you MPS is not FM, but curiously those commentators have no FM background so how could they possibly make that statement? We didn’t sell outsourcing by telling companies we would save them money. At times it cost more money to outsource but the customer outsourced because we took away areas of their business that were not core competencies: Areas that distracted them from their business. Nuisance areas like imaging and printer fleets to most companies.
There were many FM agreements that included “gain share,” where working with the customer we drove efficiencies that resulted in lower cost that we shared with the customer. But the key there is the phrase “working with the customer.” You can do the same with an MPS agreement. Strategy Development’s three phases of MPS are manage, optimize and improve. Manage comes first followed by optimize and improve. Working with the customer—after you are generating revenue from an MPS agreement (manage)—you can help your customer make a decision on the lowest TCO device for each location that will provide the required functionality. This is where the cost savings come from, although reaching 30% is a stretch.
Why does Strategy Development have what appears to be a significantly different take than many industry commentators? For one, we are on the front lines every single day working on MPS transactions with our clients; and, we are fortunate to have the most successful MPS companies in the country as our clients. So we know what is happening out there and our client’s are not saving their customers 30% to get them to sign a contract. Our clients are building business cases that support an outsourced agreement with their customers.
Second, we don’t recommend what we would categorize as “scams” for selling MPS agreements. A relationship started on a lie cannot end well. Coverage area is, in the vast majority of the situations a scam; I will add that it is an easily exposed scam as more and more companies enter the MPS space. So “saving 30%” with a coverage area scam is no more a real savings than the consistent 16% returns investors thought they were getting with Bernie Madoff were wealth creation.
Next, we aren’t trying to sell you research and we aren’t consulting for end user companies. If there is a business out there that is trying to sell you something, be it research, training, a trade show, or newsletters and at the same time they are out telling end user companies that they can drive down their spend with you by 30% I recommend you cut off their nutrition—avoid them. When that business can’t survive because the industry cut them off maybe they’ll stop selling sensationalism and start selling reality.
Lastly, we aren’t a manufacturer trying to keep their factories churning out boxes and the trailing supplies and parts in an ever decreasing space that already has significant over capacity. We aren’t telling you go out there and replace all of their “Brand A” printers with “Our brand” printers or MFDs. We aren’t suggesting that you turn your sales force into change management consultants. That is a really tough sell that will be embraced by a small segment of the business population. Let’s thank God for that because if everybody out there reduces their device count by 60% or 70% we had better find something else to sell…..and fast!
Get into MPS but make certain you truly understand the MPS space so that you maximize revenue and margins. Because of the revenue shift described in the aforementioned blog post it can be a significant revenue driver. But the opportunity to capture significant new revenue combined with the 30% decline in MFD unit sales, which is really hurting the core copier business, has brought out every snake oil salesman in the land with the latest “elixir” for an MPS program. Choose wisely as any further delay in launching a successful program will be critical. Once those prospects are another company’s customers they will be locked into contracts that will be difficult to change.
If you want the best sales, back office operations, and service training the industry has to offer check out the BTA MPS Sales and BTA MPS Ops and Service Workshops at www.bta.org
But I have to ask a simple question, what is the rational to deliberately taking 30% of the revenue out of our industry? Overcapacity and technological improvements are already creating year on year decreases in hardware and aftermarket pricing and A4 is replacing A3 at a lower unit selling price. Those environmental changes should easily drive 10% of revenue per year out of our industry. Over the last two years units sales have decrease by more than 30%; they are gone and probably will never come back. Now we are all going to join in a concerted effort to drive an additional 30% of revenue out of the imaging space? Let’s all go to the jungle and drink some Jim Jones juice!
You can read my blog post from September titled: MPS: Growth Strategy or Harbinger of a Smaller Pie on the topic that MPS is not new revenue, simply a revenue shift from transactional to contractual. We are not generating new industry revenue with MPS; different players are capturing the revenue, which is good for those MPS providers in the short term.
As the industry leading MPS consulting firm we have been advocating for companies to adopt an MPS strategy for the past four years. Nevertheless, when you do launch your MPS strategy there is no reason to lead with a value proposition of saving a company 30%. Managing copiers, printers, scanners, and fax units is not a core competency for most companies; it is a nuisance area. Tying up valuable IT employees to remove misfeeds, install maintenance kits, or replace feed tires irritates CIO’s and IT directors who do not have enough resources to devote to their more mission critical projects like business intelligence, security, virtualization, and unified communications. Therein lies the value proposition—you build a business case for outsourcing.
I led a $225 million outsourcing business and that was simply the services revenue; there was an additional $60 million or so in equipment sold into the facilities management (FM) accounts. A portion of that $225 M was “fleet management” agreements. There are industry commentators who want to tell you MPS is not FM, but curiously those commentators have no FM background so how could they possibly make that statement? We didn’t sell outsourcing by telling companies we would save them money. At times it cost more money to outsource but the customer outsourced because we took away areas of their business that were not core competencies: Areas that distracted them from their business. Nuisance areas like imaging and printer fleets to most companies.
There were many FM agreements that included “gain share,” where working with the customer we drove efficiencies that resulted in lower cost that we shared with the customer. But the key there is the phrase “working with the customer.” You can do the same with an MPS agreement. Strategy Development’s three phases of MPS are manage, optimize and improve. Manage comes first followed by optimize and improve. Working with the customer—after you are generating revenue from an MPS agreement (manage)—you can help your customer make a decision on the lowest TCO device for each location that will provide the required functionality. This is where the cost savings come from, although reaching 30% is a stretch.
Why does Strategy Development have what appears to be a significantly different take than many industry commentators? For one, we are on the front lines every single day working on MPS transactions with our clients; and, we are fortunate to have the most successful MPS companies in the country as our clients. So we know what is happening out there and our client’s are not saving their customers 30% to get them to sign a contract. Our clients are building business cases that support an outsourced agreement with their customers.
Second, we don’t recommend what we would categorize as “scams” for selling MPS agreements. A relationship started on a lie cannot end well. Coverage area is, in the vast majority of the situations a scam; I will add that it is an easily exposed scam as more and more companies enter the MPS space. So “saving 30%” with a coverage area scam is no more a real savings than the consistent 16% returns investors thought they were getting with Bernie Madoff were wealth creation.
Next, we aren’t trying to sell you research and we aren’t consulting for end user companies. If there is a business out there that is trying to sell you something, be it research, training, a trade show, or newsletters and at the same time they are out telling end user companies that they can drive down their spend with you by 30% I recommend you cut off their nutrition—avoid them. When that business can’t survive because the industry cut them off maybe they’ll stop selling sensationalism and start selling reality.
Lastly, we aren’t a manufacturer trying to keep their factories churning out boxes and the trailing supplies and parts in an ever decreasing space that already has significant over capacity. We aren’t telling you go out there and replace all of their “Brand A” printers with “Our brand” printers or MFDs. We aren’t suggesting that you turn your sales force into change management consultants. That is a really tough sell that will be embraced by a small segment of the business population. Let’s thank God for that because if everybody out there reduces their device count by 60% or 70% we had better find something else to sell…..and fast!
Get into MPS but make certain you truly understand the MPS space so that you maximize revenue and margins. Because of the revenue shift described in the aforementioned blog post it can be a significant revenue driver. But the opportunity to capture significant new revenue combined with the 30% decline in MFD unit sales, which is really hurting the core copier business, has brought out every snake oil salesman in the land with the latest “elixir” for an MPS program. Choose wisely as any further delay in launching a successful program will be critical. Once those prospects are another company’s customers they will be locked into contracts that will be difficult to change.
If you want the best sales, back office operations, and service training the industry has to offer check out the BTA MPS Sales and BTA MPS Ops and Service Workshops at www.bta.org
Where’s the Silver Bullet
I talk to many business owners that are looking for the cure to their ailment—and they would prefer something that cures them quickly. What is the ailment? Lower revenue and operating income. Some want to recreate the good old days of growth and can’t understand why that would be so difficult. Heck, in the 80’s we just worked hard and revenues increased: Why can’t we do that now? Are the new Generation X, Y, or Z kids simply lazy? My experienced reps just can’t seem to get the appointments they were once able to achieve. They’re all spoiled—we need to put them back on draw against commission and make the hungry!
If only it were that easy. Let’s start with the most obvious, although constantly over looked fact that it is not the 80’s anymore. That means that copiers are not a growth technology any longer. It means that the product extensions that allowed us to continually move upstream and replace other products is almost gone (HP, Xerox, and some other players are going full bore after displacing all printing presses with sheet fed and cut sheet high speed “digital presses” as one of the last product extensions left to conquer). Our color devices have brought outsourced work back in house and replaced presses as has our segment six production devices. B2C went main stream and penetration has stalled in the 30% range. Fax machines have gone the way of the typewriter. Copier (and printer) placements are down substantially over the last two years and are projected to continue to decrease, albeit at a slower pace.
The 80’s brought us Bill Gates (and Paul Allen but he is almost forgotten) and Microsoft, Steve Jobs and Apple, and IBM’s invention of the PC. Since then Larry and Sergey founded Google, who can even remember those two guys from Yahoo and Al Gore invented the Internet! Copiers are not “high tech,” or more appropriately, “sexy” devices to sell. Your fraternity or sorority buddies might be envious of your job at Google, Facebook, or Genentech, but selling copiers won’t elicit that same feeling.
It is a great industry with solid profits and recurring revenues, and sales professionals can still make a good living, but we have to face reality and understand that people aren’t standing in line to apply for jobs in our industry. For those of you who weren’t in the business in the 80’s I can recall when a Sunday ad in the paper (Do they still exist?) resulted in a lobby packed with applicants on Monday. The only chance you had to get the job, which was straight commission (draw) was to show up Monday…..with a wagon or van close behind.
What does all this mean? It is tougher to grow in a declining market than in an increasing market and your potential employees, and customers for that matter, have a lot more information available to make a decision. So how do you thrive in this new environment? Get real about putting together a solid business plan and stop wasting your time looking for the silver bullet. Maybe you don’t have the best website on earth, maybe your reps can set more appointments, maybe you do need some basic sales training…..anything is possible. But I’d bet that your rep’s telephone and sales skills aren’t any worse than they were 20 years ago and you grew then.
The aforementioned internet provides job seekers with lots of information. Want to know what salary or commissions to expect for your education and experience? Go to salary.com or one of their competitors. Want to know what a company pays the specific job you are interested in? Go to glassdoor.com or one of the thousands of blog sites available. Sales professionals are fungible—they can take a job with you selling copiers, they can sell medical supplies, pharmaceuticals, software, or ads on Google. The common thread of those last four is that they pay salaries. Now if you are ambitious you will take the opportunity with an “unlimited” variable compensation component over one with fixed bonuses. But will you take the opportunity of unlimited compensation—with no foundation (salary) over one with a solid base? Not if you could get the latter; for those not paying a salary that is known as adverse selection. You only get a pool of candidates that cannot get the jobs that pay a salary. Wonder why your turnover is 100% and your productivity is low?
As for growth, it isn’t in the copier space. Just in case you don’t believe me take a look at unit placements in any InfoTrends, IDC, or Gartner research. Placements, in the 1,300,000 area in 2007, have dropped to 900,000 or so in 2009. What does that mean? If you maintain your market share you will sell 30% fewer units in 2009 than you did in 2007. It is that simple. Add to that lower average unit selling price and your equipment revenue for equal market share is off more than 30%. Those units are never coming back…..they are actually going lower.
The industry has been talking about it for years but if you are not focused on clicks over placements you are chasing a quickly declining revenue stream. The answer—managed print services.
Done correctly MPS is a totally different business than you are in today. It is a solution that is focused to growing your aftermarket—it is not focused on equipment. So whether you sell Canon, Ricoh, Konica Minolta, Sharp, HP or one of the many other brands is irrelevant. You will sell equipment into your MPS agreements—and brands do have value, as any first year marketing student will tell you—but providing a consultative outsourced approach is what companies are buying with MPS.
So take the time to put together a solid business plan that has your company transitioning to clicks over equipment revenue. Transitioning is the key as you don’t want to throw out the baby with the bath water. The number you need to talk about day and night is your recurring revenue stream. With focus you can easily grow that revenue 30% or more year on year. If you want to find the silver bullet for selling more copiers I wish you luck. If you want to continue to lead a growth company that generates significant profits forget the bullet and hunker down with your senior team to put together a plan that gets you growing.
If only it were that easy. Let’s start with the most obvious, although constantly over looked fact that it is not the 80’s anymore. That means that copiers are not a growth technology any longer. It means that the product extensions that allowed us to continually move upstream and replace other products is almost gone (HP, Xerox, and some other players are going full bore after displacing all printing presses with sheet fed and cut sheet high speed “digital presses” as one of the last product extensions left to conquer). Our color devices have brought outsourced work back in house and replaced presses as has our segment six production devices. B2C went main stream and penetration has stalled in the 30% range. Fax machines have gone the way of the typewriter. Copier (and printer) placements are down substantially over the last two years and are projected to continue to decrease, albeit at a slower pace.
The 80’s brought us Bill Gates (and Paul Allen but he is almost forgotten) and Microsoft, Steve Jobs and Apple, and IBM’s invention of the PC. Since then Larry and Sergey founded Google, who can even remember those two guys from Yahoo and Al Gore invented the Internet! Copiers are not “high tech,” or more appropriately, “sexy” devices to sell. Your fraternity or sorority buddies might be envious of your job at Google, Facebook, or Genentech, but selling copiers won’t elicit that same feeling.
It is a great industry with solid profits and recurring revenues, and sales professionals can still make a good living, but we have to face reality and understand that people aren’t standing in line to apply for jobs in our industry. For those of you who weren’t in the business in the 80’s I can recall when a Sunday ad in the paper (Do they still exist?) resulted in a lobby packed with applicants on Monday. The only chance you had to get the job, which was straight commission (draw) was to show up Monday…..with a wagon or van close behind.
What does all this mean? It is tougher to grow in a declining market than in an increasing market and your potential employees, and customers for that matter, have a lot more information available to make a decision. So how do you thrive in this new environment? Get real about putting together a solid business plan and stop wasting your time looking for the silver bullet. Maybe you don’t have the best website on earth, maybe your reps can set more appointments, maybe you do need some basic sales training…..anything is possible. But I’d bet that your rep’s telephone and sales skills aren’t any worse than they were 20 years ago and you grew then.
The aforementioned internet provides job seekers with lots of information. Want to know what salary or commissions to expect for your education and experience? Go to salary.com or one of their competitors. Want to know what a company pays the specific job you are interested in? Go to glassdoor.com or one of the thousands of blog sites available. Sales professionals are fungible—they can take a job with you selling copiers, they can sell medical supplies, pharmaceuticals, software, or ads on Google. The common thread of those last four is that they pay salaries. Now if you are ambitious you will take the opportunity with an “unlimited” variable compensation component over one with fixed bonuses. But will you take the opportunity of unlimited compensation—with no foundation (salary) over one with a solid base? Not if you could get the latter; for those not paying a salary that is known as adverse selection. You only get a pool of candidates that cannot get the jobs that pay a salary. Wonder why your turnover is 100% and your productivity is low?
As for growth, it isn’t in the copier space. Just in case you don’t believe me take a look at unit placements in any InfoTrends, IDC, or Gartner research. Placements, in the 1,300,000 area in 2007, have dropped to 900,000 or so in 2009. What does that mean? If you maintain your market share you will sell 30% fewer units in 2009 than you did in 2007. It is that simple. Add to that lower average unit selling price and your equipment revenue for equal market share is off more than 30%. Those units are never coming back…..they are actually going lower.
The industry has been talking about it for years but if you are not focused on clicks over placements you are chasing a quickly declining revenue stream. The answer—managed print services.
Done correctly MPS is a totally different business than you are in today. It is a solution that is focused to growing your aftermarket—it is not focused on equipment. So whether you sell Canon, Ricoh, Konica Minolta, Sharp, HP or one of the many other brands is irrelevant. You will sell equipment into your MPS agreements—and brands do have value, as any first year marketing student will tell you—but providing a consultative outsourced approach is what companies are buying with MPS.
So take the time to put together a solid business plan that has your company transitioning to clicks over equipment revenue. Transitioning is the key as you don’t want to throw out the baby with the bath water. The number you need to talk about day and night is your recurring revenue stream. With focus you can easily grow that revenue 30% or more year on year. If you want to find the silver bullet for selling more copiers I wish you luck. If you want to continue to lead a growth company that generates significant profits forget the bullet and hunker down with your senior team to put together a plan that gets you growing.
Monday, November 9, 2009
New Wave of Industry Certification: Value or Marketing Gambit
We’ve all heard or read the stories: Company Big Shot or Government appointee discovered to have PhD, or other degree, from “diploma mill.” There is always the denial from the “degree” holder, referencing how hard they worked to earn the degree and how they considered the degree legitimate. But could they really believe that? Haven’t we all seen the advertisements? “Credit given for life experiences.”
Okay, so I have attended some “professional education” events and have worked my way up from sales professional to vice president of sales at the dealership, managing four sales professionals. I never stepped foot on a college campus other than to pitch a deal. I collect all of the certificates from my professional training and send them along with my resume and $25,000 to “University of some Geography” and puff, I have a BS in management. You didn’t actually attend any professional training and you don’t want to take the time to download some certificates from the Microsoft Office website, just send in your resume and the check for $25,000 and puff, BS in Management. What, you don’t have any professional training and you aren’t really the VP; actually you’ve never achieved quota in your 10 years of sales and you’ve worked for nine different companies? Son, you need this BS more than most so just send in the check for $25,000 and your diploma will arrive—get that check in within a week and we’ll send a free frame with the diploma.
Why don’t we all set-up colleges and collect checks? Heck, it would save me a fortune sending my three children to accredited universities. But therein lays the answer –accreditation. You see “real colleges” don’t accredit themselves. Rather, they are accredited by a recognized organization. I can’t say it any better so here is a copy of the blurb from ed.gov:
The goal of accreditation is to ensure that education provided by institutions of higher education meets acceptable levels of quality. Here you will find lists of regional and national accrediting agencies recognized by the U.S. Secretary of Education as reliable authorities concerning the quality of education or training offered by the institutions of higher education or higher education programs they accredit.
The newest wave in the industry appears to be certifying dealerships or sales professionals. You can become one of the top 100 service companies in the industry or even a certified MPS sales specialist. Heck, these programs are trademarked (I think that is what they say...or copyrighted but you wouldn’t copyright a trade name so they seem confused on that) doesn’t that show credibility? Go to the office of patent and trademark and fill out a form and you have the makings of a trademark. For copyrights it is even easier….I could send this blog post into the copyright office to “file” and it is copyrighted. It simply costs some money, like a diploma from the diploma mill, and doesn’t add any credibility.
I think Strategy Development has the deepest talent of consultants and trainers in the industry. Our experience speaks for itself. If you want to improve your service operations or get trained on how to sell MPS I strongly recommend you contact Strategy Development. But we are not an accredited institution and we are not going to insult your intelligence by telling you we will certify you. Besides, even if there are folk’s naïve enough to believe that a company can create their own recognized certification, like the diploma from the “University of Geography” that certification will have no legitimacy in front of a prospect when they ask “How did you earn your certification.” I paid a consulting / training firm to attend their course……
We provide real results, not gimmicks and we certainly will never insult your intelligence.
Okay, so I have attended some “professional education” events and have worked my way up from sales professional to vice president of sales at the dealership, managing four sales professionals. I never stepped foot on a college campus other than to pitch a deal. I collect all of the certificates from my professional training and send them along with my resume and $25,000 to “University of some Geography” and puff, I have a BS in management. You didn’t actually attend any professional training and you don’t want to take the time to download some certificates from the Microsoft Office website, just send in your resume and the check for $25,000 and puff, BS in Management. What, you don’t have any professional training and you aren’t really the VP; actually you’ve never achieved quota in your 10 years of sales and you’ve worked for nine different companies? Son, you need this BS more than most so just send in the check for $25,000 and your diploma will arrive—get that check in within a week and we’ll send a free frame with the diploma.
Why don’t we all set-up colleges and collect checks? Heck, it would save me a fortune sending my three children to accredited universities. But therein lays the answer –accreditation. You see “real colleges” don’t accredit themselves. Rather, they are accredited by a recognized organization. I can’t say it any better so here is a copy of the blurb from ed.gov:
The goal of accreditation is to ensure that education provided by institutions of higher education meets acceptable levels of quality. Here you will find lists of regional and national accrediting agencies recognized by the U.S. Secretary of Education as reliable authorities concerning the quality of education or training offered by the institutions of higher education or higher education programs they accredit.
The newest wave in the industry appears to be certifying dealerships or sales professionals. You can become one of the top 100 service companies in the industry or even a certified MPS sales specialist. Heck, these programs are trademarked (I think that is what they say...or copyrighted but you wouldn’t copyright a trade name so they seem confused on that) doesn’t that show credibility? Go to the office of patent and trademark and fill out a form and you have the makings of a trademark. For copyrights it is even easier….I could send this blog post into the copyright office to “file” and it is copyrighted. It simply costs some money, like a diploma from the diploma mill, and doesn’t add any credibility.
I think Strategy Development has the deepest talent of consultants and trainers in the industry. Our experience speaks for itself. If you want to improve your service operations or get trained on how to sell MPS I strongly recommend you contact Strategy Development. But we are not an accredited institution and we are not going to insult your intelligence by telling you we will certify you. Besides, even if there are folk’s naïve enough to believe that a company can create their own recognized certification, like the diploma from the “University of Geography” that certification will have no legitimacy in front of a prospect when they ask “How did you earn your certification.” I paid a consulting / training firm to attend their course……
We provide real results, not gimmicks and we certainly will never insult your intelligence.
Saturday, October 31, 2009
Sharp gave out more details on its recent dealer meeting in Washington DC
- Total US revenue was down 3%
- Has self-financed leases on a few major account deals, but has no plans to open up
its own leasing company
- Has a total of 440 dealers in the U.S.
- Is adding 20-40 new dealers per year, but also losing about half that many per year
- Has 10 factory direct branch operations from 13 acquisitions
- Has temporarily halted acquisitions, until economy improves, but still hopes to have 25 locations total in next few years
- Goal is for branches to account for 45% of sales in U.S.
- 4 of its 10 largest dealers are Global dealers (owned by Xerox)
- While it launched the Frontier series of A4 MFPs last year, it only has sold a total of 7000 units
- Healthcare vertical market is where most A4s are sold, accounting for 14% of units sold
- Only 310 of its 440 dealers are selling the Frontier A4 models
- In 2005, the total number of 31ppm+ A3 units was 479,431, and in 2008 was 563,309
- In 2005, the total number of 31ppm+ A4 units was 21,779, and in 2008 was 116,536
- Now has 135 technology partners for its OSA embedded solutions offering
- Now offering Front Panel, or ability for end user to customize the copier LCD display
- My Sharp Digital Signage, allows end users to run an announcement on the LCD display
- Future models will come standard with OSA, rather than current option for $349
- Has self-financed leases on a few major account deals, but has no plans to open up
its own leasing company
- Has a total of 440 dealers in the U.S.
- Is adding 20-40 new dealers per year, but also losing about half that many per year
- Has 10 factory direct branch operations from 13 acquisitions
- Has temporarily halted acquisitions, until economy improves, but still hopes to have 25 locations total in next few years
- Goal is for branches to account for 45% of sales in U.S.
- 4 of its 10 largest dealers are Global dealers (owned by Xerox)
- While it launched the Frontier series of A4 MFPs last year, it only has sold a total of 7000 units
- Healthcare vertical market is where most A4s are sold, accounting for 14% of units sold
- Only 310 of its 440 dealers are selling the Frontier A4 models
- In 2005, the total number of 31ppm+ A3 units was 479,431, and in 2008 was 563,309
- In 2005, the total number of 31ppm+ A4 units was 21,779, and in 2008 was 116,536
- Now has 135 technology partners for its OSA embedded solutions offering
- Now offering Front Panel, or ability for end user to customize the copier LCD display
- My Sharp Digital Signage, allows end users to run an announcement on the LCD display
- Future models will come standard with OSA, rather than current option for $349
Lexmark announced a new program for copier dealers
- Has created a line of 15 models that will not be sold on-line or through retailers
- These “XS” models will only be available through copier dealers
- 5 are A4 b/w MFPs, 3 are A3 b/w MFPs, 2 are A4 color MFPs, 2 are A3 color MFPs, 2 are A4 b/w printer, and 1 is A4 color printer.
- Speeds range from 35 to 55ppm
- All have a published MSRP, but not a published street price
- All have large touch screen LCD display
- Offer eTask software for embedded application ability
- Have high yield cartridges so they are ideal for managed print services contracts
- Lexmark claims it has signed up 150 dealers in the U.S. so far, and hopes to have
300 total in next few years
- Typical opening order is $12K to $30K to become authorized
- Product is actually ordered from Tech Data or Synnex, instead of directly from Lexmark
- Will have it first dealer meeting in Kentucky
- These “XS” models will only be available through copier dealers
- 5 are A4 b/w MFPs, 3 are A3 b/w MFPs, 2 are A4 color MFPs, 2 are A3 color MFPs, 2 are A4 b/w printer, and 1 is A4 color printer.
- Speeds range from 35 to 55ppm
- All have a published MSRP, but not a published street price
- All have large touch screen LCD display
- Offer eTask software for embedded application ability
- Have high yield cartridges so they are ideal for managed print services contracts
- Lexmark claims it has signed up 150 dealers in the U.S. so far, and hopes to have
300 total in next few years
- Typical opening order is $12K to $30K to become authorized
- Product is actually ordered from Tech Data or Synnex, instead of directly from Lexmark
- Will have it first dealer meeting in Kentucky
More details on the new alliance between Canon and Hewlett Packard
- HP will begin advertising Canon copiers on its website on 11/1/09
- HP will resell imageRUNNER, imageRUNNER ADVANCE, and imageRUNNER ADVANCE PRO series
- Speed range from 23ppm to 105ppm devices
- According to Larry Trevarthen, HP’s Worldwide Director of Market Development, HP also has access to the imagePRESS production print products
- All the devices will initially carry the Canon name
- The products will be identical to what Canon dealers sell, including supplies
- Service will be provided by a Canon factory direct branch primarily. Only if there is no Canon branch in the area, will the service contract be offered to a Canon dealer.
- Canon currently has 60 factory branch locations, but will expand to 90 locations within 2 years
- HP will support Canon copiers with its Web JetAdmin utility
- HP will also modify its Universal Print Driver to support Canon copiers
- Starting in early 2010, HP will begin to develop its own print controllers for the Canon copiers
- HP will resell imageRUNNER, imageRUNNER ADVANCE, and imageRUNNER ADVANCE PRO series
- Speed range from 23ppm to 105ppm devices
- According to Larry Trevarthen, HP’s Worldwide Director of Market Development, HP also has access to the imagePRESS production print products
- All the devices will initially carry the Canon name
- The products will be identical to what Canon dealers sell, including supplies
- Service will be provided by a Canon factory direct branch primarily. Only if there is no Canon branch in the area, will the service contract be offered to a Canon dealer.
- Canon currently has 60 factory branch locations, but will expand to 90 locations within 2 years
- HP will support Canon copiers with its Web JetAdmin utility
- HP will also modify its Universal Print Driver to support Canon copiers
- Starting in early 2010, HP will begin to develop its own print controllers for the Canon copiers
Hewlett Packard launches three new laser MFDs available exclusively for its PartnerONE dealers
- LaserJet M9059 is a 50ppm, b/w A3 unit, based on existing M9050.
- LaserJet M4349x is a 45ppm, b/w A4 unit, based on existing M4345
- Color LaserJet CM6049f is a 40ppm, color A3 unit, based on existing CM6040f
- All are actually made by Canon
The only difference of the new models, versus the units that they are based on, is that they have toner cartridges that are keyed, so end users have to buy the toners from the HP PartnerONE dealer, and not on-line, or in a superstore.
This appears to be an effort by HP to provide their channel with products that can be used in an MPS engagement. I have not seen pricing for the cartridges, and probably would not be able to disclose the pricing if I did see it, but unless HP is deploying pricing similar to their supplies meter program they probably will not get much traction with these products. Keyed products create logistic issues in mixed fleets--those with the keyed models as well as the orginal modles--and if the units have a short shelf life due to lack of acceptance the vendor and customer have a small group of "orphaned" devices with a special cartridge. Furthermore, the ability to move to compatible cartridges is probably lost.....another fact that probably drove HP to this strategy.
- LaserJet M4349x is a 45ppm, b/w A4 unit, based on existing M4345
- Color LaserJet CM6049f is a 40ppm, color A3 unit, based on existing CM6040f
- All are actually made by Canon
The only difference of the new models, versus the units that they are based on, is that they have toner cartridges that are keyed, so end users have to buy the toners from the HP PartnerONE dealer, and not on-line, or in a superstore.
This appears to be an effort by HP to provide their channel with products that can be used in an MPS engagement. I have not seen pricing for the cartridges, and probably would not be able to disclose the pricing if I did see it, but unless HP is deploying pricing similar to their supplies meter program they probably will not get much traction with these products. Keyed products create logistic issues in mixed fleets--those with the keyed models as well as the orginal modles--and if the units have a short shelf life due to lack of acceptance the vendor and customer have a small group of "orphaned" devices with a special cartridge. Furthermore, the ability to move to compatible cartridges is probably lost.....another fact that probably drove HP to this strategy.
Thursday, October 22, 2009
The importance of business planning
At several recent workshops, I asked the workshop participants how many of their companies prepared an annual business plan. I was surprised that in both workshops, only 20% of the companies represented actually prepared a business plan. It was interesting to note that at a follow-up question where I asked how each company was coping with the economy, they all admitted to their business being tougher than ever but the ones who earlier acknowledged that they prepare a business plan also indicated that they were doing reasonably well in a tough economy. They had a formal business plan, worked it continuously and adjusted areas as the year progressed.
That is not surprising. When a company properly prepares and executes on their business plan, the results that they achieve typically far exceed the results of companies that do not have a plan. In addition, their plan provides a basis for a scorecard of performance throughout the year. Without a plan, a company doesn’t know if they are leaving money on the table because they have no idea what they should be able to achieve.
Many companies don’t know where to begin in preparing a business plan. This is where an investment in attending a Business Planning Workshop would be a great benefit. The workshop is tailored for the Office Products industry and takes you through every detail of what a plan should entail and how to work through every detail. You will come out of there fully prepared to work with your team to construct and execute on a plan for your company
That is not surprising. When a company properly prepares and executes on their business plan, the results that they achieve typically far exceed the results of companies that do not have a plan. In addition, their plan provides a basis for a scorecard of performance throughout the year. Without a plan, a company doesn’t know if they are leaving money on the table because they have no idea what they should be able to achieve.
Many companies don’t know where to begin in preparing a business plan. This is where an investment in attending a Business Planning Workshop would be a great benefit. The workshop is tailored for the Office Products industry and takes you through every detail of what a plan should entail and how to work through every detail. You will come out of there fully prepared to work with your team to construct and execute on a plan for your company
Monday, September 28, 2009
CIOs Pare Their Suppliers
Information Officers Focus on Big Vendors With Wide Offerings
In a September 16, 2009 article in the WSJ author Jerry A. DiColo detailed
"Chief information officers--the executives charged with running corporate technology departments--are looking to reduce their number of suppliers to focus on large vendors with wider product offerings.
The Change reflects a growing push by companies on tight budgets to form partnerships with suppliers managing bigger swaths of information technology operations."
Sounds like MPS may help these CIOs achieve their goal of reducing vendors!
In a September 16, 2009 article in the WSJ author Jerry A. DiColo detailed
"Chief information officers--the executives charged with running corporate technology departments--are looking to reduce their number of suppliers to focus on large vendors with wider product offerings.
The Change reflects a growing push by companies on tight budgets to form partnerships with suppliers managing bigger swaths of information technology operations."
Sounds like MPS may help these CIOs achieve their goal of reducing vendors!
Details of the HP / Canon Alliance
Canon announced it will allow Hewlett Packard to sell most of its copier product line.
Details:
Details:
- Expansion of 25 year relationship between Canon and Hewlett Packard
- This is a one-way agreement, as Canon will not have access to HP devices
- HP will sell Canon branded B/W and color copiers from segment 2 up through segment 6
- Initially, HP will market the Canon brand, but then will switch to offering the Canon copiers with the HP name on them as soon as it develops HP JetDirect based print controllers for them
- All current HP LaserJet and Color LaserJet devices are made by Canon
- HP will also resell Canon’s imageWARE and MEAP solutions
- Canon is looking gain back marketshare when it lost all IKON locations when IKON sold out to Ricoh, and when DANKA sold out to Konica Minolta in the U.S.
- This is fifth time that HP has attempted to enter the office copier space
- HP will use expanded product offering to grow its Managed Print Services program, “creating an integrated platform and brokering a network of service partners that will enable resellers to sell contractual print offerings"
- "create new global business unit”, called Managed Enterprise Solutions, led by Bruce Dahlgren (former Lexmark executive) and headquartered in San Diego, CA
- HP, which recently acquired IT services provider Electronic Data Systems (EDS), will use 500 certified EDS account managers to sell managed print services with this new expanded device offering to companies in the U.S. (EDS currently accounts for 20% of HP’s MPS sales)
- While HP will do the billing for contracts that include Canon branded devices, HP will subcontract the service to either Canon branches or Canon dealers, based on customer request
- Customers will contact HP to place service calls, and HP will then dispatch to Canon branch or dealer
- HP claims to have 2000 customers under MPS contracts, including 450,000 devices and 18 billion pages per year.
- HP claims to win 60% of all MPS bids it participates in.
Saturday, September 26, 2009
InfoTrends and Strategy Development Announce Development of Managed Print Services e-Learning Program
InfoTrends, the leading worldwide consulting firm for the digital imaging and document solutions industry, and Strategy Development, a management consultant and advanced sales training firm, announced the development of a new e-learning portal focused on Managed Print Services (MPS) Sales Training. The Web-based training program is designed to educate sales reps, sales management and principals on the requirements for a successful MPS strategy and sales execution plan around Managed Print Services. The portal offers a self-paced curriculum with guided audio and engaging interactive exercises that are available 24 hours a day - at an affordable price.
http://www.capv.com/public/Content/Press/2009/08.27.2009.2.html
We have a great training program in partnership with the BTA (www.bta.org) and we believe that classroom training provides many benefits, not the least of which is the questioning, interaction with other students, and ability to work on real world scenarios in breakout groups. Nevertheless, we realize that there are situations where eLearning is a better option. It is a great supplement for new hires after the manager or initial sales specialist attends the more intense BTA classroom training. It is also a great approach as a refresher. Finally, it is a solid option for those that want to keep expenses low, eliminating the need for travel.
http://www.capv.com/public/Content/Press/2009/08.27.2009.2.html
We have a great training program in partnership with the BTA (www.bta.org) and we believe that classroom training provides many benefits, not the least of which is the questioning, interaction with other students, and ability to work on real world scenarios in breakout groups. Nevertheless, we realize that there are situations where eLearning is a better option. It is a great supplement for new hires after the manager or initial sales specialist attends the more intense BTA classroom training. It is also a great approach as a refresher. Finally, it is a solid option for those that want to keep expenses low, eliminating the need for travel.
InfoTrends is the leading research firm in the imaging space, to include MPS. The Strategy Development Team is excited to enter this strategic alliance; we know InfoTrends research will only help to improve our industry leading sales training.
For information on the MPS Sales eLearning Training follow the link above or contact Tom Callinan: callinan@strategydevelopment.org
Global Printer, Copier, MFP Market Sees 20 Percent Decline In First Half Of 2009
Office printing devices drove the overall decline in the global print market, with a 24.5 percent decrease in the first half of the year compared to the first half of 2008.
Some great information for you to use in your FY2010 planning. With units declining how do you increase your market share and find other sources of revenue--like MPS.
http://www.crn.com/hardware/219500374;jsessionid=KFQSF1LOTLXB1QE1GHOSKH4ATMY32JVN?cid=CRNFeed
Thursday, September 24, 2009
Culture: A Key Ingredient to Success
The consulting team at Strategy Development works with scores of dealers and resellers throughout North America. One frequent question I get when speaking at a conference is “what makes a company successful.” I could spend a year of articles on this subject—and you would want to start with having a solid business plan—but even with that plan you need a positive culture.
Whether you plan for it or it happens by happenstance you have a company culture. If the principals or senior management of the company have well defined goals and communicate the goals clearly and consistently at every level of the organization you can almost bet that you will have a goal oriented culture. If you set individual goals with a slight stretch and perfectly aligned with the company goals then provide generous rewards for achievement, you will develop a culture of accomplishment and reward.
Fun is an important aspect of culture; at least I think it is and I can tell you that every successful company we work with designs fun into their culture. Do you create an environment of fun at work?
I made an important qualification above that I hope you picked-up on; goals need to be aligned. That is another key aspect of having a winning culture. If the company’s goal is to grow 20% this year—and yes, many MPS companies are growing by far more than 20% even in this environment—and your sales force can earn a great living simply managing their base of accounts you have a disconnect. Your sales force is the engine and if they aren’t paid to grow it will not happen. You will consistently miss your goals and your culture will not be goal oriented. You are allowing a culture you would never desire to creep into your company because of lack of planning, alignment, and communication.
So great companies do not hesitate to move the goal line as long as everybody on the team understands why the goal line needs to be moved. Great companies then give outsized rewards to those that are able to achieve the more difficult goals and they make sure that everybody has fun in the process.
I have seen nothing but bad things happen when culture is left to happenstance. Employees get rewarded for behavior that can actually be detrimental to the company’s goals and because of lack of planning and lack of communication “management” becomes the reason for all things bad. Without planning and communication departments do what is best for their own fiefdom and a culture of “all out for me” develops, impairing a company’s ability to grow or achieve reasonable profits.
One of our very successful clients had a quarterly trip for those sales professionals that significantly exceeded quota. It was a short trip—a long weekend in Sonoma—for the sales professional and significant other. Five of the company’s top achievers earned the trip. When they arrived at the airport they found out that the flight was delayed for five hours due to mechanical issues. Clearly, the trip in itself was an indication of the reward culture at this company but I think what happened next will highlight the focus to culture even more. The principal of the company chartered a private jet for almost $15,000 to take his reps to Sonoma.
The principal was telling me about how great the trip was and just mentioned this event casually. My response was, “Wow that must have been expensive.” He rejoined, “Yes, but I was faced with having my top five reps remember the trip by the five hours they wasted in the airport or a great time in Sonoma and I didn’t want them to be talking about being stuck in the airport for the next three months.” The point is not to charter jets for your trips; the point is to focus on how your actions create a company culture. It is a key ingredient to success.
Whether you plan for it or it happens by happenstance you have a company culture. If the principals or senior management of the company have well defined goals and communicate the goals clearly and consistently at every level of the organization you can almost bet that you will have a goal oriented culture. If you set individual goals with a slight stretch and perfectly aligned with the company goals then provide generous rewards for achievement, you will develop a culture of accomplishment and reward.
Fun is an important aspect of culture; at least I think it is and I can tell you that every successful company we work with designs fun into their culture. Do you create an environment of fun at work?
I made an important qualification above that I hope you picked-up on; goals need to be aligned. That is another key aspect of having a winning culture. If the company’s goal is to grow 20% this year—and yes, many MPS companies are growing by far more than 20% even in this environment—and your sales force can earn a great living simply managing their base of accounts you have a disconnect. Your sales force is the engine and if they aren’t paid to grow it will not happen. You will consistently miss your goals and your culture will not be goal oriented. You are allowing a culture you would never desire to creep into your company because of lack of planning, alignment, and communication.
So great companies do not hesitate to move the goal line as long as everybody on the team understands why the goal line needs to be moved. Great companies then give outsized rewards to those that are able to achieve the more difficult goals and they make sure that everybody has fun in the process.
I have seen nothing but bad things happen when culture is left to happenstance. Employees get rewarded for behavior that can actually be detrimental to the company’s goals and because of lack of planning and lack of communication “management” becomes the reason for all things bad. Without planning and communication departments do what is best for their own fiefdom and a culture of “all out for me” develops, impairing a company’s ability to grow or achieve reasonable profits.
One of our very successful clients had a quarterly trip for those sales professionals that significantly exceeded quota. It was a short trip—a long weekend in Sonoma—for the sales professional and significant other. Five of the company’s top achievers earned the trip. When they arrived at the airport they found out that the flight was delayed for five hours due to mechanical issues. Clearly, the trip in itself was an indication of the reward culture at this company but I think what happened next will highlight the focus to culture even more. The principal of the company chartered a private jet for almost $15,000 to take his reps to Sonoma.
The principal was telling me about how great the trip was and just mentioned this event casually. My response was, “Wow that must have been expensive.” He rejoined, “Yes, but I was faced with having my top five reps remember the trip by the five hours they wasted in the airport or a great time in Sonoma and I didn’t want them to be talking about being stuck in the airport for the next three months.” The point is not to charter jets for your trips; the point is to focus on how your actions create a company culture. It is a key ingredient to success.
Sunday, September 20, 2009
Attention Copier Dealers: You’re Not Dying, But I would Adapt
In the mid 90’s industry research firms were “screaming” that if you didn’t own the network you would be out of the copier business. Their mantra was “Whoever owns the network will own the output.” Boy were they wrong.
You have always been able to find a researcher that predicted the demise of the copier dealer. Digital was the end of the dealer, but it resulted in growth. Production was going to put the dealer out of business as direct operations were the only business that could afford to support and sell production. Dealers sold thousands of production units and increased their top and bottom lines. Software was going to be too complex for the dealer; the dealer developed software applications the manufacturers then adapted.
Now yet another research firm is “screaming” that the copier dealer is headed for death: Adapt or Die is his message. Is he accurate—not really but he worked in the marketing department of printer companies so we’ll give him a rookie buy. Will there really be 50% fewer copier companies in five years? Yes, Strategy Development has been saying that for two years so our writings may be the research subject, but it has nothing to do with MPS and everything to do with a 40% decline in units sold over the five year period starting in 2007. See the blog post on this site from March, 2009 titled “Sea Change For the Copier Dealer.”
Should the copier dealer be concerned with the manufacturers, MPS programs, and “Hybrid” dealer (I have to admit I hate that term….it is a ubiquitous as “solution,” and covers everything from cars to energy sources to plants…..I think my Golden Doodle is a hybrid…can’t we just call them MPS providers)? Let’s take the MPS programs first: They add almost no value for a medium to large dealer with a true focus on MPS. You can read my former blog post on that subject. As for manufacturers, they will focus on enterprise level accounts—not the domain of the normal dealer. So unless you regularly call on MetLife, Citi, Home Depot, or FedEx I would not worry too much about the manufacturers.
How about the VAR or reseller? For these companies MPS is a totally different business model so they have a real uphill battle. Some have entered MPS successfully but most have not entered and others are piddling, maybe with one of those aforementioned MPS programs. Call me a homer but my money is on the copier dealer dominating MPS and I’d even give odds.
I’m not speaking out of ignorance. In our consulting practice, Strategy Development works with VARs, resellers, manufacturers, research firms, and dealers; so I see from the front line what is occurring with MPS.
“HP (is) entering (the copier space) with highly competitive A4 based MFPs.” Yo, 2004 is calling and they want their history back. The HP 4345 MFP was launched in November, 2004 and skyrocketed to the top of the Segment 4 MFP placement charts….working down the charts since then. But it is 2009 so how about Sharp’s highly successful Frontier line of A4 products or every other copier vendors introductions in this space. Yes, HP sent shock waves through the industry but that’s ancient history.
“Big dealers will struggle with (MPS) due to the inertia in their organizations and resistance to change.” How do you think big dealers got big? Because they have strong management and good finances; they see revenue generating opportunities and they are able to invest the time and resources to be successful in these areas. Big dealers will successfully sell MPS. I believe they will be the dominant MPS companies, san a few pure MPS providers that have momentum today.
Every time a research firm has cried wolf the copier community has responded with investment and success. MPS will be no different. Yes, adding new capabilities will require some change but to call it a business model change for the copier dealer is grossly exaggerating the facts. We heard this same “fire” scream with digital, production, and color products. Look at the components of an MPS agreement: equipment, supplies, service, and parts. Sure, we all want to be “solutions providers” but in reality software is a small part of our business. Heck, in the last business I ran $50 million of $1.4 billion was software, representing 3.5% or revenue. Even with a laser focus in 2010 I don’t think you’ll find software to represent more than 10% of your business so let’s talk about reality.
There are more devices in an MPS engagement so you need the operations and service processes to handle that complexity. You’ll need to get service trained but it isn’t anywhere near as difficult as copier training. You’ll need to establish a relationship with a distributor—like Ingram Micro or Tech Data—for your OEM supplies and your printers, and with a compatible company, like West Point Products, for your cartridges. And you will need a different sales approach and relationship management approach. So you will need to adjust your business model….and if you call an adjustment a change I am fine with the sensationalized description…but I would frame it as an adjustment.
Strategy Development can help you make the adjustment. Partnering with the BTA (who has transformed over the years from NOMDA….and is now the leading association for companies in the MPS space) we offer the MPS Operations and Service Workshop and the MPS Sales Workshop to help you adjust your model. So in the end I guess I agree with part of the sensationalism—adopt MPS as a strategy…it is not as scary as some would have you believe.
Join one of our Linkedin groups: Print Management, Copier Service Management, or MPS Executive Management and while you are at it add yourself as a follower on this blog.
You have always been able to find a researcher that predicted the demise of the copier dealer. Digital was the end of the dealer, but it resulted in growth. Production was going to put the dealer out of business as direct operations were the only business that could afford to support and sell production. Dealers sold thousands of production units and increased their top and bottom lines. Software was going to be too complex for the dealer; the dealer developed software applications the manufacturers then adapted.
Now yet another research firm is “screaming” that the copier dealer is headed for death: Adapt or Die is his message. Is he accurate—not really but he worked in the marketing department of printer companies so we’ll give him a rookie buy. Will there really be 50% fewer copier companies in five years? Yes, Strategy Development has been saying that for two years so our writings may be the research subject, but it has nothing to do with MPS and everything to do with a 40% decline in units sold over the five year period starting in 2007. See the blog post on this site from March, 2009 titled “Sea Change For the Copier Dealer.”
Should the copier dealer be concerned with the manufacturers, MPS programs, and “Hybrid” dealer (I have to admit I hate that term….it is a ubiquitous as “solution,” and covers everything from cars to energy sources to plants…..I think my Golden Doodle is a hybrid…can’t we just call them MPS providers)? Let’s take the MPS programs first: They add almost no value for a medium to large dealer with a true focus on MPS. You can read my former blog post on that subject. As for manufacturers, they will focus on enterprise level accounts—not the domain of the normal dealer. So unless you regularly call on MetLife, Citi, Home Depot, or FedEx I would not worry too much about the manufacturers.
How about the VAR or reseller? For these companies MPS is a totally different business model so they have a real uphill battle. Some have entered MPS successfully but most have not entered and others are piddling, maybe with one of those aforementioned MPS programs. Call me a homer but my money is on the copier dealer dominating MPS and I’d even give odds.
I’m not speaking out of ignorance. In our consulting practice, Strategy Development works with VARs, resellers, manufacturers, research firms, and dealers; so I see from the front line what is occurring with MPS.
“HP (is) entering (the copier space) with highly competitive A4 based MFPs.” Yo, 2004 is calling and they want their history back. The HP 4345 MFP was launched in November, 2004 and skyrocketed to the top of the Segment 4 MFP placement charts….working down the charts since then. But it is 2009 so how about Sharp’s highly successful Frontier line of A4 products or every other copier vendors introductions in this space. Yes, HP sent shock waves through the industry but that’s ancient history.
“Big dealers will struggle with (MPS) due to the inertia in their organizations and resistance to change.” How do you think big dealers got big? Because they have strong management and good finances; they see revenue generating opportunities and they are able to invest the time and resources to be successful in these areas. Big dealers will successfully sell MPS. I believe they will be the dominant MPS companies, san a few pure MPS providers that have momentum today.
Every time a research firm has cried wolf the copier community has responded with investment and success. MPS will be no different. Yes, adding new capabilities will require some change but to call it a business model change for the copier dealer is grossly exaggerating the facts. We heard this same “fire” scream with digital, production, and color products. Look at the components of an MPS agreement: equipment, supplies, service, and parts. Sure, we all want to be “solutions providers” but in reality software is a small part of our business. Heck, in the last business I ran $50 million of $1.4 billion was software, representing 3.5% or revenue. Even with a laser focus in 2010 I don’t think you’ll find software to represent more than 10% of your business so let’s talk about reality.
There are more devices in an MPS engagement so you need the operations and service processes to handle that complexity. You’ll need to get service trained but it isn’t anywhere near as difficult as copier training. You’ll need to establish a relationship with a distributor—like Ingram Micro or Tech Data—for your OEM supplies and your printers, and with a compatible company, like West Point Products, for your cartridges. And you will need a different sales approach and relationship management approach. So you will need to adjust your business model….and if you call an adjustment a change I am fine with the sensationalized description…but I would frame it as an adjustment.
Strategy Development can help you make the adjustment. Partnering with the BTA (who has transformed over the years from NOMDA….and is now the leading association for companies in the MPS space) we offer the MPS Operations and Service Workshop and the MPS Sales Workshop to help you adjust your model. So in the end I guess I agree with part of the sensationalism—adopt MPS as a strategy…it is not as scary as some would have you believe.
Join one of our Linkedin groups: Print Management, Copier Service Management, or MPS Executive Management and while you are at it add yourself as a follower on this blog.
MPS Programs: Where’s the Value
I don’t hear much from the channel regarding MPS programs but the manufacturers seem to be spending an inordinate amount of time promoting their programs. Read my post below titled: MPS, Growth Strategy or Harbinger of a Smaller Pie to gain some insight into a possible reason.
If you were a low market share printer OEM and you see the dynamic market shifts detailed in that blog post wouldn’t you come out with an MPS program? Your survival could depend on successfully positioning yourself as an MPS solution. If you are a copier OEM don’t you want your channel to replace those printers with your brand of A4 or print products?
But “program” is a broad description. Compatible companies, such as West Point Products, have programs. But they don’t sell equipment. The compatible companies’ programs consist of some combination of remote monitoring, financial schedules, presentations, sales training, and—most important for them—quality compatible cartridges with strong logistic support.
Then you have manufacturers’ programs (Qualification, I am not referring to normal vendor programs offered, such as HP’s OCPC program or any copier vendors authorized dealer “Schedule A”—which provides great benefits such as special pricing to companies selling the products. I am referring specifically to wrapped MPS programs). I’ll use Xerox as an example since they have a broad offering of programs. At one end of the continuum Xerox’s PagePack is simply a bundled equipment sale and PagePack FM is a monitoring and management program that does not includes supplies, service or equipment. Between the two you have PagePack NX and NX-T, which provide supplies (NX-T) and supplies and service (NX) for “certain” HP printers.
But I don’t think anybody is fooled: The main purpose of any manufacturer’s MPS program is to sell more of their equipment; they aren’t trying to be benevolent to the channel.
One aspect of all of the programs is remote monitoring software. This software has become so associated with MPS that some people define the software as MPS software. I’d tell you that remote monitoring software is no more MPS software than your management software. I mean, even if you captured a meter read or a service alert how do you bill the contract or dispatch the service call without management software?
Unfortunately, the inaccurate belief that remote monitoring software is the foundation of MPS seems to have set many programs off in the wrong direction. Providing this software on some type of ASP basis or meter charge became the primary value proposition. It was a leaky foundation two years ago and the foundation has cracked now that remote monitoring software can be purchased for about ten cents per month per device directly from the software company.
I find copier dealers are well equipped to put together their own “program.” You are simply putting together some vendors. If you are serious about MPS you will want to have direct relationships and control. It seems that the only programs with any traction in the BTA channel are those from cartridge companies, such as the aforementioned West Point Products. Cartridges are the largest cost in an MPS program and every MPS provider needs a relationship with a cartridge vendor, so it only makes sense that these vendors have traction.
But even in these instances I believe the MPS provider is choosing the cartridge company based on the quality and value of their product and distribution and “taking” any free aspects of the program that the vendor offers. If the cartridge company will throw in remote monitoring—and the MPS provider has not yet invested in the software—they’ll use the cartridge vendor’s software.
Besides being designed to sell their product, vendor programs are also constrained by limitations. What happens when your vendor only supports “certain HP products” and your customer has a mixture of HP—some supported and some not—as well as Lexmark and Dell printers? Tell the customer you can only put half of their printers on a contract? Or do you have half the printers on the vendor’s program and half on your own program? Maybe you go with two different vendor programs for a single customer—installing two remote monitoring applications on their network? What motivation would you have to allow any vendor to simply monitor your customer’s fleet—particularly if they sell MPS direct? And, you’re going to pay them to gather information on your customer?
One—in my mind total deal killers—constraint in some of the programs is that the printer has to be attached to the network. Newsflash, half of the printers in an office—and I am not even giving inkjets consideration, just laser—but half of them are locally connected. Then again if you only support certain printers and only connected printers I guess the prospect is expected to buy your printers to supplement?
Then you have program components. Maybe your vendor selected technologically inferior remote monitoring software and you’ll have it installed in 10 customer locations before you determine the product is weak. Now you have to deinstall the vendor’s software and install the software you selected after thorough investigation of the technology, disrupting your customer relationship. Maybe your vendor provides “sales training” or “consulting” from a totally unqualified trainer and you spend a year following his (her) direction before you figure out it doesn’t work. Don’t you want to do your own research on your trainer’s skills and experience before you spend a lot of money to launch a program?
There are minor benefits to some of the vendor programs. Some of the copier OEMs provide quota credit for compatible cartridges purchased through their program. That has potential to result in rebates so if they are competitively priced and have good logistics (like next day white box delivery) it could be financially beneficial. Other vendors offer both compatible and OEM cartridges at a good value, but this again is more a cartridge play than a program.
For the company that wants to dabble in MPS a program could be an option. So if you aren’t going to commit to MPS but you want to be able to take the occasional contract when it falls on your desk a program is an option. Understand the constraints so you understand specifically what you can sell and partner with a vendor. But in this situation the vendor is essentially the MPS provider and you providing them access to your customers. Therefore, I would be very cautious of the contract that I sign. Does it have non-compete language and will your customer data remain yours or will the vendor have rights as well once they are on their program.
For those that are serious about developing an MPS strategy, put together your own program. I recommend you work with vendors that provide you some level of co-op or MDF rather than trying to provide you with a package. Look at the core competency of the vendor. Cartridge companies’ core competency is reverse engineering and manufacturing. Copier and printer companies’ core competency is manufacturing and distribution. Distributors’ core competency is logistics. And software companies develop code. If they really want you to buy more of their products then ask them to provide some funds so that you can select your own remote meter program or training company. After all, your core competency is selling and servicing your customers.
Join the LinkedIn Groups: Print Management, Copier Service Management, or MPS Executive Management and add yourself as a follower of this blog
If you were a low market share printer OEM and you see the dynamic market shifts detailed in that blog post wouldn’t you come out with an MPS program? Your survival could depend on successfully positioning yourself as an MPS solution. If you are a copier OEM don’t you want your channel to replace those printers with your brand of A4 or print products?
But “program” is a broad description. Compatible companies, such as West Point Products, have programs. But they don’t sell equipment. The compatible companies’ programs consist of some combination of remote monitoring, financial schedules, presentations, sales training, and—most important for them—quality compatible cartridges with strong logistic support.
Then you have manufacturers’ programs (Qualification, I am not referring to normal vendor programs offered, such as HP’s OCPC program or any copier vendors authorized dealer “Schedule A”—which provides great benefits such as special pricing to companies selling the products. I am referring specifically to wrapped MPS programs). I’ll use Xerox as an example since they have a broad offering of programs. At one end of the continuum Xerox’s PagePack is simply a bundled equipment sale and PagePack FM is a monitoring and management program that does not includes supplies, service or equipment. Between the two you have PagePack NX and NX-T, which provide supplies (NX-T) and supplies and service (NX) for “certain” HP printers.
But I don’t think anybody is fooled: The main purpose of any manufacturer’s MPS program is to sell more of their equipment; they aren’t trying to be benevolent to the channel.
One aspect of all of the programs is remote monitoring software. This software has become so associated with MPS that some people define the software as MPS software. I’d tell you that remote monitoring software is no more MPS software than your management software. I mean, even if you captured a meter read or a service alert how do you bill the contract or dispatch the service call without management software?
Unfortunately, the inaccurate belief that remote monitoring software is the foundation of MPS seems to have set many programs off in the wrong direction. Providing this software on some type of ASP basis or meter charge became the primary value proposition. It was a leaky foundation two years ago and the foundation has cracked now that remote monitoring software can be purchased for about ten cents per month per device directly from the software company.
I find copier dealers are well equipped to put together their own “program.” You are simply putting together some vendors. If you are serious about MPS you will want to have direct relationships and control. It seems that the only programs with any traction in the BTA channel are those from cartridge companies, such as the aforementioned West Point Products. Cartridges are the largest cost in an MPS program and every MPS provider needs a relationship with a cartridge vendor, so it only makes sense that these vendors have traction.
But even in these instances I believe the MPS provider is choosing the cartridge company based on the quality and value of their product and distribution and “taking” any free aspects of the program that the vendor offers. If the cartridge company will throw in remote monitoring—and the MPS provider has not yet invested in the software—they’ll use the cartridge vendor’s software.
Besides being designed to sell their product, vendor programs are also constrained by limitations. What happens when your vendor only supports “certain HP products” and your customer has a mixture of HP—some supported and some not—as well as Lexmark and Dell printers? Tell the customer you can only put half of their printers on a contract? Or do you have half the printers on the vendor’s program and half on your own program? Maybe you go with two different vendor programs for a single customer—installing two remote monitoring applications on their network? What motivation would you have to allow any vendor to simply monitor your customer’s fleet—particularly if they sell MPS direct? And, you’re going to pay them to gather information on your customer?
One—in my mind total deal killers—constraint in some of the programs is that the printer has to be attached to the network. Newsflash, half of the printers in an office—and I am not even giving inkjets consideration, just laser—but half of them are locally connected. Then again if you only support certain printers and only connected printers I guess the prospect is expected to buy your printers to supplement?
Then you have program components. Maybe your vendor selected technologically inferior remote monitoring software and you’ll have it installed in 10 customer locations before you determine the product is weak. Now you have to deinstall the vendor’s software and install the software you selected after thorough investigation of the technology, disrupting your customer relationship. Maybe your vendor provides “sales training” or “consulting” from a totally unqualified trainer and you spend a year following his (her) direction before you figure out it doesn’t work. Don’t you want to do your own research on your trainer’s skills and experience before you spend a lot of money to launch a program?
There are minor benefits to some of the vendor programs. Some of the copier OEMs provide quota credit for compatible cartridges purchased through their program. That has potential to result in rebates so if they are competitively priced and have good logistics (like next day white box delivery) it could be financially beneficial. Other vendors offer both compatible and OEM cartridges at a good value, but this again is more a cartridge play than a program.
For the company that wants to dabble in MPS a program could be an option. So if you aren’t going to commit to MPS but you want to be able to take the occasional contract when it falls on your desk a program is an option. Understand the constraints so you understand specifically what you can sell and partner with a vendor. But in this situation the vendor is essentially the MPS provider and you providing them access to your customers. Therefore, I would be very cautious of the contract that I sign. Does it have non-compete language and will your customer data remain yours or will the vendor have rights as well once they are on their program.
For those that are serious about developing an MPS strategy, put together your own program. I recommend you work with vendors that provide you some level of co-op or MDF rather than trying to provide you with a package. Look at the core competency of the vendor. Cartridge companies’ core competency is reverse engineering and manufacturing. Copier and printer companies’ core competency is manufacturing and distribution. Distributors’ core competency is logistics. And software companies develop code. If they really want you to buy more of their products then ask them to provide some funds so that you can select your own remote meter program or training company. After all, your core competency is selling and servicing your customers.
Join the LinkedIn Groups: Print Management, Copier Service Management, or MPS Executive Management and add yourself as a follower of this blog
Thursday, September 10, 2009
MPS: Growth Strategy or Harbinger of a Smaller Pie
My opinion is both, depending on your current position and how well you leverage the MPS opportunity. To understand my feelings I will share my thoughts.
Fewer printers and copiers are being sold year on year. Gartner recently reported that worldwide combined printer, copier and MFP shipments totaled 51.3 million units, a 20.2 percent decline in shipments from the first half of 2008. Office printing devices drove the overall decline in the global print market, with a 24.5 percent decrease in the first half of the year compared to the first half of 2008.
Add to this year on year unit decline the facts that A4 units are replacing A3 units, at a lower average unit selling price and, like all maturing technology, average unit selling price across all segments is declining and you wonder where the growth is. The simple answer is that there is no growth; in fact, the overall market is shrinking.
Keep in perspective that there is nothing new in an MPS sale, which includes toner, parts and service (together “aftermarket”), equipment, and software. Moreover, one of the long-term goals of MPS is to reduce the quantity of devices used by a company. What does this mean? It means that the industry players—those that depend on an already shrinking revenue pool—are going to deliberately accelerate that revenue decline.
So far it sounds like death by a thousand cuts so why would anybody want to jump into MPS? Because for the short term, it is a growth strategy for those that properly deploy a strategy.
Printer Manufacturer Perspective
Every printer manufacturer is touting an MPS strategy. Why would you push a strategy that is going to result in fewer devices sold when you are a manufacturer? Simple, because you expect to take market share from the other printer companies—you intend on gaining share. So in short, the device loss is going to come out of your competitors’ backside.
MPS is clearly an inflection point in how devices, parts, and toner get sold and we’ll get to that shortly. The real question is will a printer manufacturer with low market share—when laser printers have been in the market for over 20 years—suddenly be able to leverage MPS to transform themselves into an industry player or is it simply a drowning man grasping for a thin read? Time will tell….but history usually repeats itself.
Let’s use HP as an example, who by all accounts has a 50%+ market share. I don’t care what industry you are in 50% market share is a dominating position. HP used their technical expertise—manufacturing super reliable printers that easily connected to the network—along with a “razor / razor blade” strategy to earn this dominance. One way to grow market share is to change the definition of the market so you motivate your team to penetrate adjacencies, and HP has accomplished this with their MFD products—directly targeting the copier space as a growth strategy.
But HP, in my opinion, has a bigger issue than pure market share and that issue relates to their razor blade strategy. Low priced, highly reliable, easily connected products provided HP with the ability to distribute through mass market players like CDW and PC Mall, as well as value added resellers (VAR) and dealers. The end user then purchased their HP cartridges through distribution points like their office supply company or HP direct. Sure, rechargers have approximately 30% of the mono market and 7% of the color market, but this seems to have been an acceptable level to HP, who constantly introduced new models; it took the rechargers a year or so to get enough empty cartridges to manufacturer in quantity.
Two sea changes are occurring today. First, and the point of this article, copier dealers, VARs, and other players are selling MPS agreements. Just four years ago HP, as well as the other printer manufacturers, but HP is the 800 pound gorilla, only had to deal with cartridge resellers and some private label products in super stores. Selling HP or compatible (remanufactured) cartridges was not a focus for the vast majority of copier dealers and the MPS VAR did not exist. Today, hundreds—rapidly headed toward thousands—of MPS providers are selling contracts that primarily use remanufactured cartridges in their contracts. Second, end users are holding onto their printers for a longer period of time so remanufactured cartridges are available for most products.
HP has a strong drive for market share; they are aggressive and smart and that is why they are so dominant. The other printer vendors sense there is an opportunity with the sea change of MPS. We will see if other printer manufacturers are able to take advantage of this inflection point or if HP will respond and retain their dominance.
Copier Manufacturer Perspective
No difference here—all copier manufacturers are pushing MPS. I think they have more to gain than the print manufacturer in that they have the opportunity to capture highly profitable new services revenue. So while HP is defending their turf—and the likes of Lexmark, Muratec, OKI, and Samsung are trying to take that market share—the copier manufacturer, through either their direct branch or dealer channel, can gain profitable aftermarket revenue. And they need it because year on year equipment placements are dropping rapidly!
So here is the short term gain: HP’s and the likes of CDW’s loss is the MPS delivering company’s gain. There are other winners too, like cartridge remanufacturers and distributors who supply MPS companies. We’ll cover the deliverable growth aspect in the next section but copier companies believe that they can replace that fleet of HP, Lexmark and other brand printers over the long term with their own products, while developing profitable service revenue over the short term.
I don’t think you are going to see any magic occur with this strategy: Copier manufacturers with low market share aren’t going to displace the top tier players with an MPS strategy. The channel is fairly set at this late stage of maturity so all the manufacturers can do is execute well through their branches and provide the consulting and training their dealer channel will need. They also need to provide them with a solid A4 product line of MFDs and printers.
The provider—MPS companies
Here is where the tremendous growth is near and medium term; the actual company that is on the street selling and delivering on MPS. The growth is coming out of other channels—it is not industry growth. Let’s just take an example:
ABC Imaging, a Sharp, Konica Minolta (KMBS), and HP dealer convinces Smith and Fried, a law firm, to place their 160 HP printers on an MPS agreement. Previously, Smith and Fried bought their printers from CDW with care packs and bought their cartridges and maintenance kits through Staples with their office supplies. ABC gets a contract for $15,000 to supply and service the 160 printers. So far Staples has lost the toner and maintenance kit business. ABC is going to use compatible cartridges so HP also lost some business with cartridges immediately and care packs over the near term. Time will tell if the printers are replaced with HP, Konica Minolta, or Sharp; the dealer will probably select the best product for the application. At that point CDW will have lost the business, and possibly additional HP loss.
Let’s assume Smith and Fried was spending $15,000 per month through Staples before they signed the agreement with ABC. MPS “grew” by $15,000 but other players lost the same $15,000. As ABC optimizes the fleet the revenue will continue to be reduced; there will be less capital expenditure on devices. As more players enter MPS the high early adapter margins available today will fall, as will revenue.
There could be others that gain revenue. KMBS offers revenue credit toward quota and rebates if their dealers buy their compatible cartridges through KMBS. If the dealer decides to take advantage of this program KMBS is able to recognize revenue and a small GP on the cartridges they buy at a lower price from a remanufacturing company (KMBS is simply an example…..other copier manufacturers have similar programs). KMBS also gains market intelligence. The OEMs’ direct organization also have the opportunity to grow revenue with an MPS strategy since servicing and supplying competitors’ printers is all net new business for the directs, at a loss to others.
The only absolute growth in MPS is at the provider level. Four years ago I used to tell audiences to get into MPS now because in two years everybody will be doing it. Well, it is four years later and I gave up saying that…..I guess I was more enthusiastic than the average dealer or reseller. What I would tell you is that if you get into MPS today—really get into it with a business plan and focus—you are still an early adapter. The revenue and profit opportunities are great. But in the long term we will all be fighting over a smaller pie so don’t hesitate…..get your outsized slice today!
Strategy Development is a consulting and training firm that can help you get more than your share of the MPS space. Whether you are a manufacturer, distributor, or reseller we’ll help you achieve success (http://www.strategydevelopment.org)
Add yourself as a follower to this blog and join the Linked In Group, “Print Management”
Fewer printers and copiers are being sold year on year. Gartner recently reported that worldwide combined printer, copier and MFP shipments totaled 51.3 million units, a 20.2 percent decline in shipments from the first half of 2008. Office printing devices drove the overall decline in the global print market, with a 24.5 percent decrease in the first half of the year compared to the first half of 2008.
Add to this year on year unit decline the facts that A4 units are replacing A3 units, at a lower average unit selling price and, like all maturing technology, average unit selling price across all segments is declining and you wonder where the growth is. The simple answer is that there is no growth; in fact, the overall market is shrinking.
Keep in perspective that there is nothing new in an MPS sale, which includes toner, parts and service (together “aftermarket”), equipment, and software. Moreover, one of the long-term goals of MPS is to reduce the quantity of devices used by a company. What does this mean? It means that the industry players—those that depend on an already shrinking revenue pool—are going to deliberately accelerate that revenue decline.
So far it sounds like death by a thousand cuts so why would anybody want to jump into MPS? Because for the short term, it is a growth strategy for those that properly deploy a strategy.
Printer Manufacturer Perspective
Every printer manufacturer is touting an MPS strategy. Why would you push a strategy that is going to result in fewer devices sold when you are a manufacturer? Simple, because you expect to take market share from the other printer companies—you intend on gaining share. So in short, the device loss is going to come out of your competitors’ backside.
MPS is clearly an inflection point in how devices, parts, and toner get sold and we’ll get to that shortly. The real question is will a printer manufacturer with low market share—when laser printers have been in the market for over 20 years—suddenly be able to leverage MPS to transform themselves into an industry player or is it simply a drowning man grasping for a thin read? Time will tell….but history usually repeats itself.
Let’s use HP as an example, who by all accounts has a 50%+ market share. I don’t care what industry you are in 50% market share is a dominating position. HP used their technical expertise—manufacturing super reliable printers that easily connected to the network—along with a “razor / razor blade” strategy to earn this dominance. One way to grow market share is to change the definition of the market so you motivate your team to penetrate adjacencies, and HP has accomplished this with their MFD products—directly targeting the copier space as a growth strategy.
But HP, in my opinion, has a bigger issue than pure market share and that issue relates to their razor blade strategy. Low priced, highly reliable, easily connected products provided HP with the ability to distribute through mass market players like CDW and PC Mall, as well as value added resellers (VAR) and dealers. The end user then purchased their HP cartridges through distribution points like their office supply company or HP direct. Sure, rechargers have approximately 30% of the mono market and 7% of the color market, but this seems to have been an acceptable level to HP, who constantly introduced new models; it took the rechargers a year or so to get enough empty cartridges to manufacturer in quantity.
Two sea changes are occurring today. First, and the point of this article, copier dealers, VARs, and other players are selling MPS agreements. Just four years ago HP, as well as the other printer manufacturers, but HP is the 800 pound gorilla, only had to deal with cartridge resellers and some private label products in super stores. Selling HP or compatible (remanufactured) cartridges was not a focus for the vast majority of copier dealers and the MPS VAR did not exist. Today, hundreds—rapidly headed toward thousands—of MPS providers are selling contracts that primarily use remanufactured cartridges in their contracts. Second, end users are holding onto their printers for a longer period of time so remanufactured cartridges are available for most products.
HP has a strong drive for market share; they are aggressive and smart and that is why they are so dominant. The other printer vendors sense there is an opportunity with the sea change of MPS. We will see if other printer manufacturers are able to take advantage of this inflection point or if HP will respond and retain their dominance.
Copier Manufacturer Perspective
No difference here—all copier manufacturers are pushing MPS. I think they have more to gain than the print manufacturer in that they have the opportunity to capture highly profitable new services revenue. So while HP is defending their turf—and the likes of Lexmark, Muratec, OKI, and Samsung are trying to take that market share—the copier manufacturer, through either their direct branch or dealer channel, can gain profitable aftermarket revenue. And they need it because year on year equipment placements are dropping rapidly!
So here is the short term gain: HP’s and the likes of CDW’s loss is the MPS delivering company’s gain. There are other winners too, like cartridge remanufacturers and distributors who supply MPS companies. We’ll cover the deliverable growth aspect in the next section but copier companies believe that they can replace that fleet of HP, Lexmark and other brand printers over the long term with their own products, while developing profitable service revenue over the short term.
I don’t think you are going to see any magic occur with this strategy: Copier manufacturers with low market share aren’t going to displace the top tier players with an MPS strategy. The channel is fairly set at this late stage of maturity so all the manufacturers can do is execute well through their branches and provide the consulting and training their dealer channel will need. They also need to provide them with a solid A4 product line of MFDs and printers.
The provider—MPS companies
Here is where the tremendous growth is near and medium term; the actual company that is on the street selling and delivering on MPS. The growth is coming out of other channels—it is not industry growth. Let’s just take an example:
ABC Imaging, a Sharp, Konica Minolta (KMBS), and HP dealer convinces Smith and Fried, a law firm, to place their 160 HP printers on an MPS agreement. Previously, Smith and Fried bought their printers from CDW with care packs and bought their cartridges and maintenance kits through Staples with their office supplies. ABC gets a contract for $15,000 to supply and service the 160 printers. So far Staples has lost the toner and maintenance kit business. ABC is going to use compatible cartridges so HP also lost some business with cartridges immediately and care packs over the near term. Time will tell if the printers are replaced with HP, Konica Minolta, or Sharp; the dealer will probably select the best product for the application. At that point CDW will have lost the business, and possibly additional HP loss.
Let’s assume Smith and Fried was spending $15,000 per month through Staples before they signed the agreement with ABC. MPS “grew” by $15,000 but other players lost the same $15,000. As ABC optimizes the fleet the revenue will continue to be reduced; there will be less capital expenditure on devices. As more players enter MPS the high early adapter margins available today will fall, as will revenue.
There could be others that gain revenue. KMBS offers revenue credit toward quota and rebates if their dealers buy their compatible cartridges through KMBS. If the dealer decides to take advantage of this program KMBS is able to recognize revenue and a small GP on the cartridges they buy at a lower price from a remanufacturing company (KMBS is simply an example…..other copier manufacturers have similar programs). KMBS also gains market intelligence. The OEMs’ direct organization also have the opportunity to grow revenue with an MPS strategy since servicing and supplying competitors’ printers is all net new business for the directs, at a loss to others.
The only absolute growth in MPS is at the provider level. Four years ago I used to tell audiences to get into MPS now because in two years everybody will be doing it. Well, it is four years later and I gave up saying that…..I guess I was more enthusiastic than the average dealer or reseller. What I would tell you is that if you get into MPS today—really get into it with a business plan and focus—you are still an early adapter. The revenue and profit opportunities are great. But in the long term we will all be fighting over a smaller pie so don’t hesitate…..get your outsized slice today!
Strategy Development is a consulting and training firm that can help you get more than your share of the MPS space. Whether you are a manufacturer, distributor, or reseller we’ll help you achieve success (http://www.strategydevelopment.org)
Add yourself as a follower to this blog and join the Linked In Group, “Print Management”
Tuesday, August 11, 2009
Ricoh: Getting Ready to Rumble?
The August 3 issue of Barron’s had a great article on Ricoh and their acquisitions, including InfoPrint and IKON. The link below will take you to the article.
One item that was startling to me was the quote “IKON, which also hasn't delivered a profit to its new parent,….” It would seem to me that the war between RiKON (Ricoh owned IKON) and Canon is having a significant impact on IKON’s ability to make a profit. Word is that street level equipment margins at RiKON have been halved, to 14%, over the last year. Service margins are also taking a hit as RiKON fights off Canon’s assault on their service base, having to match aggressive offers. Whatever the reason it is clear that RiKON has been operating in the red for the last year.
More perplexing are the future revenue and expected operating profit EPS from RiKON, at ¥280 billion and ¥8 respectively. Converting to dollars, revenues would equal $3 billion with approximately $65 million in operating income. Let’s assume there were subsidiary sales of approximately $350 million between Ricoh and IKON, this still represents an approximately 30% decline in IKON’s pre acquisition revenues and an almost 40% reduction in operating income. Wild to say the least.
Ricoh has been reorganizing their direct operations for years. Well informed individuals have stated that Ricoh direct has been losing money for years, with those losses accelerating. It seems to make sense for Ricoh to combine their current RBS operations with RiKON. The question is not if but when, and it appears as if the current results indicate that the still nebulous answer is “sooner rather than later.” If Europe and Canada are any indication—both of which have been combined with the Ricoh direct operations—it could be real soon.
It is nice that Ricoh takes risks to increase their business. We will see how Ricoh’s IKON acquisition works out long term. I believe a lot of changes will need to occur if it is going to be successful. When this acquisition first occurred I stated it would be great for the independent dealer. One year later and clearly it is great for the independent dealer. Revenue is cratering, the entity is losing business, Canon is assaulting the base: In a nutshell RiKON is focused on survival. Carpe Diem!
http://online.barrons.com/article/SB124908694002798273.html
One item that was startling to me was the quote “IKON, which also hasn't delivered a profit to its new parent,….” It would seem to me that the war between RiKON (Ricoh owned IKON) and Canon is having a significant impact on IKON’s ability to make a profit. Word is that street level equipment margins at RiKON have been halved, to 14%, over the last year. Service margins are also taking a hit as RiKON fights off Canon’s assault on their service base, having to match aggressive offers. Whatever the reason it is clear that RiKON has been operating in the red for the last year.
More perplexing are the future revenue and expected operating profit EPS from RiKON, at ¥280 billion and ¥8 respectively. Converting to dollars, revenues would equal $3 billion with approximately $65 million in operating income. Let’s assume there were subsidiary sales of approximately $350 million between Ricoh and IKON, this still represents an approximately 30% decline in IKON’s pre acquisition revenues and an almost 40% reduction in operating income. Wild to say the least.
Ricoh has been reorganizing their direct operations for years. Well informed individuals have stated that Ricoh direct has been losing money for years, with those losses accelerating. It seems to make sense for Ricoh to combine their current RBS operations with RiKON. The question is not if but when, and it appears as if the current results indicate that the still nebulous answer is “sooner rather than later.” If Europe and Canada are any indication—both of which have been combined with the Ricoh direct operations—it could be real soon.
It is nice that Ricoh takes risks to increase their business. We will see how Ricoh’s IKON acquisition works out long term. I believe a lot of changes will need to occur if it is going to be successful. When this acquisition first occurred I stated it would be great for the independent dealer. One year later and clearly it is great for the independent dealer. Revenue is cratering, the entity is losing business, Canon is assaulting the base: In a nutshell RiKON is focused on survival. Carpe Diem!
http://online.barrons.com/article/SB124908694002798273.html
Friday, July 24, 2009
Xerox Results: MPS Bright Spot and HP Comments
Xerox provides great information in their quarterly reports and their conference calls. The links to their slide deck and transcripts of their conference call on quarterly results are below. I encourage you to read them.
Some of the highlights of the presentation and call:
· Segment 2 – 5 installs up 10%
· Service annuity revenue down 4% in constant currency (CC) Note :(Xerox is global, and therefore has currency risk. The 4% decline is in constant dollars year over year (YOY)
· Pages declined by 5%
· Color pages grew 12% YOY
· Color equipment declined 21% CC
· Segment 1 installations declined 84%
· Office color MFD declined 21% with color printers declining 42%
· Balance Sheet improvements and expense reduction drove better margins and strong cash flow
· MPS has a $3.5 billion run rate and is growing
The CEO’s take on MPS:
Ursula M. Burns
About $3.5 billion on the MPS business the whole MPS businesses, large and small MPS business about $3.5 billion. It is growing it is a stronger growth engine or being impacted less than our equipment business. So it's an area of strength for us. By the way, these are global businesses as well. It's something that we practice around the globe. I think that's what you asked as well.
And on HP’s new MPS initiative:
Chris Whitmore - Deutsche Bank Securities
Just a follow-up on that, HP recently held a call which seemed to place a bull's eye on both your production business and your office business in terms of their expected growth going forward. What do are you seeing from HP, and maybe can you specifically address how you complete against Indigo in the high end production market.
Ursula Burns
What we're seeing from HP is their focus on our business, as you said, and they recently announced a managed print service offering that we've had in the market for quite a while. We are the leader there, as I pointed out when I was speaking earlier. So what we see in HP is trying to catch up with the position that Xerox has both in the production space, in the managed print services space, in the A3 MFP space across the board. We don't take them lightly, we are very confident based on our investments, our history, what we're doing in the marketplace today that we can effectively compete against HP.
Chris Whitmore - Deutsche Bank Securities
Are they competing more with price or more with service and solutions?
Ursula M. Burns
What we're seeing in managed print services they're competing right now with words so that's right now with an advertisement so we have to see that in the marketplace. As I said on managed print services we are very, very confident there. In the high end space, which I didn't answer to that portion of the question before, we are very, very pleased with iGen position, the install base, the activity we got in quarter two, very strong. We do not see them positioning, competing with us on price.
As you know, they are positioned in a different place in the marketplace our AMPBs and usage patterns for our iGen 4s are higher than their Indigo devices. But we have a breadth of portfolio that allows us to complete effectively and surround them, get right on top of them. So we're very - it's a tough market out there, we are very confident in the position that we have in both high end color and management services and A3 Office against HP and other competitors as well.
I encourage you to spend time reviewing the slides and to read the entire call transcript. You should also add yourself as a follower of this blog.
Link to slides:
http://a1851.g.akamaitech.net/f/1851/2996/24h/cacheA.xerox.com/downloads/usa/en/i/ir_Xerox_Second_Quarter_2009_Earnings_PresentationSlides.pdf
Link to call transcripts:
http://seekingalpha.com/article/150964-xerox-corporation-q2-2009-earnings-call-transcript?source=yahoo&page=1
Some of the highlights of the presentation and call:
· Segment 2 – 5 installs up 10%
· Service annuity revenue down 4% in constant currency (CC) Note :(Xerox is global, and therefore has currency risk. The 4% decline is in constant dollars year over year (YOY)
· Pages declined by 5%
· Color pages grew 12% YOY
· Color equipment declined 21% CC
· Segment 1 installations declined 84%
· Office color MFD declined 21% with color printers declining 42%
· Balance Sheet improvements and expense reduction drove better margins and strong cash flow
· MPS has a $3.5 billion run rate and is growing
The CEO’s take on MPS:
Ursula M. Burns
About $3.5 billion on the MPS business the whole MPS businesses, large and small MPS business about $3.5 billion. It is growing it is a stronger growth engine or being impacted less than our equipment business. So it's an area of strength for us. By the way, these are global businesses as well. It's something that we practice around the globe. I think that's what you asked as well.
And on HP’s new MPS initiative:
Chris Whitmore - Deutsche Bank Securities
Just a follow-up on that, HP recently held a call which seemed to place a bull's eye on both your production business and your office business in terms of their expected growth going forward. What do are you seeing from HP, and maybe can you specifically address how you complete against Indigo in the high end production market.
Ursula Burns
What we're seeing from HP is their focus on our business, as you said, and they recently announced a managed print service offering that we've had in the market for quite a while. We are the leader there, as I pointed out when I was speaking earlier. So what we see in HP is trying to catch up with the position that Xerox has both in the production space, in the managed print services space, in the A3 MFP space across the board. We don't take them lightly, we are very confident based on our investments, our history, what we're doing in the marketplace today that we can effectively compete against HP.
Chris Whitmore - Deutsche Bank Securities
Are they competing more with price or more with service and solutions?
Ursula M. Burns
What we're seeing in managed print services they're competing right now with words so that's right now with an advertisement so we have to see that in the marketplace. As I said on managed print services we are very, very confident there. In the high end space, which I didn't answer to that portion of the question before, we are very, very pleased with iGen position, the install base, the activity we got in quarter two, very strong. We do not see them positioning, competing with us on price.
As you know, they are positioned in a different place in the marketplace our AMPBs and usage patterns for our iGen 4s are higher than their Indigo devices. But we have a breadth of portfolio that allows us to complete effectively and surround them, get right on top of them. So we're very - it's a tough market out there, we are very confident in the position that we have in both high end color and management services and A3 Office against HP and other competitors as well.
I encourage you to spend time reviewing the slides and to read the entire call transcript. You should also add yourself as a follower of this blog.
Link to slides:
http://a1851.g.akamaitech.net/f/1851/2996/24h/cacheA.xerox.com/downloads/usa/en/i/ir_Xerox_Second_Quarter_2009_Earnings_PresentationSlides.pdf
Link to call transcripts:
http://seekingalpha.com/article/150964-xerox-corporation-q2-2009-earnings-call-transcript?source=yahoo&page=1
Wednesday, July 22, 2009
A Statement To Live By
“Pain is temporary. Quitting lasts forever.”
Lance Armstrong (1971 – )
American cyclist
seven-time Tour de France champion and cancer survivor
Lance Armstrong (1971 – )
American cyclist
seven-time Tour de France champion and cancer survivor
Gartner Released Prediction of Print Technologies
By 2012, over 75% of all printed bills and statements in the U.S. will have advertisements for products and services, generating more than $2.8 billion in ad revenue for billers
-Do you sell variable data?
By 2012, over 30% of enterprise customers with document intensive business processes will use applications or custom workflows deployed on MFPs to lower paper process costs and improve worker productivity
-Are you selling advanced capture and routing?
By 2012, over 70% of businesses with more than 250 employees will adopt a managed print services program
-This is your core; are you selling MPS (Attend the BTA MPS Sales Workshop)
By 2012, over 80% of enterprise businesses will be using fax servers
-Do you sell variable data?
By 2012, over 30% of enterprise customers with document intensive business processes will use applications or custom workflows deployed on MFPs to lower paper process costs and improve worker productivity
-Are you selling advanced capture and routing?
By 2012, over 70% of businesses with more than 250 employees will adopt a managed print services program
-This is your core; are you selling MPS (Attend the BTA MPS Sales Workshop)
By 2012, over 80% of enterprise businesses will be using fax servers
Ricoh Makes Another Dealer Acquisition
Ricoh announced it has made another dealer acquisition.
Details:
Purchased Automated Business Products, a Savin dealer, based in Salt Lake City, UT
Owners wre Lee Christensen and Mike Archer
Lee and Mike will remain running the new wholly owned subsidiary and the current RBS branch in SLC
This current ABP was founded in 1999 and has 63 employees
The original ABP was founded by the Archer family and had locations in Utah, Colorado and others, before selling out to IKON.
Details:
Purchased Automated Business Products, a Savin dealer, based in Salt Lake City, UT
Owners wre Lee Christensen and Mike Archer
Lee and Mike will remain running the new wholly owned subsidiary and the current RBS branch in SLC
This current ABP was founded in 1999 and has 63 employees
The original ABP was founded by the Archer family and had locations in Utah, Colorado and others, before selling out to IKON.
Rain On Me
IKON’s warehouse in Orange County, Florida, had its roof ripped off and trailers upended during a severe storm last week. 16,792 copiers were exposed to rain.
Monday, July 13, 2009
CIT: Will They Survive
Talk to any dealer or reseller today and they will tell you that their biggest issue is getting a deal approved. Finance companies have black listed many industries and some large providers have become fickle, pulling out of the industry and then reentering, while others have exited the small ticket leasing business completely. Add inventory floor planning issues to the mix and life has become difficult for many.
It looks as if things will only get more difficult; it was reported over the weekend that CIT had hired a prominent bankruptcy firm. For more details on the possible bankruptcy follow the link below.
http://finance.yahoo.com/tech-ticker/article/279272/Save-CIT-or-Let-it-Fail-Obama-Geithner-Navigating-a-%22Slippery-Slope%22?tickers=cit,ge,wfc,xlf,skf,fas,%5Edji&sec=topStories&pos=3&asset=&ccode=
It looks as if things will only get more difficult; it was reported over the weekend that CIT had hired a prominent bankruptcy firm. For more details on the possible bankruptcy follow the link below.
http://finance.yahoo.com/tech-ticker/article/279272/Save-CIT-or-Let-it-Fail-Obama-Geithner-Navigating-a-%22Slippery-Slope%22?tickers=cit,ge,wfc,xlf,skf,fas,%5Edji&sec=topStories&pos=3&asset=&ccode=
HP Stepping Up The Aggression with MPS
Today's Wall Street Journal (Monday July 13) featured a full page color ad "Introducing the HP Printing Payback guarantee" that promises to "...cut your printing costs or....cut a check."
When you go to the web page for the program (hp.com/guarantee) you find a series of case studies citing large companies that saved millions by implementing an HP MPS program.
When you go to the web page for the program (hp.com/guarantee) you find a series of case studies citing large companies that saved millions by implementing an HP MPS program.
Friday, July 10, 2009
Document Solutions Daily
Document Solutions Daily
On an average day Document Solutions Daily summarizes over 20 articles that could effect your business and the businesses of your colleagues throughout the industry. If you missed a month of Document Solutions Daily, you missed on the order of 450 industry news items, product release notices, product reviews, white papers, case studies or market studies that you should probably be aware of!
It's how I stay up on industry information....quickly and inexpensively.
http://kworkspublishing.com/
On an average day Document Solutions Daily summarizes over 20 articles that could effect your business and the businesses of your colleagues throughout the industry. If you missed a month of Document Solutions Daily, you missed on the order of 450 industry news items, product release notices, product reviews, white papers, case studies or market studies that you should probably be aware of!
It's how I stay up on industry information....quickly and inexpensively.
http://kworkspublishing.com/
Thursday, July 9, 2009
CFO Magazine and MPS
Below you can find a link to an article in the May, 2009 issue of CFO Magazine focused to savings in the technology area. “Hiring Managed Service Providers” is one of the seven highlighted areas, and managed print services is the example under the MS heading.
But before you leave add yourself as a follower to this blog and to the group “Print Management” on Linked In.
Don’t get hung-up on the source of the article. Although published in CFO, you will note that there is only a single reference to a CFO in the entire article, and even that is more of a technical expert role to the CTO. All of the savings mentioned were driven by the CIO’s team. In over 60% of engagements the decision to enter an MPS agreement is made inside of the CIO’s organization: They own the budget for acquiring and supporting technology.
http://www.cfo.com/article.cfm/13526087
But before you leave add yourself as a follower to this blog and to the group “Print Management” on Linked In.
Don’t get hung-up on the source of the article. Although published in CFO, you will note that there is only a single reference to a CFO in the entire article, and even that is more of a technical expert role to the CTO. All of the savings mentioned were driven by the CIO’s team. In over 60% of engagements the decision to enter an MPS agreement is made inside of the CIO’s organization: They own the budget for acquiring and supporting technology.
http://www.cfo.com/article.cfm/13526087
How Well Do You Understand the “C” Level?
Consultants, trainers, and authors earn a nice living pontificating about how to sell to the “C” level. If you have spent any time in sales you have heard how only “C” level employees have the ability to weigh the business impact of your product or service; you have also heard that the CFO is the person you want to speak to about saving money.
I believe there are few simple and unilateral solutions to complex problems. Unless your target market is small entrepreneurial companies, the belief that only a handful of employees truly understand how to evaluate business impact is misplaced. It may border on naïve and could be insulting to the people that actually make the decision regarding your product or service.
Saving money is not the sole purview of the CFO. Any business manager with control of a budget wants to find better value where they currently spend money so that they can fund other projects. Maybe you can save them money in their imaging and printing fleet that they can spend on a virtualization project?
If you sell a product or service that can have strategic impact or significant risk for a company then the decision will be made in the “C” suite. Trying to convince a company to adopt a six sigma initiative? Better call on the CEO. It is extremely expensive in the near term with the payback being long term, culture changing at every level of the organization, and has a high rate of failure. The CEO’s job could be on the line if it fails.
The key is to identify the person that has the budget responsibility for what you are selling. If you are selling training you will want to speak to the director of training and development. If you are selling office supplies you will be talking to purchasing. If you are selling liability insurance you will want to speak to the company’s risk manager. If only the “C” suite could make these decisions then it would not be logical to have these other employees; would it?
You can raise your entry point but only if you change your value proposition. MPS has changed the value proposition for purchasing printers, copiers, supplies, services, and some software. Prior to MPS these items were most frequently purchased by low level IT or purchasing. As part of an MPS agreement you can raise the value proposition to the level of middle management: Most frequently the director of IT. But it is not a highly strategic or risky endeavor so the “C” suite, except in the smallest of companies that would qualify for an MPS agreement, will not probably not be involved.
I realize it is human nature to look for exceptions so I will state up front you will find them. In a law firm you will need to be on the “business side” of the decision process so you will probably be calling on a COO or CFO. Then there are the “C” suite executives that have developmental opportunities in the delegation area and who will want to be involved in many tactical decisions. But for the most part if you identify the person that controls the budget, and your value proposition does not have an impact on the company’s strategy or involve high risk, you are at the correct level.
I believe there are few simple and unilateral solutions to complex problems. Unless your target market is small entrepreneurial companies, the belief that only a handful of employees truly understand how to evaluate business impact is misplaced. It may border on naïve and could be insulting to the people that actually make the decision regarding your product or service.
Saving money is not the sole purview of the CFO. Any business manager with control of a budget wants to find better value where they currently spend money so that they can fund other projects. Maybe you can save them money in their imaging and printing fleet that they can spend on a virtualization project?
If you sell a product or service that can have strategic impact or significant risk for a company then the decision will be made in the “C” suite. Trying to convince a company to adopt a six sigma initiative? Better call on the CEO. It is extremely expensive in the near term with the payback being long term, culture changing at every level of the organization, and has a high rate of failure. The CEO’s job could be on the line if it fails.
The key is to identify the person that has the budget responsibility for what you are selling. If you are selling training you will want to speak to the director of training and development. If you are selling office supplies you will be talking to purchasing. If you are selling liability insurance you will want to speak to the company’s risk manager. If only the “C” suite could make these decisions then it would not be logical to have these other employees; would it?
You can raise your entry point but only if you change your value proposition. MPS has changed the value proposition for purchasing printers, copiers, supplies, services, and some software. Prior to MPS these items were most frequently purchased by low level IT or purchasing. As part of an MPS agreement you can raise the value proposition to the level of middle management: Most frequently the director of IT. But it is not a highly strategic or risky endeavor so the “C” suite, except in the smallest of companies that would qualify for an MPS agreement, will not probably not be involved.
I realize it is human nature to look for exceptions so I will state up front you will find them. In a law firm you will need to be on the “business side” of the decision process so you will probably be calling on a COO or CFO. Then there are the “C” suite executives that have developmental opportunities in the delegation area and who will want to be involved in many tactical decisions. But for the most part if you identify the person that controls the budget, and your value proposition does not have an impact on the company’s strategy or involve high risk, you are at the correct level.
Saturday, July 4, 2009
Xerox's Managed Migration
Departing chief Anne Mulcahy on why printing less is good business for her company.
NORWALK, Conn. -- Anne Mulcahy came to the leadership position at Xerox in the midst of a financial crisis when she was a little-known sales executive. Named chairwoman and chief executive in 2001, she faced an SEC investigation of the company, a loss of market share, restated earnings and a downward-spiraling stock price. She sold assets, pared debt and rebuilt Xerox's product line to include more services and advanced industrial printers. She spoke to Forbes in May, just before announcing she would resign as CEO effective July 1. She remains chairwoman of Xerox. This is a transcript of a recent interview with Forbes' Quentin Hardy.
http://www.forbes.com/2009/07/01/xerox-mulcahy-innovation-intelligent-technology-retiring.html
NORWALK, Conn. -- Anne Mulcahy came to the leadership position at Xerox in the midst of a financial crisis when she was a little-known sales executive. Named chairwoman and chief executive in 2001, she faced an SEC investigation of the company, a loss of market share, restated earnings and a downward-spiraling stock price. She sold assets, pared debt and rebuilt Xerox's product line to include more services and advanced industrial printers. She spoke to Forbes in May, just before announcing she would resign as CEO effective July 1. She remains chairwoman of Xerox. This is a transcript of a recent interview with Forbes' Quentin Hardy.
http://www.forbes.com/2009/07/01/xerox-mulcahy-innovation-intelligent-technology-retiring.html
Saturday, June 27, 2009
New CEO Takes Helm at Toshiba
On June 24 Norio Sasaki, 60 years old, was appointed president and CEO of Toshiba Corporation. Toshiba lost $3.61 billion for the fiscal year ending March 31. In an attempt to shore up its balance sheet the company issued $5 billion in additional debt and equity.
Mr. Sasaki immediately set a goal of boosting the shareholder equity ratio from 19% to 30%. As noted by Daisuke Wakabayashi and Yuzo Yamaguchi in the WSJ, In order to meet the target, Toshiba not only needs to return to profitability, but might also have to exit unprofitable or weak businesses, as well as overhaul its capital-intensive chip operations. In the past, the company has been reluctant to take such steps.
In discussing business units, the article focused on semi conductors and nuclear power plants. Mr. Sasaki started in Toshiba’s nuclear power plant business and expects “significant growth” in revenues over the next two years. There was no mention of the office equipment business in the article.
Mr. Sasaki immediately set a goal of boosting the shareholder equity ratio from 19% to 30%. As noted by Daisuke Wakabayashi and Yuzo Yamaguchi in the WSJ, In order to meet the target, Toshiba not only needs to return to profitability, but might also have to exit unprofitable or weak businesses, as well as overhaul its capital-intensive chip operations. In the past, the company has been reluctant to take such steps.
In discussing business units, the article focused on semi conductors and nuclear power plants. Mr. Sasaki started in Toshiba’s nuclear power plant business and expects “significant growth” in revenues over the next two years. There was no mention of the office equipment business in the article.
Sunday, June 21, 2009
Strategy Development Launch MPS Mentoring Program
Bryn Mawr, PA (June 2009) — Over the last four years, Strategy Development has helped hundreds of dealers enter the managed print services (MPS) space through their industry leading consulting and training practices. The Strategy Development Team leveraged their significant experience leading large outsourcing, professional services, and equipment focused businesses to develop the services led MPS approach now advocated by most industry players.
Based on the Strategy Development Print Management Processes, the MPS Mentoring Program offers a Sales Track and Operations Track to help channel players enter the fast growing MPS space.
MPS Mentoring Sales Track
Dedicated Print Management Sales Professionals participate in a 13 week webinar series covering every aspect of the print management / MPS sale. Each weekly training event is paired with a weekly best practices call so that participants have the opportunity to learn from the other participants in their cohort. The Strategy Development consultants facilitate these calls and hold monthly update calls with the participant’s manager to ensure the learning’s are being applied and reinforced.
MPS Operations Mentoring Track
With the industry leading service and financial operations consultants on staff, nobody is better positioned to help you understand the processes and requirements to effectively support an MPS business. Over this 12 week program, with offsetting biweekly webinars supported by biweekly individual dealer calls, your team will learn how to build a business plan, developing a compensation plan, profitably price and manage MPS transactions, and handle all of the intricacies of installation and service, among other operational areas.
Participants in the mentoring program receive a toolset that includes:
• Sample contracts
• Web based employment ad
• Power Point scripted value proposition
• Power Point strategy session template
• Power Point proposal template
• Pricing tool
“We have encountered numerous VARs and BTA Dealers that sought the level of expertise that they could only get from Strategy Development and our team of employee consultants, but who did not have the resources to commit to a full consulting engagement,” commented Tom Callinan, managing principal. “Our mentoring program will provide a strong foundation for a VAR, BTA Dealer, or OEM Branch to launch a successful MPS strategy.”
Callinan continued “Our consulting engagements have helped channel players add millions of dollars in monthly reoccurring revenue, which I think is the correct way to measure an MPS program. You can extrapolate monthly clicks into multimillion print agreements over a three year period, but marketing spin doesn’t pay the bills so look at reoccurring revenue to drive your program.”
In addition to the consulting and mentoring programs, Strategy Development developed and instructs the BTA Print Management Workshop, open to all channel players. Ed Carroll, principal of Strategy Development, commented “An industry trainer recently commented that his MPS training doesn’t work. After having over 100 companies represented in our BTA training program, I can tell you unequivocally that our training program produces measurable results. The choice seems clear.”
You now have a choice on how to use the industry leading expertise of the Strategy Development Team: Consulting engagement, mentoring program, or training in partnership with the BTA.
For information on the MPS Mentoring Program or to request an complimentary assessment contact Tom Callinan at callinan@strategydevelopment.org or 610.527.3317
Strategy Development, a management consulting firm focused to the technology and outsourcing space, specializes in business planning, sales effectiveness, advanced sales training, and operational and service improvement. For more information visit Strategy Development at www.strategydevelopment.org
The Business Technology Association (BTA) serves office technology dealerships, manufacturers, distributors and service companies. Its members manufacture and/or sell and service hardware, software and supplies that help businesses be more efficient and save money. Through education, information and guidance, BTA members are the premier source of the technology used by businesses throughout the United States every day.
Based on the Strategy Development Print Management Processes, the MPS Mentoring Program offers a Sales Track and Operations Track to help channel players enter the fast growing MPS space.
MPS Mentoring Sales Track
Dedicated Print Management Sales Professionals participate in a 13 week webinar series covering every aspect of the print management / MPS sale. Each weekly training event is paired with a weekly best practices call so that participants have the opportunity to learn from the other participants in their cohort. The Strategy Development consultants facilitate these calls and hold monthly update calls with the participant’s manager to ensure the learning’s are being applied and reinforced.
MPS Operations Mentoring Track
With the industry leading service and financial operations consultants on staff, nobody is better positioned to help you understand the processes and requirements to effectively support an MPS business. Over this 12 week program, with offsetting biweekly webinars supported by biweekly individual dealer calls, your team will learn how to build a business plan, developing a compensation plan, profitably price and manage MPS transactions, and handle all of the intricacies of installation and service, among other operational areas.
Participants in the mentoring program receive a toolset that includes:
• Sample contracts
• Web based employment ad
• Power Point scripted value proposition
• Power Point strategy session template
• Power Point proposal template
• Pricing tool
“We have encountered numerous VARs and BTA Dealers that sought the level of expertise that they could only get from Strategy Development and our team of employee consultants, but who did not have the resources to commit to a full consulting engagement,” commented Tom Callinan, managing principal. “Our mentoring program will provide a strong foundation for a VAR, BTA Dealer, or OEM Branch to launch a successful MPS strategy.”
Callinan continued “Our consulting engagements have helped channel players add millions of dollars in monthly reoccurring revenue, which I think is the correct way to measure an MPS program. You can extrapolate monthly clicks into multimillion print agreements over a three year period, but marketing spin doesn’t pay the bills so look at reoccurring revenue to drive your program.”
In addition to the consulting and mentoring programs, Strategy Development developed and instructs the BTA Print Management Workshop, open to all channel players. Ed Carroll, principal of Strategy Development, commented “An industry trainer recently commented that his MPS training doesn’t work. After having over 100 companies represented in our BTA training program, I can tell you unequivocally that our training program produces measurable results. The choice seems clear.”
You now have a choice on how to use the industry leading expertise of the Strategy Development Team: Consulting engagement, mentoring program, or training in partnership with the BTA.
For information on the MPS Mentoring Program or to request an complimentary assessment contact Tom Callinan at callinan@strategydevelopment.org or 610.527.3317
Strategy Development, a management consulting firm focused to the technology and outsourcing space, specializes in business planning, sales effectiveness, advanced sales training, and operational and service improvement. For more information visit Strategy Development at www.strategydevelopment.org
The Business Technology Association (BTA) serves office technology dealerships, manufacturers, distributors and service companies. Its members manufacture and/or sell and service hardware, software and supplies that help businesses be more efficient and save money. Through education, information and guidance, BTA members are the premier source of the technology used by businesses throughout the United States every day.
Still Wondering if A4 Will Impact the Industry?
Sharp(R) Frontier Series Powers Company Into the Color MFP Segment 3'S Top Position in Leading Market Research Firm's US Quarterly Hardcopy Peripheral Tracker
First Quarter Shipment Results Show Sharp's Dramatic Market Foray Has Resulted in Increased Market Share as Well as Higher Overall Market Sale
-- 06/05/09 -- Sharp Imaging and Information Company of America (SIICA), a division of Sharp Electronics Corporation, today announced that they have finished with the highest overall United States market share for 31-44ppm* color MFPs** in Q1 2009. This data was made available by IDC, a premier global provider of market intelligence, and shows a dramatic increase in unit sales by Sharp over last year; particularly in the A4 subcategory of the same speed range, where SIICA was able to capture major market gains in less than two quarters.
Sharp's strong performance in the category was bolstered by the introduction of the company's award-winning Frontier Series A4 MFPs. According to the report, in just less than two full quarters, Sharp was able to move from having no presence in the color A4 31-44ppm color MFP segment, to a 40% share. This explosive growth, coupled with continued strong sales in the A3 sales, helped Sharp gain the largest percentage of overall 31-44ppm color MFP* sales for Q1 2009. In fact, the entry of the new Frontier Series helped to nearly double the total number of A4 31-44ppm color MFP units sold by all manufacturers between Q1 2008 and Q1 2009.
"Despite a challenging economic climate, Sharp continues to innovate and introduce new products that revolutionize the way companies work," said Ed McLaughlin, president, Sharp Imaging and Information Company of America. "This innovation can not be overlooked, and companies are finding products such as our Frontier Series help them work more efficiently and economically. In addition, dealers have found that the A4 Frontier line is fitting in nicely into their customers' workgroups without taking away from A3 sales. It speaks volumes about how smart our dealers are and the need for truly innovative new products as we continue to move forward."
Sharp introduced the MX-C311, MX-C401, DX-C311 and DX-C401 models as part of the Frontier Series MFPs in Q4 2008 and the DX-C310 and DX-C400 in Q1 of 2009. These units feature digital color copier, network printer and scanner capabilities in a single MFP, and a unique design that makes them aesthetically pleasing when placed directly in the workgroup. Sharp's newest A3 devices include the MX-4100N, MX-4101N, and MX-5001N, which were introduced in Q1 2009.
With Frontier, Sharp has successfully leveraged the Sharp OSA® development platform to change the MFP from a print/copy device into an IT document management system. Sharp A3 and A4 MFPs feature Sharp OSA technology, making them truly customizable; a brilliant 8.5" touchscreen panel for easy operation; and Sharp's award-winning security suite, which provides a multi-tiered system that protects data at every step of the document cycle. Sharp A3 MFPs also feature a retractable keyboard as a standard feature -- something not found on any other A3 MFP.
McLaughlin continued to say, "Sharp remains dedicated to producing a wide range of high quality MFPs that are changing the competitive landscape and giving our dealers the most comprehensive product line available."
For information about the complete line of Sharp MFP products, contact Sharp Electronics Corporation, Sharp Plaza, Mahwah, N.J. 07495-1163, or call 1-800-BE-SHARP. For online product information, visit Sharp's Web site at sharpusa.com.
*Based on letter speeds for Segment 3
**Source: IDC US Quarterly Hardcopy Peripheral Tracker, Q1 2009 for Laser Multifunction (print and at least one other function) and Single-Function Printers shipments.
First Quarter Shipment Results Show Sharp's Dramatic Market Foray Has Resulted in Increased Market Share as Well as Higher Overall Market Sale
-- 06/05/09 -- Sharp Imaging and Information Company of America (SIICA), a division of Sharp Electronics Corporation, today announced that they have finished with the highest overall United States market share for 31-44ppm* color MFPs** in Q1 2009. This data was made available by IDC, a premier global provider of market intelligence, and shows a dramatic increase in unit sales by Sharp over last year; particularly in the A4 subcategory of the same speed range, where SIICA was able to capture major market gains in less than two quarters.
Sharp's strong performance in the category was bolstered by the introduction of the company's award-winning Frontier Series A4 MFPs. According to the report, in just less than two full quarters, Sharp was able to move from having no presence in the color A4 31-44ppm color MFP segment, to a 40% share. This explosive growth, coupled with continued strong sales in the A3 sales, helped Sharp gain the largest percentage of overall 31-44ppm color MFP* sales for Q1 2009. In fact, the entry of the new Frontier Series helped to nearly double the total number of A4 31-44ppm color MFP units sold by all manufacturers between Q1 2008 and Q1 2009.
"Despite a challenging economic climate, Sharp continues to innovate and introduce new products that revolutionize the way companies work," said Ed McLaughlin, president, Sharp Imaging and Information Company of America. "This innovation can not be overlooked, and companies are finding products such as our Frontier Series help them work more efficiently and economically. In addition, dealers have found that the A4 Frontier line is fitting in nicely into their customers' workgroups without taking away from A3 sales. It speaks volumes about how smart our dealers are and the need for truly innovative new products as we continue to move forward."
Sharp introduced the MX-C311, MX-C401, DX-C311 and DX-C401 models as part of the Frontier Series MFPs in Q4 2008 and the DX-C310 and DX-C400 in Q1 of 2009. These units feature digital color copier, network printer and scanner capabilities in a single MFP, and a unique design that makes them aesthetically pleasing when placed directly in the workgroup. Sharp's newest A3 devices include the MX-4100N, MX-4101N, and MX-5001N, which were introduced in Q1 2009.
With Frontier, Sharp has successfully leveraged the Sharp OSA® development platform to change the MFP from a print/copy device into an IT document management system. Sharp A3 and A4 MFPs feature Sharp OSA technology, making them truly customizable; a brilliant 8.5" touchscreen panel for easy operation; and Sharp's award-winning security suite, which provides a multi-tiered system that protects data at every step of the document cycle. Sharp A3 MFPs also feature a retractable keyboard as a standard feature -- something not found on any other A3 MFP.
McLaughlin continued to say, "Sharp remains dedicated to producing a wide range of high quality MFPs that are changing the competitive landscape and giving our dealers the most comprehensive product line available."
For information about the complete line of Sharp MFP products, contact Sharp Electronics Corporation, Sharp Plaza, Mahwah, N.J. 07495-1163, or call 1-800-BE-SHARP. For online product information, visit Sharp's Web site at sharpusa.com.
*Based on letter speeds for Segment 3
**Source: IDC US Quarterly Hardcopy Peripheral Tracker, Q1 2009 for Laser Multifunction (print and at least one other function) and Single-Function Printers shipments.
Xerox Joins as Gold Sponsor for the Solutions Summit and Office Document Strategy Conference
(Weymouth, MA) June 18, 2009…. InfoTrends, the leading worldwide consulting firm for the digital imaging and document solutions industry, announced today that Xerox, a leading document management technology and services enterprise, has signed as a Gold Sponsor for their upcoming Solutions Summit and Office Document Strategy (ODS) Conference. The inaugural Solutions Summit will take place September 29-30, 2009, and the Office Document Strategy Conference will follow immediately September 30 – October 1, 2009. Both events will be hosted at the Hyatt Harborside, in Boston, Massachusetts.
http://www.infotrends.com/main/public/Content/Press/2009/06.18.2009.2.html
http://www.infotrends.com/main/public/Content/Press/2009/06.18.2009.2.html
Strategy Development & The BTA Launch Business Planning Workshop
Bryn Mawr, PA (June 2009) — Dealers are seeking strategies to grow revenue and profits in the face of year-over-year industry unit placement declines, a shift from A3 to A4 products, a difficult financing environment and new competition for pages from other channels selling print management solutions.
Although there are many training programs that address different aspects of planning or focus on improving results in functional areas, there is no single program that comprehensively brings together all functional areas into a cohesive plan of action — until now. The BTA Business Planning Workshop is a 2.5 day program developed and instructed by the consultants from Strategy Development. Attendees will learn through a combination of instruction, case studies and class discussion how to build and execute a business plan that becomes a roadmap to achieving business goals.
A snapshot of some of the content from this workshop:
· How to use your financial statements to make good business decisions
· Using the Strategy Development Balanced Scorecard to maximize results
· Conducting SWOT analysis and using the data to grow
· Using industry trends to plan for a profitable future
· Launching new initiatives
· Driving productivity: A key to high profits
· Engineering processes to improve workflow and employee satisfaction
· Cash management
“We have been able to help scores of dealers across North America launch print management initiatives, improve their equipment sales effectiveness and improve back office and service operations,” said Tom Callinan, managing principal of Strategy Development. “But short of a consulting engagement with our team, until the launch of the BTA Business Planning Workshop there has been no single program available that allowed the dealer to get a holistic view of growing their business and profits.”
“Our members have benefited greatly from the expertise of the Strategy Development team and we are looking forward to enhancing our training curriculum with this comprehensive workshop,” added Brent Hoskins, BTA executive director. “Business planning is one of the most requested educational areas from our members, so we are happy that we can now provide that education.”
The inaugural BTA Business Planning Workshop will be held October 6-8. For information e-mail Tom Callinan at callinan@strategydevelopment.org or call 610.527.3317.
Strategy Development, a management consulting firm focused to the technology and outsourcing space, specializes in business planning, sales effectiveness, advanced sales training, and operational and service improvement. For more information visit Strategy Development at www.strategydevelopment.org.
The Business Technology Association (BTA) serves office technology dealerships, manufacturers, distributors and service companies. Its members sell and service and/or manufacture service hardware, software and supplies that help businesses be more efficient and save money. Through education, information and guidance, BTA members are the premier source of the technology used by businesses throughout the United States every day.
Although there are many training programs that address different aspects of planning or focus on improving results in functional areas, there is no single program that comprehensively brings together all functional areas into a cohesive plan of action — until now. The BTA Business Planning Workshop is a 2.5 day program developed and instructed by the consultants from Strategy Development. Attendees will learn through a combination of instruction, case studies and class discussion how to build and execute a business plan that becomes a roadmap to achieving business goals.
A snapshot of some of the content from this workshop:
· How to use your financial statements to make good business decisions
· Using the Strategy Development Balanced Scorecard to maximize results
· Conducting SWOT analysis and using the data to grow
· Using industry trends to plan for a profitable future
· Launching new initiatives
· Driving productivity: A key to high profits
· Engineering processes to improve workflow and employee satisfaction
· Cash management
“We have been able to help scores of dealers across North America launch print management initiatives, improve their equipment sales effectiveness and improve back office and service operations,” said Tom Callinan, managing principal of Strategy Development. “But short of a consulting engagement with our team, until the launch of the BTA Business Planning Workshop there has been no single program available that allowed the dealer to get a holistic view of growing their business and profits.”
“Our members have benefited greatly from the expertise of the Strategy Development team and we are looking forward to enhancing our training curriculum with this comprehensive workshop,” added Brent Hoskins, BTA executive director. “Business planning is one of the most requested educational areas from our members, so we are happy that we can now provide that education.”
The inaugural BTA Business Planning Workshop will be held October 6-8. For information e-mail Tom Callinan at callinan@strategydevelopment.org or call 610.527.3317.
Strategy Development, a management consulting firm focused to the technology and outsourcing space, specializes in business planning, sales effectiveness, advanced sales training, and operational and service improvement. For more information visit Strategy Development at www.strategydevelopment.org.
The Business Technology Association (BTA) serves office technology dealerships, manufacturers, distributors and service companies. Its members sell and service and/or manufacture service hardware, software and supplies that help businesses be more efficient and save money. Through education, information and guidance, BTA members are the premier source of the technology used by businesses throughout the United States every day.
Wednesday, June 3, 2009
Printer Business Drops In Q1: IDC
The economic downturn has taken its toll on the printer business, causing shipments to fall more than 17 percent worldwide compared with last year, with color laser multifunction devices a relative bright spot in an otherwise gloomy market.
Follow the link to read this article: http://www.crn.com/hardware/217701335;jsessionid=PNGJBEKCRPJWGQSNDLPCKH0CJUNN2JVN
Thank you to Joe at Document Solutions Daily for introducing us to this great information www.kworkspublishing.com
Follow the link to read this article: http://www.crn.com/hardware/217701335;jsessionid=PNGJBEKCRPJWGQSNDLPCKH0CJUNN2JVN
Thank you to Joe at Document Solutions Daily for introducing us to this great information www.kworkspublishing.com
Sunday, May 17, 2009
Why All The To Do About Printed Page Coverage
For year’s copier vendors have been selling pages on a cost per page (CPP) basis without regard to an end user company’s page coverage. In so doing they have been able to achieve nice profit margins that allow them to provide quality service, an easy to understand pricing model, fund growth and provide a fair return to the stakeholders.
With copier unit placements dropping rapidly the traditional copier dealers are now moving into the printer world, bringing with them their CPP model. But many dealers are suddenly talking about page coverage area. After selling pages for years why worry about coverage area now. More important, how do you calculate coverage area? Do you take a month’s worth of samples and send them to a coverage area lab for analysis? Do we calibrate print management sales reps’ eyes to ensure they can accurately calculate coverage area?
I believe there are many players driving page coverage, all with a bias. Statistics tells us that with a normal distribution curve 95% of N fall within two standard deviations. Of the remaining 5 percent, half would fall into the “greater than expected” profit range and the other 2.5 percent would fall into the lower than expected range. Do you usually manage your process to the 2 percent?
Moreover, it appears as if there is more evidence that page coverage is not the big concern it is made out to be. Xerox, in discussing the hybrid pricing approach on their ColorCube 9200, estimates it can bring the average cost of color copies down by 62 percent.
So using my deductive reasoning, since Xerox has stated that a normal color page will be in the range of any other copier, but there will be savings with pages with less coverage, doesn’t is stand to reason that Xerox is counting on significantly more pages having low coverage? That is something to consider.
Here’s the link to this and other information on the ColorCube 9200, which does look like a nice device:
http://www.sfgate.com/cgi-bin/blogs/techchron/detail?&entry_id=39738
With copier unit placements dropping rapidly the traditional copier dealers are now moving into the printer world, bringing with them their CPP model. But many dealers are suddenly talking about page coverage area. After selling pages for years why worry about coverage area now. More important, how do you calculate coverage area? Do you take a month’s worth of samples and send them to a coverage area lab for analysis? Do we calibrate print management sales reps’ eyes to ensure they can accurately calculate coverage area?
I believe there are many players driving page coverage, all with a bias. Statistics tells us that with a normal distribution curve 95% of N fall within two standard deviations. Of the remaining 5 percent, half would fall into the “greater than expected” profit range and the other 2.5 percent would fall into the lower than expected range. Do you usually manage your process to the 2 percent?
Moreover, it appears as if there is more evidence that page coverage is not the big concern it is made out to be. Xerox, in discussing the hybrid pricing approach on their ColorCube 9200, estimates it can bring the average cost of color copies down by 62 percent.
So using my deductive reasoning, since Xerox has stated that a normal color page will be in the range of any other copier, but there will be savings with pages with less coverage, doesn’t is stand to reason that Xerox is counting on significantly more pages having low coverage? That is something to consider.
Here’s the link to this and other information on the ColorCube 9200, which does look like a nice device:
http://www.sfgate.com/cgi-bin/blogs/techchron/detail?&entry_id=39738
Saturday, May 9, 2009
Print Managed Services firms told to target IT managers' headaches
Service providers that position themselves as a consultative business focused on relieving IT management pain-points stand to reap benefits.
Follow the link below:
http://www.itbusiness.ca/it/client/en/home/News.asp?id=53057&cid=6
Follow the link below:
http://www.itbusiness.ca/it/client/en/home/News.asp?id=53057&cid=6
First HP Now Xerox: Is Tiered Color Pricing The Future of Color CPP?
HP started tiered pricing with their Edgeline product. With low enough color density your expense per color page could be as low as that of a black print. If the color increased you fell into the accent color range or professional color range, and were charged accordingly.
The tiered approach had a lot of fans on both sides of the transaction. The vendor selling the CPP had great comfort that they were being fairly compensated for the quantity of supplies they would be providing. The users of the product were comfortable that they weren’t paying too much for color prints, particularly on those documents with only a few words in color.
We’ll have to wait to see what path HP takes with the development of the Edgeline. Now that Xerox has entered the tiered color pricing game other OEMs are sure to follow. The link below will take you to an article on Xerox’s new ColorQube 9200 series and the “Hybrid” pricing approach.
http://socialcomputing.ulitzer.com/node/952771
The tiered approach had a lot of fans on both sides of the transaction. The vendor selling the CPP had great comfort that they were being fairly compensated for the quantity of supplies they would be providing. The users of the product were comfortable that they weren’t paying too much for color prints, particularly on those documents with only a few words in color.
We’ll have to wait to see what path HP takes with the development of the Edgeline. Now that Xerox has entered the tiered color pricing game other OEMs are sure to follow. The link below will take you to an article on Xerox’s new ColorQube 9200 series and the “Hybrid” pricing approach.
http://socialcomputing.ulitzer.com/node/952771
Tuesday, April 28, 2009
Don't Overlook the Hand that Feeds You
Continuously working with business throughout the year gives us the opportunity to observe the practices of the successful ones and identify areas that we all could improve upon. An area many times lacking focus and attention is the value our existing customer’s bring to the business.
In a good economy we should never take for granted our customer base but in a business environment like the one we are living through now it is critical to implement an effective customer retention strategy.
As business’ spend slows we are all looking for ways to offset declining revenues and our focus often shifts to new business or our competitor’s accounts. So as you look for new opportunities your competitor’s are doing the same by targeting your existing base. Holding on to your base should be your number one priority.
Responsibility for customer retention does not live and reside only with the sales professional assigned to the account; it resides with all members of the organization. Actually leaving customer retention to the sales professional might be part of your customer retention strategy but it is the weakest part of that strategy. With turnover being as high as it is, with quota attainment being the sales professional’s number one priority and with expectations set to achieve the goals set by the organization, sales professionals often don’t spend nor have the proper amount of time to focus on existing customers.
Two methods that can add to an effective customer retention strategy are two of the areas we cover in the BTA Sales Management Workshop (www.BTA.org), effective account planning sessions and top customer visits. Effective account planning sessions provide the organization with a process driven towards engaging multiple members in an account, understanding the current business situation, exploring new business (share of wallet) and identifying steps to implement a stronger relationship with the account. Account planning sessions are the process focused on reviewing all accounts on a periodic basis.
Like account planning sessions, top customer visits are driven towards engaging multiple members in the same account but in this case it is also driven to establish a sound business relationship with multiple levels of the customer’s organization. By establishing contacts at different levels of the customer’s organization you are expanding the knowledge, expertise and value you bring to the customer. You are also focused on how you can be more effective for your customer’s and what their challenges and goals are. Top customer visits enable you to engage all members of the leadership team in effective customer retention. Assign each member of the team 12 accounts (one per month) and you will see customer retention grow.
Want to protect your base, focus on your current customers with an effective customer retention strategy and you will find retention levels growing and more time available to pursue new opportunities.
If you would like to learn more about the next BTA Sales Management Workshop in Chicago on May 12 & 13 visit: http://www.bta.org/i4a/pages/index.cfm?pageid=2408
In a good economy we should never take for granted our customer base but in a business environment like the one we are living through now it is critical to implement an effective customer retention strategy.
As business’ spend slows we are all looking for ways to offset declining revenues and our focus often shifts to new business or our competitor’s accounts. So as you look for new opportunities your competitor’s are doing the same by targeting your existing base. Holding on to your base should be your number one priority.
Responsibility for customer retention does not live and reside only with the sales professional assigned to the account; it resides with all members of the organization. Actually leaving customer retention to the sales professional might be part of your customer retention strategy but it is the weakest part of that strategy. With turnover being as high as it is, with quota attainment being the sales professional’s number one priority and with expectations set to achieve the goals set by the organization, sales professionals often don’t spend nor have the proper amount of time to focus on existing customers.
Two methods that can add to an effective customer retention strategy are two of the areas we cover in the BTA Sales Management Workshop (www.BTA.org), effective account planning sessions and top customer visits. Effective account planning sessions provide the organization with a process driven towards engaging multiple members in an account, understanding the current business situation, exploring new business (share of wallet) and identifying steps to implement a stronger relationship with the account. Account planning sessions are the process focused on reviewing all accounts on a periodic basis.
Like account planning sessions, top customer visits are driven towards engaging multiple members in the same account but in this case it is also driven to establish a sound business relationship with multiple levels of the customer’s organization. By establishing contacts at different levels of the customer’s organization you are expanding the knowledge, expertise and value you bring to the customer. You are also focused on how you can be more effective for your customer’s and what their challenges and goals are. Top customer visits enable you to engage all members of the leadership team in effective customer retention. Assign each member of the team 12 accounts (one per month) and you will see customer retention grow.
Want to protect your base, focus on your current customers with an effective customer retention strategy and you will find retention levels growing and more time available to pursue new opportunities.
If you would like to learn more about the next BTA Sales Management Workshop in Chicago on May 12 & 13 visit: http://www.bta.org/i4a/pages/index.cfm?pageid=2408
Sunday, April 26, 2009
Lexmark International, Inc. Q1 2009 Earnings Call Transcript
One of the juiciest place to get information on the industry is in the quarterly presentations provided by the public companies and in the transcripts of their calls with analysts. The below link will take you to Lexmark's latest call with the analyst community.
http://seekingalpha.com/article/132076-lexmark-international-inc-q1-2009-earnings-call-transcript?page=1
Highlights include significant year over year and sequential revenue declines in both laser devices and laser supplies.
http://seekingalpha.com/article/132076-lexmark-international-inc-q1-2009-earnings-call-transcript?page=1
Highlights include significant year over year and sequential revenue declines in both laser devices and laser supplies.
Saturday, April 18, 2009
Developing An Effective Print Management Sales Process
Part two of this six part series was recently published in ENX Magazine. You can follow the link to view this article.
http://enxmag.com/2007/new%20site%202007/website/2009_MONTHS/april2009/article_DevelopingEffectivePrintManagement_tcallinan_apr09.htm
If you would like to launch a print management / MPS program at your company please contact the professionals at Strategy Development or attend the BTA Print Management Workshop:
http://www.bta.org/i4a/pages/index.cfm?pageid=2127
http://enxmag.com/2007/new%20site%202007/website/2009_MONTHS/april2009/article_DevelopingEffectivePrintManagement_tcallinan_apr09.htm
If you would like to launch a print management / MPS program at your company please contact the professionals at Strategy Development or attend the BTA Print Management Workshop:
http://www.bta.org/i4a/pages/index.cfm?pageid=2127
Wednesday, April 15, 2009
Service Technology Solutions
A recent industry research report indicates best-in-class service organizations (top 20%) are more than twice as likely as all others to have embraced technology solutions. These leading service organizations, having already placed there bets, are experiencing real savings and operational excellence. Of the remaining best in class service organizations, almost half have indicated they will be investing in service technology solutions within the next 12 months.
So, what are today's most beneficial technology enablers?
So, what are today's most beneficial technology enablers?
- Mobile Field Service - automated dispatch, parts management, real-time data access for technicians (service history, parts inventory), signature capture, sales at the time of service, communications.
- Scheduling and Routing - automated call assignment and routing based on technician location, customer entitlements,training, parts availability, traffic patterns.
- Remote Product Monitoring - Automated service call generation using equipment generated service alerts, supply fulfillment, billing meters.
- Forecasting and Planning - use of advanced F&P technologies that review history, trends, and real time developments to plan staffing (technicians) and inventory (parts/supplies).
- Business Intelligence and Analytics - service performance reporting & benchmarking.
The adoption of the right technology, using a thoughtful strategy, is critical to enabling service organizations achieve success. If you have questions about service technology solutions and how to justify the required investment, please contact me at woodard@strategydevlopment.org
Monday, March 30, 2009
Sea Change For the Copier Dealer
For years making a healthy profit has been a fairly easy formula for the principal of a copier dealership: Increase your unit placements, provide high quality customer service, and reap the benefits of the profitable aftermarket stream (defined as supplies, service and parts). Actually, it is a model similar to many, car dealerships being one that comes immediately to mind. Hold that example as we progress through this article.
This model of success was formulated during the late seventies and throughout the eighties as the industry flourished with technological advancements, product extensions, and year over year increases in units sold.
Many times the dealer channel has been told that there was a Sea Change occurring. First, companies like Alco (eventually IKON) and Danka were acquiring the independent dealer channel with the promise of leveraging efficiencies of scale. Some dealers wondered how they were going to compete against these behemoths. That fear never materialized as the Goliaths impaired themselves with poorly executed strategies.
Next, the transition to digital was going to be the tar pit of the copier dealership as network companies controlled the network. Remember the saying; whoever controlled the network controlled the output? Then came production units and the pundits who said that dealerships could never understand the space or afford the investment to be successful. This led to those that said the direct operations would be the death of the copier dealer. In reality, those direct operations that were not run to produce profit seem to be hurting the manufacturers themselves, but that is another subject.
I am confident that the Sea Change I am referring to is not a mirage: Year over year unit sales are declining—and rapidly. As detailed in a ChannelWeb article (see previous post) , Gartner reported that year over year fourth quarter shipments of copiers and printers in the professional segment, as opposed to consumer segment, declined by 25.3%. I saw a report by another research firm—included in a presentation so I am not quoting it since I did not see the original—that showed 2008 copier unit placements decreased 200,000 from 2007 and a projection that they would decrease by another 190,000 units in 2009. Placements were projected to decrease from 1,355,000 in 2007 to 963,000 in 2009. In case you are curious color was down year over year and projected to fall again and overall units were forecasted at 813,000 in 2012.
The dealer community has adapted to the roll-up years, the transition from analog to digital, into the color world, the proliferation of direct operations and the product extensions into the production space. And many of the dealerships around the country will adapt to the dramatic decrease in unit sales. The same can be said of the manufacturers: Many will adapt.
The other side of that equation is that there are quite a few that will not adapt. On the manufacturer side—and this has been said for years by many industry players but I think the time has finally arrived—there is simply too much distribution.
So back to that car dealership comparison; when we were buying 15 million + cars it was hard for a dealership or manufacturer to make a fatal mistake. Manufacturers produced inferior products and wasted billions of dollars in a multitude of areas. Car dealers were happy as the manufacturers drove traffic into their showrooms through big incentives. Then, unit sales fell 30% or more in a short period of time (sound familiar), the manufacturers cut back on incentives they could no longer afford to fund, and car dealerships (and soon it seems manufacturers) begin to fail.
The copier industry has a long and rewarding future for those dealerships that plan well. The second half of that statement is very important. If the predictions are accurate copier placements will decrease by 40% over the period 2007 – 2012. Combined with lower average unit selling price, the proliferation of printer based MFDs, and A4 units replacing A3 and you have a significantly lower revenue stream. Offsetting those decreases are color pages and capturing the prints made on the printers—print management or MPS. I believe the latter is a significantly larger revenue stream than the former.
But dealerships will also need to address high general and administrative expenses. At Strategy Development we believe that dealerships need to strive for a 10% G&A within the next five years. Our operations consulting practice is helping dealers put the plans in place to achieve that goal. We also believe that you need to maximize the return on aftermarket; our service consulting practice is helping dealerships achieve that goal. Our MPS practice has helped scores of dealerships launch successful print management initiatives; a must have to thrive in the future. And finally, and most important, you need a solid plan that ties together all of the aforementioned moving parts so that you are one of the dealerships that thrive through the Sea Change.
Get your plan in place, execute, and thrive!
This piece was also published in Document Solutions Daily (www.kworkpublishing.com)
This model of success was formulated during the late seventies and throughout the eighties as the industry flourished with technological advancements, product extensions, and year over year increases in units sold.
Many times the dealer channel has been told that there was a Sea Change occurring. First, companies like Alco (eventually IKON) and Danka were acquiring the independent dealer channel with the promise of leveraging efficiencies of scale. Some dealers wondered how they were going to compete against these behemoths. That fear never materialized as the Goliaths impaired themselves with poorly executed strategies.
Next, the transition to digital was going to be the tar pit of the copier dealership as network companies controlled the network. Remember the saying; whoever controlled the network controlled the output? Then came production units and the pundits who said that dealerships could never understand the space or afford the investment to be successful. This led to those that said the direct operations would be the death of the copier dealer. In reality, those direct operations that were not run to produce profit seem to be hurting the manufacturers themselves, but that is another subject.
I am confident that the Sea Change I am referring to is not a mirage: Year over year unit sales are declining—and rapidly. As detailed in a ChannelWeb article (see previous post) , Gartner reported that year over year fourth quarter shipments of copiers and printers in the professional segment, as opposed to consumer segment, declined by 25.3%. I saw a report by another research firm—included in a presentation so I am not quoting it since I did not see the original—that showed 2008 copier unit placements decreased 200,000 from 2007 and a projection that they would decrease by another 190,000 units in 2009. Placements were projected to decrease from 1,355,000 in 2007 to 963,000 in 2009. In case you are curious color was down year over year and projected to fall again and overall units were forecasted at 813,000 in 2012.
The dealer community has adapted to the roll-up years, the transition from analog to digital, into the color world, the proliferation of direct operations and the product extensions into the production space. And many of the dealerships around the country will adapt to the dramatic decrease in unit sales. The same can be said of the manufacturers: Many will adapt.
The other side of that equation is that there are quite a few that will not adapt. On the manufacturer side—and this has been said for years by many industry players but I think the time has finally arrived—there is simply too much distribution.
So back to that car dealership comparison; when we were buying 15 million + cars it was hard for a dealership or manufacturer to make a fatal mistake. Manufacturers produced inferior products and wasted billions of dollars in a multitude of areas. Car dealers were happy as the manufacturers drove traffic into their showrooms through big incentives. Then, unit sales fell 30% or more in a short period of time (sound familiar), the manufacturers cut back on incentives they could no longer afford to fund, and car dealerships (and soon it seems manufacturers) begin to fail.
The copier industry has a long and rewarding future for those dealerships that plan well. The second half of that statement is very important. If the predictions are accurate copier placements will decrease by 40% over the period 2007 – 2012. Combined with lower average unit selling price, the proliferation of printer based MFDs, and A4 units replacing A3 and you have a significantly lower revenue stream. Offsetting those decreases are color pages and capturing the prints made on the printers—print management or MPS. I believe the latter is a significantly larger revenue stream than the former.
But dealerships will also need to address high general and administrative expenses. At Strategy Development we believe that dealerships need to strive for a 10% G&A within the next five years. Our operations consulting practice is helping dealers put the plans in place to achieve that goal. We also believe that you need to maximize the return on aftermarket; our service consulting practice is helping dealerships achieve that goal. Our MPS practice has helped scores of dealerships launch successful print management initiatives; a must have to thrive in the future. And finally, and most important, you need a solid plan that ties together all of the aforementioned moving parts so that you are one of the dealerships that thrive through the Sea Change.
Get your plan in place, execute, and thrive!
This piece was also published in Document Solutions Daily (www.kworkpublishing.com)
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