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.

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