Tuesday, January 26, 2010

What is MPS?

Yesterday, Document Solutions Daily, a great publication available by subscription, had a link to a blog post titled “MPS Isn’t Just for the Big Boys.” Although the post details what can be described as an admirable job by a sales person to place a MFD, and that sales person works for a well known and respected copier company—so this commentary isn’t directed at either the sales person or the employer—does the post really describe an MPS agreement?

I ask the question for two reasons. First to define the MPS space, because if selling one MFD to replace an older MFD and some printers is MPS we may as well simply pull out the market size stats that have been put forth by Info Trends, Gartner, and IDC for the last few decades and change the title at the top from “copier and printer market” to “MPS Market.” It seems like anything with MPS on it sells so why not? Second is focus, the MPS space is a high growth high profit business today so should dealers / resellers really be looking at single placements of MFDs as an MPS opportunity?

Don’t get me wrong—I want sales professionals that can solve problems to get me new customers and retain those customers. If I still owned a copier dealership I would want them to sell copiers and I would want reps with problem solving skills to sell MPS. But I would clearly define my MPS space so I am not spending time in areas with little to no ROI.

Few companies with 250 – 1,000 knowledge employees are in MPS contracts today so why deploy resources at companies with fewer than 10 employees? Moreover, why focus on the hardware placement when the profits are in the aftermarket? We shouldn’t be measuring MPS by selling and MFD….we should be measuring MPS by how much recurring revenue it brings to our business. Strategy Development has been encouraging traditional copier dealers to get away from measuring sales success by hardware sales and to start measuring sales success by aftermarket growth. If you own the contract on the equipment you will sell the equipment.

So congratulations to that sales professional and the company mentioned in the blog—it appears as if you helped that customer solve a business problem with the correct MFD. But I would encourage companies to take a rifle approach to MPS and focus to the sweet spot, companies with 250 – 1,000 knowledge worker employees. Once that market is saturated with MPS contracts you can work your way down the food chain if you find it necessary and profitable. Don’t lose focus just yet!

Sunday, January 17, 2010

Hiring a Consulting Firm: Proceed With Caution

You engage a consulting firm to add skills and help you achieve your business goals. If the consulting firm is going to be successful in their support they need to still be in business 90 days after you sign the agreement. Over the last five years I have seen consulting firms come and go, and the going almost always follows the big announcement of the coming.

This last week I read a press release announcing that Supplies Network hired the former owner of a consulting business, who I congratulate on his new job, but what of his consulting clients? What do they do now? The same day I received an e-mail from the former owner of a consulting practice selling remanufactured cartridges as the director of sales for Virtual Imaging Products—he too apparently deserves congratulations for his new job. Six months ago he put out a press release stating he developed the first internet based MPS training program (Strategy Development has had an MPS sales mentoring program that is internet based for over a year). What if you bought that program? Two months ago Printer Essentials announced the hiring of another consulting firm owner.

Three consulting firms are apparently out of business in the last two months—this is just an example of what I have witnessed over the last five years. The biggest losers in this situation are those companies that engaged these consultants to help them launch their MPS program (they are all MPS consulting firms).

These “flash in the pan” consultants nibble at our prospect client base as well, but whenever we hear that a company hired one of these “Johnnie come lately” firms we simply feel bad for the hiring company. MPS is the most important growth strategy the industry has seen in over a decade and this company is going to get poor advice on making the transition and their “expert” will probably be working for a competitor before the hiring company comes to the conclusion they made an error in selecting the consultant. Worse, they may paint all consultants with the same brush as their short term advisor.

How do you make a decision to hire a consulting firm? The first decision point you have is do you need a consultant or trainer. If you want more information on that decision e-mail me and I’ll send a copy of an article on the subject (callinan@strategydevelopment.org).

Once you make a decision to hire a consultant look at the depth and experience of the consulting team. I would start by analyzing whether they are a firm or an association of independent consultants. If the latter there is a higher probably of them deciding to “find a job.” The other category of consultant that is apt to find a job is the sole proprietor firm. It is difficult to develop business, develop tools, and conduct consulting—and earn a living. You need a team. Make certain the consulting firm has experience in all areas of your initiative. For MPS this means you need back office operations, service, sales, and business planning. Finally, look for tenure; it appears as if most consultants fold in the six to nine month range, although some have made it as long as two years. I would not engage a firm that has less than two years of experience unless it is for a very short term project.

I am an entrepreneur and love it so I would encourage anybody to follow the dream of entrepreneurship if they have that dream. Failure is a necessary outcome of being an entrepreneur: I have a favorite saying that if you haven’t failed you haven’t tried hard enough. Nevertheless, make sure the entrepreneur you hire has a plan and not simply a dream--hire with caution and!

Monday, January 4, 2010

Trade Shows: Are they worth the time

I am frequently asked the by clients “Should I attend (fill in the blank) show / conference?” I tend to answer the question with another question, “What are you looking to get out of the event?” Your answer to that question will then lead to some research to determine if the event is worth the investment in entrance fee, travel expense, and more importantly, your time.

There are many trade shows out there and a new one seems to pop-up every other year. They may be disguised as conferences or some other educations sounding event but when you look under the covers most are simply trade shows. Let’s explore some of the goals of a trade show:

Networking: An important aspect of business and one that requires focus. Many dealers belong to industry groups such as BPCA, CDA, SDG, or others and get to see their fellow group members at the events held by these groups. The networking aspect is just one of the many reasons why we recommend that our clients belong to an industry peer group. You also have the manufacturer dealer meetings held every 18 – 24 months. The problem with both of these types of events is that they are closed—you need to be a member of the peer group or you need to be a dealer for the manufacturer.

To network with dealers outside of this group you need an open forum. Two that accomplish this goal are the BTA regional events and ITEX. As by far the largest advocacy group for the copier / MPS industry, the BTA provides many benefits to the dealer / reseller community. One of those many benefits are the regional events they hold every year. I have participated in events in the Northeast and Southeast and they had drawn a large quantity of regional dealers and they are easy to get to, not requiring extra time for travel. I strongly recommend membership in the BTA and attendance at their events.

ITEX is the other forum that provides for networking, but in this case on a national basis. Las Vegas is a destination city and airfare and hotels are relatively inexpensive. You have great restaurants, entertainment, and oh yea, gambling. One of the largest benefits ITEX provides is the networking.

Education: Two warnings when it comes to education. First and foremost, if the event sponsors have most of the speaking spots you are wasting your time. One thinly veiled secret of the conference set is that some events are simply designed to generate revenue for the event coordinator and not designed to actually provide any value to the participants. Want to provide the keynote address? Become the platinum sponsor. Want to provide the day one closing address? Buy the gold sponsorship. Just align the sponsorship hierarchy with the relative status of the speaking spot and I think you will find perfect alignment. When you pay $10,000 to $20,000 to be the sponsor you talk about what you believe is a legitimate subject—the event coordinator doesn’t have a lot of influence after they take your check.

Do you really need to pay to see a vendor speak? It is my experience that the vendor will gladly pay for you to visit their office for the presentation and maybe even buy you a nice dinner or round of golf. Heck, lately some have even been flying dealers to their offices in Asia—on their dime.

And if you gave it some thought do you think that software vendor, toner recharge sales person or parts sales person really knows how to instruct you on launching an MPS program? Improve your sales effectiveness? Improve service margins? How about that MFP manufacturer trying to sell you that they don’t necessarily want you to sell their hardware? Why on earth would you pay to have these vendors that would either pay you for the opportunity to meet or who don’t have competency in the subject matter to speak to you…or should I be more straight forward and ask why pay for a sales pitch?

The second warning is on the concept of education at a trade show or conference. Most of the time the person giving the “training” is not being paid to instruct (in the sponsorship scenario they are actually paying for their opportunity to “train” you), but more than likely considers the speaking engagement an opportunity to give a sales pitch on their program. The degree of “pitch” vs training varies. I am sure we have all sat through the training program where we received 5 minutes of 80,000 foot theory and 55 minutes of program pitch, some disguised and some not so disguised. At other times we did get 45 – 50 minutes of 5,000 foot information and 10 – 15 minutes of pitch. The former is a complete waste of time and the latter provides you an opportunity to determine if the speaker can help your organization on a consulting or training basis.

The point is that you can learn at some of the conferences where the sponsors don’t get the majority of the speaking slots, but don’t expect to learn too much and choose the seminars you attend carefully. Let’s be realistic, do you think that a person that makes a living selling their knowledge is going to provide it to you for free, and do that in one hour?

What should you look to avoid? Preconference days that are completely paid for by sponsors and all of the speaking slots are taken by sponsors. These usually focus on the hot topic of the day like MPS or service improvement. Ironically, even though the sponsors paid to speak at these events they usually cost you additional money to attend—so you are paying to get a sales pitch.

The other area to avoid is conferences designed strictly to generate revenue for the show producer. What do they look like? A subject matter conference (always the hot topic of the day as that is the only topic anybody would be lured into paying for without much investigation) where all of the sponsors have speaking engagements. Whereas the add on day to the conference usually only costs an additional $99 - $150, effectively doubling the cost of the conference, it isn’t unusual for these total rip-off subject matter conferences to cost $795 - $995. Some go as far as having an add on day as a front runner to their totally sponsored conference.

If you really want education you need to pay for it and you should select the education topic you require. The good conference, like the main ITEX show or BTA regional events, may give you exposure to different speakers to help you make your assessment but once you believe you found a good trainer go to the specific workshop they offer on the subject and don’t attend any overpriced conferences hoping to get trained. You’ll only get trained if the trainer is getting compensated for their knowledge. The BTA offers some great programs.

Product information: If you want to compare and contrast products you have three choices, two of them logical. The first, illogical approach is to visit each company (illogical because of cost and time). The second is a series of webinars. The third is got to the main ITEX show and have appointments scheduled with each of the vendors to review their products.

Research: I find InfoTrends conference to be a great research opportunity. This isn’t the traditional educational event but it is one of the most educational events you can attend. Want to know what is going to happen with unit placements? You’ll learn it at the infoTrends conference. Want to know about print volume trends and where documents are being printed? You’ll learn it at the infoTrends conference. Basically, if you want to get into the details of the industry, copier or MPS, attend this conference.

You might want to research a new area—document archival for instance. There are trade shows for these areas such as AIIM. Search out the trade shows but use the information you have above to vet the show. If it is comprised totally of talking heads from the sponsors that are going to tell you how to do something they never did avoid the event.

The bottom line—there are a few shows that are worth the money if they fit into your goals but evaluate what your goals are against the agenda of the show.