Wednesday, July 21, 2010

Oklahoma Office Systems: Successfully Selling MPS from the Top Down

By Scott Cullen

Business is doing just fine thank you at Oklahoma Office Systems, Inc. (OOSI) in Oklahoma City. Established in 1981, OOSI has established a reputation for meeting the challenges of the ever-changing office equipment landscape head on. They’ve been successful at transitioning customers to digital technology, connecting customer’s devices, and providing value-added services such as managed print long before it became an industry buzz word.

OOSI has experimented with different approaches to managed print during the past seven years and Principal Ron Carr reveals the best thing he ever did was create a separate division to focus on MPS.

“There are a few dealers that have converted their teams, but it’s difficult especially for those with longevity,” says Carr. “When it’s a separate focus and totally driven in that direction, it doesn’t allow them to back up and say, ‘You want to buy a copier, I’ll just sell you a copier.’”

Carr concedes last year was flat on the MPS side of the organization largely because of internal changes within the division, specifically the departure of a key person in the MPS division. The economy hasn’t helped, but things are on the upswing and Carr reports OOSI is running fairly close to what they’ve budgeted as growth for the current fiscal year thanks in part to increased hardware sales. He expects the MPS business to follow suit now that he’s hired a new person to manage the MPS division. This new hire will work closely with sales and marketing reps doing audits and making a case for MPS with customers in the Oklahoma City market. He’s looking to fill a similar position in OOSI’s Tulsa office.

“We’re going to be focusing on different companies and different size accounts than in the past,” says Carr. That means not just big customers and verticals like medical, but midsize companies too.

The personnel within OOSI’s MPS division aren’t from the copier industry and target new business rather than OOSI’s existing customer base. They assist OOSI hardware sales reps on calls, but none have existing relationships within the company’s current customer base.

“We haven’t taken anybody in the past seven years who was a current employee and said, ‘now you’re going to do it,’” says Carr. Despite that strategy OOSI still has a couple of veteran reps who embraced the MPS concept early on and have been successful.

It’s not easy streaking along at the head of the technology curve and there’s bound to be some bumps along the way. For example, if Carr knew seven years ago what he knows now, he would have taken a broader approach to MPS and focused less on hardware at the beginning.

“I wouldn’t have walked away from business because it wasn’t a certain profit margin,” states Carr. “The way the compensation plan was created and developed had our reps paying more attention to the hardware instead of focusing on the service aspect.”

What influenced OOSI to get into the MPS game so early on? Carr attributes it to his membership in the Copier Dealers Association, BTA, and industry events where that issue was a topic of discussion even though few dealers dared enter that fray at the time.

“It was something we needed to look at,” says Carr.

Amazingly, though, it wasn’t difficult presenting the concept to customers.

“It wasn’t a challenge other than the fact that people were hearing about it for the first time so it was a new, innovative approach,” explains Carr. “We did very well in the beginning because there was no competition.”

Seven years later OOSI has plenty of competition. “Everybody is trying to move into MPS even though many aren’t sure the best way to do it,” says Carr.

He’s also seeing more RFPs with an MPS component that obviously weren’t there seven years ago.

“That’s bringing in a whole different realm of competition whether they’ve done it before or not,” laments Carr. “My fear is if they don’t understand it and don’t have a good grasp of what the real cost is to do a true managed print services engagement, it’s going to be just like the copier side of the business and margins will start dropping and they’ll be giving services away.”

In the meantime, OOSI can only control what they can control and that’s their reputation as a hardware and services provider.

“We’re marketing ourselves as the MPS innovator,” says Carr. “We were first in this market therefore we’ve had seven years experience.”

OOSI is also an HP Elite reseller and that adds some credibility too, particularly with IT.

The biggest challenge to selling MPS in Carr’s estimation is reaching the appropriate decision maker, which in many instances is a C-level executive.

“Most of the copier people in my market and most in this industry are at a purchasing or office manager level, and it’s very difficult to get from there to a CFO or CEO,” says Carr. “Managed print must be driven from the top down.”

OOSI is doing just that. Other dealers focus on IT, but that’s not the OOSI approach even though IT often participates in OOSI’s meetings with C-level executives.

“We’ve taken the CEO, CFO approach with print management and IT people are coming in and buying into this and we get very positive feedback,” notes Carr.

With all the copier/MFP manufacturers touting MPS, we wondered if OOSI has received any help from their manufacturer.

“We haven’t asked for any help because we’ve been doing it longer than they have,” responds Carr. “For them to come in and tell us how to do it, it’s kind of like them researching themselves about how to go about doing it.”

Manufacturer’s direct branches have been the bane of many a dealer’s existence of late, but Carr isn’t concerned from an MPS perspective. “The manufacturers are going to have more of a challenge than the independent dealer because we have more choices of products to bring into it,” says Carr. “If I’m a Ricoh branch my only solution is typically Ricoh.”

OOSI has received guidance from Strategy Development in refining its MPS initiatives. Meanwhile, Carr has high hopes for the future and wouldn’t be surprised if within the next three to five years 70-75 percent of OOSI’s business involves some type of MPS engagement.

“We would love it to be 100 percent,” says Carr. “At some point our objective is to convert every one of our employees to this particular selling philosophy.”

Finally, Carr offers advice to dealers who have not yet taken the plunge into MPS.

“In the long run, if you’re going to be a viable company you need to transition into this arena,” he says. “This industry is really changing. As we know, the A4 product is starting to replace a lot of A3 products. So revenues are starting to go down if they haven’t already and they’re going to continue to drive in that direction as we go from selling a $7,000 machine to a $2,000 machine that does the same thing.”

Scott Cullen has been covering the office equipment industry since 1986. Scott is Publisher/Editorial Director for Imaging Solutions Reseller; Editorial Director/Managing Editor for OfficeSOLUTIONS and OfficeDEALER; Editor for PC Solutions; and a contributing writer and Editor for Independent Dealer, OFDA, Mercer Business, ENX, BERTL’s iTchat, Repro Report.