MPS and the Equipment Vendor Comfort Zone

  September 11, 2019

  Read Time: 2 min 45 sec

Published February 28, 2013 | Updated September 11, 2019

When evaluating their marketplace, equipment vendors and their sales teams often fall into patterns of past experience that can limit future growth. For example, many equipment vendors and sales reps, particularly newer ones, find they work best with businesses of similar size. Selling to these customers – instead of larger, enterprise accounts – becomes comfortable because the market is well known and has yielded at least some measure of success.

Smaller businesses are generally fairly easy to penetrate, or to at least to secure an appointment with. From there, provided that the business is actually looking for new equipment, the sales cycle is generally shorter than with a larger company and transactions can be closed fairly quickly. Particularly for a sales force that spends a lot of time cold calling, selling into smaller companies often offers the path of least resistance.

There are some problems with this approach, however. The comfort zone might in fact be a factor that limits growth and sales success, sometimes significantly.

For example, smaller businesses have smaller needs – and smaller budgets. They acquire equipment less frequently than larger businesses and want to spend less money on it. They also tend to hold onto their equipment for longer periods of time and are less likely to buy into larger solution-based offerings simply because they don’t think they can afford them.

Generally speaking, the decision-maker in a smaller company is not an expert in the equipment itself and may very well come to the table with inaccurate ideas. Even if an equipment need is acute, this lack of a broader understanding often limits the scope of the transaction simply because the buyer isn’t aware of what’s really needed. This problem is compounded by the fact that buyer education is never easy, particularly when the buyer resists it.

The decision for salespeople to stay within the comfort zone and sell almost exclusively to smaller businesses is not always a problem that is limited to – or even caused by – the sales force itself. The reality is that the comfort zone often starts in the equipment vendor’s business plan and go-to-market strategy. If the vendor is not properly positioned to actively go after larger customers and meet their needs, the sales force will find it very difficult to penetrate these businesses. Conversely, if the equipment vendor has a well-defined strategy in place to identify and penetrate larger organizations, the sales force has a solid platform to work from and will likely find much more success in the process.

One go-to-market strategy that can help an equipment vendor to penetrate larger companies and close transactions with them – not to mention placing a significant amount of equipment and supporting services in the process – is offering a managed print services (MPS) solution.

The term MPS is sometimes misunderstood by equipment vendors and customers alike, so it’s important to first understand what MPS really is. To set the record straight, the Managed Print Services Association (MPSA) defines MPS as “the active management and optimization of document output devices and related business processes.” In other words, an MPS solution seeks to bring a company’s entire fleet of printers, copiers, fax machines, and scanners together, and then to manage them in order to increase efficiency and reduce costs.

The reason an MPS solution offering appeals to larger companies is fairly obvious: they have a lot more equipment to worry about. A small office with one copier and 10 printers could certainly save some incremental dollars with a properly implemented MPS solution, but a company with 100 copiers and 1,000 printers could obviously save a lot more. And because more companies have launched business process optimization (BPO) initiatives to reign in escalating costs and improve efficiencies and profitability, MPS solutions have become increasingly commonplace.

Admittedly, offering an MPS solution to the marketplace is not something an equipment vendor should attempt to do on the fly. Implementing an MPS solution – particularly in a large company – can become a very complex undertaking very quickly, and it requires substantial expertise in order to succeed. A good approach for deploying an MPS solution is to partner with other organizations that have the expertise and technical know-how to bring all of the diverse elements together.

The reason lies in the name. Managed print services implies a solution that includes much more than the equipment upon which it is based. An MPS solution adds significant value to the customer by using software and professional expertise to manage and reduce a company’s overall printing and document management costs. Furthermore, because an MPS solution is largely a service-based offering, it can easily be offered to customers with existing fleets of printers and copiers.

This approach enables the equipment vendor to sell an MPS program to customers without selling the equipment to them first. Because an MPS solution is brand agnostic, it doesn’t matter where the equipment came from, who made it, or who sold it. What matters is that the equipment vendor can sell a service-based relationship that, if properly managed and executed, will perfectly position the vendor for a steady stream of equipment sales down the road.

The first step in designing an MPS solution is to determine the baseline cost-per-user of the existing printer and copier fleet. This value is based on the total cost of ownership (TCO) of the fleet itself and all related costs, and it is very often a number that the prospect company is unaware of. Many equipment vendors have found that partnering with an equipment finance company that has extensive experience in funding MPS solutions is an excellent resource for determining the baseline cost per user.

With baseline costs identified, it’s then possible to determine the projected savings from end-to-end management of the print infrastructure. MPS solutions also typically provide security enhancements by enabling confidential printing, as well as “green” benefits from a reduction in paper and toner cartridge usage. All of these anticipated benefits can be targeted up front and articulated in the initial MPS solution proposal.

Arguably the most challenging aspect of implementing an MPS solution is the administration of the program. Typically an MPS program is based on the ability to track cost-per-unit usage across the enterprise for every piece of equipment in the fleet. Most equipment vendors have found that the best way to accomplish this is to partner with a service provider – most often a finance company – that already has a tested and effective cost-per-unit infrastructure in place and operational.

Clearly there are many complexities and functional considerations that are integral to any MPS solution. Working with competent and capable partners can help the equipment vendor address and overcome any such obstacles that might arise. For that reason, the decision to offer turnkey MPS solutions is a strategic one that should not be taken lightly.

With that understanding in place, venturing into the MPS marketplace can do many positive things for an equipment vendor. It can open the door to new and potentially profitable customer relationships, and in so doing catapult the equipment vendor to the next level of business success. All it takes is stepping out of the comfort zone, finding competent partners, and deciding to go to the next level.

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