Managed Print Services, Size Does Matter - Just Not In The Way You Think

2009

I have been getting alot of "size" questions lately.

You know, how big is too big, how small is too small?

Is "small" ok if there are multiples?

What, exactly, is too big?

And by the time I find out its too big, is it too late?

Titillating queries with scintillating responses.

The answer, of course, depends on your sweet spot.

Get your mind out of my gutter -

I'm talking about how you define a Managed Print Services prospect - by number of employees, number of copiers, number of printers, fax lines, scanners or what?

Depends.

Great. What does it depend on?

It depends on what your organization can handle - more importantly - it depends on you.

Let's compare this in the most simplest terms and reduce MPS down to CPC - a prospect for a copier is anyone who has volume, wants to buy, or fogs a mirror, right?

I am not saying we should, but why don't some in MPS feel the same way?

Why is there a difference between how we qualify a copier deal vs. a MPS Engagement?

These aren't rhetorical questions, there are answers.

One answer is some do equate MPS with CPC - not that there is anything wrong with that, equipment optimization and capturing print volume is one component of MPS; indeed, just the beginning.

And, this is big, "equipment and volume" are easy issues for a dealer or Selling Professional to get his head around.

So, if your company's definition of MPS is simply equipment refresh, right-sizing, and supplies management, why not go after the 7,600 images per month deals? (Yeah, I am pulling 7,600 images out of thin air, just like everyone else is doing. But let's proceed on this assumption.)

That's 19 accounts per month if you use the 150,000 image quota per month, per rep figure being bantered about currently.

Now, if we further extrapolate an average of 3,400 images/month/machine(my accumulated studies numbers, HP shares the opinion) to reach the 150k/month, we need to sell or capture 44 machines each month, spread across 19 opportunities - just over 2 machines per deal.

Huh.

The Assassin, "I'm afraid, Captain, it's Worse than you Think."

Mal, "...it usually is..." -

These 19 deals need to take place over 20 working days each month - One, 7,600 image deal each day.

How much time, if any, would you, the Selling Professional in the field, spend on pursuing a MPS Engagement with a client generating 7,600 images a month? Would you even pursue? Is it worth your time?

As a Selling Professional, some studies say, your time is worth around $180.00/hr. $180.00 to you, personally.

How many hours of your time, does it take to close one deal?

Let's guess:

Drive Time - .5 hour
First appointment - 1 hour
Follow up/appointment summary communication - .5 hour

Drive Time - .5 hour
Second appointment - 1 hour

Assessment/Survey/Study/Data collection - 4-6 hours(?)
Analysis - 1 hour
Proposal generation - 1 hour

Drive Time - .5
Presentation of Findings and Recommendations - .75 hour
Agreement Execution/Implementation - 1 hour(?)

Close to eight hours; that's $180.00 X 8 hours for every deal you work on; or $1,440.00. So for every deal you put 8 hours of time into, you should bring home, in your pocket, $1,440.00. The bad side is, you are going to put more than 8 hours into deals you will never close - it's inevitable.

Further, 8 hours per deal, multiplied by 19 deals/month, requires 152 hours total - there are 160 hours/month available.

Roll in all the Monday Morning Meetings, conference calls, "training" sessions, your 4 hours/week of cold calls, and the all mighty, ever important, client service/problem resolution(cleverly disguised as toner delivery) and we are all upside down.

I know the numbers above are debatable, that's not the point, it's the process I am trying to illustrate. Does this make sense?

"Show Me The Money" -

Let's look at how all this fleshes out in terms of greenbacks, shekels, lire, cabbage, money.

The possible commission on that revenue, 150,000 images/month, is $150.00. This doesn't look all that enticing, does it? (150,000 times 0.020, times 5% commission equals $150.00)

But if you keep a run rate of 150,000 images added each month, after 12 months, your MONTHLY RESIDUAL COMMISSION should be $1,800.00/month, riding 1.8 million monthly images.

At this point, if you didn't sell an image for the next 24 months, you would still be collecting $1,800.00/month.

And watch out, there are all sorts of schemes coming to the surface veiled as techniques "not allowing the sales team to get lazy"; sunset clauses, equipment revenue and percentage of quota gates, etc.

So, how big is too big?

I dunno. I do know there is no magic bullet, no singularity. Unlike the copier world, for the MPS Ecosystem, THERE IS NO SINGLE ANSWER FOR EVERYONE.

And by everyone, I mean we on this side, and those soon to be Partners, our Prospects.

The best thing to do is plug in your own numbers and determine your ideal "size".

Everybody else has got an agenda, why shouldn't you?

HP LaserJet II: Whadda Mean, It's not Under Warranty?

Canon Down 54%, Ricoh Down 69%, Xerox Down 50% - Profits? We Don't Need No Stinkin Profits...

The third quarter was not kind, here are some numbers:

Canon operating profit was down 54% year-over-year and sales down 22%

Ricoh profits were down 69%, and

Xerox profit was down a little over 50 % and sales by nearly 20%.

Konica Minolta and Kyocera also reported fall-offs in profit and have readjusted their expectations for the year and have lowered profit predictions considerably.

I don't know about you, but I can not think of too many businesses that can survive these kind of numbers.

Thank goodness "O" can't get a hold of these...wait, is Xerox "too big to fail?" -

Stunning.

Absolutely stunning.

Here.

The New Document Management and The Help Desk

It's funny.

Managed Print Services North American Conference: May 3-5, 2010 San Antonio, TX

The second North American MPS Conference is scheduled for May, 2010.

A good time should be had by all.

Some of the themes so far:

Managing RFPs
MPS - Financial models for MPS providers
Moving customers to stage 3, how to know when you are ready. How to identify the right customers for stage 3 engagements.


Additionally, just like in Europe, there will be a pre-conference seminar aimed at participants with less background and knowledge in the world of managed print.

Pre-conference sessions will be offered for both end users and channel partners. These sessions will concentrate on providing a solid foundation of the subject and offering practical strategies when selecting an appropriate MPS partner or provider for first-time MPS engagements.

Last year was good, the European conference better, this May should be stellar.

See you there!

Seeking Alpha: Will HP Remain the Leader in Printers and Ink?

From the Seeking Alpha site:

"We estimate that HP's (HPQ) Printers and Ink Cartridges business constitutes 24% of the company's stock price.

HP's printer business makes money primarily through the sale of ink and toner supplies for its printers.

HP's market share in printers has gone from 35% in 2005 to 40% in 2008. We expect HP's share gains to continue over the Trefis forecast period due to HP's strong relationships with large business buyers and its traction with consumers through its PC business which has also gained share in recent years."

However, HP's printing business is continuously at risk of commoditization. The company has been able to maintain share and some pricing power in this market through printing technology designed to limit the use of low cost (non-HP) ink and toner supplies, with HP printers. As low cost printers and printing supplies become increasingly capable, HP's printing market share along with its printing profit margins will be at risk.

If HP's printing market share were to decline to 2005 levels of 35%, the company could lose $6 billion of its value or about $2 per share.

Here.

HP IPG folding into PSG? Someday, HP Won't Sell Printers

Former HP CEO Fiorina targets Boxer's Senate seat

Holy Crap!

"If Fiorina decides to fund the campaign with her own personal wealth, this could be the most expensive Boxer campaign yet," said Rose Kapolczynski, a spokeswoman for Boxer's campaign. "We could be looking at a $30 million or $35 million campaign. ... She could do a lot to remake her image with that and do a lot to distort the Boxer record."

Couple this move with Meg Whitman's, former EBay exec, bid for California governor, and we've got two, ex-technology women maneuvering for a piece of political history.

Oh - and it seems each of them have more money the God.

Check out one story here.

And a contrary view here.

Managed Print Services: On the World Stage

MPS is the buzz globally, almost as much as when tray less duplex came out and analogue became digital...JUST KIDDING.

From the recent MPS Conference in Amsterdam:

“My expectations have been surpassed. I come from Dubai, and the market is hungry for this application. I am very impressed with the quality of people attending: senior executives, dealers, end-users…some very good discussion.” - Hakam Abu Rishesh, Gulf Commercial Group


“This conference is very insightful. It is the first time I have met people that actually understand MPS. I didn’t expect so many people. I think it is a great reflection on the interest in the market.” - James Du Plooy, Solution Worx, South Africa

Full Press release.

FOR IMMEDIATE RELEASE



European Managed Print Services Conference Hits Right Notes with MPS Professionals

FMAudit Renews as Platinum Sponsor of 2010 European MPS Conference


November 4, 2009 – Lexington, KY – The 2009 European MPS Conference held recently in Amsterdam was a successful educational event for the managed print services market, with enthusiastic feedback from attendees, exhibitors and sponsors. In a show of support, Platinum Sponsor FMAudit Europe/ DocuAudit, has renewed its commitment for the 2010 European conference, which will be held in Barcelona, Spain.

“The response to the 2009 European MPS conference was overwhelming. It is imperative that we continue to support efforts that bring ideas, best practices and valuable networking opportunities to this rapidly growing market,” said Jan De Kesel, President and Managing Director, FMAudit Europe/ DocuAudit,

Surpassing original attendance targets, over 140 people attended the European MPS conference, the first of its kind. MPS dealers, end users, vendors and infrastructure providers, along with sponsors and exhibitors networked and shared their experiences and knowledge. Participants commented on the quality of information, level of expertise, networking and contacts, and the overall value for their businesses.

· “Really, really interesting, it reflects the reality of the marketplace.”
Nicolas Bouillon, Blumega Technology, United Kingdom

· “This conference is great! It has given me the background of the players, services and competition—absolutely valuable to me!”
Maikel Bongers, Office Depot Europe

· “My expectations have been surpassed. I come from Dubai, and the market is hungry for this application. I am very impressed with the quality of people attending: senior executives, dealers, end-users…some very good discussion.”
Hakam Abu Rishesh, Gulf Commercial Group

· “Can’t wait to take this away and build on it. It’s great for developing market, great for bringing all these parties together and great to have an independent forum.”
Alan Kilminister, Gulf Commercial Group

· “This conference is very insightful. It is the first time I have met people that actually understand MPS. I didn’t expect so many people. I think it is a great reflection on the interest in the market.”
James Du Plooy, Solution Worx, South Africa

· “I am getting great feedback, everyone loves the diversity in topics.”
Stuart Rideout, LRS, United Kingdom

In addition to Platinum Sponsors FMAudit and HP, other European MPS Conference sponsors and exhibitors included Gold Sponsor MWA Intelligence, Inc., media sponsors BERTL Research and DocuFacts, LRS, Netaphor, Newfield IT, PerformIT, PrintFleet, SCC and other prominent MPS players.

“The interest in MPS has no boundaries. Attendees came from as far away as South Africa, Australia and Dubai to learn about MPS strategies,” said Ed Crowley, CEO and Senior Partner of the Photizo Group, which hosted the MPS 2009 European Conference. “The fact that FMAudit/DocuAudit has again committed its support as a Platinum Sponsor for the 2010 event demonstrates the success of this conference in meeting the needs of the marketplace and in bringing the right people together. It shows the importance that MPS leaders like FMAudit place on the MPS Conference as an educational forum.”

Over 20 different sessions addressed a broad spectrum of topics with speakers from across Europe providing expertise and insights. Along with the keynote presenters from FMAudit and HP, sessions featured MPS experts from Canon, DirectPointe, EKM4, LRS Europe, PrintFleet, PulsarTec, Konica Minolta, Leads City Council, LRS Europe, Nationwide Insurance, Newfield IT, Relevance Biz and SolutionsWorx.

Conference Content Focuses on MPS Success

The series of MPS Conferences address the urgent need for information about the fast-growing managed print services market. The Photizo Group estimates that the MPS market is worth over $25 billion globally this year and is projecting it will be a $60 billion market by 2013. Conference content features case studies, panels, exhibitions and interactive sessions that highlight successful approaches and practical ideas from actual MPS engagements. MPS decision makers, vendors and channel partners benefit from a rich agenda of relevant topics.

For more information about the MPS Conference series, visit http://www.mpsconference.com.

# # #

Media contacts:
The Photizo Group
Misty Hamel
617-921-5725
mhamel@photizogroup.com


ABOUT THE PHOTIZO GROUP

The Photizo Group is a leading research firm specializing in the analysis of the printing and imaging industry and specifically the Managed Print Services market. Photizo has become the market’s main source for ongoing business intelligence about the rapidly growing opportunity of MPS. Since its landmark MPS study released in April 2008 to ongoing research covering North America and Europe, Photizo has emerged as a leader in dynamic business intelligence about the MPS market. Clients include eight of the top ten imaging manufacturers in the digital

What Remains of the "Grey Lady"?: Google Might Buy New York Times

That's the rumor. This could be the shape of things to come.

2010, the year of the Tablet and perhaps the year digital and print media truly begin to merge?

Just a blurb, but still...

The Death of Print Continues -

Bowling Green Initiating Managed Print Services Program: Print Responsibly

Press Release:


"Print Responsibilty' campaign goes into effect

Monday, 02 Nov 2009, 11:11 AM EST

By Sentinel Staff

BOWLING GREEN, Ohio -

Bowling Green State University this week will begin to implement its Print Responsibly campaign that President Carol Cartwright announced during her State of the University address last month.

The program is described as a more cost-effective and environmentally friendly way to handle everyday printing and other tasks like copying, scanning and faxing.

The university will contract with a company with expertise in managed print services.

When fully implemented next year, BGSU will no longer purchase any non-specialized printers, copiers, fax machines or scanners.

The campaign is projected to save about $1.5 million a year and reduce annual consumption of paper by up to 40 percent.

University departments will not be responsible for purchasing toner or other materials, or maintenance costs, but instead will simply pay a per-page price for printed or copied documents. This will also give BGSU access to the latest technology.

Beginning Tuesday, the Print Responsibly team will be visiting offices and departments. The purpose of these initial visits is to confirm the inventory of printers, copiers, and fax machines and scanners.

The inventory is expected to take about four weeks to complete. Other visits will follow to discuss printing needs with the departments.

In November, ITS will begin a pilot program with several departments that have volunteered to be part of the launch. University-wide implementation of the Print Responsibly program will likely begin next semester.

A Web site to provide additional information about the program can be found at here.

Cartwright said there will likely be changes to the university's approaches to printing but expects the payoff for the program will be quite significant. She said savings will stay in the respective departments.

She noted the university prints about 70 million pages per year. With Print Responsibly, Cartwright expects to see a reduction in the amount of paper used of up to 40 percent or 28 million pages.
---------------------------------------------

DOTC - 70 million pages/year billed at let's say 0.0120 results in a revenue of $840,000; at the "standard" MPS GP of 35%, 294k in GP.

The "Hunters vs. Farmers" Sales Metaphor - It's Dead: Let's Break Out of The Box

2009

Within the MPS Ecosystem, the struggle is moving between back-room infrastructure and field-level acumen.

Just like everything else the "experts" attempt to do, we selling professionals, are being classified; boxed in, and commoditized.

The questions now are, "What type of person do I need to employ as an MPS Sales Executive?"

"How many appointments should my team generate to reach a close?"

"What is a good monthly revenue/sales/profit number an MPS rep should hit?"

It is apparent that the "copier mentality" is only a fraction of what is needed to bring home MPS Engagements. That is of course unless you simply start defining your CPC agreements as MPS Engagements. Whiskey Tango Foxtrot!

And by the way, if your manager/owner/principal is plugging MPS Assessments into your "normal" copier funnel, you know, "15 face to face meetings per week, 5 Demos, 3 MPS Assessments, 1.5 closes per week", you are far, far removed from an MPS Practice.

Managed Print Services is not a bolt-on marketing scheme.

So, does MPS need Hunters or does MPS need Farmers?

The answer is Both - The answer is Neither.

We need Professionals who can do both; who can do it all.

"Hunter" - Find it, Kill it, move on.

"Farmer" - Move in after the kill, bury it, water it, reap.

It may be just me but I tend to think of selling "farmers" akin to vegetarians. And as you know, another name for a vegetarian is a "hunter with bad aim..."

Hunter? Farmer? Hello, the 1950's called, they want their sales cliches back...keep this up and the ditto-machine will make a come back.

I don't care what anybody says, real MPS is different - it is a Hybrid process, Hybrid product, Hybrid service, Hybrid business model. How can we expect the same old selling models and formulas to prevail?

How can anyone presume to tell Selling Professionals how to go about selling MPS(Hybrid), if those selling professionals are not Hybrid themselves?

What? Huh? Am I saying that there is MORE to selling than PROCESS?

Am I?

Goodness gracious, great balls of fire! Should I feel a slight agitation around my neck? Like John had when Herod came by, ready to fulfill Solome's wish? (don't get it? Go here)

Yeah - sure, sales is more than process, tell that to HP/Xerox - I often wonder how the enterprise clients feel, knowing they are part of a "process". Perhaps they feel like Velveeta?

There are, without fail, little flecks of hope, sparkling in the distance whenever I hear somebody say they are looking to hire folks from outside the industry. People with Insurance or market/advertising sales experience - not a bad start, I understand the premise. But there are challenges here as well.

Any ex-AFLAC agent is going to absolutely Laugh Out Loud when his MPS compensation plan doesn't have monthly residuals for life. The insurance industry invented that model for crying out loud.

And you are going to tell them that after developing a relationship he gets a one-time hit, a pat on the back, and a kick in the buttocks? Really? And this fresh, new, vibrant talent is going to break down your door, demanding a MPS selling position because why?

HA! But encouraging...

This is my thought; don't let "them" define you. Try, endeavor, toil against the meat grinder. And the best way to do this is to improve yourself, for yourself not your boss.

Does this mean attending company paid, useless, painful, Death-by-Powerpoint, speeds and feeds sales training classes?

Yes.

Does this mean picking up a book, if they still print them, about the latest, rehashed from the 80s, business strategies?

Yes.

Does this mean making every, single plant tour or walk-thru a field trip, learning not only how many output devices exist, but also how they run their business?

Yes.

Does this mean that everything you see and experience is yours, not your bosses, and improves you as a Selling Professional?

Yes.

Does this mean that one, tiny atom in my fingernail could be one little...tiny universe?

Yes.

Disruptive Marketing? Let's try Disruptive Defining.

Here's a message for all of us in the trenches, trying to sell MPS against ALL COMPETITION, including internal competition: The MPS Ecosystem is wide open for excited, daring, bold Selling Professionals - we work for the person in the mirror, not the one scrolling through the Monday morning sales meeting slide deck.

Don't think of yourself as either a "Farmer" or a "Hunter". Be both, Be better, be more.


Copier Sales People Destroy Managed Print Services Opportunities: Daily The New SalesPerson - Death of the "Close"

Thoughts from the CDA Meeting: Adapt or Die!

Copier Deal Up For Re-Bid, IDAHO School District Hires "Consultant" to Help with RFP:LOL!

An update to the article written back in August, "Another "GACKED" Sales Forecast: Idaho School District Reneges on Xerox Deal" - RFP responses to be reviewed by the board in January; consultants guaranteeing lowest possible cost.

Pity the 34,000 students.

In July of 2009 the school board decided to go with Xerox after reviewing 6 or 7 responses - Xerox was some 10k per month more "expensive" than the second place bidder, Fisher’s Document Systems Inc.

The deal was to provide more than 120 copiers to the school district in southwest Idaho for 60 months.

Fisher's got ticked, challenged the RFP process and now almost 6 months later, the deal will be reviewed again and awarded, again. The Xerox bid included "bodies", Fisher's did not.

Who is to say that the district really needs Xerox staff roaming around the district installing toner and xerographic units - but the district is missing the humongous point, don't ya know.

The blaring error is the inability of these "molders of young minds" to recognize anything more then the CPC and equipment cost. The case is hopeless now, there is no way to focus on any cost savings other than lease payment per month.

No real savings.

Don't Hate the Player, Hate the Game -

Classic story really, the RFP process is inherently flawed and for decades we in the business machine niche have taken advantage of the short coming. That is of course if you consider selling equipment at 3 points "taking advantage".

Adding injury to insult, now there is a consultant involved. I wonder if his fees are taken out of the "savings" provided by his oversight.

We look forward to the award announcement sometime after January.