One interesting observation about the B2B market is that companies tend to do business with other like-sized companies. Therefore, when we look for insights about SMB customers, we tend to look closely at small to mid-sized channel resellers. This rule of thumb generally holds true when we investigate the managed print services (MPS) market.
Last December we came across a survey done by MSPmentor called the MSPmentor 100, an annual barometer of trends that drive the top 100 managed IT service providers. This interesting and well-publicized survey included a result that has had us scratching our skulls for the better part of the last seven months. It showed that as many as 80 percent of channel resellers that provide managed services do not offer managed print services.
While 80 percent seems like a huge number, it may not be too far off base when you consider that the average VAR wants nothing to do with hard copy. To quote a recently surveyed VAR in the gap intelligence dealer panel, “computer guys hate printers.”
Now, that’s pretty strong language, but the bottom line is that VARs are looking for revenue streams, and vendors in the MPS market that can boil down any flavor of MPS into its most basic element — a profitable revenue stream – will be best equipped to attract the channel partnerships required to crack this coconut.
From a customer perspective, IT/IS managers have long placed network printers at the bottom of the priority scale. It is for this reason that HP enjoyed such a dominant market position in the corporate market for so many years: LaserJet printers rarely broke down. But markets have changed, and now mixed-brand fleets have become the norm. Fierce price competition has resulted in cheaper products with shorter lifecycles. The old adage rings true: they just don’t make them like they used to. And yet, the very last thing an SMB IT manager wants to worry about is a printer that won’t print, regardless of the cause. Therefore, SMB VARs that best eliminate the customer’s hassle – through maintenance, break/fix, and supplies fulfillment – have the best chance at tackling this massive 80 percent market opportunity.
This is usually when the MPS purists cry foul! But what about “True MPS” they say? A true managed print offering should include insightful assessments, sharp-witted consultations, efficiency-driven optimizations, and continuous process improvement.
Just like shampoo: Lather, Rinse, Repeat.
Well I’m not usually one to wager; but I’ll bet a sunny day in Seattle that at least 80 percent of us don’t actually repeat (the shampooing part). Why not? Repeating may give your doo a wonderfully clean, illustrious glow; but it takes time, effort and at least a little bit of hassle.
I sense that the vast majority of managed service providers have strayed away from print management in part because they feel a little intimidated by the demands (and the hassle) of a fully-fledged, “True” MPS offering. And the truth is that even among the roughly 20-percent of MSPs that do provide some level of print management services, many of them fail to perform end-of-contract assessments that might naturally lead to that next phase of optimization and continuous improvement. Instead, many of them today – including those running existing programs such as Xerox’s popular PagePack offering – take the easy route and merely renew the contract.
This is also one reason why I like the Xerox eConcierge program; and based on early feedback from users and resellers, I’m not alone. It’s an easy, low-hassle way to get a customer under contract. VARs like it because it’s an easy profit stream to administer. It’s a big hit with customers who receive free service coverage on active Xerox-brand printers and MFPs after they purchase just two replacement consumables. The customer also likes it because it removes one of the biggest hassles of printer ownership – ensuring steady supply of consumables – and it does not bill usage based on “clicks,” which are a turn off to some customers in privacy-centric verticals such as banks and hospitals, not to mention other small businesses that dislike pay-per-click models on mere principal. Lastly, the program is a treasure trove to the manufacturer, which receives a steady stream of valuable usage information that can be used to help better understand customer behavior.
Deploying this type of program in the absence of other, more robust MPS services, means these providers may be losing out on opportunities to grow their managed print service revenues; and yes, they may also be losing out on opportunities to deepen their customer relationships. But so long as a reseller or managed service provider addresses the customer’s core needs (ie., remove the headache), then perhaps the immediate method for accomplishing this, whether it be an advanced MPS approach or a simple supplies and service contract, may be a moot point. So long as a customer is under contract, there will be plenty of time down the road for developing more advanced MPS techniques and methodologies. Besides, many SMB customers with 20-box fleets often have less need for the more intensive optimization services (a.k.a., “repeated lathers”).
Perhaps the first goal for that 80-percent market opportunity should be getting a foot in the hypothetical shower door, and applying that first lather of shampoo. Deal with the biggest hassles first, then develop the plan for repeating assessments and continuous improvements later.