The Imaging Channel

Why Customers Don’t Buy

This guest blog was contributed by David Cameron

Relevant market insight is priceless and can come from unexpected sources.

“Our greatest competitors are not other restaurants, but TV sets,” said Governor Hickenlooper of Colorado, the former owner of a successful chain of brewpubs [George Will, Washington Post, 09/01/2011]. He had the foresight to open a restaurant in downtown Denver when it was not the “place to be.” His keen market insight led to placing advertising for other restaurants inside his pubs to build downtown customer traffic.

Applying this idea to the managed print services (MPS) market, we know that MPS penetration, particularly in the SMB market, is still relatively low, less than 30 percent. Asking the same question — “why aren’t customers buying?” — yields insight about this market, too.

Why don’t many CFOs and CIOs buy MPS?

Reasons for reluctance to purchase, which are supported by end-user buying behavior research and numerous executive interviews, include:

• They are not aware of it – Photizo Group end-user studies show that executive awareness is up. However, there is a difference in awareness and really understanding the benefits and value. How many customers do you call on that haven’t heard of MPS already?
• MPS is not a top IT priority – CIOs indicate that it is not one of their top priorities. (fourth or higher). Why don’t they recognize the value that MPS can bring? Maybe they don’t believe it.
• Economy is down, budgets are constrained – only the most important IT projects are funded. But hey, can’t MPS save them money? Why don’t they get this?
• Easier to do nothing – despite rising awareness many executives don’t see a reason to change. This is the big unnamed competitor, i.e., the TV comfort zone, for this industry. Executives need to understand the value to their business is real and immediate. How can we make this meaningful to them?
• Feeling oversold on equipment – this is an unfortunate hangover from aggressive sales. I don’t know how prevalent this issue is but I hear it mentioned by channel executives. Also, it may be exacerbated by the rush to gain savings through a consolidation strategy.
• Sounds too good to be true – that must be an awkward moment with the customer. Why do they feel that an offering is not believable? Is this a case of overselling?

This list suggests that new customers are not convinced of the value and benefits in an MPS offering. More succinctly, they haven’t been convinced that it can help their business in the short term to save money, improve productivity, protect the environment and simplify their lives. There is also an undertone of trust issues, particularly the oversold and blatant disbelief concerns.

A go-to market strategy is needed to overcome objections and unspoken concerns. Key messages and actions must focus on demonstrating value, benefits and trust. The customers’ objections need to be put on the table and addressed fairly. This also can be touched on by marketing material, but executive concerns must be identified, aired out and overcome. How can you build their confidence that you offer differentiated value that is real and can be realized now?

Marketing and sales messaging must deal with the customer’s interests and concerns.

• Demonstrate how MPS can save them money in the short term. Perhaps start with what it has saved for others in their industry, in their city or by their peers.
• Minimize the upfront costs to start the contract. Kevin Morris, president of OneDOC, tries to keep the cost of startup low. Not only does this make good sense, but it also builds the customer’s confidence that you are a trusted partner.
• Show how MPS savings can fund other IT projects. In a tight economy the CIO’s budget is probably constrained and showing a way to stretch the budget will get attention.
• The trust issues are more difficult to address quickly. Suggestions are to start small, repeatedly demonstrate value and creativity in helping solve their problems. It is important to smoke out their objections and concerns. Dealing with them fairly and honestly will help build their confidence that you will treat them fairly, too. This one will take time.

Market adoption of MPS in the channel is still low. There is a large group of customers that want to be convinced that the value is real. Also they are most likely to believe it from someone they trust. Now is the time to show how they can directly benefit from MPS to fund higher priority IT budgets and offload the “distractions” of printer calls. In the process of demonstrating value you will need to deal effectively with their concerns and overcome their reluctance.

Contact David Cameron at david.cameron@ccg1.net.

Posted by David Cameron on 09/06/2011