The Wild West of MPS
This guest blog was contributed by Sarah Henderson.
Last week, I traveled to the West Coast to speak on an MPS panel and participate in roundtable discussions at the Lyra Imaging Symposium. The moderator of my first roundtable started with an interesting question: “Do you believe MPS is becoming a commodity?” The topic was a hot potato tossed around among MPS leaders from all facets of the industry. The consensus, though, came down to three points that we could all agree on:
1. True MPS is not a commodity.
2. Price pressure is a reality and will continue.
3. MPS requires a different sales process.
These three points were backed by examples and insights from MPS leaders who continue to implement successful MPS programs, giving considerable weight to the opinions expressed. Before accepting these points as fact, however, it is important to understand the logic behind them.
True MPS is not a commodity
The definition of MPS has been published by the MPSA as “the active management and optimization of document output devices and related business processes.” Not one of us at the table could recite this definition from memory. But even if we could have, it doesn’t matter what we think; the only thing that matters is how providers interpret this and deliver their solutions to the end user. There was a consensus that channels such as the traditional copier dealer channel, IT VAR channel and office products dealer channel often interpret the delivery of these services based on their traditional core competencies or their own bias.
Contrary to what is commonly believed in some circles, true MPS is not an old-school CPC program with lipstick on it. Instead, MPS needs to be about uncovering customer pain points that go beyond an initial cost savings and then bringing added value beyond the initial sale. Providers must realize that just because someone says they are also providing MPS does not mean that there is an apples-to-apples comparison being made. Review SLAs, understand your competitor’s programs, and learn how to differentiate your offering.
Price pressure is a reality and will continue
As the MPS market matures and becomes more saturated with MPS providers, there is and will continue to be someone out there who is willing to place devices under contract with pricing that looks upside down. Just like in the settlement days of the western United States, some MPS providers may view capturing clicks as one large land grab. The idea of capturing clicks under contract to lock out your competition is appealing in theory, but the roundtable agreed that deals with such eroding or even upside down margins do little to offer the dealer the ability to add value beyond supplies fulfillment.
Several of us discussed past scenarios wherein we have advised dealers to simply walk away from unprofitable deals. As painful as that might sound, some providers are simply locking down clicks at no margin, and you shouldn’t lose money competing to get that business. Instead, make a note in your sales software and follow up later to make sure that customer really receives the services they thought their MPS solution would provide. The consensus at our table was that providers should stop focusing on cost savings on the initial sale as the only value proposition for MPS. Instead, look at opportunities to provide fleet optimization, green and sustainability strategies as well as business process improvement through the term of the contract.
MPS requires a different sales process
Regardless of the hardware, software or supplies, the central success factor in MPS comes down to the MPS salesperson being able to adequately present the value proposition in a way that closes the sale. We all agreed that we see the most success with dedicated MPS sales representatives at the dealership level. After you identify this sales resource, that person will need to be trained on a more consultative sales process than they may have historically followed. For instance, MPS sales training should include how to conduct assessments and quarterly reviews. But no matter how talented or trained the sales rep, the MPS providers in all channels need to develop compensation plans that drive behavior that gets results in these types of sales.
Yes, you can teach an old dog new tricks; the proof was all around our table in the form of hardware leaders now offering professional services, software companies birthed from a supplier manufacturer and suppliers building key MPS pricing infrastructure tools to make their dealers more successful.
From the wild west of MPS discussions at the Lyra show, my observations seek to help provide you some additional ammunition to move your program forward with greater success. The process of aligning the culture and business plan of your company to embrace MPS is not an easy one. This roundtable of MPS industry experts was proof that it takes time and dedication from business leadership to move forward.
Contact Sarah Henderson at shenderson@westpointproducts.com.
Sarah Henderson
Sarah Henderson is Director, MPS Operations, for West Point Products. In this role, she plans, develops, and manages the implementation of MPS programs and key infrastructure tools in multiple channels in North America through the Axess program. Since joining West Point last year, she has helped launch the industry leading MPS TCO costing calculator and a national service dispatch center. In addition, Henderson is a volunteer with the MPSA.
Henderson’s background includes more than five years in the imaging industry, with hands-on experience assisting dealers in implementing MPS and marketing strategies. She is a recognized industry writer for the MPS Insights Journal, The Imaging Channel and imageSource magazines. Prior to joining West Point Products, Henderson was Director, Strategic Marketing, for the Office Equipment Group at GreatAmerica Leasing Corporation.
Posted by Sarah Henderson on 02/01/2012