In nearly every recent survey of office equipment dealers (OED), sales staff turnover and moving into managed IT services have been cited as important challenges faced by the OED community. In a recent BPO Research survey of dealers, more than a third of respondents put these in the top four concerns they have, behind only sales growth and lower prices and margins on hardware and CPP in importance.
There is little doubt that expanding into managed IT services offers growth potential to your business. About $1.5 trillion was spent on IT just in the United States during 2018. That is 40 times the size of the printer and MFP hardware and supplies business. Additionally, CompTIA says the IT market is growing between 5–7% each year, providing an organic growth trend for your business that has been sorely lacking in traditional OED product segments.
Entering this growing market as a managed IT services provider makes good business sense and it brands you as a 21st-century high-tech provider that relates to the needs of your customers’ next-generation workforce. The move also makes your company a more attractive workplace to that next-gen salesforce that will stay with you and give you long-term business success.
The next-gen workforce is comprised of the millennial and Gen Z cohorts and, sooner than you think, post-Gen Z. These workers have seen the advancement of IT at a dizzying pace. They are “digital natives,” never knowing a world without the internet, mobile devices, and services such as Spotify, Uber or Airbnb. They understand the new services economy and how IT has enabled it to flourish. Understanding their expectations when joining a sales company provides insight into why adding managed IT services will attract and retain them.
Next-gen workers expect to work for companies that are forward-thinking and participating in growing, demand-driven markets. Benchmark data from SiriusDecisions notes that 75% of B2B salespeople leave because they are concerned that their company cannot meet market needs. Some of the reasons they leave include that the products they are selling have little market demand and that there is no differentiation against competitive solutions.
Adding managed IT services into your product and services portfolio sends a clear signal to next-gen salespeople that you are participating in a growing market area. Just your current SMB customers are a part of the overall SMB market expected to spend $500 billion on IT in 2019. They view IT costs as the number two expense, only behind payroll. This represents a path for salespeople to sales prospects that have a clear need and demand for cost-efficient managed IT solutions.
Customers with printer or MFP installations provide a fertile ground for your next-gen salespeople and your managed IT services business. Since you’ve already been managing the customers’ printers and MFPs on the network, it’s a logical step to start offering more IT services such as help desk support, backup, security, cloud or professional services and so much more. Your customers most likely already get these IT services from someone else. It can be a perfect way for your salespeople to find new, additional sales opportunities.
Next-gen salespeople can also find more, and easier, success in traditional printer and MFP sales. Perhaps a competitive customer hasn’t reached the renewal point of their MFP lease. Your tech-savvy creative next-gen salesperson can gain a foothold with that customer through managed IT services. When the MFP lease does come to the end of term, they are already there ahead of the competition with the ability to wrap new printer or MFP hardware into the IT services arrangement. That’s a strong advantage through distinct differentiation that blocks competition protecting prices, margins, and compensation. IT services can not only be the glue that makes customers truly “stick” to you, these services and resulting long term sales opportunities will motivate your next-gen salespeople to stay with you for the long run.
Of course, keeping salespeople long term, even the next-gen salesperson, requires competitive and fair compensation, leadership that understands and respects their talents – in sales, tech, and use of digital marketing tools – along with training and development opportunities. It’s important to keep next-gen workers interested, motivated and recognized for making a real difference in your business and with your customers. A powerful method of recruiting and retaining salespeople is demonstrating sales success.
Sales success comes from having differentiated competitive advantages that set you and your sales teams apart from traditional OEDs. Adding managed IT services to your business brings those types of advantages. Being in a demand-driven and growing market gives your salespeople more sales opportunities because of the differentiation in the total services package they can offer to customers. With sales success comes loyalty, and that means salespeople stay with you as they enjoy their growth through your business growth. It also means salespeople who become committed to growing with you and moving into management roles, and who in the future will be the stable foundation your business will thrive upon.
Maybe you’ve already decided to expand into managed IT services. The growth opportunity is large and growing with a clear demand behind these services. It is a logical and adjacent area to grow your business into and offering IT services provides flexibility in your sales strategy, offerings and price proposals that can help protect pricing and margin – even in traditional printer and MFP sales. Importantly, selling IT services helps attract and retain the strong next-gen talent you need to carry your business into the future. If you haven’t considered IT services, this is the time to do so. Traditional market spaces will continue to mature, the services economy will continue to grow and your ability to adapt, survive and thrive has never been more important than today.
John Schweizer is the Vice President of the Office Equipment channel for Continuum. John has had tenured runs in key executive positions at office equipment giants like Alco Standard-IKON, Ricoh and most recently as the CEO of a Xerox owned company. He also had principal ownership in a dealership in San Diego. John currently serves as a member of the advisory board for the cybersecurity firm, Fhoosh.