Transition to Services Puts Increased Emphasis on Customer Intimacy

30-Dec-2014 5:17 PM | Anonymous member (Administrator)

by Robert Palmer

The office imaging market has always had its own particular set of clichés and overhyped buzzwords. In today’s environment, the most persistent themes involve the need to change, to adapt, and transform. Indeed, the message that is most often repeated to dealers and service providers these days is that printing is not enough. It is not just that the need for print is on the decline, but for many organizations printing has become deemphasized as a business function.  

This is really nothing new. The hard copy industry has been in a state of flux for the past 20 years. During the market’s early stages, buying decisions were primarily driven by changes to hardware design and product functionality. Vendors invested heavily in new technologies, which fostered increased demand fueled by hardware innovation and compressed product replacement cycles. In those days, success was measured by hardware unit share.

Not that long ago, the office equipment market witnessed one of its most fundamental changes when it moved from a hardware-centric to a page-centric model. Products reached parity and it became extremely difficult to differentiate based on feature sets, price, and performance. At the same time, businesses began to look more closely at the costs of office printing. This, of course, fueled the early stages of managed print services. With unit sales declining and margins for hardware and traditional break/fix services contracting, MPS became the new path to the customer. With the focus shifting away from hardware, the number of pages captured became the most effective means for measuring success.

Today, the mantra is services. If you are not investing in cloud, managed IT, and other services-led strategies you are in danger of being left behind. Once again, the approach is driven by the need to transform and move beyond print to capture additional share of customer spend.  Of course, MPS has always been viewed as a means for OEMs and their channel partners to drive incremental revenue, not only by capturing pages from competitive devices but also by leveraging the MPS customer relationship to push additional value-add services. For some, this transition is easier, but for incumbent providers that are heavily invested in traditional business models that type of change is harder to achieve.

As the market continues the transition to services, success is no longer measured by unit share or page share -- it is all about customer share. How much of your customer’s wallet are you capturing and what can you add to your solutions/services portfolio to drive that ratio even higher? It is interesting to hear OEMs these days placing renewed emphasis on the customer. Listen to the quarterly earnings calls and the messages are all quite similar: “we are focused on solving business problems and not selling products.”

In some ways it is an interesting distinction to make. But the reality is that the customer has always been the primary focus -- particularly within the office equipment market. Customers choose their channel partners based on a broad set of criteria: experience, capabilities, product portfolio, services, infrastructure, just to name a few. It is an investment in a relationship, a partnership, and it is fundamental to the value of the channel. After all, it is the local dealer or reseller who often owns the relationship with the customer.

But in today’s climate, success is determined not only by the ability to solve business problems but also by developing a deep understanding of the needs of each individual customer. How well do you know your customer? What are their pain points? Where are the bottlenecks within the IT and document infrastructure? In a services environment, customer intimacy is crucial to becoming a trusted and preferred provider, and it is key to strengthening and protecting existing customer relationships.

Robert Palmer is chief analyst and a managing partner for BPO Media, which publishes The Imaging Channel and Workflow magazines. He is an independent market analyst and industry consultant with more than 25 years experience in the printing industry covering technology and business sectors for prominent market research firms such as Lyra Research and InfoTrends. Palmer is a popular speaker and presents regularly at industry conferences and trade events in the U.S., Europe, and Japan. He is also active in a variety of imaging industry forums and currently serves on the board of directors for the Managed Print Services Association (MPSA). Contact him at robert@bpomedia.com.

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