In part one of my Selling Managed Print series, I wrote about the hidden costs of the self-managed supplies process and was pleased to find so many positive responses. One comment, by Keith Houghton, stood out for me. You can read the thread yourself, but to paraphrase the conversation…
There seems to be a perception that it is cheaper to manage print in-house rather than outsource to a managed print service provider, which according to some analysts is a key reason behind the relatively low managed print services adoption rates.
I wanted to dive a little deeper and see what we as vendors and channel partners need to do about it.
What the analysts say
Photizo Group say that 72% of SMB accounts still have no MPS program in place1. That is a huge pool to target. However, competition is fierce.
Quocirca weighs in that “The top barrier to adoption, cited by 56% of non-MPS users, is the belief that an MPS contract would be more costly than managing printing in-house. This is followed by 31% of respondents citing a lack of clarity around the cost benefits of MPS.” 2
Photizo Group label this group of price sensitive clients as ‘Minimalists’.3 This group intuitively feel they are doing the right thing by taking care of everything themselves. They believe that buying at the cheapest prices is a better alternative to an MPS contract.
We all need to do a better job
Unsurprisingly this is the group that are the least satisfied of all of the client types, which makes perfect sense as they have no tools, expertise, ability to ‘right shore’ resources, automation etc. to be able to efficiently manage a fleet of devices.
Being frugal is less about saving money, and more about spending wisely. The challenge is that they believe they are saving money, yet the total costs are much higher than they think.
Photizo Group go on to say that, “both vendors and channel partners have a vital role in helping overcome this perception.” and “both need to get the message across and deliver on expectations.”
Working out the cost to the client based on the time for each task
Channel partners often ask me how I would calculate the clients cost of self-managing supplies. For any channel partner struggling with this challenge I try to quantify this by using (very) conservative calculations – for both the task base costs and for the time it takes to complete them.
You can do this yourself by taking the individual helpdesk incident steps I outlined in part one to get to an average cost per supplies related helpdesk incident. Once you do that, clients can see for themselves that when it comes to value; a well-constructed managed print services contract is hard to beat.
Danger sceptical finance officer ahead
A word of warning, discussing soft costs is not for the faint hearted. You will undoubtedly get an allergic reaction from a Chief Finance Officer (CFO) if you do not position it well. To do it properly you need the client’s real costs and perform a time and motion study, which is expensive and simply not practical in most cases.
The key is to explain that you are providing an indicative example to draw their attention to one of their challenges.
Try this self-test exercise
In part three of Selling Managed Print, I will give you a complete breakdown of how I would demonstrate these costs. In the meantime, why not try this exercise yourself by following the steps below.
- Visit Selling Managed Print: Part 1 – The Hidden Costs of the Supplies Process
- In your favourite spreadsheet application list out my client supplies process steps
- Assign an estimated time value to complete each step in minutes
- Then research a typical salary for the resources involved – IT Helpdesk, Purchasing and Admin staff to get an average salary
- Calculate an average cost per minute against this average salary
- Multiply that by the total minutes it takes to resolve a supplies incident to get a cost per device per incident
- Multiply that number buy the number of devices your client has to demonstrate a total cost for managing supplies
That is it for part two – I’ll post part three next week. Until then, take the time to do the exercise above so that you can compare your calculations to mine and see whether you are underselling the value of this ‘supplies management element’ of managed print to your clients.
Learn more about Xerox Partner Print Services
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