Tuesday, August 17, 2010

Managed Print Services Engagements and Bringing Equipment “Up To Spec.”

This is one of the steps that will need to be address when implementing a Managed Print Services program. There are several methods of dealing with bringing equipment up to OEM specification when taking over the full responsibility for all maintenance issues going forward. The important point is to not allow this to become a barrier to getting started. You need to

get your solution in place as soon as possible. Below are a couple of common methods we have seen for dealing with this issue. See which works best in a particular situation and know that you can come up with any hybrid that meets the customer needs and helps to move the deal forward

* Inspection of existing equipment:

At the start of the program, it will usually be a good idea to inspect all of the equipment and come up with a detailed list of equipment conditions, accessory attachments, parts needed, and the associated cost to bring the equipment up‐to‐spec. This can be presented to the customer with several different going forward methods:

* Discount, repair & Include:

Under this approach, you may present the retail cost of parts and labor and also show your actual or slightly inflated cost (your decision on how to play this) to the customer. The point here is to give them a strong incentive to want to bring all their equipment up‐to‐spec at a figure that would represent value and savings to them. Understand that most customers will understand that a used car owner looking to put an extended warranty on their vehicle will need it inspected and certain things repaired in order to have a new bumper to bumper warranty issued. You would be offering the same thing and willing to do it at a discount. You need to communicate that you are not looking to make margins on this process; you are seeking to cover the fair costs of initial implementation. You may even demonstrate small repair items such as “needs a thorough PM or pick up rollers” as no charge events in your proposal.

* Document & Exclude:

Under this approach, you may present the retail cost of parts and labor and also show your actual or slightly inflated cost to the customer. Again, the point here would be to give them a strong incentive to want to bring all their equipment up‐to‐spec at a figure that would represent value and savings to them. If this is not the direction they want to go on all or any part of their equipment, then you can include this list of items as an addendum to your agreement and flag them as billable items when the repairs become needed. This approach has worked well for many service providers.

* Blended Initial Rate:

Under this approach, you may present the retail cost of parts and labor and also show your actual or slightly inflated cost to the customer. Again, the point here would be to give them a strong incentive to want to bring all their equipment up‐to‐spec at a figure that would represent value and savings to them. You may then agree to a slightly higher per page rate until the cost of initial up‐to‐spec repairs meets that figure, at which time the rate will adjust downward.

Whatever the method, remember that meeting the customer needs and expectations is key to a successful implementation. Be creative and demonstrate flexibility in your approaches to meeting their needs.

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2 comments:

Ken Stewart said...

Solid advice, Eddie. What's your take on directs, or even larger dealers, conducting a "rip and replace" at no up-front charge to the customer (generally wrapping the cap-ex into an ongoing CPI, style arrangement)?

Regards,
Ken Stewart
ChangeForge

Eddie Lederer said...

Great question Ken and this does present a bit of a challenge for the smaller independents to overcome as it all looks very attractive on the surface. As you and I know, nothing is free and all the costs show themselves in the deal; just shake out the numbers. It’s even safe to say that organizations will wind up locking themselves into long term contracts on products they don’t necessarily need; and services they can only hope to receive. I think the message is clear and needs to be communicated on the front end of an engagement. “Our goal is to help manage your existing environment; to find efficiencies and inefficiencies in your current print management process; this is where it is costing companies the most. Once we have changed the process to one that more efficient (identify that savings), we can then, with knowledge and reliable real world data, make recommendations on how to best reallocate your current assets to better right size your existing environment. Then, we can make recommendations on what new devices may be needed and where they need to be deployed.” The independents must learn to sell through the snake oil. Is this a challenge…yes! Can it be addressed …absolutely! Good decisions are based on good information. Empower your customers to empower you.