Here we are...all talking about MPS as the solution to all of our problems: decreasing sales, deteriorating margins, world hunger, etc. Yet for all the chatter we then look around and wonder who is really having success with this thing?
Go ask Photizo and you can get stats on how Xerox or HP are leading in market share. But look around your neck of the woods...do you really see anyone dominating?
Art Post had an interesting survey running. He was asking vendors to rate their experience with MPS so far. The results were a little surprising. Almost 47% said that they were either not reaping the profits they expected or would not have gotten into MPS if they had to do it again.
So what's the reasoning behind it?
I think a lot of it goes back to the endless discussion forums that debate the definition of MPS ad nauseum. Unfortunately the entire purpose that MPS was supposed to serve has been lost through the well intentioned efforts of vendors to understand what this whole thing is about. The ol' can't see the forest for the trees example.
We get so lost in what MPS is, or is not, that we forget that the only thing that matters is what a specific prospect thinks. Better yet, what problem can you as a salesperson solve through combining a wider set of services?
So why is there so little success, or should I say so little success in the SMB market?
When you look at the 800 lbs. gorillas (i.e. HP, Xerox, etc.) they have some distinct advantages. First, the majority of their deals are selling enterprise accounts where there is typically a much larger problem with a much larger financial payoff. Secondly, the salespeople calling on these accounts have more refined sales skills than your typical SMB salesperson.
This second issue is probably the biggest challenge facing companies entering MPS. The problem is that you have a collection of salespeople that have been selling a specific product or service for years and now they are asked to change what has made them successful. Now that's a recipe for disaster.
Until vendors in the SMB segment figure out how to make this transition we will continue to see the similar reports out of those jumping into MPS.
The practical result of defining MPS is a company starts selling a different widget. The problem with that is that maybe the client doesn't need that widget. Maybe they only need one part of the widget...or maybe they need a bigger widget..or a completely different widget.
Every sale should begin and end with the client's problem and a determination of if/how you can solve that problem. Lose sight of that and it doesn't matter what you're selling...you will be destined for mediocrity.
Great Minds, think alike.
ReplyDeleteSome saw this coming back in the summer.
And as usual, it's worse than we think.
Good article.
Shawn, you are right on with most of your comments. We smaller guys are having only limited success it seems with MPS. Not because its an overblown opportunity though. I believe the opp is huge. But you are correct in that the 'canned' value proposotions that we are offering and presenting may not be so attractive to SMB decision makers. I think the main effort must be to get in the door with fleet managment first with all the tangible benefits that can offer the SMB (one invoice per month versus the transactional approach of old)--- then once your doing that, bring new value to the relationship by offering print control and better use principles. MY MOST RECENT CHALLENGES to winning deals seems to be that my clients internal cost data gathering (their true transactional costs) aren't justifying their moving to my MPS (maybe better described as fleet mangement or CPP program)-- even when I'm quoting what I feel to be an agressive b/w and color page cost. The last deal I didn't get (even though the client loved my proposal- especially for the cost alllocation benefits associated with one-invoice-per-month) I was told that a 'thorough check of their actual past toner buying, servicing, etc, etc, did not show them saving money under my program. They want to save money. And I'm not getting an opportunity (or I'm not doing a good enough job) to be intimately involved in their back end process. Therefore, things like 'transactional cost of dealing with multiple invoices', etc aren't being factored in to their final analysis and cost justifications. On the other hand, my company is not a 'copier dealer' but a print-centric company and so I don't have the pressure to sell boxes. So my next step should be to develop a better methodology to sell what the customer needs (in the MPS universe of course)and just basically get our feet in there servicing their fleet (and getting our remote monitoring software in place)- then hopefully as we do a better job in the field we can use quarterly assessment data to truly improve the clients print infrastructure.
ReplyDeleteDoes anyone have any examples of vendor companies that have successfully made the transition from SMB to MPS?
ReplyDeleteNice article, well done! Also thanx for the props.
ReplyDeleteChris - you are not alone.
ReplyDeleteHave you been to this new, cool site, called "DeathOfTheCopier"?
It's got lots of MPS sales info...
;-)
Chris - You can't believe a word that Greg says. I mean seriously, who has that much time to work on a blog???
ReplyDeleteNot really, Greg does a great job and has some really insightful thoughts.
One question I would ask you about an issue you mentioned is why are you not gathering the prospects actual cost information during your process?
I believe that this one of the biggest mistakes that dealers make in MPS. They try to cut corners in the sales process and close the deal faster by using "industry average" cost information. My experience is that this is rarely accurate and, in some cases, is not even close.
If you're going to provide an assessment, audit or whatever you want to call it (especially if you're not going to charge for it), make sure that the time spent serves a specific purpose. You either qualify what you can sell your services at (possibly at higher margins) or disqualify the opportunity by realizing that you don't have enough value in your solution to close the deal.
You're certainly not alone in your struggles though...
Yes Greg...I've been to your site often and regularly and it is excellent.
ReplyDeleteAnd Shawn, you are correct that I'm not getting the opportunity (because I'm not insisting)to help the client justify my proposal. I need to do better at that. But just as important and maybe the MOST important is that we not lead with cost savings right off the bat. If what Tom Callinan says is correct (and I think he is), we must save the 'money savings' proposition for later in the relationship. First, we need to get our asses in there doing a good job with basic fleet management. My priority now is to get a better methodology in place to turn those fleet management (CPP) relationships into full fledged outsourced print management arrangements-- later we can hope to save the client some money. Make sense?
I know where you're coming from. The question I always ask myself (by the way, I also ask the prospect this as well), why would this organization find any value at all in MPS?
ReplyDeleteIn principal I agree with Callinan. The issue I have with a lot of what he says is that it keeps the focus on you...the dealer, rather than the client.
At the core MPS is a grouping of potential services. It is not a cookie cutter solution where you, as a dealer, provide the exact same servcies for each MPS agreement.
I would encourage you to continually refocus on what the prospect really needs, not what you percieve they need. This requires us to stop and ask the prospect that very question. If you've got some large kahones, tell that prospect why they are wrong and don't need MPS and make them convince you why they need it.
Well said all
ReplyDeleteIf you are truly going to be successful in this game you must do a better job of evaluating their costs. I have yet to see a customer who knows what they are or can gather accurate information themselves. Additionally your point of contact is key as well. While Tom Callinan discusses and consults on MPS, he has never sold it. I've been selling MPS for 8 years to the SMB market and I can guarantee you that if you start with the right level of contact and discuss what benefits MPS can bring, you can be successful. However most people trying to sell this model simply view MPS as taking over service and supplies on printers. That is NOT MPS.
ReplyDeleteKevin -
ReplyDeleteAn important question that a lot of people overlook in MPS is what are relevant costs to an MPS program?
Depending on what you are offering (this should be addressing specific client needs by the way) makes a difference in what costs are relevant to the project.
The only addition to your assertion that CPP is not MPS is that CPP is not MPS if all a client has a need for is a CPP. This may be rare, but it does happen.
Thanks for reading and keep coming back.