At MPSToolbox, we’re pretty vocal about what we see as a massive opportunity in the transactional print and IT space that much of the imaging channel seems to ignore.
We’re also pretty bullish on what we see as the path to success for dealers with e-commerce, and that almost always revolves around having solid inside sales systems in place.
What we often run into though, are dealers who buy into the high-level understanding that e-commerce is important in today’s business landscape and that it’s a necessary investment in order to stay relevant, but then they skip the step where they implement formal digital/inside sales processes.
We say it all the time—it’s not a field of dreams. Just because you build it, doesn’t mean they’ll come.
When I say that to dealers I almost never get pushback. There is consensus that effort is needed to bring customers to your e-commerce store and generate orders. But what should that effort look like?
Sales or Marketing?
A problem regularly arises because dealers typically have an outside sales team and a marketing team or person. They look at those two teams and make a decision on where to sit their e-commerce program without questioning if this new way of doing things requires a new team.
E-commerce in the imaging channel will not work if you try to shoehorn it into your existing outside sales teams. And why would it? Those teams have been built to pound the pavement and knock on doors to hunt large deals—they’re not going to get out of bed to sell a $99 toner cartridge. Their training, approach, mindset, compensation, etc., just don’t line up with that way of doing things.
So, how about the marketing team? All too often we see dealers place the success or failure of their e-commerce program in the hands of a marketing team (both internal and external). I understand the tendency. Your e-commerce store is a website, and your website needs traffic, so in some ways it makes sense to task your marketing team with bringing users to your online store.
This is almost always the wrong approach. While sales and marketing need to be closely aligned, in this case, you need to have your ducks in a row on the sales side before investing in marketing.
But as mentioned, e-commerce can’t sit with your existing salesforce, so what do you do?
Enter a New Team
The team that many dealers lack, is an inside/digital sales team. This team’s job is to farm existing accounts instead of hunting for new ones. This team knows (from your RMS data) that while you’re managing 3 or 4 A3s for a customer, they also have 15 unmanaged A4s and they’re not currently ordering that A4 toner from you. This team knows that another customer’s employees are all working remotely, so there’s a need for more A4 devices, laptops, monitors, and more.
The goal of this team is to further your reach into your existing customer base. They should be ensuring all of your customers have accounts on your e-commerce store, and they should be tailoring every customer’s experience to their specific needs. They should make sure that the customer with 15 unmanaged A4s has the toner supplies for those devices in easily accessible buying lists. This is where the “value-added” in “Value-Added Resellers” should come in, right?
That’s where the idea for our Digital Sales Rep service came from. It wasn’t the result of a burning desire on our part to act as a white-labeled inside sales team for clients. It came from the frustration we experience in seeing many dealers having success with digital sales systems, and many others refusing to make the necessary changes to see that same success. It was truly more of a case of, “if you won’t do it, let us do it for you.”
“But CDW, Amazon and HP are able to drive e-commerce success through ad spend."
Sure, but quite frankly, you’re not them. Their combination of brand awareness and the gross margins acceptable at a certain scale mean that they’re able to focus ad dollars in different ways.
Think about this example.
On the popular HP toner SKU, CE258A, there’s an average of around $25 of gross margin for dealers when looking at their typical distribution costs and HP’s mandated MAP values (not including costs like shipping or administration).
According to Google Ads keyword planning tool, I could expect to pay roughly $1.50 per click when bidding on that keyword. If I’m able to convert 3% of clicks into sales, then I’ll pay $150 for 100 clicks, and sell $75 worth of toner GM.
Unless you have the systems in place to take that single toner purchase and turn it into a larger opportunity, that math just doesn’t work.
All Roads Lead Inside
Imagine you have an inside sales team who can connect with that new customer post-purchase. They could find out what other machines the customer has and get them set up with quotes for the supplies for those devices. They can follow up regularly to see if the customer needs to re-up the original toner purchase. If there are contracted opportunities in the account, then they can pass that off to the outside sales team. Another benefit to an inside sales team, is typically the cost to you as a business is substantially lower than that of an outside sales team - even one that may be struggling to generate consistent revenue.
New market realities call for new ways of doing things. You don’t need to eliminate your outside sales team, but you should strongly consider scaling it back and reinvesting a fraction of it into your new Digital/Inside Sales Team. Going after new transactional business (where margins are admittedly compressed) means you have to have solid inside sales processes in place to convert those new opportunities, and to grow the revenue they represent. Otherwise, you’re just setting your existing marketing and sales teams up for failure.