Now that the $100/month price floor has been breached, it can no longer be business as usual.
12 June 2019 | Norm McConkey
Today your customers can finance a NEW color MFP with OEM supplies, including 2,000 color pages per month, AND next business day service for less than $100 a month. I’m not talking about a toy printer you get free with a notebook purchase, brands like HP, Lexmark, and Epson, among others, now have products capable of 30-40, even 50 pages per minute with supplies and service bundled in, for less than $100. Implications to your business? Let's talk.
It would be a mistake to view this market segment as outside of your business focus. The print technology market is dynamic. The below graph explains that those “higher spec” installations are shrinking. If your strategy is to only partake in the A3 market, then there will be fewer opportunities for salespeople to participate in. Over time, the $99/month color MFP will dominate.
Since 1993, 68% of all US job growth has occurred in small business. If you assume most new jobs are created for millennials, who print less than previous generations, the problem becomes clearer:
A $99/month color MFP capable of printing 2,000 pages per month can easily satisfy the needs of 10-15 office workers.
Heck, even 30 employees would benefit from two of these devices, which would also provide redundancy. As they become easier to build, manage and sell, (AKA: Scale!) the likes of CDW, Staples and PC Connection.com will bring compelling offerings to serve this growing market.
Are renewals getting more difficult? A lease renewal is much different than a new sale. Many dealers do not distinguish between the two, but new opportunities will be the hardest to close when faced with a competitors $99/month offering. Your current installations are a bit safer because (in theory) you have a solid relationship and service history, HOWEVER, this safety may be temporary. Online resellers will continue to target them. Eventually, the $99/month value proposition will resonate.
How will you respond when a loyal customer asks why a competitor is 30% your cost for a similar offering?
Office technology sales are going digital. They are becoming easier to bundle. The only way to sell these offerings, at these price points profitably, is to do it without feet on the streets. To make this happen, you need a digital workflow and a functioning e-commerce website.
Is this an important moment for the industry?
In 1954 Roger Bannister broke the four minute mile.
It was a milestone nobody ever thought could be breached. Over 1400 athletes (and counting) have done so. The four minute mile revolutionized running. So too will the $100/month color MFP. Are you ready to run? Let’s chat.
About the Author
Norm McConkey has been involved in the print, imaging, and software/tech business since 1993. Holding executive level positions in a number of emerging technology firms, he founded PrintFleet in 2003, and Tangent MTW in 2009. A founding member of the MPSA, an award winning author and presenter, Norm has spoken at various industry events around the world including the Lyra Imaging Symposium, Photizo confernece, ITEX Tradeshow, Regional BTA conferences, Remax Europe, and World Expo. He has been contracted to consult and build go to market and sales training programs with several OEM manufacturers such as Canon USA, and HP, and distributors such as Parts Now and Supplies Network, as well Resellers including Office Depot. Norm’s current project, MPSToolbox (www.mpstoolbox.com), is a software platform which helps technology dealers develop and maintain e-commerce websites.