1. The simplest solutions are often the cleverest. They are also usually wrong.
By Rob Thiessen, Vice President of Sales,Print Audit
One of the difficulties I’ve always had with Managed Print Services (MPS) as it is marketed today,is the apparent conflict o f
interest that exists between MPS providers and their customers,under the Cost-Per-Page (CPP) billing model. Let me first point
out that CPP is not a requisite of MPS. In the Managed Services space generally, Cost-Per-User or per Seat billing is more
common. Nevertheless, most of the businesses Iencounterwho provide MPS in North America today, are using CPP as their go -
to billing model. This continues to be the case, even though it is widely understood that growth in printed pages within North
America is generally flat, or in decline. There are many factors which come to bear on this point, most of which I trust are
understood by the reader, so I’ll get straight to the point:
Basing your organization’s revenue on a linear association with an ever-shrinking volume of printed pages is in conflict with your
organization’s interests,and therefore the industry’s interests as a whole.
On the other hand, yourcustomers benefit from this trend. They benefit further from the technologies that are specifically
designed to replace the printed page as well as manage output in order to reduce volumes and limit waste/cost. These
technologies are constantly evolving, and are certainly an integral part of the imaging industry today, not to mention the “less
paper” office of tomorrow. As it turns out, end users are not necessarily being introduced to these technologies by their current
MPS provider. This is due to a perception that introducing current customers to print alternatives and print governance will lead to
lower page volumes and hence, lower revenues.Of course, on the surface they are right! Given the business model described
above, fewer pages means less revenue. On the other hand, if they choose to place their revenue interests before a customer’s
interest in savings,MPS providers run the very real risk of losing their customer to a competitor who is happy to provide th em
with cost saving solutions in order to gain market share.

2. So what should MPS providers do to win customers, keep customers and build recurring revenue, given the pitfalls of the CPP
billing model and the need to balance the customer’s interest with their own?
First, recognize that the same threat you face within your current customer base, represents an opportunity for you in your
competitor’s current customer base. By embracing print governance strategies in all new opportunities,you will attract business
away from your competitors, using tactics that your competitor is not likely to be promoting themselves. This gives you a
differentiator. This strategy even works on prospects who are tied into multi-year MPS contracts with yourcompetition now.
Rather than walking away from these “locked in” prospects,approach them on print governance strategies which can help them
reduce their spend. Doing so not only gives you a foothold inside the customer site, it also gives you revenue, and opportunities
to reduce yourcompetitor’s income, by helping the customer to reduce their monthly spend on printing. You’ll find that when the
MPS contract expires, you are in a much strongerposition to win the toner and service portion of that business.
Second, take a close look at every account you have now and decide what balance to strike between preserving current revenue
(short term interest) vs. keeping the account (long term interest). Sometimes, it pays to play defense by giving your current
customer greater value at the expense of your own revenue. It’s certainly much cheaper than re-mounting an offense to try and
win them back in the future. With the right solution partner and strategy,print governance solutions can deliver both savings to
your customers, while at the same time increasing your profit in the account. That is where the “new math” gets interesting.
Your customer will save more while you profit more. Skeptical? Give me a chance and I’ll showyou the math…
Third, partner with solution vendors that place you, the dealer, at the center of the value proposition for solutions. That means
you retain control over both the customer and the solutions they use. In most cases,dealers are simply handing their custome rs
over to solutions vendors who provide them with the software and offer a margin on the sale. This arrangement does not offer the
dealer any “stickiness” associated with the solution, nor does it offer recurring revenue or pricing flexibility which they can use to
make up for displaced CPP revenues. This traditional solution sales model benefits the customer and the solutions vendormost,
while the dealer stands to lose out in the long term.
Finally, consider the prospect of billing per user instead of per page. After all, it’s people and not devices that are the real
“printers” in the workplace. Headcounts are generally increasing over time, as are the total number of documents which people
produce. However, nowadays many documents never get output to hard copy. If a document is printed, it will be a person who
makes choices about what, where, and how to print it. If you think about it, it’s people, not pages or devices, which constit ute the
center of the document universe. Perhaps it’s time for MPS providers to acknowledge that in their business model. Doing so will
allow dealers, and our industry as a whole, to capitalize on growth and new revenue streams instead of just worrying about wh ere
all the pages have gone.