Increasing Margins With Print Solutions
There has been lots of discussion recently about decreasing hardware margins, especially in the print market. To counter the effects of this trend, many partners have taken steps to expand their offerings around the hardware. It’s not that print is no longer part of their business, but it has evolved to be part of a total solution that may also include copy, fax, document management, supplies, and service.
This is exactly the right thinking. Partners need to explore new opportunities with their customers, introducing more sophisticated hardware that will be part of a broader approach. Professional services customers such as law firms and financial institutions generate a huge number of documents, most of which need to be scanned or organized and stored. If solution providers are already taking care of their customers’ total network and IT infrastructure, then print solutions are a logical next step.
SPRINGBOARD TO OPPORTUNITY
If print is introduced as part of a solution, it can lead to additional opportunities. Scanned images from multifunction printers require a lot of storage space, for example. So document storage is one option. Document management and collaboration software is another.
Law firms in particular need collaboration among their team members. Case files from other offices often come in as hard copies that need to be scanned, stored, and shared across the network. Multifunction printers can be used for scanning, and can be integrated into various document management systems. Other verticals with similar needs include financial services, health care, and retail.
Many IT solution providers are already involved with vendors that offer document management systems. If they are looking for a print vendor for those solutions, they should choose the one that best meets their particular needs in their niche vertical market.
New opportunities are also available in supplies and services. Print end users have a tendency to buy from the office superstore, supplies dealers, or even retail. Traditional IT providers have not captured that market. Supplies represent an ongoing revenue stream, and a profitable one. In the color laser market, for example, margins are still challenged on the hardware, but there are margins in supplies. Multifunction printers carry higher margins because of their higher price, and they need to be fed every day with even more supplies because they not only print, but copy and fax as well. There are several ways to introduce supplies as part of your sales mix. These can range from bundling one extra cartridge for every device, to offering an attractive supplies contract that runs for a specified amount of time, to developing a fullscale managed services offering in which a software tool runs on the network and monitors supply usage. All of these options help keep a recurring revenue stream flowing back to the partner.
It also helps customers control their inventory levels. Some end customers have supply cabinets overflowing with obsolete supplies that are tying up a tremendous amount of cash. But because supplies are not the responsibility of IT and are handled by individual departments, customers have a hard time getting their hands around the cost. It’s amazing how much money can be saved by streamlining the monitoring and ordering process.
Certainly, saving money and providing additional services around a device such as a multifunction printer are ways to further endear you to your customers. They are also a good first step toward providing a managed services approach to IT solutions.
JOHN LINTON is vice president of the solution provider channel at Lexington, Ky.-based Lexmark International Inc., a leading developer, manufacturer, and supplier of printing and imaging solutions for customers in more than 150 countries.
