Lexmark has launched a no-risk MPS offering for IT resellers wanting to get more value from hardware sales

Posted on Jul 14 2015 - 10:30am by John Peters
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PITR spoke to Lexmark Channel Sales Director Martin Fairman about its benefits and how it fits into Lexmark’s existing portfolio

Now, Lexmark is introducing a third category specially designed for IT resellers that want to strengthen ties with customers and capture more of their printrelated spend

Now, Lexmark is introducing a third category specially designed for IT resellers that want to strengthen ties with customers and capture more of their print-related spend

It is customary to divide managed print offerings into Basic Print Services (BPS), consisting of device and consumables monitoring with alerts and easy ordering when new supplies are required, and Managed Print Services (MPS), which offer pro-active consumables management and the assessment, right-sizing and continuous improvement of a printer fleet.

Now, Lexmark is introducing a third category specially designed for IT resellers that want to strengthen ties with customers and capture more of their print-related spend. Sitting somewhere between a BPS and an MPS, the Lexmark Advantage MPS Core Program is a post-sales service and support offering for Lexmark print devices sold or leased by a reseller. It provides:

  •  proactive consumables monitoring, with just-in-time delivery of replacement supplies;
  •  device monitoring;
  •  remote collection of page counts via cloud services;
  •   servicing and maintenance;
  •  quarterly billing;
  •  a single click charge;
  •  no minimum number of devices;
  •  no minimum print volumes.

Advantage MPS Core Program includes elements not normally found in a BPS, such as proactive consumables management, but also lacks key elements of an MPS, notably printer fleet assessments and right-sizing.

Leaning on Lexmark

The big benefit for Lexmark’s target market of IT resellers that don’t have the expertise, infrastructure or confidence to deliver MPS themselves is that almost all elements of the service are delivered by Lexmark. The only thing the reseller has to do is add margin to the bill it receives from Lexmark and submit the final invoice to the client.

Martin Fairman, Lexmark Channel Sales Director, UK & Ireland, said: “We do all the heavy lifting for a reseller. We will set up software on the end user site so that we can monitor the estate; we will do all the proactive consumables management, which is a unique part of our offering; and we will do all of the maintenance and all of the servicing necessary for the life of the contract. The reseller has little exposure to any of the aspects people associate with MPS.

“Where we do differ from some of our competitors’ offerings is that we don’t want to invoice the end user directly, which is what a lot of our competitor vendors are doing. We will take all the data from the end user and we will package it in an invoice directly to the reseller. We then ask the reseller to add their margin – whatever they feel comfortable justifying to the end user for the service that Lexmark is providing on their behalf – and send the invoice to the end user.”

Fairman said that maintaining that connection between reseller and customer is a key selling point of Lexmark’s programme.

“It’s really important for Lexmark,” he said. “We know there’s a lot of concern in the IT market that vendors seem to be seeking a direct relationship with many more end users, so we want to make sure the reseller is always in touch with their end user. While they rely on our heavy infrastructure to manage the estate, they are the ones that present the invoice on a quarterly basis. It gives them a reason to go back to that end user to talk about other applications and software that Lexmark can help them deliver to transform a standard MPS into more of a digitised process.”

Simple entry point

The Advantage MPS Core Program is specially designed to give SMEs and IT resellers a simple entry point to MPS

The Advantage MPS Core Program is specially designed to give SMEs and IT resellers a simple entry point to MPS

The Advantage MPS Core Program is specially designed to give SMEs and IT resellers a simple entry point to MPS. This, says Fairman, explains why there are no minimum fleet sizes or page volumes – and also why expensive fleet assessments are not part of the programme.

“There’s no minimum number of devices on the contract that we offer to partners. If they find a customer with one machine, we will satisfy that requirement. It’s not ideal; we’re probably after a 50-100 plus estate, but we are realistic,” Fairman said.

“And there is no minimum bill, so whether the end user prints 1 page or 1,000 pages, we will only charge for what they print and that is a fied cost per copy throughout the contract. There is also a small monthly service charge per device that covers all maintenance for the life of a contract and the delivery of consumables to the end user’s site. We’ve made it a really simple, but very comprehensive package to go to end users with.”

Fairman added that the simplicity and affordability of the programme precludes the requirement for fleet assessments.

“Very few resellers have the skill set or the manpower to go out and do site audits. And end users typically want these for free, so we have taken that element out of the programme,” he said.

Risk-free

Because Lexmark is responsible for all aspects of the MPS, it is promoting the Advantage MPS Core Program as a riskfree option for IT resellers that in the past might have been wary of MPS.

“There are two reasons why resellers may be reluctant to adopt MPS: if they want to deliver it themselves, it requires quite a lot of up-skilling – you generally need an engineering force to be able to support it; you need a data collection tool; and you need to understand how to analyse that data and make sure machines don’t drop off the network so that you can always connect the page counter. From a reseller point of view, that infrastructure is a lot to take on board. With the Advantage MPS Core Program, all that is the responsibility of Lexmark,” explained Fairman.

“Secondly, there is a risk generally associated with cost per copy or click MPS. When you provide a click, it is based on a percentage of coverage. If the end user starts printing pages at 10% or 15% coverage, and the possibility isn’t addressed in the contract, then the reseller can face a loss. Also, if the end user doesn’t print as much as you hoped they were going to, that, too, can cause losses.”

Once again, this risk is borne entirely by Lexmark, giving resellers the opportunity to enjoy big margins for very little effort once the initial sales has been made.

“The service charge and the click charges we provide to resellers are very, very competitive and we would expect them to add a margin on top. Copier dealers are making very handsome margin – 30-40% quite comfortably – and we want to make sure our IT resellers make a proper margin on this proposition,” said Fairman.

Additional services

Fairman added that, unlike basic hardware sales, the Advantage MPS Core Program, and in particular its data collection tool, provides opportunities for additional sales that can help resellers strengthen and deepen relationships with customers.

“The data collection tool can highlight where one machine is being over-utilised or show how many scans are going through a device, which raises another conversation the reseller can have with the end user – what are you doing with that?; how are you capturing that data once you’ve scanned it in?,” he said.

“We want resellers to carry on visiting customers with software applications we have added to our portfolio from our acquisitions since 2010, to make our devices a bit more sticky for the reseller, so that at the end of a contract it is a little more difficult for the end user to unplug the device from the end user infrastructure.”

As an example, Fairman cites a new Lexmark product called AccuRead Automate that resides on an MFP and can be operated via the device’s colour touchscreen display.

“A partner can go into accounts payable, download the application software, put it into learn mode and the machine will very quickly learn what a purchase order from the end user’s suppliers looks like. You then take it out of learn mode and ask it to recognise four key fields, e.g. PO number, which it will extract from a scanned document and put into a repository somewhere to be acted upon. It takes you away from a manual process of someone getting a PO, taking off all the info and retyping it into Sage or whatever,” he explained.

He added: “IDC says that 39% of document solutions are always purchased separately from the channel partner. A lot of end users are buying hardware from one IT reseller and then going somewhere else to buy document solutions, which means we are missing the opportunity at point of sale. Effectively, the reseller is leaving money on the table, which another IT reseller is then gathering. We want to bring it all under one umbrella.

“We can start bolting on additional services all under the Lexmark brand so you don’t have to go to third parties. The end user doesn’t get into a debate whether it’s this third party or that third party that’s causing an issue they may have experienced. It’s all under one roof. The reseller can come to us and we will build that proposition for them.”

Last year, Lexmark introduced its Solutions Academy to explain to resellers how to sell solutions and what types of solution to take to particular customers.

“We do a lot of hand-holding with that,” said Fairman. “We train resellers up to make sure their engineers are qualified and their sales people know how to sell software and solutions, because it’s a completely different sale than just selling tin.”

The next stage

As resellers gain confidence in MPS and over time develop their own in-house expertise, Lexmark provides a clear upgrade path from Advantage MPS Core Program to more advanced MPS programmes.

“We have a unique Business Solutions Dealers product range available through copier dealers that typically have sold A3 Japanese manufacturers in the past. We have an aggressive hardware platform unique to them and discounted consumables and different servicing offerings for them to build their own click. They have been doing it for 20 or 30 years; they are very confident with MPS; they have the infrastructure; they have data collection tools. That’s one programme,” explained Fairman.

“We also have MPS Elite designed for the IT partner or reseller community. That’s a set of products with heavily discounted hardware, discounted consumables and discounted service and warranty. That programme is designed for resellers that already have engineers and already have a data collection tool, so they don’t necessarily need to utilise the infrastructure of Lexmark to deliver an MPS proposition to their end users.

“Advantage MPS Core completes our portfolio for resellers that want to gather more market share within their own end users, find that revenue stream and protect that revenue stream. This is the entry-point for them. As they become more comfortable with selling MPS and have enough machines in the field to start justifying the additional service requirements and everything else, then they can build their infrastructure on the back of Lexmark’s and one day move to our Elite programme.”