Upfront discounts and joint marketing aim to 'disrupt' printing and imaging selling strategies.

Last spring, Oki Data Americas scrapped its old way of interacting with printing and imaging solution providers and unveiled ProfitOPS, a new channel program that offers upfront discounts and new sales and marketing resources. In the following interview, Jackie Paralis, senior marketing manager for channel development details the key elements of ProfitOPS, who qualifies for the program, and how solution providers are initially responding to the program.

What changes are occurring today in the printing and imaging channel that show "business as usual" is a thing of the past?

We actually feel that many vendors in the print and imaging category are still engaging the channel with a "business as usual" approach, using programs and incentives to drive partner commitment. As a result, solution providers continue to suffer from margin compression due to the commoditization of the printer category. We believe someone needs to take a disruptive view to the way in which business is being done in order to bring profits back to printing for our channel partners. This is what we have aimed to do with ProfitOPS.

What challenges do these business conditions create for solution providers?

The commoditization of the printing and imaging industry has resulted in a stale channel that suffers from on-going margin compression, constant price erosion, and weaker overall business profits. As a result, hardware vendors are in need of alternative opportunities to capture new and incremental business and establish annuity revenue streams, such as service and supplies.

It is our goal to help transition solution providers from transaction-based sales to a more consultative and solution-based model, ultimately converting print solutions from a channel "afterthought" to a profitable product the channel actually wants to sell.

How does ProfitOPS address this goal?

ProfitOPS was developed as if we were entering the business for the first time, indicated by our 100-percent increased channel investment. Significant changes have been made in the way we approach sales and marketing in the channel--we have moved from a tiered, program-driven approach to a joint, strategic alliance based on business planning and partner development.

We are educating [solutions providers] on how to turn a commoditized printer market into a total profit opportunity and grow their business exponentially with OKI. Ultimately we expect ProfitOPS to double profit opportunities for our partners that are willing to commit to the strategy.

What are the key elements of the program?

There are five key elements, including strategic business planning process; focused sales and marketing resources; allocated sales development funds; marketing plan development and execution; and access to our exclusive professional services offerings. Partners willing to commit to an 18- to 21-month revenue goal and make OKI Printing Solution their first choice alternative printer vendor will receive up to 12 percent purchase discounts on LED/laser hardware and up to 3 percent purchase discounts on LED/Laser consumables.

We are providing [the] discounts upfront on LED hardware to our Select Partners. No other program offers 12 percent completely upfront for all end-user opportunities. Gaining the discount upfront enables the solution provider to proactively compete more effectively in all size opportunities, offset some of their upfront business expenses, and compensate their sales reps with higher earnings potential.

We are also providing [the] discounts on consumables, enabling the solution provider to be more competitive in gaining the coveted printer aftermarket business. We're trying to bring back profit on ink to the people who deliver the hardware.

We are helping our channel partners become more strategic when it comes to their printer business by providing a comprehensive, business planning methodology to identify new and incremental business opportunities for greater profitability. We've made a very significant investment in custom developing a "best-in-class" business planning process and tool that our partners can take advantage of at no added cost to them.

Dedicated sales development funds are available to support the co-branding of marketing services at the solution provider level and are more customized than with any other program.

We are augmenting the above rewards with an exclusive line of professional services that can increase profit margins by up to 35 percent while driving new and incremental business opportunities and establishing on-going annuity revenue streams.

How do solution providers qualify for the program?

ProfitOPS is open to all solution providers that meet the minimum business criteria: a partner that focuses on hardware, has an outside, customer facing sales force, is willing to make OPS their first choice alternative printer vendor, agrees to strategic business planning and joint territory and account mapping, commits to working towards a net, hardware revenue goal, demonstrates quarterly performance success to targeted sales goals, and is willing to jointly develop and execute marketing plans. As this is a joint alliance with shared commitment (both resources and funding), an 18- to 21-month net hardware sales goal is required to be eligible for Select Elite Status.

How are the upfront discounts on hardware and consumables calculated and when are they dispersed?

All discounts, both hardware and consumables, are pre-loaded at our distributor channel partners. The percentage discount will automatically be applied against the solution providers distribution costs (excluded are meetcomps, special pricing, volume bids and custom printer skus) at time of purchase.

What amount of sales development funds is available and how do solution providers access them?

Sales development funds are driven by the depth and breadth of the marketing plan that is jointly created and is commensurate with the committed sales goals of 1-3 percent.

How many solution providers are now in ProfitOPS?

In our initial launch stage, we have identified 30 targeted SPs across the country that we would like to strategically align with. To date, we have completed business planning sessions with about 70 percent of them. Our goal is quality-driven, not quantity-driven. We want the best, most committed players in the marketplace - partners that are committed to taking their business to a new level or the next level. Our sales force will be spending a significant amount of their field time working with these Select Elite Partners to execute the sales and marketing plans that have been put in place.

Can you provide some statistics to show how successful the program has been so far?

Right now, we have commitments from 30 Partners that want to do business planning sessions, and we will have these all completed by September. The reception has been overwhelmingly positive because we are now providing a best-in-class business planning tool with which to engage solution providers and drive collaboration to build new and incremental business opportunities and profits. This very comprehensive process is delivered over a two-day period starting with a four-hour senior management kickoff on Day 1 (for both vendor and partner) and culminating in a three- to four-hour sales kickoff and joint planning session the following morning.