Solution providers see payoffs in getting customers to think beyond ROI

ROI has always been an effective tool for solution partners to show customers the possible payoff of a new printing and imaging purchase. But in today's selling environment, ROI may not tell the whole story. As prices for hardware continue to erode by double-digit percentages, solution providers need to demonstrate customer benefits in new ways if they hope to create better profit opportunities for themselves.

One of these ways is total value ownership, a measurement of the value a new device brings to an organization by making the business more productive, efficient, and perhaps more secure. With the right set of cost and usage numbers, solution providers can demonstrate how a right-sized multifunction product (MFP), for example, provides greater value to an organization than the older, maintenance-hungry printers and discrete devices it replaces.

A recent study by technology researcher IDC shows the value of networked MFPs on productivity:

• 86 percent of the organizations surveyed experienced fewer printer-related help-desk calls
• 71 percent claimed device availability increased
• 71 percent reported better document workflows and smoother business operations

SPs can take the value message even further when they take advantage of support and services packages being offered to support the channel by an increasing number of printing and imaging vendors. For example, Hewlett Packard works with solution partners to sell a range of Care Pack Services, which provide extended warranties for MFPs, laser and inkjet printers, wide-format printers, and other products.

"With a pure hardware sale, a solution partner may get maybe three to six points of margin. But when they add a Care Pack, they can easily increase the margin they're getting on the deal by double or more," says Ron Gambassi, director of Hewlett-Packard's Imaging and Printing Services Business in the Americas Region.

"Think about how far you can extend this," he adds. "Attach an extra paper tray and a three-year Service Care Pack. Your margin has just gone up dramatically."

Service packages have one other attraction for solution providers — they're easy to sell to customers. Relatively few solution providers — some estimates put the figure at 5 percent or less — regularly push packs when quoting hardware contracts. However, solution providers who are particularly pack conscious say most customers choose extended services when they're made available. "The toughest part of a sale often is selling the main device. Our research indicates more than 50 percent of customers seriously consider the extended service if you merely ask them," Gambassi says. Solution providers that offer a short pitch promoting the value proposition of protecting mission-critical printing resources can quickly boost the acceptance rates to more than 80 percent, he adds.

Interviews with a core group of solution partners with a history of success in selling services along with hardware revealed their secret. "They told us, 'Quoting a service package is not an option, it's a condition of employment,'" Gambassi points out. "If you want to work at these solution providers, every printer quote has to have a service quote on it." That's a mindset that means value not only for customers but for margin-savvy solution partners as well.