Making a play for document management

Making a play for document management

The numbers aren't pretty.

According to research firm, Gartner, shipments of copier and multifunction devices grew by 8.4 per cent in 2007, but it was hardly worth the effort for the channel, because end-user spending on the devices grew by just 1 per cent in the same period.

More sold for less money, more effort, less gained - it's a wonder there are any printer resellers still out there! And while the price falls may have been met with glee by consumers, shrinking margins in a lacklustre market present a serious challenge to the traditional print channel.

According to research analyst of printing markets at Gartner, Jackie Yeung, this downward spiral will push some to look at the market in a brand new light.

"As the declining prices of page printers results in low margins on box moving business, it pushes the resellers to gain new revenue sources from document management solutions and services from their customer base," Yeung said. "The resellers will keep the box moving sales from volume business, but they need to gain new revenue from the value business by offering document management solutions and services."

In a similar vein, strategy and business development manager for hardware vendor HP South Pacific, Max Kaye, claimed the traditional 'speeds and feeds' pitch is at least partially to blame for price degradation.

"Feeds and speeds is a simple and effective sales model, however it relies on the customer triggering the purchase decision," Kaye said. "Treating the printer as a commodity will often lead to margin erosion as people use price as the primary differentiator between suppliers."

But there is a light at the end of the tunnel. About 18 months ago, director for hardware reseller Mitronics, Roger Amir, decided to take the company in a whole new direction.

Having come from a solid print and copier reseller base he had a flotilla of target focused, commission-based sales staff, and had been expanding steadily. But he could see the change coming, and decided to jump onto the emerging print management technology bandwagon early, rather than be forced to abandon ship later in the piece.

"Over the last year-and-a-half we've made the transition from focusing on speeds and feeds to focusing on document management solutions," Amir said. "It's been a complete cultural change for the sales staff, who had always been focused on a quick sale, whereas now they need to spend a lot more time with the customers." And while it's been difficult, according to Amir, the transition has been well worth it, resulting in more business overall, and increased ongoing revenues from individual customers.

"By doing the solutions sell you get a lot more loyalty with customers, because you're selling an entire management solution rather than simply plugging in a printer," Amir claimed. "They stick with you in the end because you show them how to decrease their costs and increase the productivity." As the bottom has fallen out of the traditional box moving market, the transition to providing a more holistic solution has proved too much of a culture change, with many opting out of the market rather than attempting to change their ways.

"There are two entirely different schools: one group of resellers is very secure and sophisticated and understands the sales cycle associated with document management," general manager of printer vendor Oki, Graham Harman, said. "The others are still just selling boxes, and I really feel for those ones because the market isn't looking so good for the box movers anymore." And with poor margins forcing many resellers to seriously contemplate leaving the market altogether, Harman suggested all print resellers consider making the shift to solutions selling, even if they are planning to sell in the longer term.

"You also need to look at it in the context of the business overall," Harman said. "If you're looking at selling your business at any stage it will be a lot more valuable if you have a range of long-term contracts, than if you've just been focusing on moving boxes."

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