by Emily Offshack
Allied Document Solutions & Services was established in 1994 to provide computer and imaging supplies to commercial accounts in Southern New Jersey, Southeastern Pennsylvania and Northern Delaware. Today, with managed print services in their portfolio, they conduct business in over 35 states and offer clients customized solutions that use state-of-the-art technology and best-in-class printing hardware.
Transitioning to MPS
Prior to offering MPS, Allied Document Solutions & Services was strictly a transactional business. They had no long-term agreements or contracts with their clients. After initially selling OEM toners, they eventually began selling compatible toners as well. Knowing that not everyone was comfortable using compatible cartridges, they hired a service team to support the business. Having service technicians available gave their clients the peace of mind that they would support the products they were representing.
In 2006, the company began offering MPS. Rob Richardson, owner and founder of Allied Document Solutions & Services said, “Really what drove our start in MPS was that we wanted to take a more collaborative, consultative approach with our clients. Get a little bit deeper. But also, from a realistic perspective, we wanted to be involved in a long-term contract or agreement that had some sense of not having to fight for every order every day. We’ll continue to prove ourselves, but do it by virtue of an agreement that not only includes supplies, but also services and some consultation with respect to understanding people’s environments. We can now bring more to the table than just having toner to them the next business day.”
The primary challenge that Allied Document Solutions & Services faced getting their MPS program off the ground was building up the required foundation, including obtaining access to software technology and training their employees. Obtaining Office Print Services Elite status with Hewlett-Packard came along with training on what MPS is and how to take it to market—not just from an executive level, but also from a sales, administrative and technical perspective. They also received consulting and training from Strategy Development, which Richardson said has been “very instrumental in our development with respect to MPS strategies.” Strategy Development has helped them learn how to win new business and cultivate that business over time through data collection and quarterly reviews.
MPS Program Components and Infrastructure
A major component of the MPS program offered by Allied Document Solutions & Services is automated supplies and service fulfillment. To do this, they have gained access to PrintFleet remote monitoring software by collaborating with Supplies Network and their CARBON SiX program. By partnering with Supplies Network, they were able to get the software they needed without having to purchase it themselves. The software allows them to receive alerts when supplies and service are needed at a client site, and they are able to get toner to the appropriate floor, department or person to get them back up and running. Supplies Network is also their primary partner from a product perspective in terms of toner.
For billing purposes, Allied Document Solutions & Services uses backend software from NetResults. Although this software is not specific to MPS, NetResults does service some MPS companies. Richardson said that for a period of time, they switched to a software company that is more prolific in the MPS industry, but eventually went back to NetResults because of their ability to integrate with online ordering. “At the end of the day, prior to all of this we were a transaction-only company,” he said. “There are certain clients that will never be MPS clients—they’re just not candidates for it. So we didn’t want to abandon those customers, and we still have a handful of people that like to go online and place orders that way.”
At the time of the interview, Richardson said they were days or weeks away from beta testing further integration between NetResults and Supplies Network’s software with respect to supplies alerts. “From the customer’s perspective, it’s automated,” he said, “but there’s some things we have to work through after we receive an alert to get that order to the wholesaler, to the warehouse, so we’re basically trying to automate that process rather than having to do additional entry.”
HP is another primary partner for Allied Document Solutions & Services. Richardson said that he can feel comfortable about the support costs with respect to HP devices. The large aftermarket for HP devices is one of the reasons why they can be competitive from a cost perspective. Becoming a member of the HP OPS Elite program has also helped them tremendously, because they are able to take advantage of different incentives, rebates and funds that HP offers. It also affords them the opportunity to now lead with HP branded supplies.
Another core component of their MPS program is quarterly client reviews. “We’re just constantly striving for efficiencies,” said Richardson. “Does demand equal the duty cycle? Are they printing a lot in color? Are there printers that we could recommend that would be more efficient from a cost-per-page perspective? We certainly try to get clients to focus on the razor blades and not just the razors. A lot of people think that if a printer breaks down, they have $400 in the budget so they should go buy a $400 printer, but we try to get them to look at the razor blades: the toner and support costs associated with that device.” Richardson explained that they can often bridge the cost difference between a cheap printer and a more expensive one within six or seven months, because the higher-end device will inevitably have a lower cost per page. Plus, opting for the more expensive device gives the client a higher-quality printer that could be significantly faster and offer more features than a lower-end device.
Richardson said that an important part of their infrastructure is their employees. “We have a really good foundation of people,” he said. “They all understand the MPS value proposition and how it is good for our business, good for our relationships, and good for our clients.”
With MPS, they are able to bring more value to a customer, partially by informing them of their costs associated with printing. “In the initial meeting, we ask customers how many printers they have, and they rarely if ever know,” said Richardson. “How could you know what your costs are if you don’t even know how many printers you have? Depending on how big the environment is, we could find an extra 15 to 40 printers that they didn’t even realize they had, and they are obviously buying toner and providing service for these devices. With MPS, we can give them a level of certainty what their costs are going to be—not only from a supplies perspective, but also services, parts and labor.”
Corporate Structure and Strategy
At Allied Document Solutions & Services, they have chosen to integrate MPS into their overall business, rather than separating it into a separate division or department. “One of the disadvantages of that is that we tend to slip back into transactional mode if we get objections,” said Richardson. “The advantage is that, at the end of the day, not everybody is an MPS candidate.”
From Richardson’s perspective, he would rather have the ability to offer a customer an à la carte solution than having to force MPS on them whether they like it or not. “Maybe they have their own help desk and have guys that they’re confident in that can work on printers, and they’re not looking to fire people. So maybe we just do supplies, or supplies and parts and they do their own labor. But then over time, if we’re able to engage them, we can constantly be pushing to show them that for x dollars a month, we can include labor and they can have their guys work on other core competencies. Let them focus on servers and things of that nature. Generally, the two negatives in any IT department are the two Ps: printers and passwords. They’re usually not a fan of either of them or the support that goes around them. We feel that if we can eliminate printers from the equation for them we will, but if I have somebody that’s 20 minutes from my office, they have 150 printers, and I can support them, I’m not going to be hell bent on saying it’s MPS or nothing.”
For the most part, Allied Document Solutions & Services didn’t make any major changes to their staff after they began selling MPS, with the exception of adding a contract administrator. This person handles the MPS contracts, coordinates meter collection, and also puts together quarterly reviews. The remainder of the staff—including executive, sales, and technical personnel—has undergone training to develop their proficiency in MPS. Everyone on their sales team sells a combination of MPS and transactional items.
“With our HP OPS Elite status, we have to train from a sales and service perspective to even retain that status,” said Richardson. “We combine that with the training from Strategy Development, which is often through the BTA. To make sure that we understand what MPS is, understand what the value proposition is. Whether it be sales, service or admin, I’ve sent them all to those trainings.”
From a marketing perspective, their biggest challenge was that since MPS requires a different conversation than a transactional toner sale, they had to get in front of higher-level people at their customer sites. They first focused on converting existing clients, but even for those, they often had existing relationships with people that would not be involved in an MPS decision. It was difficult to get all the right people—the CFO, the IT manager, and purchasing—to come together and agree that MPS made sense for their business. For similar reasons, they have struggled with getting new clients on board with MPS.
Allied Document Solutions & Services doesn’t target any specific vertical markets with their MPS program. What they look for are businesses that they can support from a technical perspective and that do a fair amount of printing. “We have law firms, we have a pumps manufacturer, we have pharmaceutical companies,” said Richardson. “It’s really a mixed bag, but I would say we don’t target one vertical more than another. It’s more of who’s in our region, who does a lot of printing, and who can we help with this model?”
Financials
Managed print services sales account for approximately 20 percent of Allied Document Solutions & Services’ overall revenue. They have also seen a significant increase in equipment sales since implementing their MPS offering. “We’ve had about a 60 percent increase in equipment sales,” said Richardson. “Because of MPS, when we get into a client’s environment, we can make recommendations for new equipment that often have no impact or a positive impact on their costs. If they have a handful of a particular model, we can recommend five or six HP printers that will cost the same or less than their existing models because of the cost-effective aftermarket for HPs. That’s led to a tremendous amount of equipment sales since we’ve been selling MPS.”
Allied Document Solutions & Services has also started leasing equipment. They have experienced a challenge trying to get IT personnel, who would traditionally purchase equipment, to lease laser printers. Leasing fits with the long-term agreements that go along with an MPS program, but whereas copier-centric companies have been dealing with facilities and leasing copiers for ages, it is more difficult to get a client to think the same way about printers.
In terms of pricing their MPS program, initially Allied Document Solutions & Services offered an all-encompassing cost-per-page program. Currently, they are looking at different ways to bundle programs so they can meet the varying needs of clients. “Not to retreat too quickly away from CPP—I think that’s the best solution for us and the best solution for the client—but some people are still just a little uncomfortable with wrapping their arms around that,” said Richardson. “And if that’s the case, then how can we bundle it? Do we do just toner only? Do we do toner and parts? Or do we do toner and labor and then transactionally sell parts?
“If I’ve got vanilla, and vanilla is the only thing I’m selling, but this guy really wants chocolate or strawberry, then I really want to have that in my arsenal so I can accommodate that.”
“I just assess the situation, understand what the client is currently doing and take their temperature as to how far they’re willing to go with respect to either a full-blown CPP program or some deviation thereof. I just hate to walk away from any potential business. If I’ve got vanilla, and vanilla is the only thing I’m selling, but this guy really wants chocolate or strawberry, then I really want to have that in my arsenal so I can accommodate that.”
Challenges
The biggest challenge that Allied Document Solutions & Services faces is a long sales cycle. Richardson said it is different than transactional toner sales, where you are often just trying to meet or beat the price of the competition. He said, “Now you’re doing assessments, you’re trying to get to the right person, you’re putting all this information together, compiling data, putting together a proposal, presenting the proposal, and then you wait. And you wait. And you wait.” While there have been some customers that have converted in the initial meeting, there have been others that have taken as long as a year to commit to an agreement.
Richardson said that one of the hardest components of the sales cycle is getting in front of the right person. Even if you think you’ve gotten the right person, you may not find out until later down the road that you haven’t. Coming from a transactional world, Allied Document Solutions & Services was traditionally dealing with the client’s office manager or help desk person that was in charge of purchasing toner. “Now we’re trying to get at the IT director or CFO or procurement manager to try to have discussions about MPS,” said Richardson.
Another challenge is managing and understanding the true labor costs associated with MPS. Richardson explained, “I know how much toner I’ve shipped in a quarter. I know what my costs were for that toner. I know what I billed the client. I know what my costs are for any maintenance kits that I had to put out there during that 90-day period. How often do I go out there for labor? It’s important to understand our cost of labor to establish what our true net profit is, versus just our gross profit or projected profit.”
Successes
One of the successes that Allied Document Solutions & Services has had is with their client Godwin Pumps. Through a cost-per-page MPS contract, Allied Document Solutions & Services provides toner, parts and labor to approximately 30 locations throughout the U.S. for Godwin Pumps. Software alerts are being used primarily for automated supplies fulfillment, but also for service errors, which allows them to dispatch technicians accordingly.
“If they were to do everything we’re doing for them on their own, they would have probably needed another one if not two people to execute it all,” said Richardson. “We created a dashboard for them in the software’s web interface so they can see, if they want to, what’s going on. Really, we monitor all of that for them and it runs pretty smooth.”
Quarterly reviews are conducted with Godwin Pumps to look for areas that could be further improved. Their environment is analyzed to ensure that print demand equals the duty cycles of the machines, that their color printing is under control, and that their costs are minimized.
Richardson said that even when they were a transactional company, he feels that they always brought a lot more to the table with their client relationships. They were always the company that would suggest a high yield toner over a low yield toner—even though it had a higher upfront cost, they would teach the customer that it had a lower cost per page. MPS has enabled them to be even more consultative in their approach.
“For us, MPS has just kind of made things a lot more fun and interesting and dynamic,” said Richardson. “This model really enables us to shine with respect to further cultivating our client relationships, and enables us to bring that much more to the table.”
MPS Tips from Rob Richardson, Owner and Founder, Allied Document Solutions & Services
1. Get MPS training. It’s important from an executive leadership perspective to get training so you are able to drive the MPS message internally. It is also important to train your sales team, service technicians, administrative personnel, and anyone else who is going to be involved in supporting your MPS initiative. There are many ways to access training, whether it’s through an OEM partner such as HP, a dedicated MPS training or consulting company such as Strategy Development, or distribution partners that have experience and resources that can help you out.
2. Get access to a software tool. It’s critical to have a data collection software tool that allows you to collect meters and receive service and supply alerts. Getting access to a software tool does not mean you have to purchase it directly from the software vendor—if you are just starting out, many distribution partners, such as Supplies Network, have tools that you can use for little to no investment. This allows you to get up and running with MPS almost instantly, and you always have the option of purchasing your own software when you get to a critical mass where it makes sense to do so.
3. Target your existing clients first. You already have relationships with your existing clients—it’s friendly territory. You can make mistakes together. At minimum, they are certainly going to be more forgiving than a completely unknown client. Pound your existing clients as hard as you can with the MPS value proposition and see if you can convert them.
