Four-Cent Color! How Do You Compete in the Color Market?
This guest blog was contributed by Aaron Dyck.
We recently met with the owner of a midsize copier/MFP dealership who inquired about our new line of aftermarket color toner. He was complaining about losing out on a color MFP deal because his competition offered color impressions at 4 cents per page. Yes, you read that correctly: People are now selling color impressions for 4 cents per page in the commercial arena. Can you believe it? It’s the lowest price point we’ve heard of in a commercial deal with less than 100 units for some time – if not ever. This dealer gave us more information about this particular deal and indicated that he has noticed that more of the Xerox solid-ink printers are offering customers color output for the cost of black-and-white prints.
Of course, you could argue that the cost of color is usually dependent upon the amount of color on a page, but you have to agree that the idea of getting color prints for the cost of black and white can sound pretty appealing to cost-conscious buyers in today’s economy.
After listening to the additional and all-too-common details about why this particular deal went south, the dealer asked us how he could improve his chances on the next color deal and protect the long-term value of his current color volume from the competitor to whom he just lost, whom he referred to as “the 4-cent color guy.”
We talked about two ways his dealership could win more color deals. The first way was to teach his entire sales team how to expand lower-margin hardware deals into managed print opportunities. If the dealership could place a lower-margin device among multiple higher-margin units across the fleet, in essence, it could break even on the color device but make up lost profits through the monochrome printer fleet – sort of like losing the battle to win the war.
Of course, this dealer understood the MPS value proposition and even had an MPS page on his website, but the actual competency within his organization to sell and manage a customer’s fleet didn’t really exist. As a result, his sales team shied away from completing a proper print assessment to fully understand the true scope of the deal. Like so many deals that are won today, the company that did the assessment ended up winning the business here as well.
To compete and win more profitable color pages under contract, another suggestion was for this dealership to leverage the growing popularity of aftermarket color toner. If you’ve been in the industry since the 1990s, you know aftermarket toners of any color have gone through their growing pains, and as a result, big question marks still loom whenever OEM alternatives are discussed in low-margin transactions.
As this dealer will soon realize, a lot has changed over the last few years, and if he is serious about defending his base and beating “the 4-cent color guy,” it would make sense for him to question the conceptions he’s retained and learn why more and more of the top copier/MPS dealerships are now reaping the rewards of the latest generation in color toner technology. Who knows – maybe “the 4-cent color guy” is already using aftermarket color toner, and that is how he achieves his lower cost margins.
As the president of LMI Solutions Canada, Dyck is responsible for bringing LMI’s MPS offering to the Canadian market. LMI Solutions is the global leader in providing MPS infrastructure that includes a “direct-buy” relationship and a powerful suite of MPS tools to maximize dealer profits. As the former director of sales with PrintFleet, Dyck developed PrintFleet’s distribution channel across North America and worked with more than 300 independent dealers on executing a managed print services offering.
Posted on Aug 01, 2012