Xerox has launched a new tool that tracks an end user's printing fleet needs and lets the customer order supplies through a preferred VAR's e-commerce portal, an initiative designed to dramatically increase the VAR's after-market supplies revenue.
The program, detailed last week at Xerox's first big partner event in four years, was met with applause from more than 200 solution providers, many of whom were managed service providers that Xerox is trying to woo into adding managed print services for the first time.
The new eConcierge service should let VARs add revenue that's about 10 times the cost of the printer they sold for little investment and effort, said Deb Koehler, Xerox's director of North American reseller sales, Business Platform, at the Fusion 2011 event in San Antonio.
"You're missing out on supplies revenue on those printers you worked so hard to place," she told VARs. "How long did it to take you to place that equipment with customers? It could be weeks, months. If you're not getting the suplies attach, you're missing out on that revenue."
Xerox executives positioned eConcierge as a complement to the vendor's existing PagePack managed print program, a first step to get more visibility into a customer's printing habits before approaching them with a full managed solution.
Koehler estimated that office superstores and e-tailers take in about 90 percent of ink sales after a printer is sold.
"Why? There are almost as many office superstores as there are Starbucks. They have great online stores. Sometimes they offer rewards benefits. But they're not providing value to your customers. We are told by customers that if they could work with a reseller to bundle supplies with services, they'd be willing to pay more for the convenience factor," she said.
The eConcierge tool also tracks supplies for Hewlett-Packard and Lexmark printers and lets them order those OEM-branded suplies too. More vendors will be added to the service, Koehler said. Orders are placed by credit card by the end user and directed by the VAR through one of three distributors: Ingram Micro, Synnex or Tech Data. VARs get paid up front but retain their regular terms with the distributor, allowing solution providers to improve their cash flow, Koehler said.
Initially, eConcierge only works with network-enabled printers but Xerox expects to include USB-connected printers in the future too, said Koehler.
To entice customers, Xerox is offering a free services contract to end users for Xerox devices if supplies are purchased through eConcierge. That feature could save end users hundreds of dollars in service contracts for each device, according to the company.
"They have the ability to earn a free service contract, the same entitlement they had when the printer was new. They keep that as long as they purchase through the program. And if you're an authorized service provider, you get to do that service," Koehler said.
Next: Branded With VAR's Name And LogoKoehler estimated that a VAR managing supplies for 500 printers under eConcierge can expect to make an additional $250,000 in supplies sales each year.
"That's incremental revenue with zero inventory dollars and very low investment. Imagine that opportunity as you grow it in your customer base," she said. "This is a service that you deliver to customers that makes their jobs easier. They're going to remember you for that.
EConcierge is also branded with a VAR's name and logo so it appears to the end user and is meant to be a stepping stone to print managed services, a way to entice customers, especially SMB customers, who feel they're not ready to embrace a full managed print solution, she said.
"Now you have network visibility to all printers designed to manage under the system. That's a huge opportunity. You can see what their [printing] behaviors are, how old are their machines for a potential future managed print contract. And because it's fulfilled through distribution, you don't have to carry any inventory."
Terry Williams, owner of Advanced Technical Support, a Morrisville, N.C.-based solution provider that piloted eConcierge, said he was able to win supplies business from customers he'd never been able to get sales from in the past. And he sold six new printers that he directly correlates to having more visibility into the customers' existing print fleet.
"It's stickiness. It gives you a compelling reason to get in front of a client. That's what we're looking for: to stay in front of the client. If you do that and be very proactive and consistent, you can have tremendous success," Williams said. "You know the client is buying supplies but you don't know how much they're buying. All of a sudden you get that visibility. We can say, do you realize we can sell you the Phaser 6180, which offers you a lower cost per page. It gets you back in front of customers."
Buddy Carpenito, owner of Technology Solutions of America, a Winter Garden, Fla., solution provider that also piloted eConcierge, said his customers are so happy with the program that no one has even asked how much he's charging for toner cartridges. They're just buying it," he said. "For most customers it's a super convenience. Xerox gave us a franchise. They set us up in a business for virtually no cost. I'm very excited."