Recurring Revenue Riches: How One Solution Provider Got Ahead Of The Managed Print Services Market

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CRN: How fast has your business been growing?

Lemmermann: Our business is seeing steady growth. We've seen some attrition of page volume since it's usage-based. I've seen 2 percent to 5 percent page volume attrition, meaning people are printing less, but I've seen more color printing than monochrome, which has gone down. Color is more expensive so that has boosted revenue. But in terms of the customer base, we are finding it more competitive. And more people are selling [print services] transactionally and that confuses the market in terms of what managed print is. Somebody could be selling transactionally and calling it managed print.

CRN: How are you marketing your services and getting your brand out there?

Lemmermann: We use business intelligence and we decide who we'd like to have as our client. For example, we call in law firms and use a lot of reference points in the legal sector, and we ask our clients to refer us to other clients. It's word-of-mouth. We don't do any advertising. We get a lot of business from employees moving to other firms. In the last 30 days we've had five [client] employees move from one to another. So the person who is the beneficiary of our MPS program, the IT manager, gets hired by another firm and they see that their printing situation is a mess, so they’ll call us.

CRN: What is your MPS service, True Advantage, primarily about?

Lemmermann: The main thing about True Advantage is that we branded it as a preventative service model where it's all about preventing things from happening. It's solutions-based selling with the core of it being preventative and having the products actively managed so what we have to do every quarter is remind them of why they bought our program because they forget.

What we've found is that typically people are in a reactive model -- if something breaks, you call and fix it. I've had people in that reactive model that usually have 12 repair events for every 100 printers. But with a preventive model, that goes down to four repair events for every 100 printers per month. If you can get their fleet on a preventative model, it really reduces breaks and it helps the users to not have breakdowns. And there are many great tools like remote monitoring and performance maintenance intervals.

CRN: What top vendors are you currently working with and how are you being treated by them?

Lemmermann: Our top vendors are HP, Xerox and Dell.  Of all the companies we work with, Xerox is the most credible and honest. They really want to work with their resellers and are very supportive. I don’t have as much fear of the direct channel poaching my business. I can't say that about other OEMs.

There's still some channel conflict at HP. In your publication, [HP CEO] Meg Whitman said she was going to fire anybody that is poaching a reseller partner's account. About a month after she said that, our HP sales representative, who we had some trouble with, resigned. Maybe Meg forced that, we're not sure.

CRN: How do you think HP is doing with its turnaround?

Lemmermann: I would say Meg is doing a much better job indicating a clear direction of the company and expressing how important the reseller channel is to HP. She is serious about helping the resellers sell more HP products and educating them in terms of solutions, not just the hardware. From that standpoint, I see a much more focused communication and direction and leadership, and we haven't seen that in the past. Unfortunately, HP has floundered in the past because they have had such a turnover of their leadership that would change the course of the [channel strategy] back and forth. Meg is probably the first in a long line that said this is the course we're going to take and we're sticking to it, and it's helping HP because they are not having to deal with directional shifts every couple years. I think Meg has a solid direction and communicates well and has more respect from the reseller community than many of the others before her.

CRN: What is your road map for 2014 and what are you hoping to see?

Lemmermann: I am hoping to see a big increase in IT services and will invest more in that. We will see some growth in non-printer but, generally, in IT services any kind of services that we can add like help desk support, backup data, monitoring of servers, the idea is to monitor equipment and move it to managing the equipment. A lot of our clients have their own cloud solutions so it's hard to resell a cloud solution to a big law firm. We've got a cloud solution from HP we haven’t implemented yet, which is something we just need to do. We don’t have our own cloud solutions yet, but that is something I want to do in the future.


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