Vertically challenged

With a product that has become as commoditised as the office printer, it can be hard to identify the particular benefits that appeal to individual industry sectors. But it is well worth doing so.
To assume that a printer is simply a printer would be a foolhardy stance for a reseller - one that could severely limit the potential sales opportunities.
For those looking to tap into this lucrative market and reap substantial rewards it is necessary to find the right blend of product and features.
Customers operating in vertical markets have specialist needs and this means there is more of a value-added opportunity for resellers that understand their niche.
“When selling into vertical sectors, resellers capable of offering a value-added, application-based package to users will be at an advantage over those who compete primarily on price or on ‘speeds and feeds’,” says Ewa Johnson, marketing director at Oki Printing Solutions.
Johnson believes that, as with so many IT sectors, the channel for printers and printing solutions is showing signs of change. “Resellers are moving towards an application-based sale and, in doing so, a more verticalised approach - developing solutions specifically designed for certain market sectors,” she says.
That said, there is still a long way to go, and Johnson is not alone in believing that the industry has not moved on much further from an acknowledgement of the different scale of solutions required for SMEs and larger enterprises.
“In today’s market,” she says, “IT resellers who genuinely understand what the word application means
are still in the minority and those who are able to sell on an applications basis are worth their weight
in gold.
“In terms of the market opportunities for printer resellers within vertical sectors it all ultimately comes down to the question: ‘What is the reseller set up to be?’”
For those resellers that are essentially volume based, focused primarily on price and prepared to do a deal on almost anything to guarantee sales, Johnson says it’s little more than a numbers game.

Customer retention
All well and good for some, but to generate sales opportunities per vertical, those in the channel will need to endear themselves through new offerings such as bundled promotions or an understanding of what the customer really needs.
“Resellers tend not to be geared up to thinking about the long-term retention of the customer,” says Johnson.
But she accepts that such resellers have their place, particularly when it comes to selling low-end printers for a vendor looking to gain market share and raise its brand perception.
So just what can resellers do to identify the biggest opportunities and how should they go about winning such contracts?
“It comes down to picking your fights,” explains James Jenkins, public sector sales director for the printing solutions and services division at Lexmark.
Jenkins goes on: “First, it is essential for VARs to understand where their business is today. Where are their key skills? Where have they had success? And where do they want to be in three to five years?
“Once they know the answers to these questions, then they can start to see which vertical is most appropriate for them.”
This means understanding which contracts they need to be on to be successful, planning accordingly and then switching their attention to the customer.
Jenkins sees managed print services as a real opportunity for resellers where customers are now driving demand.
“They have seen the opportunity and are pushing forward change internally,” he adds. “We see new engagements in this area every day, and it is an opportunity in which resellers looking for growth should definitely be involved.”
Even greater opportunities can be expected for resellers that bundle the printer product with something they bring to the party within the mid-sized to large product range.
Such resellers, says Johnson, may have a marketing specialism that links them to a particular vertical.
“Also, they may actually have a product of their own, which, put together with a print solution, makes for an unbeatable offering, either in terms of a vertical market like education or in relation to a function such as document management or document finishing,” she says.

Tailor to the target
Although Tracey Rawling Church, marketing director of Kyocera UK, believes that there are two key areas for resellers to target - colour and print management - she says that priorities may differ depending on the sector targeted.
“For larger corporate organisations the proliferation of colour devices continues,” she adds. “Increasing numbers of departments are making sound cases for needing a colour device, while the network managers’ budgetary fears are assuaged by the facility to restrict colour usage via management software.”
James Mackenzie, product manager at Toshiba, identifies other areas of interest: “Speed of input and speed of output are the main market sales opportunities for printer resellers across all of these sectors.
“Cost control is important too,
as well as the ability to track individual costs, which is now possible with the latest multi-functional printers [MFPs].”
But whatever the functionality, the single most important feature
of a printer has to be reliability. Unfortunately, it can also be one of the hardest attributes to demonstrate prior to an installation, and vendor case studies and third-party tests can be a valuable way of proving any product’s pedigree, according to Rawling Church.
“The majority of large opportunities will require a product test phase, which is a great opportunity for VARs to work with their vendor to present the key benefits of the product to the purchase stakeholders,” she says.
For the larger contracts it is essential that resellers work very closely with vendors because such projects are usually put out to tender. This then requires the provision of extremely detailed information, not only on the hardware specification involved, but also on the lifecycle issues such as support, maintenance and the cost of consumables.
The environmental performance of both the vendor and channel partner is becoming increasingly important, says Rawling Church. Tenders now require information about recycling, energy consumption and production methods, among a number of other factors.
“The only way to be successful is to have an open line to a vendor that is prepared to do its utmost to get the information across,” she says.
But what of the various sectors themselves and the particular opportunities that each present?
“We have found the corporate, banking and retail sectors to be particularly strong this year, with major wins from all our leading print vendors,” says Alex Ward, commercial director at distributor Midwich.
In many cases he puts much of this increased spend down to users upgrading from stand alone machines to multi-functional devices.
It has also been a good year for sales to local and central government and healthcare and education sectors, says Ward, with more run-rate ordering as opposed to the more traditional larger deals.
“Multi-function sales have also increased dramatically in these areas along with the purchasing of colour lasers. The main drivers are the ever improving price points and paper-handling capabilities of these products,” he says.
In government, key concerns are likely to centre on security of documentation. Resellers and print vendors can make the most of sales opportunities here by de livering solutions that allow users to print high-quality documents securely while saving time and reducing waste - and all at an exceptionally low cost of ownership.
“Critically too,” says Johnson, “the solutions should focus on increasing productivity while meeting budgets.”

The full picture
With this in mind, the ability to manage a fleet via network software that allocates costs on a departmental basis will have resonance with purchasers who are trying to get
a full picture of the financial impact of the printer fleet.
Taking the education sector, for instance, the sell might be all about total cost of ownership. MFPs allow users to set quotas and their IT managers to maintain efficiency across the network.
“There are often no dedicated
IT resources, especially in primary and secondary education,” adds
Sebastiaan Crebolder, marketing manager for indirect channels at Xerox. “It is therefore crucial that teaching and administration staff
are able to install and operate printers themselves.”
In this instance, resellers must provide transparency and clear cost structures as well as a robust and durable product.
Within the healthcare market, Rawling Church says, good all-round performance and accreditation by software vendors such as Cerner and InPractice are important, but it is also valuable to highlight office environment benefits such as zero ozone emissions and low operating noise.
The scanning qualities of multi-functional devices are also handy, as Toshiba’s Mackenzie points out: “The MFPs’ scan station helps them to facilitate scanning of hard-copy files into a management system and keep to data protection guidelines.”
Lexmark’s Jenkins adds: “The technology in these devices today means that to call them printers is a misnomer. For example, our MFPs dovetail into document management systems, use workflow systems, and automate the scanning and routing of customer information.”
“In the public sector - healthcare, education, local government - there is often a need for high volumes of printed material, and budget constraints mean that this needs to be produced at the lowest possible cost,” adds Simon Fagan, general manager of reseller Computer 2000’s print and supplies division.
In such markets there is a large focus on taking cost out to provide best value to the citizen.

Central control
This is where print management, comes in, says Ian Grewcock, marketing director at XMA. Print management is about the central control of all an organisation’s print, and can lead to businesses reducing the costs of buying, running and maintaining a fleet of printers.
“During the last year this has typically saved XMA customers between 30 to 40 per cent on printer consumables and maintenance,” says Grewcock.
When selling such print management solutions, resellers are often able to tie the customer in to a two- or three-year agreement, during which time they can supply all machines, print consumables and maintenance.
A reduction in the amount of ink, toner and paper consumed, as well as in actual printer usage, also means that not only are companies reining in costs, but also reducing their carbon footprints.
According to Terry Caulfield, general manager for corporate sales at Brother’s printing solutions division, another good way of identifying opportunities in the public sector is to subscribe to public sector contract tracker services.
“To win such contracts,” he says, “the reseller must have extensive experience in the tendering process, which can represent significant investment in people and time.”
Training is vital too, as Rawling Church points out. “Kyocera’s account managers are highly experienced in their particular sectors, and able to advise channel partners on the key features that need to be highlighted for success in a particular market,” she says.
“It’s often a case of background research. What software is an organisation using? Will the printers take GPs’ prescription paper? Is there a major software update being rolled out? And is the printer robust enough for use in the classroom?”
Lexmark also provides training to its partners, customising each programme to the requirements of the individual reseller.
“Each reseller is assigned an account manager who will provide marketing support, onsite training and online training,” says Jenkins. “More vital is the support that Lexmark provides in the field, both in the corporate and SME sectors, to assist the sales process. In other words, if resellers find an opportunity, we will work alongside them and offer full support to help them secure the business.”
Jenkins sees benefits from resellers focusing on one customer segment and becoming a specialist.
“It’s this focused approach that adds the most value to customers, retains their loyalty and helps to create customers for life,” he says.
Many vendors are now offering open platforms for their MFP devices, which means that resellers can develop customised software for particular verticals.

Targeting verticals
“Resellers who are able to take advantage of this will be the best positioned to approach a particular sector with customised solutions for their needs,” says Louella Fernandes, principal analyst at Quocirca.
With the managed print services market still relatively low in terms of penetration, Fernandes believes that resellers should offer potential customers a review or assessment of their current print environment and practices to demonstrate where the inefficiencies lie.
“Using print management tools also enables proactive monitoring of the printer fleet and automatic supplies replenishment, which can all improve user productivity and business continuity,” she adds.
“Any reseller who can showcase their knowledge in these areas can then further recommend appropriate document solutions and benefit from more than just hardware revenue opportunities.”
It is clear that there are some very good opportunities to be had for resellers provided they continue to evolve what they sell and how they are selling it.
Attention to detail will be key and knowledge will be power. Training and direction will also be essential for those SMEs that are often not aware of the gains that can be made through deploying print management solutions.
For the moment, though, those opportunities for selling large-format and high-definition colour printers, or printers with advanced paper handling, high capacities and long duty cycles, are still there. But in the future, as Fagan points out, it will be much more about selling print services that meet the specific needs of public sector and other specialist organisations, rather than selling the printers themselves.
“That’s a major change and one that everyone in the channel - from the vendors through to the specialist reseller - is going to have to face up to sooner or later,” he says.
£50m deal to help health authority slash print costs