IT focused channel partners have multiple questions to consider before making the jump to services. After all, if the delivery of services was a walk in the park, we’d all be doing it already, right? But many partners are doing it, and doing it successfully, so what’s the best way in? How do service margins stack up versus the margins from traditional technology sales? What about business growth with services. Is it about acquisitions or other considerations?
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Let’s take each question one at a time, starting at the very beginning. How do we start this journey?
The journey into services starts with identifying what your customers are using and what they ultimately need from you or other technology/service providers, specifically:
- Could the answers to how we enter the services market come from our existing customer base?
- What is it that our customers are asking for? Are we finding ourselves providing ad hoc support to customers in certain non-core areas because “it’s the right thing to do” as a supplier?
- What services do our customers buy that we are not currently providing?
- As a trusted IT supplier, are there services that we could provide?
- How could we provide the services our customers are interested in with minimal investment and maximum credibility?
Could print-aas be a defensive strategy as well as a profit opportunity?
If you’re hesitating to move into services, or maybe you have started down the path and are now looking to improve your portfolio of offerings, then print-as-a-service could be a good answer for you. At Xerox we are seeing a shift in traditional print resellers who started their services journey with Managed Print Services (MPS) and are now moving into broader IT services – if this is an emerging competitive threat to your business, then perhaps print is a defensive strategy as well as a profit opportunity for you.
How do service margins stack up?
It’s true that in the early phases of selling services, the margins probably won’t stack up as well as traditional technology sales. Just remember that services can bring long-term stability, but you do have to make an initial investment. And certainly margins will improve after any initial cost of sale or implementation has been absorbed.
Where does growth come from?
Services may help you smooth out the troughs associated with a pure technology business — but how can you drive growth? New customer acquisition remains an important part of the equation. But adding new services is just as important. The more services you offer, the greater the sway you have with customers and greater your revenue and profit potential.
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As an IT solution provider, you can view “print-as-a-service” as an opportunity or a threat. It’s an opportunity if you are prepared for the move into providing print as a service and mine the print spend in your customer base. If you choose not to engage customers on print, it’s important to ask who is or will be managing your customers’ requirements in this space to avoid missing a key opportunity.