h1

A Box is a Box, or is it?

June 30, 2009

I recently heard a Purchasing agent say “a box is a box”. He was attempting to make the point that (in his mind, at least) one manufacture’s MFD was the same as another. Is this true?

I can understand why a Purchaser would want to say this, and even why at some level that they may believe it to be true. The primary job of a Purchaser is to get the best price for the right equipment or product. So the Purchaser REALLY wants to compare “Apples to Apples”. They want to reduce it to a commodity so they can simply say, all else being equal (If it truly is) they can go with the best price. WOW, that was easy what’s next on my list of things to do today. Unfortunately this is an over simplification of a complex decision.

To be fair to the Purchaser there is an arguement to be made that one box has the same basic function as another. Each MFD, Multi Functional Devices have the “same” basic 4 or 5 functions; they can all 1) Copy, 2) Print, 3) Scan, 4) Fax, and more and more each of them can 5) load additional software on the MFD that can enhance and extend the capabilities of the MFD (like the Canon MEAP platform).

When a Sales person from company “A” shows up and says my box (MFD) can copy, scan, print, fax, etc. And I am a nice guy and I work for a good company please buy my box. Then right behind them the sales person from company “B” walks in and says my box (MFD) also can print, copy, fax, scan, etc. And I too am a nice guy, who works for a different good company please buy my box (MFD) instead of the Box that Salesman “A” tried to sell you. Add to that Salesman C & D with the same speach and the only logical question left for  a Purchasing agent to ask is the dreaded “Who is the cheapest”? If you are a sales person who finds his/her self constinatly battling to be at the lowest price then you are either talking to the wrong person (just the Purchasing agent) or you have not shown the Value that your company, your products, or you yourself can add to this deal. Shame on you.

Even with all of the “Boxes” (read MFDs) having the same basic functionality there are a few things that would and do still differentiate one Box from another. They are:

1) How easy is it for your End Users to Copy, Scan, Print, Fax, or use the additional software loaded on the “Box”? This is one of the things that BLI (Buyers Lab) said about the Canon product line when they awarded Canon the MFD line of the year for 2008.

2) How reliable will that “Box” (MFD) be in year 2, 3, 4, or 5 of your lease? They all work pretty well when they are brand new, just out of the box. But how many customers buy the same brand again and again and again because they are happy with how it performed not just at the begining of the lease, but at the end of the lease. This was the other main point that BLI (Buyers Lab) said about Canon when they awarded them the MFD Line of the Year for 2008.

3) Finally, how well does this “Box” (MFD) integrate with your network, or servers? How well does the company who sells this box, support it not just before the sale, but after it as well? This is what really separates the “Players” from the “Posers” in our industry.

These are the things that do differentiate one Box, one MFD, from another. While the Purchaser may hate to address these subtle value adds because they skew the Apples to Apples comparison, they are extremely important to how well this equipment will work in your environment. Which will have a direct correlation on how happy your end users will be for the term of the lease. This is the reason why only a few MFD vendors continually take up the lion’s share of the Pie Chart year after, year after year for MFD Sales in the US. You can’t be in that top tier group without making a pretty decent product. But even more to the point why do you think certain MFD manufacturers who have been selling MFDs for the past 10 – 20 years still have little to no discernible market share? A good sales person could convince a new Purchasing agent to buy a “Cheap” MFD simply on price, well at least once. But when that Purchasing Agent has to live through 3 – 5 years of their end users hating the “Box” (MFD) and blaming them for the purchase they begin to see the importance of the Value Adds that I speak of. Isn’t life hard enough without having to go to work every day in a place where everyone hates your guts for making them use difficult or unreliable equipment?

I often tell customers early in the sales process that WE WILL NOT BE THE CHEAPEST vendor that you look at. We will be competitive on price, but we will not be the cheapest. If you are looking for “Cheap” then you shouldn’t be looking at us. We don’t sell “Cheap” products. What I can offer you is the best value for the money that your company spends. And isn’t that what most of us look for when we shop for anything, Value! On occasion I see a purchaser put in a “Straw dog” Vendor. That is a vendor that is strictly selling on price, but is not really able to support this customer or offer them any of the real value add that we are talking about. This Straw Dog vendor is just being invited to bid to drive down the price. If this customer is truly considering doing business with them then they really don’t want what we can provide. After all does someone shopping for a new car compare a KIA to a Lexus? Aren’t these two very different people looking for very different things? If you are looking to buy a KIA or a Hyundai do you even look at a Lexus, or a Cadillac, or an Infinity? Not seriously!

When I went over to a direct _BS branch of a manufacturer I was able to convince a few of my former Canon customers to give us a try. And they did because they liked me, or one of the sales people that came over with me. Now that I am back with NECS many of those clients are returning to Canon because they now see the difference between the Value that the Canon “Box” offered and the cheaper _BS box that their end users hated! These _BS Boxes did not stand up as well towards the end of the lease. Now I know that the _BS sales person would be happy to “upgrade” those boxes early, at “no penalty” to you. Sure they would. Let’s get those _BS boxes out that aren’t working well in year 2, 3 or 4 and replace them with other _BS boxes that will work OK the first year they are there and then the cycle will start all over again. BTW, No Penalty doesn’t mean you still don’t have to pay off the rest of your lease, they will simly roll it into the new lease, but there is no penalty. Wouldn’t it be a greater value to your company if you could actually use the Box, the MFD for the whole length of the lease and not have to “upgrade” it because it is not working well. I am not against upgrading equipment early if it helps my customers. For instance they may need a new feature that wasn’t available on the original model, or maybe they have grown their business and need higher volume machines. But they shouldn’t be forced to upgrade because the box, the MFD just isn’t holding up at the end of the lease.

If you really want to compare Apples to Apples then you should compare a Tier 2 MFD manufacturer with a 3 year lease to a Tier 1 MFD manufacturer with a 5 year lease. You will find that the better equipment will be very competitive and will work well till the end of the lease.

That’s my $0.02
Vince McHugh
vince.mchugh@yahoo.com

Advertisements

8 comments

  1. We agree on something! Sort of. I agree that their are manufacturers out there that are the reason for the price erosion in our industry. The point I would like to make however, is that if you actually sold this way, please, I beg you to train your reps in Rhode Island to sell the same way you are speaking of. The only time I have ever lost a deal to NECS was to a rep who dropped the bottom out and brought no value to the customer other than a low price and mediocre service. No one in my office is out to Gouge a customer, we are just trying to make a mutually benificial business decision for both companies.

    Also, you speak of a solution that will hold up over time. I suggest any comapny concidering Canon to look long and hard at the MEAP technology that is trying to be pushed as part of a solution and see if it will hold up for the 5 years you may be leasing equipment and how it integrates with other devices on your network. If it changes how you do business, I would be hesitant to move forward seeing as though once you make that decision, you are stuck with it until you want to change your entire business back.

    Food for thought.


  2. Manny,

    In every organization you will occasionally get a young sales person who will “give away the farm” to get a deal. It is definitely not SOP over here.

    As far as the Canon MEAP platform or the Konica Minolta (or other Manufacturers) Web Based MFD platforms what is important is what applications or solutions will run on these platforms! Not the platform itself. No one buys a PC so they can run Windows XP, they by a PC or a MAC to get their email, surf the web, or type a letter on MS Word. It is the functionality that people want, they don’t care that much about the platform, as long as it is easy for them to use.

    So when you want to integrate the MFDs as a front end (or on ramp) to your back end servers, or to your company’s work flow what is going to be most important to the end users and their IT Staff is what application (eCopy, NSI, Paper_to_Office, Rightfax, etc) will they need to accomplish their business goals.

    This is were a good Pre-Sales Solutions Engineer does his\her best work. Go in and gather the customer’s business requirements and THEN propose the best solution to meet that need.

    I tell customers that if a salesman walks in to your office and tries to sell you a “solution” before he\she has spoken to you about your “problem(s)” you should throw them out! They are simply pushing boxes disguised as a solution. You can NOT propose a true solution until you understand the business problem that they (and hopefully you) are trying to solve.

    Vince


  3. Your logic is flawed.

    You first point out how some manufacturers have little market share after 10-15 years in the business. This is presumably because these manufacturer’s make an inferior quality product.

    You then go on to try to make it seem like _BS is one of these 3rd-Tier companies… and that Canon’s “boxes” are so much better. Yet _BS is one of the Top 3 manufacturer’s by market share… no matter how you play the stats… _BS is in the Top 3.

    So which is it?

    Wouldn’t you make a better case against _BS by not spouting your own obvious BS? Beat them on service or solutions. Trying to say your “box is better” goes back to the “old” way of selling that you say isn’t the right way.

    Just my $0.02.


  4. Mr Logic,

    These are two distinct and different points, but both are important. The quality of “The Box” does indeed make a difference! During my time at Ricoh I never saw a Ricoh MFD in the field that was 12+ years old. I see Canon equipment that old, and older all too often. It is simply better made equipment.

    The service & support behind “the box” is very important. But great service & support on an inferior “Box” will only go so far. What is best is to have the best box with the best service & support! That is what NECS offers our customers.

    And please don’t take it personal when I refer to the _BS organizationss (direct branches). I don’t just refer to RBS, but CBS, TABS, KMBS, and any other _BS organization that I may have left out.

    By the way, Mr Logic. are you friends with Manny Manufacturer? You both post from the same IP Address. Curious?


  5. Vince,

    You didn’t address the contradictory point you made in your Blog post.. i.e. how some vendors have little-no market share -> implying that vendors with large market share make “better boxes”.

    Answering your last question… I do know who specifically Manny Manufacturer is, but he must be someone at the same company.

    Mr. Logic


  6. Mr L.

    Yes, I do think that the fact that certain Manufacturers consistently have a significantly larger market share than others DOES indicate that they make a better product, or at the very least a more desireable product.

    And I also believe that the quality of “the box” that hosts the solution DOES matter. What is the benefit of having a solution on a “box” that is unreliable? If the customer can’t depend on the Box what does it matter what solution is on it!

    Vince


  7. 10 year old machine. Must be analog, expensive and full of environmental hazardous materials. Expensive to run and service. Please replace it or do you want me to. Please give me address of customer.


  8. Vince,

    If the point you make that manufacturers with higher marketshare are better products, why do you attack Ricoh? Take out the segment 1 and who beats Canon on a regular basis? Ricoh, Ricoh, Ricoh, Ricoh, and Ricoh. Why the bad taste in your mouth?



Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: