BREAKTHROUGH’10 Conference Report

Services Spectacular!

The new decade agenda: Personalised productivity services

31 May 10 (Updated 2300 UK time; 1800 ET)

“Dealers seem more motivated by fear of loss, than opportunity to gain business,” said Peter Frost in  his opening address at the 5^th annual BREAKTHROUGH Marketing Conference at Kempton Park on Thursday. 

"Invest now!” he urged, "learn how to provide single source, productivity services e.g. managed print, before you lose your ink and paper business... for at least 3 years!”

The productivity service future - Peter Frost

Frost recited examples quoted by HP recently where it had won major Fortune 500 accounts and secured 5 year MPS contracts to supply brand printers and toner and shut out competitors including dealers who had previously supplied compatible cartridges. This was a stark warning for dealers to move quickly from their beloved transactional ’lowest price-highest discount’ model to offering valuable personalised productivity services.

Frost recounted the OP revolution... a stationery world trade that had multiplied itself 10 times in 30 years from a $40 Billion market to $400 Billion by transforming and expanding its product portfolios. OP is one of the top 5 world industries and one of the fastest growing.

Frost’s message reinforced in style by most of the top cast of speakers was “Go beyond the paperclip...go beyond the buyer to reach Lucy, the user chooser...the ultimate decision maker. Lucy is not interested in price alone, she wants to gain productivity. Lucy wants to save time, money and space. Our goal should be to satisfy that need!”

“The key to reaching Lucy” stated Frost, “was initially to shift the marketing focus to the C-level executives. We need to upgrade our selling approach to engage with the CFO/the financial directors/controllers, the IT managers, the facility managers. CFO’s understand cost reduction proposals and the benefits of low cost, low carbon, local service providers”.

“Most single source providers to date have been national superdealers e.g. office2office, Oyez Straker or Office Depot. Today, there are many progressive regional dealers offering personalised single source service. The challenge now is to expand that capability into managed print services (MPS), for example. The MPS proposition offers to cut clients print costs by 30-40% by reducing the printer fleet, reducing carbon emissions and improving productivity in return for a 3-5 year contract. The service provider’s profitability soars from 8% product margins to 30% service margins, expands the product range supply opportunities...and it shuts out competitors for the contract period. Irresistible!”

Innovative marketing services – Laura Gale, United

Laura Gale, VP marketing and ‘change-maker-in-chief’ at United Stationers, US#1 OP business services wholesaler gave a powerful presentation of its innovative brand and dealer development services programme.

Laura and her talented Chicago based team had re-energised the innovative spirit that had originally differentiated the leading wholesaler. United’s lead in expanding product portfolios from stationery to business services via furniture, IT supplies, FM supplies was now expanding into interiors services and managed print services support for dealers.

Since her VP appointment in September 2008, Laura had transformed the me-too, cut and paste look, catalogue and flyer offering to a world class portfolio of personalised marketing tools. “We started by looking at the dealers brand values, their culture, their personality, their goals and created a brand characterisation that carried those values,” said Laura. United has created over 20 personalised brand marketing programmes in conjunction with dealers e.g. Innovative Office Solutions in Minneapolis.

The results have been phenomenal. The new designs have motivated pride and sales success...a winning confidence that is infectious to employees, suppliers and customers,” enthused Laura.

“Once we addressed the fundamental brand values, we worked with dealers on the services offering. We offer brand support, the widest product portfolio support, personalised emarketing (to the user) and webstore development support to partner dealers. We boosted our technology and ecommerce capability recently with the acquisition of leading software house MBS Dev,” said Laura.  This will ensure that independent dealers will have access to the latest robust technology solutions in order to compete and beat bigbox players.

Everything for the office - George Adams, Spicers

George Adams, the new CEO at Spicers since July 2009, has been busy building a new infrastructure to support dealer growth across a wider and deeper product portfolio. He has visited the 7 European countries Spicers serve and checked out best practice distribution models e.g. Grainger in Chicago, in order to create a springboard for future growth.

George has invested in new management talent in supply chain, merchandising plus a new UK MD Alan Ball to add impetus to his plans. He provided range details of a wider portfolio in refreshment, maintenance and facilities management supplies. The goal, simply to provide a total service for resellers: ‘Everything for the office’ the new slogan.

Results were beginning to come through with support services to aid dealer growth e.g. Spicers Academy...the new dealer training arm.

Putting dealers in pole position - Adrian Butler, VOW

It was good to welcome the experienced Adrian Butler, appointed MD at VOW in January by Alan Barclay...following 2 years of management turmoil which threatened its existence. Adrian roared on  to the stage with a Formula 1 theme as a precursor to his presentation to goal of putting resellers inro pole position when competing with the power channel.

Adrian focused on the PACT national accounts support programme featuring pricing and contract tendering. “We have invested £2M in PACT and in 2009 pitched for £80m plus on behalf of dealers, we won 25% of our tenders and retained 90% of existing business resulting in a 20% sales increase,” stated Adrian.

“We are investing in new distribution centres to support planned growth...the IDC and NDC facilities which will enable dealers to compete more effectively as we strive to reduce cost to serve. The Wrapide customer delivery service on behalf of dealers has been improved with unrivalled fill rates and excellence in partnership with UPS. We are striving to help our dealer partners to compete on equal terms”, Adrian concluded.

Easy value added services - Chris Madaus, Staples

Chris Madaus (pic below right), VP marketing for Staples Europe gave an impressive insight into the strategic brand values that drive its success and market leadership. Staples relentless promotion of the word ‘easy’ supported by its world class customer service performance, TV advertising (especially, the ‘wow...that’s a low price’ US message) and daily email shots to user choosers make the brand ubiquitous.

This visibility has made it so much easier to launch value added services at retail stores to drive customer traffic. Copy and Print and EasyTech are the most prominent today and both are attracting strong destination buyers and a major factor in building order size and customer loyalty.

On the delivery side, Staples has invested in a specialist managed print services company to provide expertise in building its market share in the contract print and supplies market.

Managed Print Services – Glen Mason, Samsung

Glen Mason (pic below), head of Samsung’s vertical market print division gave a very clear exposition of the mighty managed print opportunity for resellers. Glen outlined the evolution of printer speeds and the haphazard, multiple brand expansion of printer fleets in businesses today.

Rather than focus on Samsung brands, graciously Glen agreed to provide a generic insight into the rapid development of the MPS marketplace. The driving force from a business viewpoint was productivity improvement from more efficient use of printers, cutting costs by networking a fewer number of printers, controlling wasteful practices and obsolescence; and last, but not least, reducing carbon emissions and carbon footprint.

Glen stressed the need to act now by gaining an in-depth knowledge of the branded printers capability and how the printer fleets can be networked and monitored. Moreover, appointing an MPS specialist to work with the general sales force and to link up with the OEM brands was essential.

“The rewards from dealers’ investment in training and systems will be handsome. Margins are boosted by moving from a transactional pricing mentality to a value added services contract for printers, maintenance and supplies over a 3-5 year period. The goal of course is to deliver the savings and hold quarterly reviews with the FD, FM or IT” emphasised Glen.

Transformational leadership, from stationery to productivity services - Simon Moate, office2office

Delivering productivity in a personalised and eco-friendly way – Mark Heath, Bluefish

Aggregating dealers competitive advantage – Steve Harrop, Office Friendly

Probably the best webstore in the office world –- Paddy Donnelly, Evolution Software

Action Plan Now  – Peter Frost

To continued and completed tomorrow morning

Survey