I had an interesting conversation with someone in the Managed Print Services (MPS) business who had attended the recent ITEX Expo & Conference, held in Las Vegas in April. For those of you not familiar with ITEX, it’s an event which, according to its website, “showcases all aspects of the evolving office market and the growing influence of IT services”.
Anyway, he told me about one session where the speaker asked them to look at a typical managed print services contract they provided to customers and asked: “Would you sign it?”
It’s a very good question for two reasons. First, I feel it’s something that many people involved in providing MPS to customers really should ask themselves more frequently. Second, I have a very strong suspicion that many of them have never once done so.
One of the characteristics supposed to define the role a channel partner plays for its customer is the ability to stand in the customer’s shoes and understand what his or her requirement is. As such, you would expect the channel partner to make a virtue of only selling products or services that it would be happy to use itself. That should include the contract the channel partner expects the customer to sign.
The problem with quite a few MPS contracts is that the “use it or lose it” stipulation within them isn’t really fair. Essentially, it gives a customer a fixed number of pages per quarter, say 15,000 for example, but states that if it only uses 10,000, it loses the other 5,000. However, if the customer prints 20,000 in the next quarter, it gets charged for printing an extra 5,000 copies. What this means is that over the year, given the fluctuations in quarterly printing patterns, a customer might well be within the agreed 60,000 copies annually but could end up paying for 70,000.
Most people selling these types of contracts must surely be aware that the rigidity of fixed quarterly targets puts them in a win-win situation with the customer. As such, I would be surprised if many of the people at the ITEX session would have put their hands up when the speaker asked if any of them would sign their own contracts.
But I am surprised that they expect their customers to do so. And I’m even more surprised that many of those customers do.
Picture credit: Siri Stafford
This was first published in June 2013