Don't Throw Away Scanner Service Opportunities
Selling more lower-volume, lower-cost document scanners doesn’t necessarily mean you have to take a hit in service sales.
It can be easy to forget to sell service and support contracts on
the document scanners you install in the imaging solutions you
implement for customers. Service is not a tangible or “sexy” technology
or offering, but given that your margin on scanner service over a
three- to four-year period will likely be more than the margin you earn
on the entire scanner sale, ensuring you sell and renew scanner service
contracts can have a substantial impact on your bottom line. This
article provides some tips that will help you do just that.
Scanning Applications Will Determine Service Attach Rates
Service contract sales (service attachments) on mid- to high-volume production scanners have always been, and continue to be, strong. The cost of these units, combined with the large volumes of business-critical documents they process, typically makes it easy for a VAR to convince an end user to invest in a higher level of service response — typically 4-hour or next-day on-site service or advanced unit replacement.
However, VARs may find it more difficult to convince an end user to invest in a service contract over and above the manufacturer’s warranty on low-volume document scanners in the workgroup and departmental segment given their low cost and multiple points of deployment. According to Kevin Smith, director of services for value-added distributor (VAD) NewWave Technologies, it all depends on the application.
“If the low-volume scanners purchased are being rolled out to multiple separate geographic locations, then a VAR will have a better chance of selling service contracts, because many of these scanners will be the only imaging device in a given office and critical to a business process,” Smith says. “However, a VAR’s chances for service contract sales decrease when these low-volume scanners are to be deployed within a single office environment. In these instances, the uptime of each scanner may not be as critical. If the scanner malfunctions, an end user can simply use another department’s scanner. Given the affordability of low-volume scanners, an end user may be inclined to simply purchase a few extras to use as replacement devices.”
One service strategy being employed by VADs and manufacturers to make service contract purchases more attractive on low-volume scanners is a service voucher program. Service vouchers provide a less expensive, more flexible, and ultimately more appealing way for customers to purchase scanner service. With a service voucher program, a customer can purchase 20 document scanners and, instead of buying a separate service contract for each scanner, can purchase a service contract for 5 scanners that would allow any 5 of the 20 scanners purchased to be serviced over the course of a year. This prevents the customer from having to purchase a service contract for each scanner, yet ensures all are covered, regardless of which scanner breaks.
Provide Service Options, Consumables
VARs need to realize that service contracts are the annuity part of the scanner sale equation. VARs that don’t sell service could be throwing away hundreds of dollars of recurring revenue per scanner on an annual basis.
To effectively sell service, a VAR needs to completely understand its customers’ paper processing needs. Is the paper being processed critical to a business outcome, or can the customer live with a certain amount of downtime? Based on this information, a VAR should present two or three service options to the customer and allow it to select the program best suited for it.
“Oftentimes, customers will forgo scanner service because they really don’t know what options are available to them, or they haven’t been presented with a service option that meets their needs,” says Tony Barbeau, director of document imaging global services for Kodak. “VARs must ensure they take the time to present all the service options that are available.”
Even if a customer passes on a full-blown service contract, VARs can still earn recurring revenue by selling these customers consumables kits containing new rollers, pads, and other replacement parts to ensure the longevity of their investment. “Regardless of what segment they fall into, scanners need to be maintained by regularly replacing consumables,” says Scott Slack, VP and general manager of Cranel Imaging. “Customers need to be made aware that parts of a scanner wear over time, and regularly replacing these components is as fundamental to a scanner as replacing the oil and filter is to the maintenance of an automobile.”
Ensure You Renew Your Scanning Service Contracts
Even if VARs are successful at selling service at the point of a scanner sale, many still forget to regularly renew these contracts with their customers when they expire and end up losing these service revenues to other VARs or the scanner manufacturers themselves. There are several ways in which you can ensure you maintain this service business.
“VARs should not rely on the individual salesperson that made the scanner sale to keep track of the service contract,” says Christina Vaden, senior manager of service and support for Fujitsu Computer Products of America. “The salesperson may be more focused on other projects or may even leave the company. A VAR should create a database, spreadsheet, or calendar that provides the entire organization with full ownership and visibility of all clients, the scanner service contracts they currently possess, and their renewal dates. It should then use this calendar to proactively reach out to its customers to renew these contracts.”
Some document imaging VADs even provide special programs to their VAR customers that help them track and renew their scanner service contract business. These programs provide VARs with an online portal to the VAD’s Web site that allows the VAR to view and manage every service contract that it currently has in place with customers. This program also sends VARs e-mail notices 60 and 30 days in advance of a service contract expiring to ensure they don’t forget about the renewal opportunity. Some VADs even provide a service that tracks the standard manufacturer’s warranty of all the document scanners sold by a VAR. This program comes in handy when an end user decides to rely solely on the manufacturer’s warranty for service. By notifying the VAR when this warranty expires, a VAR is provided with the ammunition to recontact the customer and sell them a postwarranty contract.