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August 30, 2008
Two Services Options for SMBs
As our latest Focus On: Upselling story explains, the SMB market is heating up for solution providers, and so too is the competition for SMB dollars. One choice for plying this important business segment is Hewlett-Packard’s two-tier Smart Printing Services program.
The plan offers a way for solution providers to establish an annual price for consumables and perhaps hardware that isn’t defined by volume minimums or usage rates. “We keep that payments level for a 12-month period so [end users] know exactly how much it is going to cost on a monthly basis,” says Daniel Forsch, Smart Printing Services
business development manager. Solution providers and customers renegotiate charges after 12 months to account for usage changes.
Solution providers have two options when participating in the program. In one scenario, they just receive an agent fee for their role in selling the transaction. Payments range from 9 percent of the entire contract value for MFP deals to 6 percent for printer-based ones. HP holds the responsibility for delivering all of the contracted services, hardware, and supplies.
Alternatively, resellers can choose an arrangement that consists of the same terms except solution providers retain responsibility for the hardware. They procure the printer or MFP as in a traditional transactional deal and set the sale price with their customers. HP then incorporates that price into the customer’s monthly payment. “Our proposals just show the level monthly payment. We don’t break out how much customers are paying for the individual elements of the bundle,” Forsch adds.
“There are a couple of advantages to the [latter] model. [Solution providers] recognize the top line revenue on the hardware and they control the margin,” he explains.
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Posted by ajoch at August 30, 2008 04:31 PM
