When it comes to Managed Print Services (or MPS) contracts, many customers we deal with have a tendency to stick with what they know. Rather than go digging for a new supplier when the time of a contract renewal arises, they are instead lead by their incumbent supplier who will call all the shots. Alternatively, and in many instances we come across, our clients just do not know who to turn to when it comes to securing a new contract, or more importantly who is the right company to turn to. If the time of a renewal looms, they usually rely on people that have contacted them in the past to save time.
Do any of these situations sound familiar? Unfortunately when speaking to our clients we hear a lot of this and it adds complete credibility to a report which we read a few weeks ago that said 1 in 3 customers are unhappy with their current provider and are looking to change.
So to help clients who are looking for a new MPS provider, we thought we would put together a little guide as to what makes a good provider and what things to be wary of. Enjoy!
So what makes a good MPS partner?
There really are some great suppliers out there who do things the right way. Looking after customers is paramount to them as they want to keep your business and yourselves happy! Unfortunately there are also a lot of companies out there who do not treat customer satisfaction as their main priority.
MPS contracts are notoriously complicated, with terms and conditions that can be harmful if not checked, removed or amended. Tip Number One would be to take your time reading through the contract and ensuring you understand all of your liabilities before signing. If something doesn’t make sense, ask the MPS representative to clarify. You need to be completely satisfied with their answers before committing, because once that agreement is signed and the devices are in, you are then in a long term contract which can be tricky to negotiate your way out of if an unforeseen issue arises. A good MPS partner should have clearly defined terms & conditions and should spend time with you going through them putting you at ease. If you have to ask them rather than them telling you, we would recommend that you move on.
We will do a separate blog this week on what terms and conditions to be aware of and ones you want removing, so stay tuned for more.
Another tip? Ask to talk to some of their other current or previous customers. This is so important, as it’s a great way to find out whether or not the company have ethics, and whether their service infrastructure is as good as they say. You could even ask to speak to customers who have the same devices you are looking to buy. Here at My Procurement Partner, we would always recommend that you ask for five customers who have a similar set-up to you and they are comfortable for you to speak to, then contact a few of them by phone, using some of the questions below as a base:
- How long have you been a customer of [ABC* Limited]?
- Can you explain to me how their service works?
- How long does it take for an engineer to attend a breakdown call?
- How do you log your call?
- How do they monitor your device(s)?
- Can you tell me a time they have exceeded your expectations?
- Can you tell me a time they have not met your expectations?
From our experience, other businesses will have no problem in speaking with potential clients of a supplier they use. Hearing real-life experience from their clients gives so much credibility to the MPS provider, so they should have no problem with putting you in touch with them.
Overall, what makes a good MPS partner is complete transparency and honesty. If something doesn’t stack up, then back away. If something sounds too good to be true it probably is.
Take your time, do not be rushed and make an informed decision based on facts.
How do I make sure I’m getting competitive pricing for my business?
Test the market. Never renew your contract without looking elsewhere first. Clients we deal with who have used the same Account Manager for a long time are usually the ones who are paying the most amount of money. They receive a good service, but if you put them against a customer who the exact same set-up but has just signed with the provider, and the prices are usually poles apart. You get this in instances in every industry, with promotional offers, but the percentage difference when it comes to MPS tends to be very high.
It’s also best to wait! Do not be forced into upgrading early if there are no problems with your machine and service with the temptation of saving money. We guarantee you will save more money seeing your contract to the end and then going out into the market to see who has the best offering. Staying with your current provider creates an unfair advantage for them, as they will not have to settle the service part of your agreement – meaning that when others try and compete financially, they have a large amount of money they have to include that your current provider does not. Unfortunately, no matter how much of a good offering the new providers may have, you will have to pay more for it because your old provider holds all the aces.
Speak to other businesses in your community. Ask them for recommendations on providers they use and what they have been like. Research online for MPS providers in your location and draw up a shortlist of companies who you would like to quote for your business.
Always ask for a purchase price! On average MPS providers make around 30-44%+ margin on each device, when you are only receiving lease prices from your selected providers it is very hard to understand until you sign how much this device actually costs. MPS providers also make money from the lease of devices, so asking for the purchase price of the device will give you a level playing field in which to judge all your potential providers.
What type of contract is best for me?
So many clients come to us believing that the contracts they have for leasing their device(s) are with the same company which services them, in 99% of instances this is incorrect.
Stay away from volume-based agreements. In the business world, it is very hard to forecast what business is going to happen over 3-5 years, so why would you commit to achieving a certain amount of volume for that period? These contracts are very fruitful for both the leasing company and the service provider. If you are going to lease an MPS solution, separate the lease and service contract. Don’t forget that these contracts can be long term, so ensuring they are right is key.
A lease agreement is fine as long as you have tested the market and know you are getting best value. Our tip with lease agreements would be to ask for any annual admin charges or initial admin charges to be removed.
Service contracts are where most companies get in the most trouble, as this contract ties you in to your service provider. If you sign up to a 5 year agreement but after your first year the service level starts to drop, can you remove yourself from this agreement and find a new service provider to service your devices? Yes, but it will cost you to do so and usually the amount is so large that it’s more likely that you will grin and bear it until the time is up.
Set up a contract which allows you to exit the agreement at certain intervals should you wish to with no penalty. Time after time clients come to us having received a bad service and are powerless to do anything about it.
You as the customer should always have the power. Put caveats into your agreement allowing you to leave, and should your current provider not pull their weight you know from your market research you have five other companies who are willing to service your devices and who would all love to do so.
At the end of the day, choosing your next MPS provider can be treacherous, but if you follow a few of the steps above, hopefully you will be able to make an informed decision and if things do go wrong for any reason you will not get penalised for your provider’s mistakes. Or alternatively you could just employ My Procurement Partner to do all of the above for you while you sit back and focus on other business activities! The MPS market can be seen as extremely complicated but it does not need to be, we look to provide transparency for our clients so they can make an informed decision which is the right one for the long term.
Do you have any questions or want to know some more about the MPS industry? Get in touch with My Procurement Partner today!