It Is Time to Launch a Market Share Offensive
How prepared are you to take ownership of your market? Is your best offense a good defense? We are currently amidst a market share war, and if you’re only focusing efforts on defending your current customer base, you will lose out.
There are various forecasts, all of which seem to reference a shrinking market for the placement of MFPs and convenience printers. Some sources have that forecast as high as an 8% reduction in the equipment sale of office MFPs and desktop printers over the next 3 years. There are also internal battles that can eat away at your revenue base as an Office Technology Dealer. Churn, for instance, which is what happens when you upgrade a current customer and cut their aftermarket pricing by 30% or more, is another concern for Dealers. Even if you are among the elite in customer retention, you can expect to lose around 2% of your revenue base every year. Additionally, if you consider how each time you upgrade your current leases, the new lease results in a 30% reduction of service click rate. This reduces the effective aftermarket by 30%. To overcome this, Office Technology Dealers must make up for these clicks by stealing market share.
In order to generate net new business and win the market share war in your geography, your sales force must begin to act more on the offense.
What is Market Share and Why Is It Important?
Do you know where your Office Technology Dealership currently sits from a market share standpoint? Do you know why it is important?
By definition, market share refers to the portion of a market that is controlled by a particular company or product. It’s said that at 5% market share, you’ll have name recognition, meaning your market has heard of your company, but they may not quite be sure what you do or what value you can bring. At 10% market share, you will have brand recognition, meaning your market has heard of you and understands what you do. If they develop a process pain that your product or service can solve, you will be considered in their search for a potential solution. While most independent dealers have reached that 5% market share threshold, few have clipped the 10% mark. Those that have reached 10% market share are considered the real competition. So how do you get there?
How Can You Win the Market Share Battle?
With an MFP/Printer industry that is shrinking ever so slowly, Dealers are left to compete for their piece of a pie that seems to be getting smaller and smaller. But despite the contraction of this market, Dealers will remain tenacious and innovative in order to continue increasing their market share.
Dealers that continue to thrive will do so by evolving their service offerings and educating themselves on strategies for success. These are the Dealers that will know no limits. These Dealers will have a strong mix of equipment revenue that is sourced 70% from their current customer revenues and 30% from net new revenues. Dealers who are acting on the offense understand that there are only two ways to grow aftermarket revenues with net new clicks. One is with net new equipment sales and the other is with new clicks that come from the pickup of service and supply agreements related to desktop printers and the management of desktop printer fleets commonly referred to as MPS. Those who evolve in this direction will see their aftermarket revenues increase as a result of their relentless focus on ancillary services like MPS.
Savvy dealers will also understand the importance of implementing and leveraging a Sales Management processes that drives fact-based conversations with their Sales Professionals, focusing on the RESULTS of their activities. They’ll know the dollar value of their pipelines and will have set clear expectations for their Sales Professionals to contribute to their growth though a published and well executed continuum of prospecting activity. These Dealers will monitor the details of move forward appointments weekly. Current Customer cyclic visits will have defined business expansion goals that will grow rather than churn the value of their current base. These Dealers will learn to use business analytics tools to clearly identify what the current customer value of each sales territory is and assign a net new revenue quota based on that sales territory’s market share. This information will be combined to give each sales professional an individualized sales quota that ties to their company’s 12-month growth plan.
This all may sound lofty – like the unattainable, unrealistic, Dealer of the future, but this is not some pie in sky dream; Dealers are making this shift now. Over 400 Sales Managers from Dealerships throughout North America have been trained and are ready to weather and prevail in this market share battle.
Are you ready to win the market share war? Learn more about our ‘NexGen’ Advanced Sales Management Training here. Or give us a call at 410-446-3032.
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