2023 Policy Change: $500 Minimum
When running a business, it’s essential to hone in on what your ideal client looks like.
The truth is, it’s impossible to cater to the needs of every single type of client.
How does that old saying go?
You can please some of the people all of the time, you can please all of the people some of the time, but you can’t please all of the people all of the time.
If you’ve been running your MSP for long enough, I’m sure you also have an ideal client in mind.
For those in the MSP community who never heard this before:
- Our business model depends on Xerox and HP, two manufacturers that have the best national in-house service networks.
- For every dollar that your customer spends with us, 60 cents goes to that manufacturer to pay for replenishment and field services. In other words, if your customer pays us $500, we keep $200, and the rest goes to Xerox or HP.
In this article, we introduce our new $500 minimum and break down what our ideal client looks like. That way, you’ll know what businesses to look for when scoping out new prospective referrals to send our way.
Over the past three years, Print Partner has been working tirelessly to create the best possible service and sales experience for both our MSP referral partners and our clients. And our parent company, Green Office Partner, has been an industry leader for over 14 years.
In our years of service, we’ve achieved a profound understanding of the managed print services (MPS) industry and our niche in the market. And our experiences have guided us to make a very important change to our business model.
Effective immediately, we’re implementing a $500 per month minimum print spend for all future client referrals. This means that, when only considering allotment and solutions-related costs, the client is spending at least $500 per month.
Going forward, we will only accept client referrals that have the potential to spend $500 per month with us on managed print services.
The keyword here is: Potential. This is an important specification.
In some cases, large clients that have the potential to spend thousands with us in the future, are not ready to transfer their entire fleet to us at once.
In other cases, the prospect could be a startup that doesn’t have robust print needs right now, but expects to expand in the near future. In situations like this, we may be able to get our foot in the door with them with a small deal, which may lead to future opportunities.
This potential is on a case-by-case basis, and it’s up to our expert sales team at Green Office Partner to determine which deals are worth pursuing.
What Does a $500 Per Month Client Look Like?
Print clients come in all shapes and sizes, and determining what a good fit looks like is not always easy.
To hit that $500 per month threshold of monthly print spend, a client generally meets certain criteria.
While none of these are set in stone, here are some general qualities to look for when determining if a client would be a good fit for us. If they fit one or more of these descriptions, they could be a good fit:
- They have 100+ office employees. A construction company with 99 field laborers and one accountant won’t qualify as a good opportunity.
- They operate across multiple locations that rely heavily on print.
- They rely on at least four big A3 copiers with some smaller printers. Anything less, and they are probably not printing enough to meet our minimum.
- They either print a decent amount of color pages, or they print a TON of black and white pages. As a ballpark statistic, to spend $500/month, a client needs to print around 50,000 mono pages or 5,000 color pages. Or, some combination of both.
- They have complex faxing and printing needs and could benefit from solutions such as XMFax, PaperCut, PrinterLogic, Square 9, Umango, or other solutions that will incur a regular monthly spend.
This list is by no means comprehensive, but this will give you a good idea of what types of clients we are looking for.
What Does This Mean for Existing Clients?
Nothing will change for any of our current clients that do not meet this $500 threshold. They will remain under our management for the lifetime of their current contract with us.
Well before their contract is up for renewal, their sales representative will discuss options with them. The determination to renew their contract will ultimately be up to the representative handling their case.
If we do not foresee them meeting the $500 minimum monthly spend upon their renewal, we will offer to continue to provide hardware to them and enter them into the self-service support option directly available from Xerox or HP. This is where instead of calling Green Office Partner for support, they will instead call the manufacturer to get their issue resolved.
Why are we doing this?
We’re implementing this $500 minimum for two reasons.
First, we want to dedicate our service to the clients that are the best possible fit for us. No use shoving a square peg in a round hole.
Second, we’ve found that our customers spending below $500 per month on print spend are not profitable for us.
We want to be completely transparent with our MSP partners on this, which is why we’ll break down the details of each reason below.
1. Green Office Partner’s Value Proposition
Green Office Partner established its value in the market as a boutique, white-glove managed print service experience. “Major manufacturer benefits without the major manufacturer hassle” is the Green Office Partner tagline.
We take pride in cultivating close-knit relationships with each of our clients. We get to know their team and their priorities, which help us mold a service experience custom-fit for each business we work with.
With advanced workflow analysis, full document management and routing, multifunction printer apps, and advanced printing security measures, we go above and beyond the industry standard.
That’s our value proposition. And because of our deep commitment to providing superior service, our service can be on the higher end of MPS pricing.
Small organizations with a single copier and a low volume of print will not be able to take advantage of our caliber of service. As a result, we often have more trouble winning their business.
We have clearly found that the companies who are looking to spend less than $200 per month on a service allotment are more inclined to want a budget-friendly solution rather than what we have to offer.
As such, we have found our sales team spending lots of time trying to close these smaller opportunities and the win ratio doesn’t line up as nicely as it does for the larger opportunities, where we have a very high close rate.
Signing up these low-volume customers will lead them to pay for a robust printing support network that they will not notice nor appreciate.
2. The Profitability of Small Clients
When Print Partner was in its infancy a few years ago, we accepted referrals of all sizes from our MSP partners.
But it wasn’t long before we realized we were losing money on many of the new small accounts we brought in. That’s why, in 2021, we set a minimum of $200 per month of minimum service spend.
- Note - If you recall that we pay 60% of that to the manufacturer for field support and replenishment, that means we were bringing in $80 per month before calculating our time spent supporting and managing the account.
It’s been two years since setting this minimum, and we’re still losing money on our smallest accounts. The amount of money it costs to service these clients is just not worth the high level of effort we put in.
We’ve clearly observed that there is little room for a profit with customers below a $500 service minimum, and at the end of the day, we’re in business to make a profit! While small deals offer us short-term profits on the hardware, the service loses money in many cases.
Imagine providing unlimited (All You Can Eat) remote and onsite support for your customers for $200 per month!
Remember that print vendors are on the hook for networking issues just as much as MSPs are on the hook for print issues. Like you, we invest the time and expertise of our tech support teams to rule out issues outside of our environment, which can eat up many precious hours.
Also, lower print spend usually means single-production device environments. And these one-copier offices make the most noise when things break, since they don’t have a backup device to fallback on.
In other words, we absolutely get the highest amount of grief and anxiety from the clients spending the least amount of money with us.
We’ve found that nearly 80% of the support calls we receive from our sub-$500 clients require some time escalation or exception, leading to countless additional hours of labor.
“These scenarios require considerable amounts of time from the support staff, resetting their expectations of service delivery and the support process, and not actually resolving their issues,” says DeAndre Hodo, Vice President of Service for Green Office Partner and former MSP owner.
And what are all of these headaches for? Businesses spending less than $200 monthly with us make up approximately 7% of our revenue.
It’s just not worth it!
Instead of managing a swarm of tiny accounts, we want to focus on best-fit clients we can dedicate 110% of our efforts toward and scale with.
Print Partner’s Year Ahead
After reading this article, you should understand why we are raising our minimum print spend $500. Much like how your MSP has standards for your business, we have ours.
We expect that after honing in on our ideal client base, we will have less issues and smoother relationships with our mutual customers.
Our team at Print Partner and Green Office Partner are looking forward to 2023 and a bright future for our business, our clients and our MSP partners.
Cheers, and happy new year!