Finding MPS Revenue Growth in Enterprise Accounts

As markets grow and mature, achieving growth for individual competitors rapidly shifts from winning ‘greenfield’ opportunities to using market segmentation, customer targeting, and other techniques to drive growth. It is at this stage that your marketing team should begin earning their paycheck by identifying ways to grow revenue in a market that increasingly consists of companies who are already someone’s customer (if not yours!) versus greenfield or blue ocean markets where most potential customers have not engaged, and they are not committed to a vendor.

Market Characterization: Understanding the Market Dynamics

In Managed Print Services, particularly in the enterprise space, we are rapidly reaching the point where growth comes from either A) switching accounts from competitors, or B) going deeper into existing accounts. This is demonstrated in figure 1 which shows how over 54% of all enterprise accounts have at least one MPS engagement (this is close to the level of saturation which we believe is 60-70% of all accounts). However, these accounts typically only have a single site, or at most, multiple domestic sites even though most are multinational companies. Thus, over 67% of the opportunity ($8B) is available by penetrating further into existing accounts, versus 33% ($3.8B) which is available from ‘new to MPS’ accounts.

Figure 1 – MPS Decision Maker Tracking Study

 

 

 

 

 

 

 

This means that for enterprise accounts one key strategy is to go deeper into your existing accounts. That is pretty much common sense.

Market Targeting: Growing by Converting Your Competitors Customers, And Keeping Your Customers

But what about winning accounts from competitors? Is it even possible? The short answer is yes. In our 2015 wave of the Decision Maker Tracking Study (DMTS) we identified that 34% of existing MPS customers plan to either switch MPS vendors or exit outsourcing MPS altogether and shift to an internally managed MPS program. By understanding which types of your competitor’s customers are planning on shifting or exiting MPS outsourcing, you can craft programs to actively win these customers

Figure 2 – MPS Defection Rate (DMTS)

away.

There is also an important defensive element to this. Specifically, you can become vulnerable if your customer satisfaction or loyalty tracking programs fail to accurately identify specific types of customers you have that are considering other vendors and who may become susceptible to competitor’s sales pitches. Often firms become complacent in tracking only their own satisfaction and loyalty levels. This becomes dangerous in that you typically don’t know how your competitors are doing. While a 5-point drop in customer satisfaction might seem disastrous for your brand, if your competitor’s customers are dropping by 15 points – you have an opportunity. And this is where understanding the complete picture not just your own position comes in. Do you spend your scarce marketing dollars on driving loyalty and fixing the 5-point drop, or do you focus your dollars on driving incremental customer growth by targeting your competitors dissatisfied customers whose satisfaction has dropped by 15 points? (There is a right answer to this question!)

Customer Context is Key – Not All Customers Are Created Equal

Not all Enterprise customers are the same! Photizo analyzed over 1,000 MPS customers using a technique called cluster analysis to understand what ‘groups’ do MPS customers fall into. The results identified three groups which are described in figure 3 as minimalist, traditional, or strategic buyers. It is critical to understand how these customers engage and what drives their decision-making behavior. For example, if you try to sell advanced capabilities and ‘solutions’ to a minimalist buyer who just cares about a few capabilities and obtaining the lowest price – your pitch is going to fall on deaf ears. Likewise, if you target a strategic buyer (who is focused on driving significant outcomes through innovative services and solutions) with a ‘price leadership’ message, again, your sales pitch is going to fall on deaf ears.

Figure 3 – MPS Customer Segmentation Analysis

Summing It All Up

This is the key. It takes more than just understanding your customer.  That’s a basic expectation and any marketer worth their salt is already doing that. It takes understanding your competitor’s customer, and segmenting these customers into buckets. Buckets of likeminded customers who are motivated by the same things. And then piling on the targeting program to reach those customers in a way that engages them. Whether it is your existing customer or your competitors. As the MPS market matures, the level of marketing sophistication also must mature. Can you quantifiably segment your customer base? Can you segment your competitor’s customers base? Or are you just focused on finding the next ‘new MPS’ account – and hoping that you do that faster than you lose accounts? Photizo Group believes this is the most critical issue for our clients who are chasing enterprise MPS accounts and as a result, have launched a new multi-client study with the purpose of helping our clients profile their customers, and their competitor’s customers and to developing winning strategies for finding growth in a mature MPS market! For the prospectus, please click for the attachment 2017 Customer Loyalty Study.

Now again, back to market dynamics, the mid-tier and small business markets are entirely different from enterprise markets in terms of their penetration rates and the structure of their MPS agreements. So understanding their unique market dynamics, structure, and customer behavior patterns are also critical. As the market matures, and growth seems harder and harder to come by, now is the time to invest in your marketing and sales strategy. The marketer’s tools can be an indispensable guide to creating opportunities for your sales team.

 

 

 

 

 

 

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