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Feature Article for February "BuyerZone.com Friend or Foe"?

AP Art Post (Guest)
BuyerZone.com Friend or Foe?


It seems everyone wants to move boxes. We've said this all along; more boxes generate more clicks for service and more clicks for supplies.

Lets face some hard facts, Internet Buying is here and it’s not going to go away! Margins continue erode for all aspects of our business, sales, service and supplies.

I’d like to tell you all about Buyzone.com www.buyerzone.com/copiers. Potential clients who search for copiers on the major Internet search engines will see buyerzone.com. The link basically states that you can receive FREE price quotes from multiple vendors!

That’s a fantastic idea for the client, no interaction with sales people, no coming to visit your office, no looking at systems and IT can still hide in their hole. Everything is usually done via email. You click on the link and then answer six or seven questions in reference to your copier needs, speed, volume, special features, maintenance etc.

Buyerzone is good for the Client and good for Buyerzone and what I think is a bad idea for the dealer.

Here’s Why:

We have been signed up with Buyerzone for the last year to receive copier leads. I have received over 50 leads. I have not closed one of those leads!! When you get a lead, you've got to keep in mind that there are five other vendors in your area also receiving these leads (especially if you are in a major market).

I have offered machines for as little as a 5% MU and still have not received the order. I have sent emails (that’s how you receive the leads) and have followed up with phone calls. Eighty percent of these people requesting quotes will not speak to you, even if you tell them you are calling on behalf of Buyerzone. Keep in mind that they are probably doing this because they do not want to talk to anyone and they are looking for the lowest price and may or may not want to do the research on their own.

I believe that dealers subscribing to Buyerzone are hurting their own market. This market is price driven and that’s it! Most of these potential customers only want email quotes. All I can think of is that all of the supplies will also be bought from the Internet and service contracts will be ignored and customers will only get service when they need it. If you think you’re going to make money on service and supplies, then forgetaboutit! (Famous Jersey slang)

I went along with this for about a year, just replying to the emails and then making the calls. I figured all of these leads would be gravy and I kept on working my target accounts. After getting no response from my quotes, I set out to find out why systems were not being purchased from us (me). Yep!, the answer was price, price and price, someone was giving the equipment away for a few hundred dollars over cost on a large system and a few percent on the smaller systems! How can a commissioned rep compete with these tactics. WE CANNOT!

Most of the leads were for small machines Segment 1 or Segment 2. Here’s what worries me. Over the last three weeks, I have received three leads from Buyerzone for mid to large size accounts in my territory! Two were for 30ppm color systems and the other was for a 65ppm system. Times are changing and it looks like IT buyers are hitting the Internet more and more. They do not want to be bothered by "salespeople" or are we consultants?

What to do, what to do, hmmmmmmm……. Do you waste time on following up with the potential client to make an appointment so you can tell them why they should pay more (keep in mind that most of them will not want to see you), or do you just prepare a quote to meet their needs, send it email and hope they contact you, or do you just throw the lead in the garbage? The low end of the market has already eroded margins; do we need this on mid to large volume systems?

I’m a firm believer that doing business with Buyer Zone can degrade the dealers market for commanding prices that are essential to their well being and the well being of their industry. Why? News travels quick, good news travels quicker and IT buyers getting substantial savings travels at lightning speed! Can you image if 10% of the companies in your area just searched quotes through BuyerZone?

Do you need the IT buyer of one company talking to another or getting a job at “xyz” company telling others the only way to get quotes is though the BuyerZone?

I decided to test the waters and really see what is going on.

I filled out a BuyerZone prospect sheet, stating that the Print 4 Pay Hotel.com was looking for a copier. I got an email in an hour saying I was matched with six different dealers from my area (of course one of them was my dealership), and one was Konica/Minolta branch office! It’s been 24 hours and I haven’t received any phone calls and zero quotes via email. Now, I’m thinking what the heck is going on, maybe they all know me (Naw, not me, but wishful thinking)?? Maybe they can’t meet my needs for high-end color? Or am I just to impatient and expect a response ASAP!

Day 2, I have heard back from two companies ( well, I guess I was impatient), one represents OKI MFP (I clarified and they are a dealer) and the other is a dealer for Canon (or so they say). The company that represents the OKI called and asked me all of the right questions, volume, speed, feed, and stapling. However, I was taken back when he told me the system was very expensive. Anyway, he did not push for an appointment to delivery the quotes and said that he would email them. He seemed knowledgeable with his product and services.

With the second company I got a call from the “service manager” who stated he would sell the system at cost to get the maintenance revenue!! He also stated that his salespeople do not want to be bothered with these types of leads because they cannot make any money, however all he hopes is that I will take out a maintenance agreement. The “service manager” did ask for an appointment to sit down and deliver the quote, I reneged and said to please email it to me. He also stated that his ImageRunner 2620 was capable of doing 600,000 pages in six months with out a service call (why must people do this?). I told him I had quotes from other companies and he asked who they were; we spoke about speeds, feeds, etc. I then asked him what was the bit depth of color for the Canon, he seemed perplexed, and I then said it has to do with the depth of color. He then responded and I quote: “You mean DIP”, I said DIP?, and then I stated “don’t you mean DPI”? He said yes, at that point in time I just asked him to email me the quote as soon as you can.

I realize that I’m not be quite ethical in doing this, however I believe that dealers who are selling equipment at cost or a little over cost are jeopardizing my future. I need to find a way to get some of this business and what the competition is saying or doing.

Out of these two dealerships neither mentioned that they would like to see my operation or probe further to see if their system has a particular solution that may save me time and money. Neither representative talking about scan2email, print drivers, scan2folder, security, document management or software.

Hopefully, I will have a few more calls in a few days and will have the pricing I need.

On another note, I called my boss and told him about the competition and he stated that he knew the Konica/Minolta dealer that is associated with BuyerZone in our area and he confirmed that the owner takes the leads and looks to move the boxes at cost! I think he’s traveling down a slippery slope, we’ll have to wait and see. I do not have a quote from the Konica/Minolta dealer yet.

If you are subscribing to Buyerzone, maybe you should think about canceling your membership and do not give these companies that many choices and if you don’t want to cancel then you should change sales tactics when dealing with these customers. No appointment, no quote, if they do not answer your call, and then no quote!

With BuyerZone, I was hoping to move a few more boxes and thought it would be easy and that my expertise would come out with my quotes and follow up. Boy, was I wrong. Take it to the bank, the thought of aftermarket service and supplies are intriguing, however the thought of IT buyers buying from us instead of IngramMicro and CDW could be a big gamble.

BuyerZone also has a link for Document Imaging Systems, now this may be a horse of a different color! If Document Imaging is a popular as all the hype, I would then suggest that you sign up for this service to give it a try. We are going to sign up sometime this week. I am hoping that the Document Imaging may not be as cutthroat as someone just buying a copier. Selling to real pain, or having a customer that needs a hardware and software solution may be able to put more Gross Profit in our deals. (link: http://www.buyerzone.com/software/doc_man_software)

I am asking the owners of my company to cancel their subscription to BuyerZone.com for copiers.

It’s now Sunday night and I have been working on this off and on for three days. I’m going to post this and then do a follow up reply when I hear from the other dealers in reference to their quotes.

Do you agree or disagree? Would you like to add anything? If so, please post a reply with your thoughts.


Art Post
Original Post

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NealNealDocusultant Elite P4P'er
In reading the article one thing came to mind. What is different? By that I mean that I am convinced that what so many sales reps and their dealerships are doing little more than that already. It amazes me when I am involved with my reps in deals today where the other companies and their reps have done little homework and simply ask two questions...how much you spending and when you want it? So many today are simply "Walmarting" their product. Going in with the lowest price and hoping for the best. Now I know there are times that we are all involved in deals where that is the only thing that matters and nothing we can say or do will get the prospect to look at a solution, but far too many provide a "box" at the "Walmart" price and go on.
AP Art Post (Guest)
Investment to include:

Canon Color image Runner i.R. 2620
Auto duplexing document handler
Finisher-M1
Network Multi-PDL Print Kit A-2
Cabinet/Pedestal

Manufactures list pricing $16,655
Offered Price $13,195

Canon Financial leasing rates
$0 security deposit required
Fair Market Value optional buy out at lease term
36 Months $362.87 48 months $304.81 60 months $254.66

Service .085 color prints ( up to 12x18), Black&white prints 0.014 ( up to 12x18)
This agreement includes all parts, labor, travel, toner, photo-receptive drums, preventative maintenance and placed calls.

The above quotes exclude sales tax. Toner is shipped by ground service.
Leases have terms and Conditions.
JasonRJasonRMaven VIP
"Poking the bear"

I realize that most of the users of this site are sales reps who make their living off of commissions. This means what I'm going to say might not go over well, but I don't mean any disrespect. I hope this comes across as what I meant it to be, a "devil's advocate" approach to the issue. I'm not espousing this view as much as trying to explain them.

First and foremost, Sales Representatives provide a valuable service for the customer by exploring the needs of a company, matching those to a machine that best meets those needs and going beyond to show the customer new capabilities of our products that the customer can use to make their business more effective.

Sometimes.

As Neal pointed out, many "sales reps" are not "consultants" they simply show up, ask about "speeds and feeds" and generate a quote. These reps are NOT providing a valuable service that is worth the extra money the customer pays above cost.

Given that a customer contacting a dealer for a copier has no idea if the rep they will be assigned is a "rep" or a "consultant", what's their incentive to pay the extra?

When this decision falls into the IT area, they will of course choose to use services like Buyerzone. They can do the research, pick the best machine (ha ha) and get it at the lowest cost available. They don't think they need additional services and consultation. Plus, they don't have to spend time they feel is "wasted" going to see the machine and guiding the sales rep through how they do business.

When you take the commission paid to a rep, benefits and sales incentives, most companies lose money on every sale they make. I know this is hard to believe, but with all the "cost" of bringing in a machine, setting it up, providing a demo room, providing the rep office space and a computer and phone, etc., the math comes out very close.

The money in this industry is made in service. As a service manager, why not just move the machines at cost? You eliminate all that upfront cost, wind up making exactly the same on the sale of the machine, and still get the same service revenue on the back end.

Where's the downside?
NealNealDocusultant Elite P4P'er
Jason...there are a number of reasons as to why we don't just move "boxes" at cost to get the service/supply dollars. From a dealership standpoint the margins on those dollars are decreasing every year and we need to look at ways to be able to get better margins on the equipment. From the standpoint of the customer there are even more reasons not to buy from companies like buyerzone and work with a true professional.
When conducted properly and with the right person (CEO,CFO) then a high-end assessment can be of great value to them. Looking at not only what they are paying for equipment and related costs like service and supplies, but also conducted executive and end user surveys will give you a tremendous amount of information that you can then use to help that client out with recommendations that will not only help them contain or even reduce costs, but help them with workflow productivity. There are soft cost invovled that customers do not think about or look at that when presented in a "consultative" format can provide them with information for them to make a completely informed decision when it comes to document management and production.
When done right, the consultative approach can provide an increible amount of value and allow us to not only build value but get paid for it.
AP Art Post (Guest)
Just a follow up for Buyer Zone, a few more things that irked me. When you register you are told that you are one of six preferred vendors. I double check and yes, we were one of six. They sent me a list of the six vendors that would contact me. After a week, I received a call from Xerox and another dealer and they were not on the original lease.

I can only assume that 6-9 dealers or manufacturers are contacting the end users. What a way to start a price WAR!!!

In recent recent weeks, I have received four leads, out of the four, none I repeat none returned my phone calls or my messages! How can you sell a solution if these people will not call you back. Buyer Zone is advantage towards the client and Buyer Zone.

Seems to me all they want is a number and no interaction for any type pf solution.

I'm going to keep on doing what I've been doing and find my own leads for solutions and hardware.

Art Post
A AllenP (Guest)
Jason,

What you say is true.

Sometimes.

In fact, if I sense that a customer is shopping and wants only a "price", that is what they get. On the other hand, when a potential customer is truly intrested in giving attention and an open mind to the investment, they in turn receive my attention and knowledge. Although, this too comes with a price. I no longer "show up and throw up". I have learned that too many customers lie about everything, anytime. So they must offer me some commitment in order for me to perform analysis, and make recommendation.

Besides, do you want yourself or one of your technicians to have to do every in-service. And those pesky operating questions and demonstrations do tend to get in the way of service calls. But if you order and buy it, then you are stuck with assembly and manuel reading!@!
Old GloryOld GloryMaven VIP
Let's not lose track of Jason's statement that most salesreps do not consult and customer's don't know who they are going to get from a dealership. We are all in agreement (including Jason) that the consultative approach is best but we are a minority in our business. Most reps do not, can not and will not do what it takes to be a specialist worthy of extra compensation.
NealNealDocusultant Elite P4P'er
Jim...sad but true, and frankly there are times when we all have to revert to a "box" sale because that is all the customer wants. But there have also been times when I've turn that "price only" customer to one that allowed some type of solution sale and both of us were better off for it. Bottom line is that our industry, like so many, have succumbed to the "walmartinization" of business.
JasonRJasonRMaven VIP
Thanks for the defense Jim! =)

Neal, thanks for your reply, it's what I was looking for =).

I do feel that a large part of our industry is going toward the "Walmart" approach (lowest cost gets the deal no matter what) and it makes me sad to see it.

I'd guess for now, those wanting consultants will seek them out, those wanting lowest price will get it despite our best efforts.
G GreatAmerica (Guest)
From the industry side it is well known the margins are going down, not only on machines but I am noticing a decline in margins on the service side as well. With the industry move towards more color and capturing printer fleet output of an office... money has to be made elsewhere and more value added services provided by a dealership and even their leasing partner. Leasing companies do the same thing.. walmarting rates.. the lowest rate, but all the other hidden charges and fees and high residuals that lessees will incur and will ultimately cause more unnessary pain, hassle, and wasted time for dealerships. I battle the same issue as you all do. I have been in the industry of leasing for the office equipment side for close to 13 years. Watching rates drop like flies but it left the independent dealers picking up the pieces and at times, costing them a repeat sale. Service is the profit center of a dealership. Boxes have to be moved, sometimes at cost or below cost, however the right leasing partner will help increase the bottom line. Anyone who buys purely on price, shouldn't expect value added benefits or features. I am a consultant as well for leasing and dealerships. My goal is to help a dealership move more equipment and increase bottom lines of the busines with unique programs. These programs center around protecting the customer base, help make a dealership different from their competition, and generating more profits. We are thinking and operating very similar in the industry.
M MichaelSenior P4P'er
BuyerZone is a pain in the butt resource, but it is a resource that produces sales for us. In 2005, BZ represented approximately 150K in sales. I average approximately 5 - 8 leads per month.

We don't play the internet "quote" game. I use a follow up call to the internet notification to "sell" an appointment! If they won't see me, half the time I don't even send a quote. Our business is done and won "face to face" - use BZ to get into the customers office. I will screen any segment 3 or higher system and attempt to get the appointment set for one of my sales team. The leads I have found to be the biggest waste of time are the document managment leads - most we have talked to are so early in the sales process that they haven't even determined how a solution like this might help their business. They are just curious! We see them, work with them, and help see what could be.....based on what we learn about their business. Bottom line...none of the 5 - 6 leads we have follow up have been ready to purchase.

Bottom line...BZ is a foot in the door if you want to take it. Sending quotes via the internet "per BZ policies" is a waste of time. Go get the business....make something happen.

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