One-in-Three Managed Print Services Customers Said to be Dissatisfied, Leaving MPS

Reporting in ENXMagazine, market-research firm Photizo Group reports that, according to it latest research, one-in-three customers are leaving managed print services (MPS), which could potentially cost the industry some $1.6 billion in North America.

MPS can generally be defined as a program provided by print-service companies (such as Lexmark International and Xerox) under which the company manages all of the customer company’s printing devices, including standalone printers, copier/MFPs, scanners, and fax machines, whether onsite and/or at telecommuters’ locations, and/or manage print jobs sent to outside providers. The goal is to generally to reduce printing costs and reduce paper waste.

Photizo notes that, while office-print volumes have declined, the MPS market has seen “steady growth.” However, a recent Photizo study reveals that one-in-three current MPS users intend to either switch providers, or stop using managed print services altogether,  “posing substantial widespread negative impact on the market, in the form of customer dissatisfaction.”

Photizo Group’s 2015 Decision Maker Tracking Study, which tracks the attitudes and behaviors of decision makers for more than 3,000 MPS customer programs, showed a “startlingly high rate” of bad end-user experiences, indicating growing discontent within the North American market.

“With such a rosy outlook, just a few years ago, this may come to a surprise to those invested in the industry” wrote Ken Stewart, vice president of Market Intelligence at Photizo Group, “but clear indications have been cited, directly from customers, spanning multiple industries and organization sizes, depicting a significant, measurable rise in delivery dissatisfaction.”

Some 34 percent of decision makers in the study said they were ready to leave their MPS contract (21 percent), or switch to a new provider (13 percent).

Additionally, the study reports that one-in-five customers are “actively seeking” to exit outsourced management altogether. The article notes that: “With recent market trends showing decreasing printed pages that were being offset by increased managed pages, a substantial exit of customers could severely impact the industry, stemming one of its major positive revenue opportunities. Specifically, given these numbers, if 21 percent of the customers leave MPS, that would equal $1.6 billion in the $7.6 billion North American MPS market.”

Other findings include:

• First-time buyers are five-times more likely to switch MPS partners, and six-times more likely to exit MPS altogether. According to Photizo, buyers are becoming smarter about what to expect and less patient as the market matures.
• Among customers seeking to leave their MPS program, 79 percent were using all-inclusive (per page or per seat) programs. Photizo notes that, “as the contract becomes more inclusive, customer expectations increase, requiring a higher level of service excellence.”

Photizo concludes that: “Negative trends in customer satisfaction, leading to loss of first-year contracts, and inability to expand services poses major financial concern in the imaging industry that should be addressed immediately. Implications are already seen in major organizations, such as Lexmark and Xerox, with negative financial performance, particularly in core imaging business.” Both Lexmark and Xerox have recently seen declines in hardware-related revenue.

More Resources

• December 2015: PrintFleet Partnering with MWA Intelligence to Enhance MPS Print-Monitoring Solutions
• September 2015: Fuji Xerox Says More than Half of its Revenue to Come From Services, Including MPS, by 2017
• September 2015: HP Inc. to Focus on ‘Ink in the Office,’ A3 MFP/Copier Market, 3D Printing, Graphics, MPS
• August 2015: New Katun MPS Profit Calculator Cloud-Based Tool for Generating Profitable MPS Assessments
• July 2015: PrintFleet and Katurn Form MPS Partnership
• June 2015: New Lexmark Managed Print Services Offering, ‘Advantage MPS Core’ for U.K., Ireland
• June 2015: Canon U.S.A. Earns CompTIA’s Managed Print Trustmark for MPS
• April 2015: New Xerox CompleteView User Analytics Tool for MPS, Monitoring Users’ Printing
• January 2015: Xerox to Market Kofax’s Total Agility Platform to Enhance its MPS and Document-Management Services
• September 2014: Xerox Targets SMB Segment with New MPS (and Free Printer) Plan; New ConnectKey Multifunctionals for SMB; More