Customer Intimacy: Xerox vs. the Rest of the Industry

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Watch these two advertisements from two competitors in the same industry. Both advertisements appeared on YouTube this month, within the past week.

Xerox:

and,

Konica Minolta:


None of the above will achieve viral status, but they reveal how these two businesses approach their markets. One, Xerox, embraces customer intimacy.  In fact the entire video is about solving their customers’ issues.

The other, Konica Minolta, creates an implausible fiction around a product.  When was the last time you saw everyone gather around and welcome the new MFP?  Speaking of which, what is a MFP?  They don’t tell you in the ad. (FYI, it’s a Multi-Function Printer). On a historical note, Xerox’s very first advertisement is in may ways more compelling than the inauthentic product tall-tale we see here.

But let’s get serious for a minute. We see Xerox stressing its ability to impact major accounts.  Their story is around managing business processes in a sustainable way.  I believe Xerox created this market and although other companies play in it, Xerox is consistently telling the market that they are the player that can impact business.

This is a fundamental business model difference. Here’s how the two companies define themselves:

  • Xerox Corporation is a $22 billion leading global enterprise for business process and document management. 

  • Konica Minolta Business Solutions is a leader in advanced imaging and networking technologies for the desktop to the print shop.

While they both make claims that are true, only Xerox has positioned itself as meeting customer’s true business needs. We all know that Xerox’s has a rich history of product innovation. But Xerox is a business partner and solution provider not just a product seller. And the market is rewarding them for it.

A Gartner report shows that a segment of this industry - Managed Print Services (MPS) - is a cost-effective alternative to the traditional purchase and leasing arrangements under which organizations acquire their office printers and multifunctional devices. Here’s how Gartner phrases it:

Cost savings is the main driver behind the decision to go with MPS, and the poor economic climate has boosted MPS opportunities. MPS enables organizations to reduce the cost associated with printing and copying through product consolidation or redeployment. It gives them a consolidated contract for hardware, supplies and maintenance for greater visibility of spending. MPS also provides the flexibility to scale pages, print resources and cost to match business volume and staffing. It has the ability to shift costs to where customers have available budget via chargeback and by turning capital expenditure into operating expenditure or vice versa.

managedprinty.gif

Xerox is now really competing with HP on the basis of customer intimacy. It knows that solution selling is not enough. So what could Xerox do to further differentiate itself in this market?  For starters, Xerox could easily do what HP is doing and put out a line of ads stressing its varied and deep solutions and its ability to impact many more customer issues. Where is Xerox in its customer intimacy journey?  As stated Xerox has a vibrant and varied solutions business with a global reach.  Further, Xerox has a strong focus on major accounts and is building strong capabilities to impact them through a variety of solutions. 

If you look at the copier segment of Xerox’s other competitors they often stress features and functions; they’re addicted to product innovation. These companies are using traditional market awareness story-telling - so that customers will be familiar with their brand when sales representative many times an outside channel calls on the accounts.  Unfortunately, far too many of the stories told are not compelling, especially in this economic environment.

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About this Entry

This page contains a single entry by Dean McMann published on July 25, 2010 8:03 PM.

Customer Intimacy: Linking Service Delivery to Value Creation was the previous entry in this blog.

Establishing a Beachhead: Introducing Customer Intimacy to the Organization is the next entry in this blog.

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