Lexmark channel chief Sammy Kinlaw sees the new entry level machines as a ‘game-changer’ for Lexmark in the SMB space.
Today, Lexmark is announcing the expansion of the low end of their mono workgroup Open Product printers for channel partners. It’s another step in Lexmark channel chief Sammy Kinlaw’s strategy to build up the Lexmark brand in the commercial space, and get them into double digits in market share.
“It’s a one-year anniversary for me at Lexmark,” Kinlaw said. “At our North American kickoff this year, I said that it was impossible to know where we are going unless we know we have been. I had a good gig where I was, but I joined Lexmark because the opportunity was there to grow at a premium to the market. Some things needed to happen to do that, so we made a bunch of tweaks. I knew the market would respond to some of the things we were doing.”
The immediate results have been strong, Kinlaw emphasized.
“Printing for the market as a whole hasn’t been growing but it was for us in 2018,” he said. “We grew in both revenue and units, and if you peel back the onions on who we sold to, our revenue per unit increased, and we sold more colour, and more MFPs. We also went deeper with the partners who knew us. We have a healthy channel. We sold out more than we sold in. We may have too LITTLE inventory on distributors’ shelves. You always find things you can do better, but overall, I’m pumped. 92 per cent of our product line turned over in the second half of 2019. Reasons to call our reps increased dramatically, as we have more things to sell. I’m looking for double digit unit growth year-over-year in North America. I know that’s not easy to do in our area, but we have major new products.”
The new Two-series models being announced today are a key part of that, expanding Lexmark’s Open Market portfolio with a new entry-level series.
“This product will open up the laser category entry level market in a way we haven’t explored previously,” Kinlaw said. “Last year, we were focused on the upper end of the market. The Two-series is an entry-level laser – small, lightweight, fast, compact, secure, and at a very affordable price-point. We have two models, a single function mono model [the B2236dw] and a multi-function mono model [the MB2236adw]. We consider that they double our addressable market. They really open up an opportunity for us to find new customers.”
The B2236dw does 36 ppm with a duty cycle of 30,000, and is 30 per cent smaller than the ‘Three-series’ model, the B2338dw, which Lexmark had previously been selling into the space. The MFP model, the MB2236adw, has the same metrics.
“We consider this a green fields opportunity, because previously we addressed it with our Three-series products,” Kinlaw stated. “The Two-series is specifically designed for SMB end users, a market that we didn’t design for previously. We think that this is a game changer, so if you are a partner, and sell a competitor of ours, you have a reason to consider us at a great price point with leading edge design.”
Kinlaw said that Lexmark is looking to grow their channel as well as their market share with the Two-series, and that he is well aware of the challenge of expanding the channel while continuing to provide strong support to previous partners, particularly in a heavily commoditized, low-margin market segment.
“My goal is to grow our numbers,” he said. “Let’s face facts. We have a single-digit commercial share at Lexmark. I’m on a mission to get that to double-digit share, and the company has given me products and support to get that done. With this Two-series product, I have to widen the long tail in the channel. I have to grow the number of partners to grow the overall numbers – but not at the expense of existing partners. This is a segment of the market we weren’t really covering before. I’ve added sellers concentrated on the small partner market, and made major investments in distribution for the coming year. I know the power that they can bring. It’s an investment.”
Kinlaw said to expect much more from Lexmark this year.
“In this commoditized world, we will be big this year in telling value story around our cloud offerings, with our Cloud Fleet Management and our Print Management, which enable partners to better manage customers. I also have to make sure that I’ve got the right partner experience. I can’t afford to have partners waiting for answers on special program rebates or special bid letters, or to provide an answer to a technical question. We did better there in 2018 and will do even more in the new year.”
Kinlaw also said that Lexmark’s Go line for channel partners will be expanded this year.
“I’m committed to growing open products for the channel,” he said. “When I joined Lexmark, we did not have a channel-classified offering, and that’s something I worked on from the day I walked in the door. We announced the Go line in the fourth quarter, a suite of new offerings for the partner community. It’s intended for channel use and there is now more money involved if they sell that. I’m increasing that to gain traction and gain interest.”