Feeds

Tech industry IGNORES customers: 'It's a supplier-driven world'

Printer biz boss lifts lid on thing we all knew

Choosing a cloud hosting partner with confidence

Tech manufacturers and their third party suppliers have profiteered by ignoring the real demands of SME customers in the pursuit of extra margin, or so says the CEO at a print hardware and services biz.

The, er, revelatory piece of info was announced by Steve Francis, boss at print solutions company Danwood.

Francis was parachuted into the firm in late 2012 to sort out a financial mess.

The discovery of accounting errors spanning six financial years led to the restatement of numbers from fiscal '05 to '10 and the departure of some in the senior management ranks – including the founder.

But, as Francis told us, "this is ancient history". He claims to have steadied the ship - recent results suggest he's right - and is trying to carve out a brighter future for the UK's largest independent print house.

"This [ICT] industry, more than any I've ever met, is dominated by powerful OEMs," he told us. "[Customers] don't decide what they want to buy, it's essentially a supplier-driven world".

He said this is as true for product sales - suppliers pushed A3 format MFDs defaulted to a colour setting because they were more lucrative than mono A4 machines - as it is for services.

"As a service and support organisation in the channel, our service proposition is typically standardised; it's a multi-year break/fix service that is not tuned across SMEs," he said.

But before Francis descends into Gerald Ratner territory, he said there is a point to his candour - Danwood is going to act like a one-company revolutionary, putting customers "at the heart" of strategy. Hell. Yes.

Danwood has some 15,000 firms on its books and obviously wants to win over more, but the move to "revamp the way we understand what customers want" is not coming cheaply.

Some £1m has been wasted invested with a consultancy to segment the market and ascertain printing behaviour, and a CRM system has been installed.

Based on the research, customers will be bracketed into six distinct segments based on the complexity of their printing needs and other requirements: i.e - multi-site firms, Ryanair or BT Club class service.

At the high end, Danwood may have staff working at a customer site. Conversely, at the entry level space, the company is "scaling a team of telesales people" and beefing up a web presence for low-touch punters.

Danwood remains a loss-making entity, but those losses narrowed in fiscal 13 ended September last year, according to results recently filed at Companies House for parent Hykeham Group Ltd.

Turnover dropped to £211.8m from £228.8m and despite a near-£20m drop in admin expenses, a big bill for exceptional costs of £11.89m wiped out any profits, leaving operating losses of £3.2m versus an operating loss of £8.2m in th prior fiscal.

But interest repayments of £19m and and tax on loss on ordinary activities left a net loss of £23.6m compared to £26.5m the year before.

The exceptional charges included legal fees related to non-operational matters, staff severance and a provision for contract remediation – with the remainder comprised of supplier disputes and professional fees.

Some £11.65m of the interest charges related to rolled-up interest on long-term notes with private equity backer Bregal Capital, and £2.4m was payable on bank loans. ®

Choosing a cloud hosting partner with confidence

More from The Register

next story
Facebook pays INFINITELY MORE UK corp tax than in 2012
Thanks for the £3k, Zuck. Doh! you're IN CREDIT. Guess not
DOUBLE BONK: Testy fanbois catch Apple Pay picking pockets
Users wail as tapcash transactions are duplicated
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
Google Glassholes are UNDATEABLE – HP exec
You need an emotional connection, says touchy-feely MD... We can do that
YARR! Pirates walk the plank: DMCA magnets sink in Google results
Spaffing copyrighted stuff over the web? No search ranking for you
In the next four weeks, 100 people will decide the future of the web
While America tucks into Thanksgiving turkey, the world will be taking over the net
prev story

Whitepapers

Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
New hybrid storage solutions
Tackling data challenges through emerging hybrid storage solutions that enable optimum database performance whilst managing costs and increasingly large data stores.