Sammy Kinlaw On Lexmark’s New Printers And How His Channel Vision Is Now A Reality

Lexmark channel chief Sammy Kinlaw talks about the big job of selling to small business as the company releases new color printers aimed at small workgroups and micro-SMBs.

Lexmark has doubled down on its commitment to partners, driving new printers through the channel and forging strong relationships with distributors. All of this is targeted at the underserved small workgroup, or micro-SMB end user, which the company estimates is a 10 million-device total addressable market.

Following January’s news of channel-focused GO Line products and the release of the 2 Series, monochrome printer and MFP, Lexmark Tuesday unveiled the GO Line 3 Series, a collection of color devices that come as printers and multifunction printers with built-in managed print services annuities.

“What we say is, ‘It’s built like a tank, but has the weight of a ballerina,’” Sammy Kinlaw, vice president of worldwide channel and OEM sales at Lexington, Ky.-based Lexmark, told CRN in a conversation edited here for length and clarity. “It’s designed for small workgroups. Could be a small bank office. Could be a small anything. Size and weight are important. It’s 30 percent lighter than our comparable product that we had previously, and it’s 50 percent smaller.”

Kinlaw joined Lexmark in January, 2018, and has spent the past year and a half rebuilding the channel at Lexmark and paving the way for the company’s new portfolio. The differentiators with these printers and MFPs are security—which at Lexmark means the entry-level device has the same security features as its top-of-the-line product— durability in terms of robustness, and future-proofed processors that are faster than their competition. Lexmark is growing its total addressable market by delivering those features to solution providers, he said.

“The growth goals for our company are squarely on the shoulders of the channel. If you look at the A4 market today, if you look at where we participated in the market, our addressable market prior to January was right around a third of the market,” Kinlaw said. “To reach the goals of revenue and units, we couldn’t expand within that prior addressable market quickly enough. So the company recognized two years ago we had to grow in smaller-footprint, faster, more aggressively priced product in mono, color and color MFP that allowed us to double our addressable market.”

What is the differentiator in these new color devices?

The No. 1 thing if you are a partner is what are end users most concerned with today? Security. So if you look at our competition in this price band, what you see side by side [is] their summary of their security offering is asterisks—meaning their entry-level products are not secured the same way in which more complex solutions are secured. At Lexmark, we call it ‘No asterisk security.’ At Lexmark, an entry-level product is secured as dynamically as a more complex MFP offering. So entry level all the way through our most complex offering has the same security.

What impact will the new GO Line 3 Series have on Lexmark’s position in the channel?

It makes me feel confident that I can stand on a main stage, or I can walk into an owner, or president or CEO of a VAR, and give them compelling and true reasons to consider us. Before, I was selling them a vision. Today, I can give them a reality. All the vision statements that I worked on when I arrived, that my team has helped me build out, we have been able to do. The support of the company from the CEO down is behind me. So for me, the pressures are real because they’ve said, ‘You have the strategy. This is a good thing, Sammy. Go build out the channel.’ They’ve given us the product. They’ve given us the investment. I’ve expanded the team substantially, all those things have happened. Now we’ve got a lot of work to do. I have thousands of these color devices yet to be sold. Do I feel confident? My product guys have shown me, ‘You’ve got the goods. You can talk about security in a way in which our competition cannot. You can talk about price point. Value statement. Yields. Processor speed. Memory.’ Those are all heavy value statements for a VAR. It doesn’t end there.

When you get on the main stage at a conference, what reason do you give solution providers as to why they should sell print?

If I was a VAR, and I knew this product was hitting the market, why would I begin to choose selling print? Because they may be walking past the print order today just because they’re selling PCs and server and wireless and networking. They might not be selling print, but they should be because they’re selling data center. They’re selling PC. One-stop shop. I tell people, ‘If you are not looking at print, you should because it’s a recurring revenue stream. Once the hardware is sold once, you still get to sell annuities.’

I think they moved away from print when print was perceived to be a dying industry, and that hasn’t proven to be true. And what that has allowed is VARs who are print experts. Those are our bread and butter. At the same time, I can assure you there are thousands and thousands of VARs today not selling print … and allowing a dot-com to pick up the order.

So the task in front of us is how do we market and explain those compelling reasons: Aggressive price points. The technical specs of the products, the reliability, the serviceability, the footprint and the weight in comparison to what our competition is offering today.

The forecast for print is a slight decline in market, but actually MFP in print is growing, along with PCs where there’s certainly a resurgence and an opportunity. So a VAR today that is considering the print space, the barriers to market are lower now than they have been before and, frankly, that [gives us an advantage] because [a VAR can be competitive in the market] with Lexmark and have fewer competitors with the product line.

Why sell print through Lexmark?

If you’re an HP or Brother reseller or VAR, you are going to be competing against hundreds of people trying to sell this box. So that’s one beauty of a growing brand like ours—you can get behind a brand and have some exclusivity where you wouldn’t be able to find it with another manufacturer.

If you are partnering with Lexmark, you have a path to market that is clearly defined, with products intended for the SMB and midmarket marketplace. You’re not dealing with competition from an e-tail- type community. Who is the enemy of the VAR? Online sellers.

They could show up there, but our primary path to market is the SMB and midmarket VAR, through distribution, with the ultimate goal of having a channel that is independently selling, that is empowered and incented, all the right ways. This is the perfect box for them. That’s not inflating it. That’s what it was designed for.

This has a launch kit associated with it, collateral, co-logo opportunities, all the training, all the videos. Everything that a VAR would need to begin selling this product is served up on a silver platter on July 16.

Where are you directing your efforts when it comes to channel sales?

I’m focused on that distribution marketplace. I don’t have the arms and legs to reach 10,000 VARs. We have to use a vehicle that is going to allow us to touch them. I’m a big believer in the power of distribution because they’ve transformed themselves beyond a warehouse and a bank into a marketing agent for a VAR. They’ve transformed themselves into technicians. They’ve transformed themselves into a service provider, where a distributor can perform a service with the partner name on it. So all those things that make a small VAR appear bigger.

The data shows us that the VAR community sells this product at this price band. Compelling reasons if I was a VAR today are besides security what also is important to a VAR is size constraints. A lot of these guys are working in small offices. It’s designed for small workgroups. Could be a small bank office. Could be a small anything. Size and weight are important. It’s 30 percent lighter than our comparable product that we had previously and it’s 50 percent smaller. What we say is, ‘It’s built like a tank, but has the weight of a ballerina.’

How big a game-changer is what you are bringing to the table?

The reason I decided to join the company is the opportunity that Lexmark could present to the channel. We had great products. We have great products. We have a design plan of introducing new products that they showed me. I said, ‘There’s an opportunity for growth well beyond what is in the market.’ So when you look at the task in front of us, and the company has bet itself on growing its channel, it’s monumental.

The company is saying, ‘Our future resides on the path to market in this route.’ … You have to have the right products, with the right promotions, the right incentive and then the very important additive is using four ‘Ps’: product, placement, price, promotion. Actively. Every week.

You have to dedicate teams to who are we competing with? How is our product faring? How does our promotion look in comparison to all the other competition? Do we have the right inventory on shelf? Is there aged [inventory] that I need to address? It’s a success factor that I learned from my prior companies and we’ve indoctrinated into Lexmark. Over the course of the year, we’ve built out a management system that’s built on those four key principles.

The intelligence was there. Understanding the market and what products we needed to participate in. But what has evolved in the last year in and a half is management by the four Ps, the designation of the route that would consume it, how we’re bringing the product to market. All the collateral, underneath the product that’s at the market today, the support for the organization that needs to sell it: channel. This is a companywide, worldwide effort.

What are the biggest incentives that are going to drive the long-term relationships with partners? Is it the rebate on the new product sales? What’s the key thing?

So it’s not lost on me that profitability has to be a core tenet of the products that we’re bringing to market. I’m well aware that if we’re asking the channel to do the heavy lifting and selling, then we’ve got to reward them accordingly.

The only ask that we have is that you become an authorized Lexmark partner. We’ve built an on-boarding team that provides white-glove treatment to all the new VARs coming into the community. If you join us today, we explain here’s who we are, here’s how we go to market, here’s how you make money, promos, rebates and incentives, here’s how you are trained, here’s where the products reside. Here’s who the distributors are. All of that has been built out this year. I have a team in place that all they do is on-board new partners.

The second piece of that is become authorized and then it’s automated. You buy the product from distribution. This product falls into the GO Line Series of products. Much like my competition has a segment or product designed for the channel, we have our own. The 2 Series is designed for the channel. The 3 Series is designed for the channel. It falls into what we call GO. What does GO mean? GO products on shelf are already discounted. They’re readily available at distribution. There are back-end monies associated with them, and all a partner has to do is buy it through an authorized distributor, and then the monies flow accordingly. That’s rebates, promos, incentives, all that follows the box.

What has been the biggest change to the channel program at Lexmark?

We’ve pointed our marketing and investment dollars to open-market products. Open-market products are GO Line. We assume if a partner is selling GO Line, they’re doing the heavy lifting, they’re calling on the end user. They’re creating the demand for our products. They know for GO Line, these are the products that are built for the channel, intended for the channel, rewarded for the channel, and most specifically designed for SMB and midmarket end users.

Interesting additive fact: Within the month of July we’ll allow partners to use the GO Line logo within the end-user community. This thing is taking on a life of its own. It’s growing legs. It not only designates to a partner that the product is built and intended for them, the evolution of this is the GO line takes it one step further and shows an SMB or midmarket customer this could be the right product.

How does Lexmark compete in the cloud?

We have our own offerings. We know that our VARs … are either building out or have a practice today with managed print. So how do you take your managed print environment to the next level? You use cloud. Our way in which to help those environments is through, No. 1, Cloud Fleet Management, CFM.

So this is a Lexmark-designed cloud initiative. It’s our technologies. What it allows a VAR to do is to add a Lexmark printer into their management system. They can wake a device up remotely. They can restart a device remotely. They can add an app remotely. They can monitor usage. They can look at ink levels. There is third-party software out there today that will allow for print management. Ours is different in that it can wake. It can add apps. It can restart remotely. You cannot do that with other third-party apps.

Cloud Connect is a way in which you can access a cloud storage offering like Google Drive or Dropbox from the device. From the device you can upload documents.

There’s a third cloud app called Cloud Print Management. Cloud Print Management allows a VAR to set up a print network and bypass, disregard, and not use a print server. So it allows a device from PC, from endpoint device, to be uploaded to the cloud at the printer. It can pull down the document and then secure release at the printer [with a PIN].

Cloud Print Management. Cloud Fleet Management. Cloud Connect. They’re all value-adds on top of good hardware. ... So those are distinguishing factors that most of our competition doesn’t offer with their products. So any VAR worth their salt today is investing in the cloud, a part of the cloud, selling the cloud.

How big is the opportunity here?

To quantify it, it is thousands upon thousands of units. It’s a multimillion-dollar opportunity that we’ve invested in based off where we compete and what the market is consuming today and what we plan. So this is a must-succeed initiative. I can’t fail. Every ‘I’ and every ‘T’ has been either dotted and crossed to make sure that we’re ready to roll, we’ve produced enough product, we’ve forecast enough demand, that we’ve created the right collateral so that we’re ready for the hockey stick—up and to the right.

It’s a very, very big deal for me personally. For all of the channel organization, our worldwide teams, our CEO. This is a company initiative. My boss told me yesterday, ‘There’s no initiative inside Lexmark that is more important than our channel strategy.’