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CONTENTS Volume 13 No. 7
FEATURE ARTICLES 10
16
PRINCIPAL ISSUES
Dedicated Scanners A possible addition to your product line?
JBMIA Update Association’s president reports on activities & plans
25
by Brent Hoskins Office Technology Magazine
by Yoshihiro Maeda JBMIA
Today, among the MFP’s highly touted functions is scanning — providing an on-ramp for paper documents into the digital domain. In many cases, however, the need for scanning could lead to another sales opportunity for an alternative or complementary product — the dedicated scanner.
Here is a look at some of the current initiatives of the Japan Business Machine and Information System Industries Association submitted by its president, who also serves as president and CEO of Toshiba TEC Corp.
Selling Color Today, it has finally achieved ‘full citizen’ status
All Business is Local The key to becoming ‘the source’ in your market
26
by Paul Schulman Global Imaging Systems Inc.
by Michael Zeis Blackstone Research Associates
Although color printers and copiers always had a lot of sizzle, the glamour products were not always money-makers. However, step-by-step, manufacturers have changed the products into the high-value “B-to-C” color products of today.
20
Close-up: Canon OEM’s executives meet with analysts & editors
Global’s senior vice president of operations shares a few examples of how some of Global’s locations use local marketing, public relations and community relations to position themselves as “the source” in their markets.
SELLING SOLUTIONS New Compensation Plans Here are nine steps to gain sales reps’ acceptance
29
by Brent Hoskins Office Technology Magazine
by Tom Callinan Strategy Development
In an effort to provide a better understanding of Canon’s manufacturing operations and its corporate perspective on the office technology industry, the OEM recently hosted 15 industry analysts and editors on a trip to Japan and China.
COURTS & CAPITOLS 22
Who Are You? You must properly register your business & name by Robert C. Goldberg BTA General Counsel
DEPARTMENTS Bob’s Refurbished Copiers
Business Technology Association
23
February-March Education Calendar BTA Membership Application
Est. 2005
As the new year begins, this is an excellent time to verify that your business is properly registered with your secretary of state and county, if required. All assumed names under which you conduct business must be registered. 4 | www.of ficetechnologymag.com | Januar y 2007
Is it time for a new compensation plan in your dealership? If so, are you looking for a way to gain acceptance of a change? These nine steps can help you not only gain acceptance, but also win advocates of a new plan.
6
Executive Director’s Page
8
BTA President’s Message
30
Advertiser Index
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EXECUTIVE DIRECTOR’S PAGE
What Are Your Plans For Growth In 2007?
I
n my role as editor of Office Technology magazine, my goal is to provide the best editorial content I can in each issue. Likewise, as BTA’s executive director, I strive to ensure that the association is providing the information, guidance and support that dealers are seeking. With the arrival of the new year, naturally, I have that feeling of a “fresh start” we all get. In my case, I find myself eager to help take the magazine and the association to new heights in 2007. I have a vision of where I’d like both to be by the end of the year. There is a lot of work to be done between now and then, but I’m ready to charge ahead. How about you? Do you have great plans for the new year? Are you set to take your dealership to new heights? The questions bring me back to BTA. That is, through this magazine in particular, it is my hope that you find some ideas in each issue that will help you manage and grow your dealership. I often tell people that whenever I write an article or assign an article I have one thought in my mind — the dealer’s bottom line. I’m as big a champion of the independent dealer channel as anyone. If Office Technology can provide you something that could ultimately serve to increase your profitability then we’ve succeeded. So, looking back to the questions regarding your plans for the new year, let’s see if we can find some ideas in this issue that could ultimately lead to boost your dealership’s bottom line. (I encourage you to do the same with this issue, and when reading the remaining 11 issues in 2007). 6 | www.of ficetechnologymag.com | Januar y 2007
Let’s start with the cover story, “Dedicated Scanners.” I believe those quoted in the article share some compelling reasons to take a closer look at some of the scanner products on the market. Visioneer’s John Capurso, for example, says: “Wherever there are MFPs, there is almost always the need for additional scanners.” Here’s what I am thinking: “This may be akin to the reality that people like personal printers on their desks. I imagine there are those who would benefit from a scanner as well. And the footprints of these devices can be pretty small.” In his article, “Selling Color,” Michael Zeis does a nice job in sharing the insight from three dealers regarding the market for colorcapable MFPs and color printers. One of those dealers, Gordy Opitz, comments on the importance of dealerships having color devices in the showroom. I like the way he says, “We always provide ‘what-if’ and ‘whatcould-be’ color documents” to customers who, perhaps, had only been thinking about a monochrome device. Do you have a colorcapable MFP in your showroom? If so, are your reps trained to effectively transition the conversation and demo to a color device? The article from Paul Schulman, “All Business is Local,” has a number of ideas worth considering. He mentions how the Global dealerships cited have embraced promotions related to sports teams or athletes. There are also references to fund-raising efforts for groups such as the March of Dimes. Is your dealership seen as a leader in community involvement and support? This seems to be a trait of Global dealerships, generally thought of as particularly successful. I hope 2007 proves to be a great year for your dealership. — Brent Hoskins
Executive Director/BTA Editor/Office Technology Brent Hoskins brent@bta.org (816) 303-4040 Contributing Writers Tom Callinan, Strategy Development www.strategydevelopment.org Robert C. Goldberg, General Counsel Business Technology Association Yoshihiro Maeda, JBMIA www.jbmia.or.jp Paul Schulman, Global Imaging Systems Inc. www.global-imaging.com Michael Zeis, Blackstone Research Associates www.blackstoneresearch.com
®
Business Technology Association 12411 Wornall Road Kansas City, MO 64145 (816) 941-3100 www.bta.org Member Services: (800) 505-2821 BTA Legal Hotline: (800) 869-6688 Valerie Briseno Membership Marketing Manager valerie@bta.org Cathy Kenton Membership Sales Representative cathy@bta.org Gary Hedberg Accounting Manager gary@bta.org Mary Hopkins Accounting Clerk mary@bta.org ©2007 by the Business Technology Association. All Rights Reserved. No part of this publication may be reproduced by any means without the written permission of the publisher. Every effort is made to ensure the accuracy of published material. However, the publisher assumes no liability for errors in articles nor are opinions expressed necessarily those of the publisher.
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Why did over 200 independent ofďŹ ce equipment dealers award Muratec “Outstanding Performance Secondary Product Line?â€?
Based on the Business Technology Association’s 2006 Channel’s Choice survey, Muratec America, Inc. was awarded “Outstanding Performance Secondary Product Lineâ€? by over 200 independent ofďŹ ce equipment dealers. Muratec was recognized for its outstanding corporate support, digital product line and marketing distribution practices. It’s simple. No manufacturer is easier to work with. And with our award-winning Network Gateway Platform, which enables seamless network connectivity, powerful digital document delivery and intuitive touch screen operation, no other manufacturer’s products are easier to work with.
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BTA PRESIDENT’S MESSAGE ®
Watch For These Two BTA Reports in 2007
A
s many of you already know, among the leading benefits of membership in the Business Technology Association are the various research reports it provides the industry. Ultimately, our research reports — along with the information, guidance, support and other resources we offer — are intended to help you, our members, make decisions that could lead to a boost in your bottom line. Following is a brief overview of two new research reports to be released by the association later this spring. 2007 BTA Compensation Report — By now you should have received an e-mail from eBrain Market Research on behalf of BTA asking that you complete an online survey regarding your current compensation practices. (If BTA does not have your e-mail address, then you received a letter from the association by mail providing you the URL for the online survey.) The results of this survey will be used to produce our 2007 BTA Compensation Report. A look at the most recent Compensation Report, produced in 2004, shows the type of metrics you can expect from the new report. For example, in 2004, the median total compensation for an outside sales rep was $48,000; for a sales manager it was $76,000. Meanwhile, the median total compensation for a senior service technician was $35,800; for a service manager it was $48,000. We will see how these numbers have changed in the new report. Incidentally, the current 2004 Compensation Report is available for download at no charge to members. Just visit www.bta.org 8 | www.of ficetechnologymag.com | Januar y 2007
and click on “Research” and then “Benchmarking Reports.” Also on the site, you will find the 2006 BTA Service Report and the 2005 BTA Finance Report — again, members may download these reports at no charge. 2007 Channel’s Choice Report — In late December and early January, many of you returned your completed ballots for the association’s annual Channel’s Choice Awards Program. The ballots asked dealers to rate their primary and secondary hardware suppliers in specific performance areas in four categories: Corporate Support, Marketing Distribution, Product Line and Inventory. The results of the balloting will serve two purposes. First, they will serve to identify the winners of this year’s awards, which will be presented at the 2007 ITEX Show in Las Vegas. Awards will be presented in the categories of Corporate Support, Marketing Distribution and Product Line. In addition, a Superior Performance Award will be presented to the overall primary product line supplier, and an Outstanding Performance Award will be presented to the overall secondary product line supplier. The second purpose of the balloting is to provide the data for BTA’s 2007 Channel’s Choice Report. This comprehensive report, compiled on behalf of BTA by Industry Analysts Inc., will provide dealers (and suppliers) with a comparison of the leading suppliers in terms of how they rank in each of the performance areas of the four primary categories. Watch for information on the availability of the report this spring. There is more to come. Details on yet another BTA research project — the 2007 Business Equipment Quota Index (BEQI) — will be announced soon. — Dan Hayes
2006-2007 Board of Directors President Dan Hayes Purcell’s Business Products 222 E. 1st St. Campbellsville, KY 42718 dan@purcells.com President-Elect Shannon Oliver Copier Source Inc. 215-G Industrial Ave. P.O. Box 36395 Greensboro, NC 27406-4542 soliver@copiersourceinc.com Vice President Ronelle Ingram Steven Enterprises Inc. 17952 Sky Park Circle Ste. E Irvine, CA 92614 ronellei@msn.com BTA East Thomas Chin Accolade Technologies LLC 604 Hampshire Road Mamaroneck, NY 10543 tchin@accotech.com BTA Mid-America Mike Blake Corporate Business Systems LLC 2018 S. Stoughton Road Madison, WI 53716 mblake@corpbussystems.com BTA Southeast Bill James WJS Enterprises Inc. 3315 Ridgelake Drive P.O. Box 6620 Metairie, LA 70009 bjames@wjsenterprises.com BTA West Rock Janecek Burtronics Business Systems Inc. 216 S. Arrowhead Ave. P.O. Box 1170 San Bernardino, CA 92408 rjanecek@burtronics.com Ex-Officio/General Counsel Robert C. Goldberg Schoenberg Fisher Newman & Rosenberg Ltd. 222 S. Riverside Plaza Ste. 2100 Chicago, IL 60606 robert.goldberg@sfnr.com
09OT0906
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Dedicated Scanners A possible addition to your product line? by: Brent Hoskins, Office Technology Magazine
T
he rise of digital technology and the subsequent onslaught of document-related software have led to a significant focus on the MFP’s various functions in the workplace. Today, among the device’s highly touted functions is scanning — providing an on-ramp for paper documents into the digital domain. Certainly, the ability to scan documents is a key component of the MFP’s value proposition. In many cases, however, the need for scanning at a customer location could lead to a sales opportunity for an alternative or complementary product — the dedicated document scanner. A number of models are readily available from manufacturers traditionally aligned with the BTA Channel. Panasonic, for example, currently offers ten document scanners ranging in speed from 25 to 105 pages per minute (ppm). Similarly, Canon offers eight document scanner models ranging from 12 to 90 ppm. Meanwhile, Xerox offers nine document scanners, ranging in speed from ten to 50 ppm. Dealers can also buy scanners for resale through distributors. Dedicated document scanners from market-leader Fujitsu, for example, are available to dealers from such companies as Ingram Micro and TechData. (Xerox brand scanners are manufactured by Visioneer. In the past, Xerox brand scanners were also only available through distributors. Effective this month, they are available direct from Xerox to authorized Xerox dealers, who now receive revenue credit for scanner sales.) For some dealers, the thought of a dedicated scanner may lead to visions of centralized, high-volume production environments, rather than general office settings. The reality, however, is that the scanner market includes workgroup and departmental product segments, in addi10 | w w w . o f f i c e t e c h n o l o g y m a g . c o m | J a n u a r y 2 0 0 7
tion to low-, mid- and high-volume production segments. In fact, there is a growing demand for dedicated scanners in the general office. “In the workgroup segment, year over year, the analysts predict something like 35 to 40 percent growth,” says Kevin Neal, production scanners product manager for the Imaging Products Group of Fujitsu Computer Products of America Inc. “There’s definitely a trend into distributed capture.” The trend is commonly cited. “We have seen our devices not only being used by the scanner experts where scanners used to solely live — largely in the backroom — but today scanners are being used by people in the general office,” says John Capurso, vice president of enterprise marketing for Visioneer (again, manufacturer of Xerox brand scanners). “These users include office managers, nurses, insurance agents, real estate managers — whatever.” Why has use of dedicated scanners shifted from the back office to the front office? “Users are wanting to convert paper to an electronic format when they receive it right away for faster and more accurate processing,” says Alexandra Dilly, a business development specialist at Panasonic Digital Document Company, referring to the growing practice of scanning paper documents into storage and retrieval systems. “Scanning is now more front-end capture, more decentralized.” Another reason for the shift to front-office scanning is legislation. “So many documents now need to be in digital form because of regulatory requirements, whether its SarbanesOxley, HIPAA or the Patriot Act,” says Capurso. “So, there is a general move to take paper and make it digital.” Fortunately, says Capurso, today’s scanners are better
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suited for widespread use single button a document “... We have OneTouch than in the past. “The techcan be scanned to a file technology built into these nology has advanced to the folder or to an application, devices so that with the point where scanners are such as e-mail, or to a devery fast, highly accurate vice, such as a printer.” push of a single button a and disk space — storage Dedicated scanners may document can be scanned space — is very inexpenbe shifting to the general to a file folder or to sive,” he says. office, but what about the an application, such as Citing Xerox brand scanMFP? Can’t it provide all of e-mail, or to a device, such as a printer.” ners in particular, Capurso the scanning capability — John Capurso adds that Visioneer has that workers need? The Visioneer ensured that dedicated answer appears to rest in scanners for the general three areas — document office are ideally suited for workers. “We don’t want to volume, convenience and the advanced features and funcmake the requirement that they fit into our world, but, tionality of dedicated scanners. rather, we are adapting to their world,” he says. “Ease of use “When a customer environment calls for high-volume is the most important feature that will help with the adop- scanning and large batch processing, they will find a dedition of this class of scanners. So, we have OneTouch tech- cated desktop scanner will increase productivity,” says nology built into these devices so that with the push of a Mark Machida, director and assistant general manager of
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manufacturer doesn’t really image filing systems at “One route to selling focus on how important this Canon U.S.A. Inc. “Also, the success we have seen kind of thing is, because you convenience of a desktop has been selling customers are just doing 20 scans a unit located at a workstaday, for example.” tion helps save time and a complete scanning If it sounds as if the case is money when compared to solution from capture being made for the dedicated employees having to walk to devices to software in scanner as a replacement for the nearest MFP for each order to ... meet their the MFP’s scanning functionscan throughout the day.” scanning needs.” ality, that is not the case. “We Neal provides a more — Mark Machida see MFPs as a complement definitive answer on the Canon U.S.A Inc. to scanners,” says Neal. “Peoquestion of document volple who have an interest in ume: “We think that anyad hoc scanning or distributed scanning can use an MFP, but thing over 50 pages a day scanning should dictate a dedias volumes increase or they need additional functionality then cated scanner.” As noted, the area of the dedicated scanner’s features and they realize they need a dedicated scanner.” Capurso comments on the complementary nature of the functionality are also factors in answering the MFP vs. relationship between MFPs and dedicated scanners as scanner question. For example, explains Dilly, unlike MFPs, Panasonic’s scanners can accommodate multiple sized doc- well. “Once a company has made the strategic move to go uments in the automatic document feeder (ADF). “This from paper to digital, there is already that mindset that could range from a thick ID card to an invoice to an 8 1/2 by scanning is an important function,” he says. “So, we look at MFPs as augmenting and supporting the cause for stand11 sheet to a long sheet — all at the same time,” she says. Among the other features of Panasonic’s scanners — dis- alone scanners. Wherever there are MFPs, there is almost always the need for additional scanners, either in individtinguishing them from MFPs — that Dilly cites: The ADF on the OEM’s scanners range from 50- to uals’ offices, remote locations or just other locations where 1,000-document capacity. “If you have 1,000 sheets of paper, there are not MFPs.” Increasingly, it appears, end-users are showing an obviously, you are not going to be able to place them on the interest in dedicated scanners. “Over the past year, our MFP’s ADF at one time.” The scanners are able to scan exceptionally long docu- sales into our traditional MFP dealer channel have more ments, such as EKGs, fetal monitor printouts and oil drilling than doubled,” says Dilly. “In talking to dealers, I’ve learned that most of them are getting questions about scanning.” logs. “Our high-end models scan up to 183 feet.” Selling dedicated scanners in addition to MFPs allows In the case of MFPs, the chemicals from NCR paper can adsorb into rollers and make them swell and crack. “The dealers to provide the “total solution sale,” says Dilly. Canon’s Machida agrees. “Dealers can look to provide cusrollers on scanners are NCR-paper retardant.” Similarly, Neal cites features that distinguish Fujitsu scan- tomers with a total scanning solution,” he says, noting that, ners from MFPs. “For example, there is technology like auto- ideally, the dedicated scanner is sold with software as part orientation or auto-rotation, so that you don’t have to put all of a document storage and retrieval system. “One route to of your documents in the right-side-up direction,” he says. “If selling success we have seen has been selling customers a they are upside down or flipped, you just take a stack of docu- complete scanning solution from capture devices to softments, place them on the scanner and let the software auto- ware in order to provide them with an appropriate and ready-to-use solution to meet their scanning needs.” orientate your images so that they are right side up.” Of course, the world of dedicated scanners is closeNeal also notes the appeal of auto-color detection. “You don’t want to scan everything in color because the file sizes ly aligned with the world of software. In fact, often, scanners are big,” he explains. “So, with automatic color detection, are shipped with software. “Our scanners are all bundled you put your black-and-white and color documents in the with RTIV, which is our Panasonic proprietary capture softsame batch and the scanner is intelligent enough to know ware,” says Dilly. “You can capture an image as a PDF, JPEG, ‘this one is color’ and ‘this one is black and white’ ... An MFP Bitmap, etc., and save it wherever you want. If the customer 12 | w w w . o f f i c e t e c h n o l o g y m a g . c o m | J a n u a r y 2 0 0 7
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is just looking to replicate product category particu“The real margin is in their processes electronilarly appealing to dealers, providing a value-add — cally, then this would be a says Dilly. “The real margin selling our scanner with good first step.� is in providing a value-add — Similarly, Capurso comselling our scanner with another piece of software ments on the software shipanother piece of software and providing service to ped with Xerox dedicated and providing service to the the end-user. Typically, scanners. “Our scanners end-user,� she says. “Typisoftware margins are come with the necessary cally, software margins are higher than an MFP or scanner margin ...� drivers, whether they are higher than an MFP or scanAlexandra Dilly TWAIN or ISIS, but we also ner margin due to the upPanasonic Digital Document Company include high productivity grade fees and license resoftware in the box — a full quirements. Hardware is just version of PaperPort, OmniPage and Kofax VRS,� he says. a piece of the puzzle. Selling a total solution is where our “As you find scanners being deployed into larger enterprises, dealers can make their revenue.� there are other applications out there, such as DocuShare There is also residual income from the sale of the hardware and Documentum.� itself, notes Neal. “Scanners have consumable parts and It is the revenue from software sold separately from dedi- require maintenance,� he says. “Consumables will wear out cated scanners and the subsequent support that makes the over time. In addition, mission-critical scanning often
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Make an Impact! BTA has made a difference to your business.
Now you can make a difference in your industry. BTA is currently seeking nominations for the vice president, president-elect and two board of directors positions for the 2007-08 year. If you are a BTA dealer member with voting privileges and you are interested in serving — or you would like to nominate someone who may be interested in serving — please submit your name or the nominee’s name and a brief resume to the Leadership Development Committee, c/o BTA Executive Director Brent Hoskins at brent@bta.org. Nominations are due by Feb. 15.
For more information, call (800) 505-2821.
Volunteer 14 | w w w . o f f i c e t e c h n o l o g y m a g . c o m | J a n u a r y 2 0 0 7
“Consumables will wear out over time. In addition, mission-critical scanning often requires yearly on-site service contracts to ensure uptime. That’s where a lot of our customers [dealers] are very focused.” — Kevin Neal Fujitsu Computer Products of America Inc. requires yearly on-site service contracts to ensure uptime. That’s where a lot of our customers [dealers] are very focused. They can realize service margins for, perhaps, 10 years.” While hardware service is a traditional focus of the office technology dealership, some dealers may hesitate to pursue the dedicated scanner market due to the predominance of related software. Can the general line rep be successful in selling dedicated scanners or does it require a specialist? The responses vary. Says Machida: “We find that a specialist is able to best present these devices to customers, as many of them are new to high-speed document imaging devices.” Says Capurso: “Skilled MFP sales reps can sell standalone scanners because they understand the customer’s need to digitize paper in their business.” Says Dilly: “It’s a little bit of both. Some of our dealers do have an imaging team or one person who is focused on being the ‘go-to’ person for scanners.” Despite the varied opinions on having specialists or general line reps selling dedicated scanners, all agree that it is a sales opportunity more dealers need to consider. The market for dedicated scanners is significant, given that it is both horizontal and vertical, says Capurso. “There are healthcare applications, for example, where scanners are being used not only to capture paper documents, but also insurance cards or ID cards,” he explains. “Or, maybe account applications are being taken at a bank for new customers and their IDs are being captured. So, there are a variety of vertical applications. But, capturing paper is also horizontal. It applies to anyone who is managing paper. And that can be anyone from a small store owner to a Fortune 500 company.” Brent Hoskins, executive director of the Business Technology Association and editor of Office Technology can be reached at brent@bta.org.
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Selling Color Today, it has finally achieved ‘full citizen’ status by: Michael Zeis, Blackstone Research Associates
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lthough color printers and copiers always had a lot of sizzle, the glamour products were not always the best money-makers. However, step-by-step, over the course of 20 or so years, manufacturers have changed a technology that was slow, cantankerous and costly into the high-value “B-to-C” color products of today. Color still has sizzle, of course, but now, instead of approaching the products with the tentative first steps of years ago, both customers and vendors alike have a mature understanding of what to do with color. At one time, a color specialist told prospects the color story. Now, most of the time, the brochure for the color MFP is the first one out of the salesperson’s briefcase. Today, the salesperson is on the lookout for one of three color opportunities: B-to-C transfer. Everybody understands this one. For the same monthly lease that paid for an old-technology, blackand-white copier, one can have a new-technology color copier that also prints, with black-and-white pages costing about the same as before and color pages charged on an as-used basis. Ink-jet and desktop laser replacement/migration. Desktop printer replacement can be a sensitive issue for the prospect. If replacement is politically incorrect, cost-saving and serviceefficiency objectives still can be achieved by transferring the print volume to a new more productive machine, assuming the client can effect change in end-user behavior. Bring work inside that had previously been done outside. The broad applicability of color in the office does not mean that specialists are no longer welcome on the sales staff. It takes special knowledge to guide a customer to equipment with the image quality, media flexibility and finishing capability to produce acceptable substitutes for outsourced work, while still being cost-effective. 16 | w w w . o f f i c e t e c h n o l o g y m a g . c o m | J a n u a r y 2 0 0 7
Control is Important Customers who fear inappropriate use of color need to be reminded that, at some point, they are going to have to learn to integrate color into their operation, especially if manufacturers stop producing monochrome-only products. Richard Shea, president of SBP Image Solutions, St. Louis, Mo., uses management of color costs as a principal message. “There is a lot of concern about color,” he says. “Even though the per-page costs have come down, color remains dramatically more expensive than black-and-white. From our side of the table, almost without exception, we are talking about how to help our client control color once we get it in there. Of course, we warn customers that they are going to use it more than they thought they would. We also tell them that the time will come when they won’t be able to get a machine without color, except for the very high volumes. So, they had better figure out how to control it now.” Customers following Shea’s train of thought need only to be asked to remember their own history with inkjet. “Most of them understand and agree that [inkjet printing] is out of control and they want help controlling it,” he says. Of course, one does not create an advantageous sales situation by insinuating that customers are poor managers of their resources. “Once we help a client get their arms around what they are really spending now, that helps them justify investment in new hardware, by re-directing those same dollars,” says Shea. “Everybody would rather get more value for what they are spending, than just spend more. When you explain that, their eyes just light up.” Shea says the case is especially easy if the customer’s color printers or copiers are a generation or two old, from an era where per-page printing costs might have been closer to 25
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cents or 35 cents than the 10 cents or 12 Be ready to help your client be a color “Exposure ... to the cents that is common now. “If you save enabler, a color booster, a person who printing marketplace 20 cents per print and you do 5,000 a looks at color samples and says, “we and the printing month, that’s $1,000,” explains Shea. should do more color.” But be aware “That makes a big lease payment.” that even customers with a great deal of industry has been John Heiser, executive vice president enthusiasm will need to put the brakes important in opening of MT Business Technologies Inc., on and manage access. up the opportunity Mansfield, Ohio, says having printers in to sell color MFPs.” the product line has given his sales staff Better Prospecting valuable real-world exposure to the ecoThere is no substitute for having innomics of printer-printing compared to MFP-printing. depth knowledge of the account or prospect. “The most suc“Since our sales reps now understand that customers who cessful sales tactic is to really understand the customer’s were making prints on inkjet and some lasers were paying business,” says Gordy Opitz, senior vice president of 15 cents to 50 cents for a color print, they understand how ComDoc Inc., Akron, Ohio. And the investigation of docuto sell them something for 7 1/2 cents or 8 cents per print,” ments in a company is more encompassing and beneficial he says. “Exposure and education to the printing market- when color is part of the conversation. When the whole sales place and the printing industry has been important in staff is talking color, the level of account knowledge overall opening up the opportunity to sell color MFPs.” ramps up and the number of opportunities increases to
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include office printers, document management and high-volume printers. “I wish every sales rep would ask all the perfect questions on every call, but sometimes we stumble,” says Dave Choura, a product specialist at ComDoc. “Color causes us to ask questions that we should be asking anyway. We have come across significant high-volume opportunities by asking whether the prospect outsources color.”
Retain Focus in Spite of Digital As mentioned, discussing color leads the discussion to other opportunities, and dealer management must use discipline in deciding which opportunities to follow and how far to follow them. Dealers have added network installation and service, printer sales, printer service, fleet management and many other business areas. Management needs to determine whether additional lines offer beneficial product depth or instead are expensive distractions. Says Heiser: “No matter whether your dealership handles one brand or three brands, the salesperson is only going to be able to sell so much every month.” Says Shea: “Adding more products doesn’t necessarily mean the salespeople will sell more, it may just mean they will sell different.” Not too long ago the concept of putting a copier-based product on the network was viewed with suspicion. Now that the computer connection has been made physically and “emotionally,” dealers have to accept the complexities that digital brings. Since “digital” covers so much territory, dealers have to be watchful that their salespeople remain focused and have a widely-applicable set of discussion points for prospects. To ensure that customers understand the range of hardware and software options, the sales team at ComDoc is encouraged to bring both prospects and established accounts into the showroom where a full range of products can be demonstrated and a full complement of technical, sales and account management staffers can respond to questions. “You are not only selling current technology, you are selling future technology, which not only includes color, but also includes the migration from print to MFPs,” says Opitz. “To do that, we really have to understand their applications and document workflow. Many times customers and prospects come into our showroom to evaluate monochrome systems. With color an integral part of our offering, we always provide ‘what-if’’ 18 | w w w . o f f i c e t e c h n o l o g y m a g . c o m | J a n u a r y 2 0 0 7
and ‘what-could-be’ color documents as examples. Now the conversation can address the future. Customers will say, ‘Wow, if we had this equipment, look what we could do.’” The close rate with showroom visitors is in the 70 percent neighborhood, he says. In addition to adding revenue, document imaging puts the dealership in the role of a business process enabler, which protects the account and can prompt the sale of still more products and services. But Shea says the process takes longer. “Yes, there is more revenue on the sale,” he says. “But the downside is that it is slowing the sales process. All at once, all the customer wants to talk about is scanning. It is almost like hardware becomes secondary.” The establishment of a distinct product offering — such as bundling scanner utilities with each sale — is important because, in most cases, dealers are in direct competition with others in their area offering the same hardware. The current sales environment is one in which the program is as important as the product. Says Choura: “There are five people selling the same product, so it really does come down to zeroing in on what the customer is trying to achieve.”
“Color causes us to ask questions ... We have come across significant high-volume opportunities by asking whether the prospect outsources color.”
New Color Product Lines? Workflow and color-management consultants have emerged to help those in graphic arts work with color. But this highly specialized field holds little attraction to a business where “color management” means providing color lock-out codes and monochrome-only drivers. “The next place I go to that has calibrated their monitors will be the first place [that does so],” says Choura. Formal color management is a requirement in the graphic arts (commercial printing) workflow. But the lack of formal color management in office environments can be taken as an indication that the print quality differences between highend printers and office-grade products are minimal, and that office color systems are quite stable. Having the printers work properly (finally) is a market driver. Also moving the market forward is software that gives non-graphic artists the ability to produce professional-looking color documents. Large-format color printers share neither applications nor target markets with B-to-C color machines, so office technology product dealers who add large-format printers do so with the knowledge that they are not adding a line of products, but rather are adding a whole new business.
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chrome products that were connected What to Watch Out For “We are doing over the last ten years. The same feet-onThe opportunities with color are clear, everything we can to the-street that converted analog copiers to but there are hazards to address, too. convert our ... base to digital and then converted digital copiers No redundancy. Although color is to connected copiers are now converting frequently offered as the lead product, some kind of color. The monochrome offices to color. And they are the installed base consists mainly of first one in with color is doing so with some urgency, because the monochrome machines. With a degree going to keep and first one in has a great advantage. of monochrome redundancy, customers expand that business.” “We are doing everything we can to can divert work to another machine if convert our black-and-white base to one fails. Few customers have such a safety net for color. “If a color machine isn’t performing some kind of color,” says Shea. “The first one in with color is right or you can’t get supplies for it, all at once you are a going to keep and expand that business.” Michael Zeis, president of Blackstone Research high-profile vendor, in a bad sense,” says Shea. Associates, publishes the Color Business Higher inventory costs. There are more supplies for Report newsletter. Has has been color products, and they cost more — a color MFP needs helping clients track technology adoption four toner cartridges and drums inside the machine, and and understand the implications four more sitting on the shelf. The investment required for of technology change for nearly 30 years. toner inventory is much higher for a B-to-C fleet of equipVisit www.blackstoneresearch.com. ment, compared to the inventory of the monochrome equipment that is being replaced. So, while the customer hears “pay for color only when you use it,” dealers must pay for color up front. “Instead of one bottle of toner at $40,” says Shea, “I have to inventory four bottles at $100 apiece.” Risk of stock-out. Most business owners would respond to this demand for resources by minimizing the stocking level, which increases the risk of a stock-out situation. Cost-per-copy without a benchmark. Especially with new placements, the dealership must be cautious about color cost-per-copy programs, where high area coverage can turn a profitable account into a loser. Heiser uses an estimate for the first year, and terms on the maintenance agreement allow for adjustment based on actual usage in subsequent years. Fix the network for a fee. Another pricing tip: have a clear distinction between machine-related service (covered under cost-per-copy) and network service (to be billed separately). With Some Urgency Part of the credit for the success of the B-to-C concept should go to the scientists, engineers and manufacturing teams who advanced the technology. It is not just that good results are obtainable, good results are easy to obtain. It is not just that the products perform consistently, they perform consistently without a lot of tinkering by the service reps or the end-user. Remember that one of the pivotal breakthroughs was a pricing breakthrough. B-to-C works because of low system cost and near-parity per-page monochrome copy costs. But, ultimately, today’s color MFPs are successful because of the digital monow w w . o f f i c e t e c h n o l o g y m a g . c o m | J a n u a r y 2 0 0 7 | 19
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Close-up: Canon OEM executives meet with analysts & editors by: Brent Hoskins, Office Technology Magazine
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n an effort to provide a better understanding of Canon’s manufacturing operations and its corporate perspective on the office technology industry, Canon U.S.A. Inc. recently hosted 15 industry analysts and editors on a trip to China and Japan. The itinerary included a visit to Canon Inc.’s headquarters and a meeting with senior executives, including Chairman and CEO Fujio Mitarai and President and COO Tsuneji Uchida. The December 3-10 trip also included tours of Canon factories in Suzhou, China, and Toride, Japan. At both facilities, local Canon management emphasized the merits of the OEM’s cell production system. The approach eliminates the use of conveyor-belt assembly lines. Instead, a small team or “cell” of workers handles the assembly of products from start to finish. “The two main aims of our system are to improve productivity and to decrease the investment amount,” said Ishii Hiroshi, president of the Suzhou factory, noting that the system also eliminates wasted space. “Another objective is to remove the wasteful motions of people. We also try to reduce the amount of inventory.” Hiroshi noted that cell production allowed Canon to reduce its workforce worldwide by 58,000 people and reduce space by 1.7 million square meters between 1998 and 2005. “When you think about mass production, you might imagine the conveyor belt system, but in the Canon factories, we don’t have any such systems anymore. In the year 2002, our last conveyor belt system was abolished.” At Canon corporate headquarters in Tokyo, senior management provided analysts and editors with an overview of the company’s growth strategy in the coming years. President and COO Uchida said 2006 marked the first year of Canon’s Global Excellence Corporation Phase III, a five-year management plan. He described the plan as “crucial” for Canon, noting that the company is striving to realize “healthy, sound growth” through achievement of the goals of the plan. 20 | w w w . o f f i c e t e c h n o l o g y m a g . c o m | J a n u a r y 2 0 0 7
Above: Tsuneji Uchida, president and COO of Canon Inc., visits with industry analysts and editors at Canon Inc. corporate headquarters in Tokyo. Right: Fujio Mitarai, chairman and CEO of Canon Inc., greets visitors before sharing his welcoming comments. The plan includes such strategies as further diversification of the company’s product line and ensuring the highest quality workforce possible. “One of the key strategies is, of course, achieving the overwhelming number-one position worldwide in our core business,”said Uchida. “We hope that by 2010, the last year of this five-year plan,
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million,” he said. “I stayed in the United to achieve 1.5 trillion Yen in sales and “Major accounts States for 23 years. By the time I left the profitability of 10 percent or above,” he and large enterprises states, we had grown to a sales level of said. “And, this objective, if achieved, I are no longer just $2.8 billion with personnel of 6,400.” hope will mean that we rank in the top Sharing a story about Canon’s pur100 of the best companies in the world interested in purchasing suit of its first patent in the United in terms of all different economic and a device, they are States, Mitarai said he was especially managerial indices that exist.” more interested in pleased when it was approved. “We In his presentation, Masaki Nakaoka, having solutions.” were wondering whether the U.S. Patent director and chief executive of the Office Office would actually give us approval Imaging Products (OIP) Group of Canon Inc., noted that one-third of Canon total sales come from for this technology,” he said, referring to the technology office imaging products. He also noted that the OIP Group that would be in direct competition to technology from includes about one-third of Canon’s approximately 120,000 Xerox Corp. “But, I must say, the United States is a very equitable and fair country; we had no problem at all employee workforce. Nakaoka shared some of the key areas of focus of the OIP obtaining our patent. And, since that time, I am very proud Group. “One of the major trends we see in our sales revenue to consider the United States as my second home.” Brent Hoskins, executive director is that color and document solution sales are growing,” he of the Business Technology Association and editor said. “We are enhancing our color line-up. We will further of Office Technology, can be reached at brent@bta.org. strengthen our foothold in the office color market.” In a question and answer session, Nakaoka commented on the continued rise of color-capable imaging devices, noting that he expects half of Canon placements within the next three to five years will be color-capable devices. “Of course, there is a benefit of black and white that customers continue to have a need for,” he said. “So, I believe black and white will continue to stay in this market.” Nakaoka also emphasized Canon’s focus on softwarebased solutions and their importance to the company’s ongoing success. “Major accounts and large enterprises are no longer just interested in purchasing a device, they are more interested in having solutions,” he said. “Having solutions will also help increase our device sales. Once we are able to win customers, they tend to stay with us for a long time. So, we think this is a very important factor.” As noted, the meeting at Canon’s corporate headquarters also included a presentation by Chairman and CEO Mitarai. He, too, emphasized the significance of the OIP Group to the company and commented on the greatest source of revenue within the group. “Over the past seven years we have been fortunate to record increases in sales and profits,” he said. “The driving force for our growth is accountable to the North American market, i.e., Canada and the United States. It is accountable for 30 percent of the total sales of Canon.” Mitarai also reflected on the company’s sales growth in the U.S. market through the years. He noted that he was one of the first 14 Canon employees to begin operations in the U.S. market. “We were making annual sales of only $3 w w w . o f f i c e t e c h n o l o g y m a g . c o m | J a n u a r y 2 0 0 7 | 21
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COURTS & CAPITOLS
Who Are You? You must properly register your business & name by: Robert C. Goldberg, General Counsel for the Business Technology Association
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pursue claims incurred under “Bob’s ecently, I was requested to pursue a Copiers” and, likewise, may be precluded significant account receivable owed from defending actions as a corporation. one of our members. What appeared b’s Bo The worst result would be the elimination of to be a routine matter proved to be very all corporate protections and personal expocomplex when it was found that the dealer Refurbished sure due to the lack of proper registration. had failed to properly register his business iers Cop In our member’s case, the business was and the name under which the business was conducted under a shortened version of the conducted. The result was extensive corpoEst. 2005 corporate name. The shortened version was rate maintenance in order to become qualiused on all contracts and transactional docfied to bring a lawsuit. uments. Naturally, the shortened name was All companies, regardless of the industry, transact business under some name that is either assumed or not properly registered with the secretary of state. The court, real. For most business entities this does not present a problem due to the failure to do business in a properly qualified name, as the business name has been registered with the secretary of dismissed the collection suit brought. Fortunately, the claim state and, where necessary, the county where the business is was not dismissed with prejudice and it was possible to located. Properly done, the registration is made at the time the correct the situation and proceed again. Let’s say, to correct matters, my corporation’s contracts business is formed. All assumed names under which you conduct business must be registered. The failure to register an and transactional documents were all revised to state: “Bob’s assumed name can prohibit a business entity from bringing suit Refurbished Copiers Inc., d/b/a Bob’s Copiers.” The next step and can expose the business entity to liability, including the would be to properly register all assumed names with both the award of attorney’s fees. The cost of failing to register may be secretary of state and county where the business is located. Fortunately, we’ll say, the assumed names utilized were availthe personal liability of shareholders, officers or directors. The problem of unregistered business names often arises able and had not been registered by another business. Had the when doing business with individuals or sole proprietorships. names been previously registered it may have become necesLet’s assume that I am just beginning to conduct business and sary to change the business’ name. As the New Year begins this is an excellent time to verify am doing so as Bob’s Refurbished Copiers. I have not incorpothat your business is properly registered with the secretary of rated nor filed the name as an assumed name. If Bob’s Refurbished Copiers brought suit, the opponent could seek state and the county, if required. All corporations are dismissal based on the fact that the name was never regis- required to file an annual report. Most states make corporate tered. In the process of doing so, the opponent could seek their filings available online so you can verify your corporate status attorney’s fees incurred in having the matter dismissed. Most easily. Corporation Acts require an annual meeting of the corstates prohibit a business that is not “properly qualified” from poration and board of directors at least once per year. The minutes of these meetings must be included in the corporate either bringing or defending a lawsuit. The situation more likely to affect you is where a registered minute book. These obligations may not seem important, but company contracts or utilizes documents in a name other than rest assured if you become involved in litigation they would the exact name registered with the secretary of state or county become important factors. Check your corpowhere the business is located. If my corporation was Bob’s rate health annually and it will not become a Refurbished Copiers Inc., but all of my contracts and transac- terminal problem. Robert C. Goldberg is general counsel for the tional documents were in the name of “Bob’s Copiers,” a court Business Technology Association. He can be may well find I was doing business under an unregistered reached at robert.goldberg@sfnr.com. assumed name. If so, the corporation would not be able to 22 | w w w . o f f i c e t e c h n o l o g y m a g . c o m | J a n u a r y 2 0 0 7
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EDUCATION CALENDAR BUSINESS TECHNOLOGY ASSOCIATION • January 2007
EDUCATION CALENDAR February 12-14 Sales Management Workshop
Tahoe, NV This three-day workshop, presented by MOTIVE8S Inc., is designed for the office technology sales organization — specifically for owners and sales managers, executives, vice presidents and supervisors. Workshop focus areas include leadership, situational management and team culture. The workshop is followed up with four months of individualized, one-hour telephone coaching sessions and access to quarterly web-cast meetings. The ongoing coaching allows for continuous process improvement. For information, call MOTIVE8S at (515) 210-2136.
20-22 Sales Management Workshop
Dallas, TX
March 5-6
Service Management Workshop Lexington, KY This two-day workshop, presented by MOTIVE8S Inc., will provide office technology dealership service managers with improved management techniques and enhanced team productivity. The goal of the program is to help service managers improve consistency, accounting and productivity through the development of new mind-sets, strategies, processes and tactics. The first area of focus is leadership: How to manage individuals and the service team with a consistent management process. The second area of focus is team development: people development and training; team staffing and recruiting; accountability standards; daily, weekly and monthly communications; and motivation, recognition and service team meetings. For information, call MOTIVE8S at (515) 210-2136.
20-23 ITEX 07
Las Vegas, NV ITEX 07, presented by imageSource magazine, is aimed at helping dealers and VARs who are seeking suppliers for all aspects of the expanding copier/printer and document solutions market. The show will feature more than 250 exhibitors and 100 hours of education. BTA members receive a discounted $79 registration. Use promo code GBTA17. For more information or to register, visit www.itexshow.com.
For a full list of upcoming BTA and other industry events or to register for MOTIVE8S workshops visit www.bta.org or call (800) 843-5059. Effective Jan. 1, BTA is now offering dealer members a $250 discount coupon towards FIX and ProFinance. Members may use their $150 discount coupons for the MOTIVE8S workshops. For details, e-mail info@bta.org.
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MEMBERSHIP APPLICATION PART I – COMPANY INFORMATION Company Name: Street Address:
PO Box:
City:
State/Province:
Phone: (
)
Fax: (
ZIP/Postal Code:
)
Country:
Web Address:
May we communicate with you via fax and/or e-mail? Yes No May we include your fax number in the BTA Membership Directory? Yes No May we include your e-mail address in the BTA Membership Directory? Yes No Occasionally, BTA makes its member list available to companies who wish to present opportunities to our members. If you prefer not to receive such information, please check here: Contact Names (first name listed receives all mail): Principal Contact:
Title:
E-mail Address:
Sales Contact:
Title:
E-mail Address:
Title:
E-mail Address:
Service Contact: No. of locations (include parent):
No. of employees (include owners):
PART II – PRODUCT INFORMATION
OEM Authorizations:
Please indicate the products you sell (check all that apply):
Equipment/Products: Audio/Video Presentation Equipment Bar Coding Equipment Binding Equipment/Supplies Cash Registers/Point of Sale Check Writing/Protection Equipment Computers/Accessories/Parts/Supplies Copiers (MFPs) B&W/Accessories/Parts/Supplies Copiers (MFPs) Color/Accessories/Parts/Supplies Duplicating Equipment/Parts/Supplies Facsimile Equipment/Parts/Supplies Filing Systems/Electronic Organizers Furniture Identification Systems/Labeling Equipment
Mailing/Shipping Equipment/Supplies Networking Products/Services OCR Scanners Office Supplies Paper Handling Equipment Phone Answering Equipment Power Protection Printers B&W/Accessories/Parts/Supplies Printers Color/Accessories/Parts/Supplies Recycled/Remanufactured Equipment/Supplies Security Equipment/Systems Shredders Software Development/Sales/Support Time Recording Equipment
Typewriters/Accessories/Parts/Supplies Other:
Services: Circuit Board Repair Consulting Equipment Rental Financing/Leasing Insurance Internet Solutions Publication Service/Repair Training/Education Other:
PART III – MEMBERSHIP Categories, Classifications and Investments Retail Dealer/VAR Memberships
Vendor Associate Memberships
Service Associate Memberships
$430
1-10 Locations
$1,500 Annual Sales up to $5 million
$500 Annual Sales up to $1 million
$885
11-50 Locations
$2,000 Annual Sales $5-$10 million
$750 Annual Sales $1-$5 million
$2,500 Annual Sales over $10 million
$950 Annual Sales over $5 million
$1,395 51+ Locations $125
Branch Location (in addition to parent)
$100 Keylink
$150 Publications Associate
Will your OEM reimburse you for your membership dues? Call BTA at (800) 505-2821 for details. Payment Enclosed (Make check payable to Business Technology Association)
PART IV – INVESTMENT Annual BTA Dues:
MasterCard Visa American Express
Processing Fee:
$ $ 25
Card Number:
TOTAL:
$
Card Holder’s Name:
Exp. Date:
Membership dues must be submitted in U.S. funds. Dues paid to BTA do not qualify as a charitable tax deduction, but do qualify as a business expense. $45 of the annual dues pays for your subscription to Office Technology magazine. I hereby apply for BTA membership: Signature: Date: Don’t let my membership lapse! Renew my membership using this credit card number at the end of my membership year. Return to: Business Technology Association, 12411 Wornall Road, Kansas City, MO 64145 Phone: (800) 505-2821
Fax: (816) 941-4838
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Join online at www.bta.org
JAN 07 OT
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PRINCIPAL ISSUES
JBMIA Update Association’s president reports on activities & plans by: Yoshihiro Maeda, JBMIA
Editor’s Note: Expressing his best wishes to members of the Business Technology Association in the new year, the following was submitted by Yoshihiro Maeda, president of the Japan Business Machine and Information System Industries Association (JBMIA). Maeda also serves as president and CEO of Toshiba TEC Corp. t has been trumpeted that the Japanese economy expanded last year for longer than it did during the Izanagi Boom. Although the growth rate was not even comparable, it is hoped that another period of expansion will ensue and economic growth further develop. In this environment, JBMIA was successful last year in transmitting information outside the organization and carrying out an international cooperation/exchange. In June, JBMIA held the first JBMIA Forum 2006 at Otemachi Sankei Plaza to announce the results of its committees and groups. This helped its members to better understand the organization’s activities and enabled them to be fully apprised of developments. In October, JBMIA dispatched a mission to Europe for the first time in three years, strengthening partnerships with associated European organizations like BITKOM and EICTA. Among other projects, JBMIA also sent a mission to China for the protection of intellectual property rights and held a workshop on the Korean eco-labeling program, showing steady progress in its international activities. JBMIA is planning to broaden its activities this year, by promoting exchange with Southeast Asian countries. One of the issues JBMIA has been progressively tackling is the construction of an advanced sustainable society. Each member company has made energetic efforts in response to RoHS, a directive implemented in Europe last year. In addition, JBMIA has collected and dispersed relevant information to its members, so that its industry can respond appropriately to the regulation. Since global environmental issues are universal, the actions taken to tackle them have become increasingly diverse. In addition to responding to new environment-related regulations such as RoHS in China and REACH and EuP in Europe, JBMIA plans to aggressively broaden its 3R (Reduce, Reuse, Recycle) activi-
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ties through its committees and groups. Last year, the media took a strong interest in safety issues related to such devices as gas appliances, elevators and paper shredders. JBMIA is making continuous efforts to improve product safety as a starting point in the development of any product and toward this end it will focus on activities for safety standards, including IEC/TC108. In this regard, JBMIA is also playing an important role not only in establishing safety standards, but business machine standards such as JIS/JBMS, and in developing and disseminating BMLinkS and PJLink. JBMIA considers it a challenge to take the lead in setting international standards and will strive to achieve this by stimulating activities related to ISO/IEC/JTC1/SC28, and by conveying to the world the international standards set in Japan. Support services play an essential role in the business machine and information system industry. JBMIA established the Service Support Committee in 2005 and, among other activities, has been making efforts to improve the skills of CEs (customer engineers) and create support menus that are comprehensible to customers, as well as to prepare a common industry-wide CE training system. As for new business categories, JBMIA has improved the functions of the Electronic Paper Consortium and has advanced its activities to realize a new concept based on UC (Ubiquitous Workware and Collaboration), which is an industry-wide challenge to realize the next generation office. JBMIA will also nurture BMLinkS. The revision of accounting standards for leasing is one of the new developments related to our industry since last year. Currently, many office business machines, such as copiers and printers, are leased. For customer convenience, and with an eye to the possibility that it will have a dramatic impact on industry business models, JBMIA is going to carefully see how the situation develops. With the activities described above, JBMIA will contribute to the development of the business machine and information system industry, and it is our hope to contribute to the progress and prosperity of the society as a whole. In order to achieve this, we request your continued support and cooperation this year. Thank you. w w w . o f f i c e t e c h n o l o g y m a g . c o m | J a n u a r y 2 0 0 7 | 25
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PRINCIPAL ISSUES
All Business is Local The key to becoming ‘the source’ in your market by: Paul Schulman, Global Imaging Systems Inc.
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hat matters to most of us is what happens close to home. The conditions of our roads, overcrowding in our schools, the local unemployment rate, rising property taxes — these issues that confront us every day are the ones that have the most direct impact on our lives. For that reason, former Speaker of the House Thomas “Tip” O’Neill used to say: “All politics is local.” Certainly, we judge our elected representatives first and foremost on how well they help us deal with these local issues and improve our daily lives. Local issues and concerns have an equally significant impact on the world of business. In fact, we can safely say that “all business is local” as well. How many times have you had a problem that was a direct result of the people you were dealing with not knowing you? Perhaps it was the loan application that took longer than necessary because the financial institution didn’t have a local branch with local people who had the authority to make local decisions. How many businesses have failed, not because their product or service was inferior, but simply because they didn’t know “how things work” in a particular area? It is almost impossible to overemphasize the importance of local know-how and experience, and of demonstrating your commitment to being a good corporate citizen. I think this is especially true in industries like ours, where the products are complex and the technology changes daily. What we are really selling are solutions and service after the sale. That means we not only need to know our community, but we also need to know our customers and their businesses as thoroughly as possible. It is not enough to simply provide great products at a great price. We need to demonstrate that we are a good neighbor, close at hand and always ready to help. Adopting this approach to doing business is not necessarily easy. Research and relationship-building may seem like a tall order, but the payoff can definitely make it worthwhile. The one or two office technology providers in each market that become known for these traits are almost always also known as “the source” for office technology. They are also usually the market leaders. At Global Imaging Systems, we are firm believers in the “all business is local” formula. Or, as we say it: “Think Globally. Act Locally.” This is what our business model and our success is based on. Since we have been at this for awhile now, and have 26 | w w w . o f f i c e t e c h n o l o g y m a g . c o m | J a n u a r y 2 0 0 7
Clockwise from above left: ESI’s Kim Fichandler sells cookbooks at a fund-raiser; ESI CEO Dan Cooper is “arrested” to raise money for an American Cancer Society Relay for Life event; and ESI’s Martha Dunn walks at the Relay for Life event with her mother, a cancer survivor. learned a lot about what seems to work best, I’d like to share just a few examples of how some of our local companies use local marketing, public relations and community relations to position themselves as “the source” in their markets. First of all, back to our corporate motto: “Think Globally. Act Locally.” We make sure it is seen everywhere. It is prominently displayed on our Web sites, letterhead, training materials and holiday greeting cards. We don’t want there to be any doubt that we believe it is the local, personal touch (and reputation, expertise and relationships) that counts. We also make sure that this drives everything that we do. As a decentralized company, each of the more than 80 businesses we have acquired continues to operate under its pre-acquisition name and management, maintaining and building upon existing local relationships. Community service is strongly encouraged. Our mission statement calls for operating with integrity. One of the most important ways we do this is by striving to make sure the communities in which we operate thrive. At Global’s headquarters in Tampa, employees participate in an annual Thanksgiving food drive, walk to help cure Juvenile
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Robinson signed a limited number of Diabetes and hold a summer blood drive. “When I began thinking Spurs’ jerseys, which were placed in We also help support the University of about the quickest, frames and given to anyone who made a Florida’s Center for Entrepreneurship & most credible way to significant purchase of equipment. Sales Innovation, Metropolitan Ministries, for the two-day event exceeded $600,000. Joshua House and the Centre for Women. attract attention to our The campaign has included using RobinBut these are not national, companycompany ... partnering son in radio commercials, on billboards, wide causes. Again, since all business is with Robinson was a direct mail, personal appearances at local each of our core companies is given slam-dunk solution.” Dahill facilities, and in tie-ins during total latitude to decide which activities Spurs’ basketball games. and organizations to support in their local Dahill also created and was the lead sponsor for “A Salute to market. In New York, employees work with the Long Island Volunteer Enterprise to beautify the grounds at Madonna the Admiral,” an event that acknowledged Robinson and House and walk against breast cancer at Jones Beach. In raised more than $400,000 for The Carver Academy, the notSeattle, employees collect baby food, formula and cereal for a for-profit school that Robinson founded. As momentum from local food pantry and support the Boys & Girls Club. In Vir- the partnership built, along with Dahill’s reputation, Mueller ginia Beach employees walk for the March of Dimes, bowl for decided to expand the campaign to include being the official Junior Achievement and collect blankets and gloves for the sponsor of the Spurs’ new practice facility during Robinson’s needy. In New Hampshire, the American Red Cross blood last year as a professional player. This allowed Dahill to have drive is an annual event. We want to be known for delivering advertisements and placements throughout the facility, a fulllocal service and community support “from local companies page ad in the Spurs’ game day programs and mention in with local pride.” Everyone, from employees to suppliers to “Spurs Update” radio spots. Dahill’s support of and tie-in with investors to, most importantly, our customers, knows that this the Spurs also includes courtside season tickets and a suite. Throughout the campaign, local media coverage of various is our goal and what they should expect from us. Let’s take a look now at how San Antonio-based Dahill events and the campaign itself built on the paid advertiseIndustries’ president, Mike Mueller, put this approach into ments, increasing exposure and credibility for Dahill. Dahill decided to make its ties, knowledge and dedication action. Back in 2001, Dahill had reached a sales plateau. “Our company had a decent reputation in the market, but we knew to its customers and to the Texas market clear by latching on that to resume our growth we couldn’t settle for decent,” says to a big idea and a bigger-than-life personality to attract Mueller. “Our goal was to be recognized as the undisputed pre- attention and increase its stature. But since there is not a David Robinson in every market, let’s take a look at another miere office technology dealership.” Mueller also wanted Dahill to become known for honesty, approach. At Electronic Systems (ESI) in Virginia Beach, they trustworthiness, responsibility and integrity. In San Antonio, are equally focused on the “all business is local” philosophy. no one better personifies these traits than former Spurs super- ESI President and CEO Dan Cooper says that customer star David Robinson. So, Mueller figured that the perfect way service and community involvement are the cornerstones of to boost Dahill’s awareness and reputation would be to team ESI’s business. “Our employees are enthusiastic about giving back to the community,” says Cooper. “Knowing you are up with Robinson, aka “The Admiral.” “When I began thinking about the quickest, most credible making a difference in the community is part of what makes a way to attract attention to our company and to the way we do job a career.” At ESI, however, the methods of communicating this combusiness, partnering with Robinson was a slam-dunk solution,” says Mueller. While Robinson doesn’t represent many mitment are totally different than at Dahill. Rather than companies, when he heard that Mueller wanted to run Dahill focusing on one big idea or campaign, ESI has found it more productive to mount “mini-campaigns” in each of the eight according to Robinson’s image he decided to give it a try. What began as an initial six-month contract has continued markets it operates in throughout the state. Director of Marto the present day, with Dahill now often referred to as “the keting Karen Newnam explains why. “First of all, there are Admiral’s company” to Mueller’s delight. Needless to say, it distinct differences between the markets,” says Newnam. has been a success. The campaign began with an open-house “What works in one may not be appropriate at all in at Dahill for customers and prospects. Instead of autographs, another.” She said that these market-by-market campaigns w w w . o f f i c e t e c h n o l o g y m a g . c o m | J a n u a r y 2 0 0 7 | 27
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Allegheny Conference, a regional alliance also take into account ESI’s stage of “... We make use of of community development organizations. development in each. “Our objectives, almost every marketing TeamAmcom supplies and supports all of messages and means of delivering these tool available, from the technology in a showcase at the messages are determined by a number of Allegheny Conference office. In addition, things,” says Newnam. advertising to direct they maintain their own office space there In one market, ESI may have recently mail to public relations to support their downtown sales team. acquired another local company. In to open houses and In 2006 Lightholder says they launched another, it may be celebrating its 10th special events.” campaigns aimed specifically at the busianniversary, while in another the focus ness community, creating partnerships may be on announcing a major expansion. Because its marketing is so diverse and widespread, ESI has with two local sports venues. The Robert Morris University one of the most extensive in-house teams among the Global Sports Complex has TeamAmcom dasher boards on all three Imaging core companies, with a graphic designer, a marketing of its ice rinks. The Washington WildThings, a Frontier League specialist to assist Newnam and, of course, a state-of-the-art professional baseball team, sports a large TeamAmcom print shop to handle the steady stream of marketing materials banner in its outfield. This field is used for baseball games, professional soccer matches and outdoor concerts. Amcom ESI produces. “At one time or another, we make use of almost every mar- also sponsored a local technology show in conjunction with keting tool available, from advertising to direct mail to public the WildThings that focused on the school districts in Western relations to open houses and special events,” says Newnam. Pennsylvania. Targeted advertising has also been used. The company is a sponsor with the Pittsburgh Business Times, She also maintains a very detailed monthly calendar of events, broken down by each market and filled with open houses, cus- with special focus on The Top 100 Fastest Growing Businesses in Pittsburgh. This campaign involved not only ads supporting tomer education seminars, chamber meetings and events. Support of local causes is determined, once again, on a the event that culminated in the rewards presentation banquet. market-by-market basis. The ESI Cookbook for Charity con- TeamAmcom was also a presenter and provided award phototaining ESI employees’ favorite recipes, for example, was graphs to all of the winners, providing the opportunity to meet printed, bound and sold to raise funds for the American each winner and personally introduce the company. Cancer Society, Make-A-Wish Foundation and the March of Lightholder said that awareness of the TeamAmcom name, as Dimes. Meanwhile, Cooper was “arrested” to raise money for well as an understanding and appreciation of what the new name says about the company’s focus and expertise, have an American Cancer Society Relay for Life. There is one more example I would like to share with you: increased significantly and continue to grow. “We couldn’t be the re-branding campaign that TeamAmcom (formerly more pleased with our partnerships or the results of our investAmcom Office Systems) in Pennsylvania has used to reshape ments in these community groups,” he says. There are many more examples of this “all business is local” its public image from a copier vendor to one of the area’s acknowledged top solutions providers. Tim Lightholder, vice philosophy at work throughout our Global companies. Many president of marketing and special projects, explains the most are just as innovative and effective as the ones I have shared important elements. “In 2004 we developed a powerful multi- with you here. But I believe these should give you a good idea of media presentation focused on the technology of moving why we do what we do, how we do it and, most importantly, information throughout the office and examples of how why. Hopefully, you have picked up some ideas that will work TeamAmcom works to help companies maximize their invest- just as well for your dealership. This approach truly is a “winwin” way of doing business, where each of our companies is ments in this technology,” he says. Lightholder says all their sales representatives used the able to build its reputation and market share by respecting and presentation with both new and existing customers, and supporting the community that is its home. Paul Schulman is senior vice president focused on the detailed analysis necessary in their presentaof operations for Global Imaging tions and the Global Image Audit. “This helped us establish Systems Inc. He can be reached at our unique capabilities and expertise with the processes in the schulmanp@global-imaging.com. Visit office, not only with the office products,” he says. www.global-imaging.com. This effort was supplemented by partnering with the 28 | w w w . o f f i c e t e c h n o l o g y m a g . c o m | J a n u a r y 2 0 0 7
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SELLING SOLUTIONS
New Compensation Plans Here are nine steps to gain sales reps’ acceptance by: Tom Callinan, Strategy Development
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ales compensation has always been a hot topic of conversation among dealers. With the continued convergence of printer and printer-based MFPs and the proliferation of seemingly hyper-aggressive direct operations, sales compensation has been getting even more attention. I find that there is one thing that is keeping many dealers from doing the right thing with their compensation plans — fear. They are afraid of upsetting their sales forces and forcing an exodus of top salespeople. The first thing I want to point out is that the compensation plan is only one variable in the ability of a sales rep to earn money. His (or her) customer and prospect lists are also major variables. The sales manager and the company support are variables, and there are others. Nevertheless, I understand that if all else remains the same, the rep does have comfort in the fact that he knows how to work the compensation plan. I hope to help you achieve your goal of changing your compensation plan and have your sales reps feel comfortable that they have a fair plan and that they know how to leverage that plan. I developed my system over eight years while working for a company that felt compelled to drastically change its compensation plan each and every year; sometimes for very good reasons. These were not minor tweaks — they were full-blown new compensation programs. On the first day of the new fiscal year the plan was implemented and the business effectively shut down for 60 days. Anybody who thought the plan was meant to reduce their compensation had a self fulfilling prophecy because they did not sell for two months. So, I learned how to implement a new compensation plan with minimal disruption to the sales force. One of the key aspects of a sales compensation plan is the financial modeling. Conducting some discreet examples will not be enough if you want a plan that can last for years. A sales compensation plan is simply a word problem so it can be turned into an algebraic equation and graphed over ranges of revenue and margin. You can then solve for the variables to stay within the payout range you target. As an example, 12 percent of revenue is what I targeted for tenured middle market sales executives.
Now that we have the concept of modeling in mind, let’s discuss how you gain acceptance for your new plan and can even have reps advocating the new compensation plan. Step One — Put together a sales compensation team. This team should consist of a finance person, service manager, your sales leader (vice president or director), sales manager and two sales reps. All members of the team should be broad thinkers. The team size may be smaller depending on the size of your organization, but it should not be larger than six members or you will not get anything accomplished. Step Two — Have a kickoff meeting and review the changing industry, the goals of a new sales compensation plan and the issues with your current plan. Be candid in this meeting; if the goal is to change behavior make that clear. If the goal is to reduce sales expenses make the goal and the reasoning clear. Do not mislead this group on your goals and expect to manipulate the outcome. Step Three — Set three additional meetings over a threemonth period to work out a new compensation plan. You want the time between meetings because you want to gain buy-in and momentum. You also want the opportunity to influence the outcome so you want time to thoroughly analyze the suggestions and provide alternatives with financial analysis. Nevertheless, after your initial kickoff meeting, which sets the foundation, you will have three meetings to get a draft plan so make certain you are moving forward. Step Four — Prepare a compensation rollout presentation. You want to review the goals of the change in an executive overview — the team that developed the plan and the work the team performed to get to the plan. You can either leave the commission analysis to your sales reps after you roll out the plan or you can do it for them. I suggest you have examples of commission payouts on discreet transactions in your presentation. Step Five — Have the sales compensation team members update a few key influencers before they “finalize” the sales compensation plan. Use the presentation you composed for Step Four, but be open to tweaking it after you get input. Step Six — Present the plan to the “bullpen lawyers” a week w w w . o f f i c e t e c h n o l o g y m a g . c o m | J a n u a r y 2 0 0 7 | 29
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before it is rolled out to the entire sales model that graphically shows the payout Design a fast start force. The “bullpen lawyers”need to be of the compensation plan, run financial promotion and/or sworn to secrecy. These folks will provide models to show each rep what his earnbonus. You want the you with all of the objections and give you ings will be on the new compensation plan reps to digest the plan an opportunity to handle those objections versus last year’s plan and how he can or make final tweaks in the plan. (The leverage the plan to earn more than in the quickly, so give them “bullpen lawyers” are those sales reps who past. Immediately after Step Eight have a big carrot to get off will extend significant effort to uncover sales managers meet one-on-one with to a fast start ... any faults or negative aspects of a program each sales rep. and will not waste a second getting to your You can adapt this model to just about office to inform you of what you missed or what you did any size organization. The keys are: Clear goals, involvement wrong. They advocate strictly for themselves without bal- from affected parties and compensation plan modeling. There ancing the positive aspects of the program.) is one area of caution: If you have made significant errors in Step Seven — Design a fast start promotion and/or bonus. your previous compensation plan and your sales force is You want the reps to digest the plan quickly, so give them a big grossly overcompensated I would look at the process as a carrot to get off to a fast start in the months following the plan marathon and not a sprint. Put together a multi-year plan to launch. Have the bonus decrease from month one to two and get your compensation plan to a realistic level. two to three so those that get out of the gate fast have the Tom Callinan is the managing principal ability to earn more. You need to build excitement around this of Strategy Development, a management consulting and fast start and your sales managers should be part of the payout advanced sales training firm. From 1998 to since they will drive the behavior. 2005, he was an executive with IKON Office Step Eight — Give a presentation to the entire sales force, Solutions. Prior to that he was the founder and which includes the fast start promotion/bonus. CEO of Copifax Inc. He can can be reached Step Nine — Prepare a compensation analysis for each at callinan@strategydevelopment.org. tenured sales rep. In addition to your comprehensive financial Visit www.strategydevelopment.org.
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Panasonic Digital Document Company (800) 742-8086 / www.panasonic.com/office Print Audit (877) 412-8348 / (403) 685-4932 / www.printaudit.com
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Piecing Ideas Together.
The BPCA was founded in 1963 with the vision of forming a best practices organization that unites leaders of independently-owned office equipment dealers. The concept is quite simple - bring the leaders of these companies together so that they can share ideas, learn from each other, and take their businesses to the next level. Our members will attest that it’s well worth the investment by making each of them better leaders and bringing more value to their dealerships. Feel like there’s something missing from your organization? Let BPCA bring together all the pieces of the puzzle.
“Better Dealers Through Learning and Idea Exchange.”
If you’d like more information about our organization and how to join, please send us an email or give us a call. Phone: 800.897.0250 Email: info@businessproductscouncil.org Website: www.businessproductscouncil.org Membership Director BPCA c/o BTA 12411 Wornall Road Kansas City, MO 64145
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Office Technology Magazine Business Technology Association 12411 Wornall Road Kansas City, MO 64145 (816) 941-3100 www.officetechnologymag.com www.bta.org
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