January 2011 Office Technology by Business Technology Association

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CONTENTS Volume 17 • No. 7

FEATURE ARTICLES 10

MPS Delivered Suppliers provide dealerships the tools they need

SELLING SOLUTIONS Interactive Sales From pencil selling to probing for pain

by Mitch Morgan Growth Achievement Partners

by Brent Hoskins Office Technology Magazine

Today, there are more products and services our customers are looking to us to provide. We have come to see that the expectations of the customer, among other factors, has created the need to evolve the sales model to effectively compete and win.

There is no shortage of educational resources, support programs and various tools available for dealers seeking to embrace MPS. Among those providing the tools dealers seek are a number of aftermarket suppliers serving the office technology industry.

2011’s Opportunities Dealers share expectations, advice for the new year Compiled by Brent Hoskins Office Technology Magazine

P R I N C I PA L I S S U E S Avoiding Bad Debts How to ensure better collection of receivables

In 2011, what do you believe will be the greatest areas of opportunity for dealers in the office technology industry? What do you believe will be the best strategies for success in pursuing those opportunities? Office Technology asked these questions of its readers via an e-mail survey.

Account Reviews The process is all about inspection

by Larry Coco Coco Training & Consulting Inc.

by Sven Nelson C2C Resources

No matter how well you know your customers, you are always going to have that 1 to 2 percent a month who are not going to pay you within your terms. In these tough economic times, it is more important than ever to make your 30- to 60-day-old receivables a priority.

Do More With Less The key to business success (or survival)

If we do not have a solid review process, then how can proper adjustments come into play? The simple answer is that they cannot. Let’s put the spotlight on an effective account review process for you, your managers and your sales teams.

by Ed Carroll Strategy Development

The purpose of this article is not to bring doom and gloom to your new year, but to suggest that this is a very good time to reassess your business operations, preparing your company for whatever challenges might be thrown at it in the coming years.

COURTS & CAPITOLS 25

On-Call Policies Make sure they are in compliance by Robert C. Goldberg BTA General Counsel

In today’s competitive environment, it is essential to offer 24/7 service and support to your customers and prospective customers. Staffing this service presents numerous issues and potential traps. Most technicians are non-exempt employees and are eligible for overtime payment.

D E PA R T M E N T S Business Technology Association

• BTA Highlights

Executive Director’s Page

BTA President’s Message

Advertiser Index

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Put More Green in Your Bottom Line 

Maximize margins and hardware pull-through

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Generate professional services and a recurring revenue stream

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Extend the customer relationship beyond the life of the lease

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Learn how to build your own successful professional services team

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Benefit from one-of-a-kind proven training and go-to-market programs

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Outstanding certification program and technical support

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Onsite sales representatives working with your sales team

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How? Enter the profitable world of selling document management solutions.

12/10/2010 1:59:52 PM 12/14/10 8:33 AM

EXECUTIVE DIRECTOR’S PAGE

Dealers Embracing 2011’s Opportunities

t may be just a date on the calendar, but it is an important one. Every 12 months, with the arrival of Jan. 1, we have the opportunity to look forward with a renewed sense of hope and expectation. The previous year is now in the past. It is time to focus on the opportunities of the new year. In 2011, what do you believe will be the greatest areas of opportunity for dealers in the office technology industry? What do you believe will be the best strategies for success in pursuing those opportunities? I recently asked these two questions of Office Technology dealer readers via an e-mail survey. Below are some of the responses. The rest appear in the feature article that begins on page 18. I hope the comments give you some new insight or ideas — or at least confirm that you have a view that is similar to your fellow dealers.  “The evolution of MPS. The trick will be to find a program that has matured into something usable from end to end. We find ourselves patchworking ‘this program’ to ‘that product.’ It’s like trying to put together a puzzle using pieces from separate boxes. It seems that folks have mastered MPS theory, which is great, but now we need the complete package.” — Aaron Falk, DiMAX Office Solutions Inc., Janesville, Wis.  “Right now, the greatest opportunity seems to be the ability to strengthen your organization with quality people who have been laid off within our industry. Building a stronger infrastructure will separate you from all of the companies that have been weakened by the economy and the cuts they have made.” — Greg Gondek, Advanced Copy Technologies Inc., Cromwell, Conn.  Managed print services; developing a

separate strategy to deliver.” — Steve Knutson, Marco Inc., St. Cloud, Minn.  “I think that the greatest opportunities we have in the office technology industry will be with the customer that is looking to simplify its office documentation. The best strategies for success will be to show the difference that simplification of the document flow makes. The electronic technology, along with the savings on paper and increased productivity, will bring faster communication between companies and their customers.” — Leonard Garcia, Dependable Office Systems, La Feria, Texas  “I continue to believe that managed print will be the best growth opportunity in the coming two years. Equipment sales margins have been reduced to all-time lows. Gaining equipment market share means losing money on the sales transaction. Therefore, managed print services remains the guiding light for those of us committed to offering a true value proposition to our clients.” — Arthur Schwartz, Image Systems for Business, Somerset, N.J.  “We see managed print services as a continued area of growth. We had success in 2010 with MPS and have a pipeline to large opportunities in 2011. We also see A4 MFPs gaining acceptance as more manufacturers enter the A4 space.” — Michael Blake, Corporate Business Systems LLC, Madison, Wis.  “More services and solutions (MPS, managed services, document management), which will lead to more MFP and printer sales.” — Mark Kinley, Digitex Corp., League City, Texas  “I think color unit placements will continue to grow, which allows for more revenue. We are also seeing more inquiries on document management than we have in past years.” — Tom Ouellette, Budget Document Technology, Lewiston, Maine  — Brent Hoskins

Executive Director/BTA Editor/Office Technology Brent Hoskins brent@bta.org (816) 303-4040 Associate Editor Elizabeth Marvel elizabeth@bta.org (816) 303-4060 Contributing Writers Ed Carroll, Strategy Development www.strategydevelopment.com Larry Coco, Coco Training & Consulting Inc. www.cocotraining.com Robert C. Goldberg, General Counsel Business Technology Association Mitch Morgan, Growth Achievement Partners Sven Nelson, C2C Resources www.c2cresources.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 Mary Hopkins Database Administrator mary@bta.org Teresa Leerar Bookkeeper teresa@bta.org Brian Smith Membership Sales Representative brian@bta.org ©2011 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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BTA PRESIDENT’S MESSAGE 2010-2011 Board of Directors

BTA Can Help Make 2011 a Banner Year

ith the arrival of 2011, you are undoubtedly considering strategies that will help you take your dealership to new heights in the new year, through education, cost savings, process improvements, etc. Are you also considering how BTA can help? If not, I encourage you to take another look at the benefits BTA offers. We can help ensure that 2011 is a banner year for your dealership. For your consideration, here is a brief look at just a few of the benefits BTA offers: BTA Marketplace — The BTA Marketplace provides BTA member dealers with the opportunity to take advantage of discounts and value-added offerings from participating BTA Vendor Associate members. Currently, there are 21 participants ranging from Azerty to DocuWare to Sharp. To see the full list of participants and their offers, visit www.bta.org/BTAMarketplace. 2010 BEQI — The Business Equipment Quota Index (BEQI) provides market potential (product demand) indices for specific product categories within the U.S. market. Specifically, users of the BEQI are provided with an index for the desired state, county, MSA (metropolitan statistical area) or ZIP code in the United States. These indices can be used to forecast sales, evaluate territories, measure sales potential and establish sales quotas. For details, visit www.bta.org/2010BEQI. Building My Business Webinar Series — Each month, the association hosts a free one-hour educational webinar for members designed to help dealers improve the management of their companies, take full advantage of market opportunities and, ultimately, improve the bottom line. To date,

we have hosted 36 webinars, led by a variety of industry experts. For details, visit www.bta.org/BuildingMyBusiness. BTA Benchmarking Series — Members can download, at no charge, three reports, based on the results of comprehensive surveys of dealers: 2010 BTA Finance Report; 2010 BTA Compensation Report; and 2010 BTA Service Report. These reports are designed, in part, to help dealers see how their key metrics compare to those of other dealers. To download these reports, visit www.bta.org/2010BenchmarkingSeries. BTA District Events — In recent years, the Southeast and East districts of BTA have hosted education/networking events. In 2011, all four districts will be hosting events as follows: BTA Southeast, Feb. 1718, Orlando, Fla.; BTA Mid-America, May 3-4, St. Louis, Mo.; BTA East, Sept. 22-23, White Plains, N.Y.; BTA Southeast, Oct. 2122, Waynesville, N.C.; and BTA West, Nov. 17-18, Las Vegas, Nev. (Note: These events are open to both members and non-members.) For details on the first of these events, visit www.bta.org/BTASoutheastEvent. BTA Scholarship Foundation — Each year, BTA awards $1,000 and $1,500 scholarships to the qualifying children of fulltime employees of member dealerships. Applications for the 2011-12 school year are due May 2. For details, visit www.bta.org/ Scholarships. (Many dealers view the ability to apply for BTA scholarships as a nice addition to their employee benefits.) Space only allows for a brief look at the many programs and services offered by the association. There are also a number of education workshops (offered at a discount to members), legal services, publications and a variety of discount programs. Take a look at the full list of member benefits at www. bta.org/MemberBenefits.  — Rock Janecek

President Rock Janecek Burtronics Business Systems Inc. 216 S. Arrowhead Ave. San Bernardino, CA 92408 rjanecek@burtronics.com President-Elect Tom Ouellette Budget Document Technology 251 Goddard Road Lewiston, ME 04240 touellette@bdtme.com Vice President Terence Chapman Business Electronics Corp. 219 Oxmoor Circle Birmingham, AL 35209 tchapman@businesselectronics.com BTA East Todd J. Fitzsimons Network Imaging LLC 122 Spring St. Southington, CT 06489 tjfitzsimons@networkimaging.biz BTA Mid-America Ron Hulett U.S. Business Systems Inc. 3221 Southview Drive Elkhart, IN 46514 ron.hulett@usbus.com BTA Southeast Mike Upchurch Business Machines Inc. 3121-C Glen Royal Road Raleigh, NC 27617 mike@bmi4u.com BTA West Greg Gray Burtronics Business Systems Inc. 216 S. Arrowhead Ave. San Bernardino, CA 92408 ggray@burtronics.com Ex-Officio/Immediate Past President Bill James WJS Enterprises Inc. 3315 Ridgelake Drive Metairie, LA 70002 bjames@wjsenterprises.com Ex-Officio/General Counsel Robert C. Goldberg Schoenberg Finkel Newman & Rosenberg LLC 222 S. Riverside Plaza, Ste. 2100 Chicago, IL 60606 robert.goldberg@sfnr.com

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MPS Delivered Suppliers provide dealerships the tools they need by: Brent Hoskins, Office Technology Magazine

ften, where expertise in and optimism for managed print services (MPS) among vendors exist, so, too, do opportunities for office technology dealerships. There is no shortage of educational resources, support programs and various tools available for dealers seeking to embrace MPS. Among those providing the tools dealers seek are a number of aftermarket suppliers serving the office technology industry. Specifically, these are the vendors offering, among other products, compatible toner cartridges, often seen as a key component to a dealership’s MPS program. The promise of lower costs and higher margins is the appeal. “OEM supplies might provide margins in the 10 to 12 percent range, maybe less dependent upon the manufacturer,” says Doug Johnson, executive vice president for Supplies Network, a wholesaler of IT consumables. “Compatible supplies might be 20 to 25 points.” While representatives of some OEMs may debate the merits of compatibles versus their own cartridges, few, if any, would argue that MPS does not provide dealers with a needed opportunity for new revenues. Johnson offers an enticing view of even greater margins when MPS comes into play. “When managed print is done well, you’ll make 30 to 45 points of gross margin on hardware and 40 to 60 points of gross margin on service and supplies,” he says, emphasizing that dealerships are increasingly seeing the appeal of MPS. “We have some resellers in our program today that have converted a significant portion of their business — on the order of 60 or 70 percent — over to managed print and now have a fundamentally different business model.” The program Johnson is referring to is Supplies Networks’ CARBON SIX, which provides dealers with a range of tools that help to get them into the MPS business. “With CARBON SIX, we focus on providing everything the dealer needs to sell and manage a best-in-class managed print services

program,” he says. “We have built a system that enables the dealer to confidently sell, knowing that we have the services, software and other operational support mechanisms to help them actually deliver an MPS program at the level of profitability they expect.” CARBON SIX offers a variety of components, ranging from software for remote data collection to help-desk support to deal crafting and consulting. Johnson says the program is “completely turnkey, where the dealer can come in and sell and we do everything else.” In some cases, he says, more “sophisticated dealers” have built their own MPS programs but use CARBON SIX to supplement their operational areas. “Essentially, our value proposition is helping to mitigate and manage risks on the operational side,” says Johnson. “So, the dealers can focus on what they do best, which is going out and selling and then managing the resulting relationships.” Of course, as noted, Supplies Network is by no means alone as an aftermarket supplies company offering an MPS program for the dealer channel. Diversified Computer Supplies (DCS), for example, offers its OptiPrint MPS program. The company promotes on its website that the program is “structured around flexibility — tools and components can be selected as required to allow for customization of any dealer’s managed print program.” Among the key components of OptiPrint: software that allows dealers to track and monitor supply levels, page counts, model descriptions, etc.; training programs covering such subjects as sales, compensation, installation and proposal generation; and sales support tools and services, such as customizable sales presentations, marketing materials and proposal consulting. The goal of the OptiPrint program is to “teach our partners ‘how to fish’ in a very, very competitive market,” says Brian Leek, president of DCS’s Imaging Solution Division. “We show them how to use the tools and how to be

10 | w w w. o f f i c e t e c h n o l o gymag.com | January 2011

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â&#x20AC;&#x153;At West Point, we believe that if our dealers donâ&#x20AC;&#x2122;t win, we donâ&#x20AC;&#x2122;t win. We offer AXESS at a very low entry cost so dealers can use the program to sell more toner, as well as parts and equipment. So, we all win.â&#x20AC;? â&#x20AC;&#x201D; Ray Loisel West Point Products successful in the MPS business. We are here to support dealers, probably a lot more in the beginning, until they get proficient with the tools and are capable of doing much of this work on their own.â&#x20AC;? West Point Products offers an MPS program as well â&#x20AC;&#x201D; AXESS MPS. The program offers sales and technical support, device monitoring and comprehensive training. A look at one of the capabilities of AXESS provides a good indication of the type of benefit such MPS programs can provide dealers. AXESS offers integration with, among other software products, Digital Gatewayâ&#x20AC;&#x2122;s e-automate, says Ray Loisel, West Pointâ&#x20AC;&#x2122;s senior vice president of managed print services, citing in particular e-automateâ&#x20AC;&#x2122;s purchase order tool. â&#x20AC;&#x153;When a P.O. is generated by the dealership using eautomate, it integrates with West Pointâ&#x20AC;&#x2122;s ERP system,â&#x20AC;? he explains. â&#x20AC;&#x153;So, the P.O. automatically goes to order processing, is approved and sent to our warehouse where the toner cartridge order is picked, packed and shipped.â&#x20AC;? Loiselâ&#x20AC;&#x2122;s comments point to the core and understandable motivation within supplies companies to offer MPS programs for dealers â&#x20AC;&#x201D; selling toner cartridges. Says Loisel: â&#x20AC;&#x153;At West Point, we believe that if our dealers donâ&#x20AC;&#x2122;t win, we donâ&#x20AC;&#x2122;t win. We offer AXESS at a very low entry cost so dealers can use the program to sell more toner, as well as parts and equipment. So, we all win.â&#x20AC;? Leek acknowledges the goal as well: â&#x20AC;&#x153;We are in the business of selling imaging supplies.â&#x20AC;? While toner cartridge sales may be the ultimate goal, within supplies companies, there is no lack of enthusiasm for the topic of MPS and the commitment to helping dealers succeed. It appears there is also no lack of experience and expertise. Prior to joining Supplies Network, for example, Johnsonâ&#x20AC;&#x2122;s background included service at Seattlebased Print Inc. (before it was sold to Pitney Bowes) where he was responsible for creating and managing the Print Value program, designed to instruct dealers on how to develop an MPS program. So, it comes as no surprise that, beyond viewing MPS as a means for Supplies Network to

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sell more toner, Johnson is topic when they walk into among the many people in the customer location.” “I tell dealers, ‘If you want the industry who also hold It is also important to tarto move your business to a zealous view of MPS as a get the right kinds of cusvalue-added selling, move particularly important optomers. “We tell dealers that to a partner relationship portunity for dealers. if they are going to do a full rather than a vendor “When we look at our MPS strategy, they need to dealer base, those who are find accounts that have relationship; you can do not actively engaged in manenough volume for it to so with managed print. aged print have tended to make sense,” says Leek, notThis leverages your expertise ... “ have a business that is flat ing that the customer’s “raw — Doug Johnson or down in revenue and, cernumber of printers on loSupplies Network tainly, they are on a downcation” should not be the ward trend in terms of gross dealership’s focus. “The best margins,” he says. “Those who are actively engaged in man- candidates are those companies with a minimum of 20,000 aged print are growing. I was just in Florida talking to a to 30,000 pages per month. If they are in that neighborhood couple of our largest dealers who are very engaged in MPS. or greater, they are certainly decent candidates for MPS.” They have seen year-over-year growth in the 20 to 30 perLoisel offers similar advice, but specifically emphasizes cent range during the last two or three years.” the appeal of higher volumes on fewer printers. “Volume Today, says Johnson, a primary and unfortunate reality dictates,” he says. “The right customer is the customer who in the industry is the highly commoditized nature of office has volume. If you have a prospect doing 60,000 pages per equipment. In a mature market where commodity products month on four printers and another doing the same volume prevail, channel players that once co-existed in an account on 45 printers, which is the better prospect? It’s the one with “now find they are reaching ‘over the aisle’ to grab more the four printers. The number of printers doesn’t mean anyshare of wallet,” he says. “That has no positive outcome be- thing. It is the print volume that matters.” cause all that does is lead you to expand your business with For years, says Loisel, many sales reps essentially overtraditional, commoditized product and, inevitably, you will looked printers in the prospect’s workplace, focusing inend up competing on bids.” stead on the copier and the renewal of the lease. “Dealers In contrast, says Johnson, MPS presents the dealer with are starting to say, ‘We’ve been walking past these printan opportunity to return to value-added selling, helping ers for 20 years. It’s time that we go after these clicks,’” he end users see how to optimize document output devices and says. “With MPS, they are increasing their MIF (machines the associated costs. “I tell dealers, ‘If you want to move your in field) with a low cost of sale, since they are not selling the business to value-added selling, move to a partner relation- hardware to get the service and supplies. They don’t have to ship rather than a vendor relationship; you can do so with sell the ‘razor,’ but they’re getting the ‘blades.’” managed print,” he explains. “This leverages your expertise Whether they seek support and guidance from supplies and allows you to not only get a broader share of wallet, but companies or elsewhere, the timing is right for more dealers a broader share of wallet at higher margins.” to consider an MPS strategy, says Loisel. “For dealerships Successfully selling MPS starts with a high level of com- predominately dealing with copier/MFPs, taking control of mitment by senior management. “The most successful deal- a customer’s printer fleet is a logical next step in securing ers we have helped have an MPS strategy that starts at the that customer’s business,” he says, adding that it is unfortutop,” says Loisel. “If you do not have the buy-in from the nate that some dealers remain hesitant about MPS. “I think owner or president, the transition can be difficult.” some people want to make this more complex than it is. It’s Of course, beyond the buy-in from senior management, not rocket science. Simply stated, it is: ‘Here are my costs success in MPS requires the right sales team; most recom- and what I need as a return. I find out the customer’s print mend a dedicated MPS rep or reps. “It is definitely helpful to volume, hopefully come in with the right have at least one or two people who are dedicated to MPS,” price, give them more value and we go down says Leek, noting that selling a cost-saving service like the road.’” n MPS to a CFO is much different than selling a machine to Brent Hoskins, executive director of the an office manager. “It takes a certain skill set and knowlBusiness Technology Association, is editor edge level. Dealerships need to have dedicated MPS sales of Office Technology magazine. reps and educate them so they are knowledgeable about the He can be reached at brent@bta.org. 14 | w w w. o f f i c e t e c h n o l o gymag.com | January 2011

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2011’s Opportunities Dealers share expectations, advice for the new year Compiled by: Brent Hoskins, Office Technology Magazine

n 2011, what do you believe will be the greatest areas of opportunity for dealers in the office technology industry? What do you believe will be the best strategies for success in pursuing those opportunities? Recently, Office Technology magazine asked these questions of its readers via an e-mail survey. Among the many responses received, it may come as no surprise that managed print services (MPS) was the most frequently cited opportunity. However, there are a variety of other areas of focus as well. Perhaps the comments shared by your fellow dealers mirror your plans — or provide some new ideas.

“Managed print services. Introducing MPS to the existing customer base to secure and cross-sell.” Edward Potrzeba Jr., President Upstate Office Equipment Inc., Westmoreland, N.Y. “Professional services and MPS. Align ourselves with proficient software programs and the people to sell and install them.” Albert P. Scibetta, President Copier Fax Business Technologies Inc., Buffalo, N.Y. “We will cease selling copiers and begin selling technology portals, which will further increase the ability of individual companies to maximize their use of technology.” Nick Kirtz, President NorthShore Business Technology, Kenosha, Wis. “MPS will continue to be a hot area for growth. A dedicated sales rep strategy would be best for success.” Richard Van Dyke, President Imaging Plus Inc., Irvine, Calif.

new hardware, a tractable software platform that is expandable, and IT services, along with traditional “break/ fix” (hardware) service support, is the business strategy that Encore Business Systems Inc. will follow to strengthen the relationships we have with existing customers. We are providing new incentives for referrals from existing clients and we are using the Web to expand our customer base.” J. Michael Power, President Encore Business Systems Inc., Upper Marlboro, Md.

“Enhancing service sector business productivity is the greatest opportunity that we see for the greater Washington, D.C., metro area that we serve. Being able to provide our clients with all of the major components, including

“I believe the greatest opportunities going forward for office technology dealers will be both MPS programs and electronic document management systems (EDMS). If you have not started an MPS program within your dealership, you are

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already behind the curve. With both en“I see our opportunity deavors, it all starts as a small dealership in with building a specontinuing with our core cialist team led by competency ... with a either your MPS or continuing emphasis on EDMS champion. Weekly meetings to local, personal, caring start will keep these and competent service.” programs on track. Don’t lose focus; they are longer selling cycles.” Matthew McDermott, Service Manager Discovery Office Systems, Santa Rosa, Calif. “Managed print services, period. The only strategy for success in this arena is being able to look at our industry from a completely new perspective — sales, marketing, service and rep compensation. The inability to do this is why so many dealers have failed to this point.” Bob Lovelace, Vice President Image Matters Inc., Knoxville, Tenn. “MPS isn’t the opportunity that it’s been blown up to be; EDMS also isn’t that opportunity. Both are there with potential, but customers are slow to jump on board at the price we need to be profitable. I see our opportunity as a small dealership in continuing with our core competency — office equipment to the general commercial SMB market — with a continuing emphasis on local, personal, caring and competent service. We can be, and have been, quite profitable if we keep it to that.” Giles Scott, President & CEO Scott Technology Group, Rohnert Park, Calif. “Major account takedowns. Big companies are doing well. Also, we need to go after the new and expanding businesses.” Mark Gasior, President Simile Imaging Solutions, Charlotte, N.C. “The opportunity is going to be total managed services; the strategy will be to include managed print with all servers and desktops.” Russ Bennett, President Bennett Office Technologies Inc., Willmar, Minn. “Service and support (technical and IT programming) will be the main backbone for us. Plus, further securing our existing client base. The best way to be successful is to work harder and make an extra effort to be in front of www.officetechnologymag.c o m | J a n u a r y 2 0 1 1 | 19

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all of your existing customer base. Work, work, work.” Gary A. Smith, President Office Equipment Co., Eugene, Ore. “Two things: used equipment and the obvious grouping of all printer equipment supplies in one contract, including network services.” John Baron, President American Copy Equipment Inc. Independence, Ohio

“I think expanding your ability to offer online products. People want to purchase their toner cartridges and office supplies all together ... “

“Service, service and more service — intelligent sales, service, repair service and servicing the customer’s account. Take advantage of every discount and rebate afforded. A good in-house leasing program will help, along with keeping a lean inventory.” Loren Davis, President Davis Business Machines Inc., Helena, Mont. “Offering a complete MPS solution seems to be the best for 2011, as is working on building and expanding business relationships with potential and current customers.” Diane C. LaBrie, Owner Mac-Durgin Business Systems Inc., Laconia, N.H. “Production color, converting desktop color products to color-enabled MFDs.” John Lewis, President & CEO Doceo Office Solutions, York, Pa. “Our growing MPS program will be a big focus as it was in 2010. The SMB arena continues to be a growing focus, as well as education and government. Our job continues to be making life easier for our clients, so we are expanding our professional services offerings to reflect this in 2011.” Gary Thomas, Sales Manager Thomas Office Machines LLC, Muncie, Ind. “I believe managed print services offers the best opportunity for strong service dealers to grow. We will be focused on growing this side of our business by increasing the amount of site assessments we perform for these types of prospects.” Jay Verno, President Hagan Business Machines of Meadville Inc., Meadville, Penn. “As the economy continues to remain difficult, I believe our best opportunity is to continue to help our customers and prospects improve their efficiencies while showing them ways to control their costs with MPS, document

solutions and low-CPP Kyocera MFPs and printers.” Lorraine McNally, Owner & President California Business Machine Co. Fresno, Calif.

“Managed print services and document management services (DMS) are the greatest opportunities. MPS is a conceptual sale that cements the relationship between the dealer and the client. It is different from traditional hardware sales and requires training to learn the strategies for the sales process as well as to embed the new culture. DMS is now more affordable and adaptable for small clients. It, too, offers an opportunity for the dealer to become the ‘trusted advisor’ to the client. Both initiatives promote long-term relationships between the provider and the client.” Nancy Taylor, President Taylor Business Equipment LLC, Chicago, Ill. “I believe that MPS is still one of the greatest opportunities in our industry at this time. Our strategy for success is to continue driving our sales team to look for these opportunities and give them support from the top down to be successful.” Ron Carr, President Oklahoma Office Systems Inc., Oklahoma City, Okla. “Any opportunity where the manufacturers are not directly involved. If they are involved, walk away. If they continue to expand, the BTA dealers will be out of business.” Vick Meredith, President BizDoc Inc., San Antonio, Texas “I think expanding your ability to offer online products. People want to purchase their toner cartridges and office supplies all together and having this offering for them in the easiest way is a winning formula. We have invested in the software to do this and we see significant growth. We also see that with the smaller sales cost, as well as the revenue stream, we can grow monthly.” Mark Watson, President CDS Office Technologies, Spring field, Ill. “For our company, it is my belief that our best area of opportunity for 2011 lies in connecting the powerful scan ability of our copiers to a document storage and retrieval system. It will become just another accessory, but an accessory that will be sold with an additional maintenance contract.” Mike Upchurch, President Business Machines Inc., Raleigh, N.C. n

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Account Reviews The process is all about inspection by: Larry Coco, Coco Training & Consulting Inc.

et me set the scene for this article. It is a Monday morning after a great weekend and you are looking forward to starting the business week on a positive note. As you drive to the office, you think about all the things you want to accomplish. You have planned meetings with your sales reps. Their forecasts and activity sheets from the prior week are due and you need to review them. As you walk in the door, you are met with “stuff” that needs to be taken care of. You feel the time crunch, so you make some hasty short-term decisions. What happens next? Problems occur. Now you have more fires to put out, which means you have even less time. Does this sound familiar? Truth be told, my goal in sharing this scenario was to grab your attention by bringing back some memories that would cause you to feel some pain. I can assure you that the rest of this article is dedicated to getting you to a better place, so let’s keep going. Years ago, I was introduced to a business approach called PDCA (Plan, Do, Check and Act). The first step in this methodology is planning. As I travel the country, for the most part I see that office technology dealers are good at coming up with an initial plan or idea — for example, a new marketing promotion designed to drive a solution that will increase both revenue and profit. The next step is doing. I think we are okay there as well. At this point, we meet with the sales team, fire them up and launch the program. Now we come to the critical step — checking (another term for it is “inspection”). This is where we really fall apart. The bottom line here is that we do not have a true process in place to communicate effectively with our field managers and sales reps to know who they are talking to, what the next steps are, where we are in the sales cycle and if the program will be effective. The final step is to act, since any plan worth its salt will require necessary adjustments to be made. I think you know where I am going with this. If we do not have a solid review process, then how can proper adjustments come into play? The simple answer is that they cannot.

Let’s put the spotlight on an effective account review process for you, your managers and your sales teams. Why do we need one in the first place? Here are some benefits: n A review process allows you to maintain better control over your business. n It improves forecasting accuracy. n It allows for larger transaction takedowns. n It better positions your reps as “solution providers.” (We say we do this, but do we really live it?) n It allows management to observe and drive the daily behaviors of sales reps. n It provides much-needed direction for sales reps. n It focuses on activities and results. (I cannot emphasize this one enough. I think we all agree that highly valued activities lead to good results.) n It allows the sales manager and sales reps to communicate at a higher level through effective questioning. (For those who have embraced an MPS strategy, these valued opportunities should now become a point of focus.) n It promotes better teamwork and thinking. Now let’s get back to Monday morning. It is a great opportunity for a manager to spend 20 to 30 quality minutes with each of his (or her) sales reps. Put a sign-up sheet on your door so every rep knows what time his appointment is. In this weekly meeting, each sales rep should be prepared

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Coco Jan 11.indd 1

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to participate and discuss the following: may be a great idea for owners, vice n The appointment schedule presidents of sales, directors, etc., to atWhen you share ... n A weekly summary, including key tend these meetings as well. As a great the importance of activities the rep performed in the previquote says: “People don’t care how much having a strong account ous week and the activities he is expectyou know until they know how much review process ... it ing to perform in the coming week you care.” should align everyone to n An updated forecast Normally, this monthly meeting can n Time and territory management include the following: the overall goals ... n An updated database/CRM tool n A review of the previous month’s of your organization. n Open issues forecast — “Did you get your share of It may be a good idea for every sales your commitment? Why or why not?” rep to scan and send his completed weekn A discussion about the current/uply summary and updated forecast to his manager every Fri- coming month’s forecast day before leaving the office for the weekend. We are in the n A review of the rep’s monthly activities technology business, right? As a good friend of mind always n A “big hit” list that includes all product and solution says: “Eat what you cook.” opportunities that are greater than $25,000 (Note: WhatA quick story: I was recently in a dealership working with ever number works for you is fine. The important thing is to a sales manager. Her reps had rolled up their weekly fore- make the quota busters a top priority.) casts and she, in turn, pushed them up to the president’s n Focused account penetration — Perhaps you assign 10 desk. Of the $105,000 forecasted, $37,000 represented one targeted accounts each month to your sales rep and you tell opportunity. I asked the manager a few questions. She did him that next month you will discuss progress made. not have a good feel for the account, so I asked the sales rep n Year-to-date performance versus expectations to visit with us. He told us he had cold-called the account n Sales strategies and trends the previous week and found out the company had a trial n An action plan going forward in place from a competitor. He had a contact name, but had Now let’s put this all into perspective. None of it is easy not performed a needs assessment, had not proposed a solu- unless you spend time making a plan and implementing it tion and had not met the decision maker. Did this really be- with precision. It requires both structure and process. Allong on the forecast? Not a chance. The moral of the story is ways remember that your top priority is to develop elite, to never assume anything. Sometimes we let things like this high performers. Now think back to those Monday mornslip through the cracks and that is unacceptable. ings and realize that if you are getting involved in things It is important for everyone involved to have a clear un- that are taking away from your top priority, there will be derstanding of what you are looking to accomplish and disconnects and a lack of direction. Frustrations will build. what high-level questions will get you there. I would conWhen you share with your employees the importance of tend that an effective account review process is quality time having a strong account review process — a true inspection with your major accounts (your people) designed to strate- process (emphasize that you are doing this to support them) gize key activities and potential accounts, uncover specific — it should align everyone to the overall goals and objecsolution opportunities and build the mighty pipeline. tives of your organization. In other words, it allows your emOne way to really upset a sales rep is to have him create ployees to know where they stand and how they contribute reports that, at best, get a quick glance from the manager, to the overall success of the team and company. or are never really inspected at all. Sometimes we wonder Keep in mind that once you begin moving in this direcwhy a sales rep will roll his eyes and become resistant when tion, the meetings and processes become easier to manage. required to fill out reports, activity summaries, etc. Grant- You are now creating an inspiring culture. So there is your ed, it may be that the rep has not done the work (and this is challenge: Be the fire inspector, not the fire chief. n often the case). It may also be that the rep views the added Larry Coco is president of Coco Training & Consulting Inc. work as a worthless activity since he sees it piling up on the For the last 28 years he has focused his career manager’s desk, not being made a priority. Any way you cut in the world of document management, it, it is a lose-lose for all. working with both dealer and direct Now let’s move on to the monthly plan and review, which organizations. Previously, he worked at Ricoh can take place a day or two following the month’s close. Corp. in a variety of positions. He can be These are meetings scheduled between the manager and reached at larry.coco@salesoptimizer.com or sales rep that should be at least one hour long. I believe it (914) 588-5384. Visit www.cocotraining.com. www.officetechnologymag.c o m | J a n u a r y 2 0 1 1 | 23

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BTA HIGHLIGHTS BTA would like to welcome the following new members to the association:

Dealer Members Appalachia Business Communications Corp., Knoxville, TN M&H Duplicating Systems Inc., Griffin, GA One Touch Office Technology, Torrance, CA For full contact information of these new members, visit www.bta.org.

2010 Business Equipment Quota Index The 2010 BTA Business Equipment Quota Index (BEQI) provides market potential (product demand) indices for the U.S. market. Specifically, through a comprehensive study conducted on behalf of BTA by Lieberman Research Group, a market research and consulting firm, in partnership with Market Research.com, users of the BEQI are provided with an index for the desired state, county, MSA (metropolitan statistical area) or ZIP code in the United States. These indices can be used to forecast sales, evaluate territories and measure sales potential/performance to set sales quotas. BTA members may purchase the BEQI for 50% off! For more information, visit www.bta. org/2010BEQI. For information on BTA member benefits, visit www.bta.org/MemberBenefits.

For the benefit of its dealer members, each month BTA features two of its Vendor or Service Associate members in this space. BTA Vendor Associate member Color Imaging Inc., founded in 1989, specializes in color toners for copiers, printers and MFPs. The company offers more than 150 aftermarket toner products for use in office machines from Ricoh, Canon, Konica Minolta, OKI Data, Xerox, Dell and others. All of Color Imagingâ&#x20AC;&#x2122;s compatible products are 100 percent new with either chemical, mechanically rounded or conventional toners to optimize performance and value. They have been thoroughly tested for image quality, density, yield and component wear. www.colorimaging.com BTA Service Associate member Outlaw Group Inc., founded in 1984, is a management consulting firm specializing in employee selection, sales and management. This resultsoriented firm identifies the barriers to greater results and provides the tools, techniques and assistance to overcome these barriers. The Outlaw Group assists clients through customized employee and customer surveys, performance management systems, hiring systems, organizational development, elearning, seminars, workshops and keynote speeches. www.outlawgroup.com A full list of BTA Vendor and Service Associate members can be found online at www.bta.org.

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COURTS & CAPITOLS

On-Call Policies Make sure they are in compliance by: Robert C. Goldberg, General Counsel for the Business Technology Association

n today’s competitive environment, it is essential to offer 24/7 service and support to your customers and prospective customers. Staffing this service presents numerous issues and potential traps. Most technicians are non-exempt employees and thus eligible for overtime payment. But when is compensation required? There are two classifications of on-call employees. There are those who are “engaged to wait” and those “waiting to be engaged.” An employee who is “engaged to wait” is on the clock and should be compensated. By being “engaged to wait,” an employee is not free to use the time for his (or her) own purposes. The employee is typically at the office waiting to be dispatched. He is limited by what he can do and is subject to the employer’s direction. Hours incurred while being “engaged to wait” are compensable and must be included in overtime calculations. An employee “waiting to be engaged” is typically an individual who is carrying a pager or mobile phone and is “on call” if a service issue should arise. This individual is free to pursue personal interests. The question arises as to how limited the individual is in pursuing those personal interests. The more limited he is, the more likely compensation will be required. Courts have found it reasonable to require an employee to respond to a telephone call or page within 15 minutes. Courts have also found — depending upon the geographic area served — that a requirement to be at the customer’s site within 20 minutes is reasonable. I am more comfortable with having a 60-minute on-site requirement. An employee “waiting to be engaged” may be required to report to the site not intoxicated and able to perform the required duties. This will not prevent an employee from having a beer, but will limit the amount that can be consumed. Keep in mind that the individual will be driving to the customer site and is under similar legal restrictions in regard to operating a motor vehicle. An employer may prefer that the individual wear his uniform at the customer site, but it is best not to require it. This provides the employee more flexibility. Certainly, the requirement that the employee present himself in a businesslike manner is appropriate. Since an employee may not be wearing his uniform, company identification should be issued and presented to the customer. Although on-call time may be required of all technicians, it can be voluntary as well. Since on-call time is usually financially attractive, it should be assigned on a fair and equitable

basis. A four-week rolling schedule should be prepared so employees can plan their time appropriately. Allow flexibility for an employee to trade with another employee, as long as management is advised. As for compensation, many companies provide a weekly payment for employees who are on call. This could be $100 per week if “on-call only” includes weekdays, or $200 per week if a Saturday, Sunday or holiday is included. This payment is for being on call and is paid regardless of whether the employee is engaged. The minimum hourly payment is typically two hours beginning at dispatch and including travel time. If company vehicles are not provided, mileage should be paid. Proper policies and procedures for on-call time are essential to a company. If a violation is found, the Department of Labor can go back at least three years and order, for all affected employees, back pay, interest and penalties. Review your policies and ensure they are in compliance. n Robert C. Goldberg is general counsel for the Business Technology Association. He can be reached at robert.goldberg@sfnr.com. 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 1 1 | 25

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Selling Solutions

Interactive Sales From pencil selling to probing for pain by: Mitch Morgan, Growth Achievement Partners

ne of the great things about the office technology industry is the existence of a model for success in all aspects of the dealership. The service organization has very clear metrics that help ensure success. The financial model (taught in BTA’s ProFinance workshop) provides a very clear understanding of what “good” looks like for financial and operating performance. Similarly, a sales model has been built over time and it has worked. However, it has been primarily characterized by monthly payments and the “start/finish line” of a lease transaction. Today, we have more products and services to offer our customers and, more importantly, there are more products and services our customers are looking to us to provide. We have come to see that the expectations of the customer, the nature of the buying process and the influence of our solutions have created the need to evolve the sales model to effectively compete and win. Changes Inside the Account In the past, the typical sales cycle involved an individual (usually from our customer’s purchasing department) and we discussed features and applications. The sale was developed by performing a cost analysis where the proposed price would be attractive compared to current expenses, therefore securing the next agreement. However, we are seeing signs of the significant changes that have taken place inside our accounts and it is affecting the results from our current selling model. Today, the typical sales cycle involves a group instead of an individual. IT often plays a more significant role than purchasing, needs have progressed from features and applications to functions and integrations, and customers are seeking programs and solutions that demonstrate value and business impact more than the lowest-priced offering. The foundational aspects of yesterday’s selling model are still sound, but they do not align with the current buying model. Therefore, results (and profits) are suffering. In other words, we do not need to change what we do, but rather, how we do it. A Defined Sales Process A repeatable process will bring consistent outcomes. A well constructed and consistently implemented sales process

will yield positive results. In spite of this, we are often surprised by how few MFP dealers make it a high priority to implement a time-tested solution-sales methodology. In a recent survey by CSO Insights (www.cso insights.com), 81.8 percent of respondents indicated that the implementation of a consistent sales process either modestly or greatly improved sales performance. In my opinion, this is especially important as we change the nature of the products and services we sell, as previously described. From a sales management perspective, a verifiable, repeatable sales process is easier to inspect and manage. Many companies bring sales management focus only on sales results, and not on building and inspecting a consistent methodology for achieving success. In times of change like we are seeing today in the buying process with our clients, coupled with the increasing business impact our solutions provide, a defined, repeatable process is critical to truly achieve change in behaviors and improvement in results. Changes in the Sales Cycle Another effect of the changes we have seen inside the account is the change (and, more importantly, the opportunity) in the selling cycle after the deal is closed. In the past, a new lease agreement represented the finish line for both the rep and customer for the next 42 to 60 months. Today, however, many of the products and services we now sell can be (and often are) best positioned within the lease cycle. This “off-cycle” selling represents an increasing opportunity for sales reps. Managed print services (MPS) and software solutions are primary examples of the expanded product/ services portfolio. In short, the opportunity to get deeper and wider into the account and increase revenue per customer is better than it has ever been. Proper account planning, communication and management are key tools to be utilized to capitalize on the tremendous amount of off-cycle opportunity that exists within our base. Solving Business Problems The cornerstone of a successful sales process in the new model focuses on the ability to identify and understand broad business goals, the issues related to achievement of these

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goals, the exact business processes that This updated sales need to be implementmodel provides tools to ed or improved that the sales process that are aligned to the goals develop an “interactive and, most importantly, process” with customers customer involvement in developing the prowhile solidifying your posed solution. credibility ... This updated sales model provides tools to the sales process that develop an “interactive process” with customers while solidifying your credibility in delivering complex programs and solutions. An example is implementing a methodology for mapping current state processes. This methodology establishes management commitment up front, and combines customer and sales resources to collaborate on the current state process map, further working together to perform a clean sheet redesign with our solution built in. This interactive sales process enables a shared responsibility and a deeper commitment to the solution while providing a tangible, graphic representation of the impact of the solution, effectively turning interest into need. n Mitch Morgan founded the Connectivity Dealer Program from NIA in 1991. After his businesses were acquired by IKON Office Solutions in 1996, he led their Technology Services division. In 2001, he formed the Professional Services division for IKON. Morgan has been consulting with CEOs on strategy, operations, organizational development and sales since 2005. He can be reached at mtmorgan@kc.rr.com.

Account Reviews

Many owners I talk to stress the importance of ongoing account reviews to maintain and enhance customer relationships. However, too many sales teams spend too little time in account reviews. And if the reviews are performed, they are often too tactical in nature. The focus of these account reviews is usually on operational issues, like volumes, service history and billings. While these are important, we recommend our clients leverage the account review to focus more attention on aspects of strategic sales. We believe there are several goals associated with a quality account review process, including the following: n The process must be streamlined so that the sales rep (or sales support) does not spend an excessive amount of time pulling together the information for the review. n Operational performance issues should be covered, especially since they can serve to highlight the outstanding service that most organizations provide. However, these issues should only be a portion of the account review. n You should use this process to gain an understanding of business goals and the issues your customers have in achieving these goals. n Utilize account reviews as a vehicle to broaden your contacts and go wider and higher in your accounts. n Through case studies and product/services presentations, we can eliminate the “I didn’t know your company had that product or service” statement that we hear too often when a good customer purchases products and services elsewhere. n We should seek to build a relationship geared toward “office automation planning.” Many of the changes that are taking place in technology provide outstanding opportunities to help our customers create a road map to greater office efficiency. All of your accounts should be included in a periodic account review process. When properly executed, these account reviews can act as a “Trojan horse” to develop additional off-cycle opportunities within the account base. Savvy dealers will use these opportunities to focus on strategic sales, introduce additional products and services, and increase revenue per customer. n

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PRINCIPAL ISSUES

Avoiding Bad Debts How to ensure better collection of receivables by: Sven Nelson, C2C Resources

o matter how well you think you know your customers, you are always going to have that 1 to 2 percent a month who are not going to pay you within your terms. In most cases, these are not companies that started out with the intention of not paying you, but perhaps they became over extended and have to selectively pay their bills. Unfortunately, they have decided not to pay you. Is it because they do not like you and are picking on you? Probably not. The fact is, another company made payment of its invoice a priority before you did. How did it do that? In these tough economic times, it is more important than ever to make your 30to 60-day-old receivables a priority so they do not become a problem. I have developed three easy steps to help your business maintain a high level of importance in your client’s mind to ensure you are paid in a timely manner. Have a dedicated system for collections. Here is the recommended collections timeline: n Ten days after sending the invoice, call to make sure the client received it and that there were not any problems. n Thirty-five days after the sale, send a past due notice and make a follow-up call. n Sixty days after the sale, send a termination of credit letter, place the account on COD and make a follow-up call. n Eighty days after the sale, send a certified letter with a 10-day final demand. n Ninety days after the sale, send the invoice to collections. This timeline may not work for some because every company has different terms and opinions on what is acceptable. However, if you are writing off more bad debt than you are comfortable with, you may need to look more closely at your collections policy and decide if it is really working. Avoid nonsense excuses. There are two excuses I hear most often when trying to collect a debt. The first is: “We never got the invoice.” The second, usually given after 90 days, is: “There is something wrong with the product (or service) that we received.” If there was really something wrong, why wasn’t it mentioned earlier? Usually, this second excuse is a stall tactic. I recommend to my clients that 10 days after the invoice has

gone out, have someone in accounting make a call to the customer to make sure he (or she) got the invoice and that the product or service he received was exactly what he ordered and was expecting. This eliminates a nonsense excuse down the road and may even get you another order. Final means final. When it comes to collecting debts, many companies find themselves in a vicious cycle of doing the same things over and over again while expecting different results. Remember, you are not the only one who is trying to collect from your customer. The customer may only have a “6-inch pile of money,” but a “12-inch stack of bills.” How do you get your invoice to the top of the “pay now” pile? Do something different than everyone else. This may include placing the account with a third party for collections. Before you do this, make sure you have sent a final demand for payment via certified mail or e-mail with a read receipt so you know it was received. When you do send a final demand, make sure you only send one. After all, “final is final.” You do not know how many companies I have seen send four or five different “final demands,” then months later, place the account for collection, only to find out that the company they are trying to collect from went out of business months ago. Keep in mind that final demands are your final request for payment. Once the final demand is ignored, you must take action to maintain credibility. If you do not follow through with some action, any further demands for payment will not be taken seriously. Remember, a sale is only complete once you have received payment. n Sven Nelson is a senior account executive with C2C Resources LLC, Overland Park, Kan., which offers nationwide and international collections services. For the last 12 years, Nelson has worked in the business and consumer finance industries helping clients to secure financing on capital purchases and reduce overhead and excessive fees. He also helps clients develop credit and collections policies and procedures, and recover lost funds. BTA members receive a discount on C2C Resources’ services. Nelson can be reached at (866) 341-6316 or snelson@c2cresources.com. Visit www.c2cresources.com.

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PRINCIPAL ISSUES

Do More With Less The key to business success (or survival) by: Ed Carroll, Strategy Development

010 is behind us and it is hard to believe we have completed the first 10 years of the new millennium. It seems like it was only yesterday when we welcomed the 21st century, yet when we look back, there is much that has changed. There was 9/11, the launching of a new war in the Middle East and the Great Recession. Now, there is a mortgage crisis and property values continue to decline while foreclosures are increasing at historic rates. The government has stepped in to try to stir the economy through record deficit spending â&#x20AC;&#x201D; something we all will be paying for in the years to come. In our industry we have seen the megaconsolidators (IKON, Global and Danka) disappear through acquisition. There has been a significant decline in new unit placements with the A3 market hovering at 70 percent of pre-recession levels. Managed print services (MPS) has emerged as a growth opportunity, although one might consider it more of a survival necessity. The A4 market continues to be the product of choice in many areas of the business community and it is more about capturing page volumes than selling equipment. It has been a challenging 10 years and one can only hope things will start to settle down. The purpose of this article is not to bring doom and gloom to your new year, but to suggest that this is a very good time to reassess your business operations, preparing your company for whatever challenges might be thrown at it in the coming years. One of the best ways to evaluate your operation is to look at it from a productivity point of view. There is no doubt that in todayâ&#x20AC;&#x2122;s economic climate, the need to do more with less is critical to future success. You need to look at every part of your operation and determine if the resources dedicated to each area meet or exceed the needs of the organization. If they do not meet or exceed, then you have areas where new resources might be needed. I would recommend approaching this cautiously. If your resources meet or exceed the needs of the organization, is your business improving, stagnant or declining as it relates to productivity? Are you getting more out of the resources than you have in previous years? If not, you need to consider why this is and how you can change it. Not doing so will cause

adverse effects on your business if you have not already experienced some. A decline in productivity is a sign of increased expenses when we should be looking for ways to reduce expenses. What are ways to evaluate productivity? Letâ&#x20AC;&#x2122;s assume we have sufficient resources to at least meet the needs of each area. After all, the job must be getting done. If this is the case, then you will look to evaluate each area of your business compared to the previous year, five years back and, if possible, 10 years back. In looking at this, you will need to use a consistent evaluation method relevant to this area to determine if you have improved productivity. For example: If you are reviewing the sales department, you could look at the number of sales professionals in relationship to the equipment (or total revenue) for the years mentioned. Using a hypothetical example, if in 2010 equipment revenue was $3,500,000 and you had seven sales positions, productivity per head would be $500,000. If, in 2009, equipment revenue was $3,600,000 with the same seven sales positions, then the results for that year would have been $514,000 per head. Compared to 2010, productivity declined 3 percent year over year (100%-500,000/514,000). This is not a healthy situation, but it is not an alarming one either. Now, if you had looked five years back to 2006 and found that you generated $3,600,000 with six sales positions, the change in productivity from 2006 to 2010 would be a decline of $100,000 per head, or a 17 percent decline over the fiveyear period. This would mean that at a time when revenue remained flat, productivity per head declined and, most likely, selling expenses increased. If margins declined over the same period, you would have experienced a negative impact on profits generated from increased expenses and lower margins. Zero growth with more expense and less margin might spell disaster or failure. At this point, it would be equally important to understand the reasons behind this trend. You would want to devise a plan to reduce the resources in sales to improve productivity and reduce selling expenses. This could come in the form of restructuring the account assignments/territories and www.officetechnologymag.c o m | J a n u a r y 2 0 1 1 | 29

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peel back the onion and dig into the details eliminating a position or using this posito identify areas that need to be addressed. tion in an area that might generate new You need to peel back Doing so will increase your chances of sales opportunities for the company. Eithe onion and dig into success, but ignoring these areas will dether way, productivity improvement would the details to identify crease your chance of survival. be an important goal as you move forward areas that need to be The business climate of the last 10 years in the new year. addressed. Doing so will continue to evolve into new challengThe example I used is fairly straightes and opportunities in the coming years. forward and one that is easy to grasp. It will increase your Preparing for the challenges will involve becomes more difficult when you look at chances of success ... constant review and adaptation for your other areas of the organization, but you company’s sustainability and profitable should. In the case of field service, there are many areas to consider: Machines in field, average time in growth. The start of every year is a good time to reflect, refield, number of service calls, aftermarket revenue and copy view, plan and execute changes. Doing more with less is one of the areas you should continuously focus on. n volumes all could be reviewed on a per-technician basis. Ed Carroll is a principal of Strategy Development, In the case of administration, you might look at total revan advanced management consulting firm engaged in sales enue per administration head count, active customers per leadership, managed print services, operational efficiency, head and invoices processed per administration head count. service productivity and business planning. Clients include And in the sales area, in addition to the examples above, equipment manufacturers and resellers you could look at margin per head, selling expense per head (large and small) focused on equipment and number of customers per head to determine if you are imand service in the document and imaging proving your productivity or not. industry throughout North America. It is important to determine a common baseline or evaluaCarroll can be reached at (703) 722-2973 or tion method that is relevant to today’s business versus the precarroll@strategydevelopment.com. vious year, five years or even 10 years back. Just looking at total Visit www.strategydevelopment.com. revenue, margins and profit trends is not enough. You need to

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