June 2015 Office Technology

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CONTENTS Volume 21 • No. 12

FEATURE ARTICLES 10

Solutions Smart Which message is your dealership projecting?

P R I N C I PA L I S S U E S Leadership in ECM DocuWare holds annual conference May 19-21

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by Elizabeth Marvel Office Technology Magazine

by Brent Hoskins Office Technology Magazine

It’s June 2015. Is your dealership where you thought it would be at this point? More specifically, even with the abundance of software-based solutions providing opportunities for new revenues, greater customer loyalty and differentiation in the marketplace, do you still adhere to a hardware-led approach?

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Focusing on its leadership in enterprise content management, DocuWare hosted DocuWorld 2015 May 19-21 at the Caribe Royale in Orlando, Florida.

Achieving Benchmarks Are you ensuring your dealership is on track?

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by Steve Rolla Pros Elite Group

Cruise to Success BTA Mid-America hosts district event in Minneapolis

Many dealers have not invested in developing the processes that ensure the level of execution necessary to achieve benchmarks.

by Brent Hoskins Office Technology Magazine

BTA Mid-America hosted its annual Cruise to Success district event May 7-8 at the Radisson Blu Mall of America in Minneapolis, Minnesota. The event kicked off with the keynote session, “Within Your Grasp: Future Opportunities in the Office,” with Rick Taylor, president and COO of Konica Minolta Business Solutions U.S.A. Inc.

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Ideal Indoctrination Successfully transitioning a family-owned dealership

by Jim Kahrs Prosperity Plus Management Consulting

When looking at the copier/MFP industry, one realizes there are many family-owned and operated dealerships. When you own a business and have children, the natural progression is to bring the children into the business.

Dealerships have achieved different degrees of success in this process.

COURTS & CAPITOLS 23

Lease Equipment Returns BTA hosts summit May 6 in Minneapolis

by Robert C. Goldberg BTA General Counsel

On May 6, more than 25 executives met in Minneapolis to discuss the early termination of leases and the return of assets.

Do Not Believe It All What is really going on in corporate America?

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by Bob Sostilio Sostilio & Associates International

It is tempting to assume everything you read concerning the office technology industry is applicable to your particular market.

SELLING SOLUTIONS Customer Referrals How to give them; how to receive them

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by Troy Harrison Troy Harrison & Associates

Referrals are the Holy Grail of the sales profession.

Here is how to handle a referral if you want to make the best impression on all involved.

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

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• BTA Calendar • BTA Highlights

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Executive Director’s Page

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BTA President’s Message

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Advertiser Index

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EXECUTIVE DIRECTOR’S PAGE

Join Us in Las Vegas for Capture the Magic

T

he BTA West dealer volunteer leadership team has put together a phenomenal Capture the Magic event this year that you will not want to miss. Each of the event’s educational sessions will provide valuable insight and guidance that will help you boost your dealership’s bottom line. Plus, the event’s locale and the closing entertainment options will make this dealer educational and networking event particularly memorable.

Capture the Magic will take place Aug. 6-7, 2015, at The Venetian in Las Vegas, Nevada. Nate Booth, CEO of Nate Booth & Associates, will kick off the event on Aug. 6 with his keynote presentation, “Legendary Leadership in Changing Times.” Booth is the author of three books: “Thriving on Change: The Art of Using Change to Your Advantage,” “Strategies for Fast-Changing Times” and “The Diamond Touch: How to Get What You Want by Giving Others What They Uniquely Desire.” Over the past 20 years, he has presented 1,600 programs to audiences around the world. His keynote will be packed with information that will improve your business and change your life.

Following the keynote, Sally Brause, director of human resources consulting at GreatAmerica Financial Services, will moderate a panel discussion, “The Millennial Mindset.”

The panelists: Lindsay Dick, director of sales, Collabrance; Pete Eckstrom, logistics coordinator/warehouse manager, Carolina Business Equipment; Michael Schwartz, senior account manager, Image Systems for Business Inc.; and Jenna Stramaglio, vice president of marketing, MWA Intelligence Inc. A welcoming reception will take place following the panel discussion. Attendees will have the opportunity to network with peers

and more than 30 exhibiting sponsors. Extended breaks between sessions on both days will give attendees additional networking time.

On the morning of the second day, following breakfast, three educational sessions are scheduled: “Best Practices & the 2015 Industry Benchmark Model,” with Todd Johnson, partner, Strategic Business Associates; “Sales Is Still a Numbers Game, but the Numbers Have Changed,” with Gil Cargill, owner, Cargill Consulting Group Inc.; and “Are You Prepared to Engage Buyer 2.0?” with Chris Glover, channel marketing manager, Ricoh Americas Corp.

After lunch, two additional educational sessions are scheduled: “Landing the Largest Opportunities in Each Territory,” with Kate Kingston, founder and president, Kingston Training Group; and “How to Use LinkedIn to Grow Net-New Business,” with Larry Levine, social sales strategist, Dealer Marketing.

Closing comments and prize drawings will wrap up the educational portion of the event. That evening, attendees can choose to attend one of two Cirque du Soleil performances: Michael Jackson ONE or Zarkana.

BTA’s FIX: Cost Management for Service 2.0 will be held Aug. 5-6 as the front runner to the event. Workshop attendees will receive free registration to Capture the Magic. Visit www.bta.org/FIX for additional information or to register.

BTA member dealer registration for Capture the Magic with a Cirque du Soleil ticket is only $199; the price includes a second registration for another of the member dealership’s employees. Non-member dealer registration with the Cirque du Soleil ticket is $249.

For more information or to register, visit www.bta.org/BTAWestEvent. I look forward to seeing you in Las Vegas. n — 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 Robert C. Goldberg, General Counsel Business Technology Association Troy Harrison, Troy Harrison & Associates www.troyharrison.com Jim Kahrs, Prosperity Plus Management Consulting Inc. www.prosperityplus.com Steve Rolla, Pros Elite Group www.beipros.com Bob Sostilio, Sostilio & Associates International bsostilio@embarqmail.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 Photo Credits: Bigstockphoto. Cover created by Bruce Quade, Brand X Studio. ©2015 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 2014-2015 Board of Directors

It Has Been an Honor to Serve as President

I

t’s difficult to believe that this will be my last President’s Message. The year has gone by so quickly. It has truly been an honor to serve this great association and the dealer community.

Volunteering for BTA has been such a rewarding experience. If you have not considered volunteering, I urge you to do so. I have had the opportunity to meet so many wonderful people and, as a result, have cherished friendships that will last my lifetime. Plus, I would not have gained the new knowledge I have about the waves of change affecting our industry had I not stepped forward back in 2009 as a volunteer.

BTA is such an important resource for our industry, and continues to be highly respected by all the manufacturers and vendors alike thanks to great leadership over the years. What makes BTA so great are all the volunteers who give selflessly without an expectation of personal gain, and I just cannot say enough about the wonderful people on staff — Brent, Valerie, Brian, Teresa, Elizabeth and Mary, and last, but certainly not least, Bob, our general counsel.

They are the primary reason this organization continues to grow and be held in such high regard by the entire industry.

As my final days wind down, I can’t help but reflect on the memories and events that I experienced over the years and would just like to highlight a few that stand out. n 2009 BTA East, White Plains, New York — My first national BTA Board of Directors meeting took place at this event. I remember being so intimidated by my lack of knowledge of what was to come and the responsibilities of my role. The event wrapped up with the opportunity to see the New York Yankees in their brand new stadium. My

father is a huge Yankees fan and I got to take back some memorabilia for him. He has never had a chance to go to a game, so it was a joy for me to take back a little part for him. n 2012 BTA Mid-America, St. Louis, Missouri — The event was at the beautiful Four Seasons Hotel, overlooking the Gateway Arch. One of the biggest highlights for me was provided by Chris Polek. He sponsored John O’Leary to come and share his story; what a powerful message of love and perseverance. It changed my life and outlook. n 2013 & 2014 BTA Dealer Member Appreciation Receptions, Las Vegas, Nevada — If you were there for either reception, you know what a great time we had; I don’t think we could have fit one more person into the Rio Hotel’s VooDoo Rooftop Nightclub. n 2014 The Cannata Report Awards and Charities Dinner — This was an illustrious event with all proceeds going to charity. It is the annual “Who’s Who” of the industry event, with all of the industry’s top executives in attendance. It was a fabulous night. n 2015 BTA Southeast, Orlando, Florida — The event was at Disney’s Grand Floridian Resort & Spa, an absolutely top-shelf property. For me, the event was highlighted by the huge honor I had to present Bob Goldberg with the newly established Bob Goldberg Legacy Award, recognizing him for all he has done for our industry.

In closing, I would just like to thank you for your support of me and BTA. The association is in very good hands as our new president, Dave Quint, takes office on July 1. There are so many others that I could mention, like Todd and Terry (past national BTA presidents), who I have become friends with and respect, but time and space just won’t allow it. So, I will end with a few of the lyrics to an old favorite song: “Happy trails to you, until we meet again.” n — Ron Hulett

President Ron Hulett U.S. Business Systems Inc. 3221 Southview Drive Elkhart, IN 46514 ron.hulett@usbus.com President-Elect Dave Quint Advanced Systems Inc. 2945 Airport Blvd.

P.O. Box 57 Waterloo, IA 50704 dquint@asiowa.com Vice President Rob Richardson Allied Document Solutions & Services Inc. 200 Church St. Swedesboro, NJ 08085 robr@ads-s.com BTA East Mike Boyle BASE Technologies Inc. 23 Francis Clarke Circle, Ste. 1B Bethel, CT 06801 mboyle@baseinc.com BTA Mid-America Dan Castaneda International Copy Machine Center 1515 Lee Trevino, Ste. EE El Paso, TX 79936 dan@icmc-elp.com BTA Southeast Gerry Purvis Purvis Business Machines Inc. 4505 Highway 39 N. Meridian, MS 39301 gerry.purvis@gopurvis.com BTA West Mike Ehlers Yost Business Systems 685 E. Anderson Idaho Falls, ID 83401 mike@yostonline.com Immediate Past President Todd J. Fitzsimons Automated Business Solutions DBA Network Imaging 277 Captain Lewis Drive Southington, CT 06489 tjfitzsimons@ni-ct.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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Solutions Smart Which message is your dealership projecting? by: Brent Hoskins, Office Technology Magazine

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t’s June 2015. Is your dealership where you thought it would be at this point? More specifically, even with the abundance of software-based solutions providing opportunities for new revenues, greater customer loyalty and differentiation in the marketplace, do you still adhere to a hardware-led approach? If so, do you believe that your dealership is on the right path for future growth and success?

Let’s coin a new industry term here: solutions smart. The definition: The observable trait of a person with the skill set and knowledge to effectively sell or implement software solutions that are designed to provide business process improvement. Are you, your sales reps, technicians and, in turn, your dealership, seen by others — namely your clients — as solutions smart? Do your clients turn to your dealership as their leading resource to help them address document and information workflow issues? Or, do they simply look at your dealership as a source of imaging devices?

Certainly, there are dealerships that continue to do well focusing on hardware sales. “They have established a very good business and have a very strong clientele — unbeatable relationships with their customers — and they have a business model that is working for them today,” says Doug Frazier, manager of solutions engagement, North American channel, at Lexmark International. “However, while these dealers are not necessarily actively looking to move into a more solutionscentric approach today, they know that there are [solutions] opportunities within their customer locations and that at some point they will need to address the ‘solutions question.’”

Joe Contreras, director of product and solutions marketing at Toshiba America Business Solutions Inc., likewise acknowledges that there remain hardware-centric dealerships, but emphasizes that as manufacturers like Toshiba continue to “educate them and share the message on how the industry is transitioning,” many will ultimately become

solutions-centric. “However, there are still some dealers who are identifying how the transformation impacts them and how best to manage the transition,” he says. “The economics of a hardwarecentric business model are proven and have led to successful dealerships, so it is difficult to step out of that comfort zone.”

Today, that zone is becoming less comfortable, given that industry-wide hardware unit placement growth numbers are now relegated to the past. “We all know the statistics,” Contreras says.

“The market is essentially flat. So, the only way to grow today is to steal [hardware] market share or add value through new services and solutions. To be relevant in this day and age, it is imperative to expand beyond just the hardware sale and upgrading leases.”

Phil Boatman, business alliance manager at Lexmark, offers a similar perspective. “For dealers who want to grow profits, develop deeper relationships and be viewed as trusted advisors, the time is now for them to figure out a way to shift gears and implement solutions as part of their strategy — if not begin to lead with solutions,” he says. “There are limited opportunities for hardware growth. Sure, if a dealership picks up a hardware segment that it has never sold before, it will get some spiked growth with existing customers. However, we know what the hardware numbers look like; they are relatively flat. If the dealer wants to grow his [or her] business deeper and wider within that existing customer base and go get new customers, then the answer is understanding software solutions.”

Of course, a significant number of dealers are now shifting to a solutions-centric approach, if they have not fully done so already. “The number of dealers we see participating, if you will, from a solutions perspective or who are now actively engaging with Lexmark, is growing fairly quickly,” Frazier says. “This year we have seen substantially more

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partners becoming interested channels and SMB for in learning more about how Lexmark, his company “Somebody else out there is to not only approach solutions has made both software going to eventually call on as a first step, but then learning solutions and helping the dealer’s customers and about the solutions they can offer dealers succeed top prithey are going to capitalize to specific types of customers.” orities. “Lexmark’s idenon it. So, if dealers want to Elizabeth Fox, vice president tity is centered on develkeep customers as long-term of managed print services for oping technologies that SMB at Xerox Corp., attests to remove the inefficiencustomers, it behooves them a similar growing interest in cies of information silos to broaden their scope into solutions.” solutions among her company’s and disconnected pro — Joe Contreras dealers. She cites a year-old cesses, connecting peoToshiba America Business Solutions Inc. Xerox training initiative for ple to the information dealers interested in the Xerox they need at the moment Extensible Interface Platform, whereby dealers can create they need it,” he says. “We’ve built a culture of listening, colpersonalized document management solutions for clients, laborating and responding that reinforces our engagement accessible from Xerox MFPs. “We were delighted at how with our dealers and their customers. This creates expandmany dealers signed up or expressed interest in advanced ed opportunities for our dealers.” solutions — and they weren’t just those with the biggest Those expanded opportunities, Frazier says, could start, dealerships; there is one dealer who has 12 employees who for example, with the dealer offering “very simple document sent someone to our training,” she says. “We weren’t sure management” or Lexmark’s Forms and Favorites applicahow many would sign up, but we now have a backlog for the tion, which lets users quickly and easily print frequently training we are offering.” used documents from the MFP control panel. “Then, of With the acknowledgement from Frazier and Fox that course, we also offer more advanced solutions that have a Lexmark and Xerox dealers are showing a heightened inter- much higher ROI and are more enterprise-centric in terms est in solutions — as is undoubtedly true among dealers rep- of the impact that they can have on a customer,” he says. resenting other MFP manufacturers — those dealers who “Lexmark has personnel who can stand next to the dealer have not jumped on the solutions bandwagon have an added and help him ‘tell that story.’” incentive for doing so. “The bottom line is, the demand is While advanced solutions may be the dealer’s ultimate there; it is just a matter of uncovering it,” Contreras says. goal, it appears that MFP manufacturers have no shortage “Somebody else out there is going to eventually call on the of resources to help dealerships develop solutions-centric dealer’s customers and they are going to capitalize on it. So, strategies from the ground up. “We have dealers who are if dealers want to keep customers as long-term customers, it just exploring this idea,” Fox says. “Our job at Xerox is to give behooves them to broaden their scope into solutions.” them the technology and tools that deliver value to customAs noted, there are a growing number of dealerships ac- ers, but are streamlined enough that a dealer doesn’t have to tively pursuing software solutions opportunities, viewed by make a ginormous investment in order to use them.” their clients, on a local basis, as the “go-to resource” for busiFox cites Xerox App Studio as an example of a tool that ness process improvement. Says Contreras: “The customers of does not require a lot of expertise within a dealership. The dealers who have embraced workflow solutions, made the in- tool allows dealers to select from a variety of connectors to vestment and structured their businesses accordingly abso- customize an app for a specific end-user need. “If you can lutely look to those dealers for these types of solutions.” Says draw a PowerPoint slide, you can use Xerox App Studio to creBoatman: “Progressive dealers, who have either been with us ate a custom workflow for a client,” she says. “This is a simple for a long time or who have seen the value of having the ex- tool that does simple workflows appropriate for dealers who pertise they can share with their customers, have positioned just want to get their feet wet without having to go out and themselves as trusted advisors where customers come to hire [for example] three document management experts.” them for workflow solutions, just as they would for hardware.”

For dealers only now actively entering the software soluBoatman’s reference to dealers who have “been with us tions arena, it is wise to “start small,” Fox says. “It can be a for a long time” points to a welcome reality for those deal- little daunting for somebody who doesn’t come from the softers only now ramping up with software solutions: Manufac- ware solutions space; there are so many choices. We engage turers are focused on helping dealers succeed. In fact, says the entry-level dealer who is just exploring solutions with: Mike Johnson, vice president of North American business ‘You don’t have to be an expert in everything on day one.

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their competencies and skill Just pick a practice area. For sets so that, at some point, example, if you think docu“ ... If you think document they are able to execute on ment security is particularly security is particularly their own.” important to your customer important to your customer For those dealers working base, start there. You don’t base, start there. You don’t to become solutions smart, have to transform your dealhave to transform your transitioning the message ership overnight. Just pick a dealership overnight. Just they are projecting to cuspractice area, solution and a pick a practice area, solution tomers away from “we sell partner like Xerox who can boxes,” there is a significant help — and get started.” and a partner like Xerox who can help ... ” benefit of offering software Contreras offers a similar

— Elizabeth Fox solutions that is important perspective. “I think some Xerox Corp. to recognize. “If you lead dealers are apprehensive, to with solutions,” Frazier says, some degree, because they have a good relationship with their customers and don’t “you are going to sell more hardware.” Contrewant to jeopardize their ability to renew an MFP lease when ras agrees. “Absolutely,” he says, “there is defithe time comes,” he says. “For those dealers, I would say, nitely going to be hardware pull-through.” n Brent Hoskins, executive director of the ‘There can be a crawl/walk/run approach, if you so desire.’

Business Technology Association, is editor Toshiba and the software partners within our portfolio have of Office Technology magazine. He can be the capabilities of doing both ‘handholding’ and educating reached at brent@bta.org or (816) 303-4040. of dealers along the way. That gives dealers time to build

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Cruise to Success BTA Mid-America hosts district event in Minneapolis by: Brent Hoskins, Office Technology Magazine

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TA Mid-America hosted its annual Cruise to Success district event May 7-8 at the Radisson Blu Mall of America in Minneapolis, Minnesota. The event kicked off with the keynote session, “Within Your Grasp: Future Opportunities in the Office,” with Rick Taylor, president and COO of Konica Minolta Business Solutions U.S.A. Inc. The agenda included a dealer panel, “Taking the Right Steps into Managed IT Services,” moderated by Ed McLaughlin of Valderus. The panelists were: Joseph Birk, Data Comm Inc., Jefferson City, Missouri; Jim Oricchio, Coordinated Business Systems Ltd., Burnsville, Minnesota; Brent Simone, Stratix Systems, Wyomissing, Pennsylvania; and Greg Walker, East Texas Copy Systems Inc., Tyler, Texas.

Additional educational sessions included: “Keeping Pace With Your Legal Liability,” with Bob Goldberg, BTA general counsel; “Removing the Mystery From Managed IT Services,” with McLaughlin; “Selling Strategies in the Internet Era,” with Richard Farrell of Tangent Knowledge Systems; “The Key to Smart Sales Hiring,” with Troy Harrison of Troy Harrison & Associates; “Creating Immediate Relationships in Every Presentation,” with Jody Cross of Leaders Speak; and “Sales Compensation for the Services-Led Dealership,” with Luis Gonzalez of SalesScoreKeeper.com.

The exhibiting sponsors: Accutech, Brother, Buyers Lab, Crawford Thomas, Digitek, ECi e-automate, ECi FMAudit, Epson, ESP/SurgeX, EverBank, Frontier Imaging, GE Capital, GreatAmerica, HP (May 7-8 breaks sponsor), Hytec, InfoTrends, Innovolt, Katun, Laser Pros International, Lease Corporation of America, Lexmark, LMI, Muratec, NA Trading and Technology, OKI, PHSI, Polek & Polek, Print Audit, Q2 (May 8 breakfast sponsor), Smart Power Systems, Supplies Network, TSAworld, Wells Fargo and Xerox (May 8 lunch sponsor).

BTA’s next district event, Capture the Magic, will be held Aug. 6-7 in Las Vegas, Nevada. To learn more, see the ad on pages two and three or visit www.bta.org/BTAWestEvent. n Brent Hoskins, executive director of the Business Technology Association, is editor of Office Technology magazine.

Clockwise from top: The Cruise to Success agenda included eight educational sessions; attendees had many opportunities for networking during scheduled breaks with exhibiting sponsors; Arlen Gangwish (center left) and John Ross (center) of Laser Logic, Lawrence, Kansas, visit with Dave Carpenter (right) of Brother International during a break; Rob Richardson (left) of Allied Document Solutions & Services Inc., Swedesboro, New Jersey, visits with Aaron Dyck (center) and Mike Donahue (right) of Digitek during a break; and Rick Taylor presents his keynote session.

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BTA presented several awards at Cruise to Success, including the 2015 Channel’s Choice Awards. Top photos, from left to right: 2014-15 BTA President-Elect Dave Quint (left) and 2014-15 BTA President Ron Hulett (right), present BTA Channel’s Choice awards to Pete Salmon (center), vice president of Western region sales at Sharp Imaging and Information Company of America. Sharp received awards for Superior Performance — Primary Brand, Corporate Support (a three-way tie), Distribution and Product Line; Quint and Hulett present the awards for Outstanding Performance — Secondary Brand and Corporate Support to Tom Walsh, vice president of the Western Division at KYOCERA Document Solutions America Inc.; Quint and Hulett present the awards for Corporate Support and Inventory to Rick Taylor, president and COO of Konica Minolta Business Solutions U.S.A. Inc. Bottom photos, from left to right: Quint and Hulett present the award for Remanufactured Cartridges to Paolo Galvez, key account manager at Micro Solutions Enterprises (MSE); Quint and Hulett present the award for Third-Party Leasing to Josie Heskje, director of strategic marketing at GreatAmerica Financial Services Corp.

Above left: Bob Evans, 2014-15 BTA Mid-America president, served as emcee for the Cruise to Success event. Above right: Kirk Studebaker (left) of Coordinated Business Systems Ltd., Burnsville, Minnesota, visits with Dave Milton (center) and Mark Albert (right) of OKI Data Americas during a break.

Above: Quint and Hulett present the 2015 BTA Volunteer of the Year award to Mike Ehlers (center), 2014-15 BTA West district director and president of Yost Business Systems, Idaho Falls, Idaho. Far left: The Cruise to Success event wrapped up with a Las Vegas casino-themed dinner cruise on the Mississippi River aboard the Anson Northrup riverboat. At the end of the night, attendees traded their poker chips for raffle tickets to have chances to win prizes from BTA Mid-America. Near left: Britt Siedentopf of Muratec America Inc., visits with attendees during a break between sessions. www.offi cetechnol ogymag. c om | J u n e 2015 | 17

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Within Your Grasp

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Top photo: The dealer panelists were ( from left to right) Joseph Birk, president and owner, Data Comm Inc., Jefferson City, Missouri; Jim Oricchio, president and CEO, Coordinated Business Systems Ltd., Burnsville, Minnesota; Brent Simone, president, Stratix Systems, Wyomissing, Pennsylvania; and Greg Walker, president, East Texas Copy Systems Inc., Tyler, Texas. Ed McLaughlin (right) moderated the panel.

Clockwise from top left: presenter Bob Goldberg; attendees and exhibitors visit during a break between sessions; John Dodge (left) of Advanced Systems Inc., Waterloo, Iowa, visits with an exhibitor during a break; presenters Jody Cross; Troy Harrison; Richard Farrell; and McLaughlin. Right: presenter Luis Gonzalez.

onica Minolta Business Solutions U.S.A. Inc. President and COO Rick Taylor encouraged BTA Mid-America Cruise to Success attendees to broaden their product offerings and services in order to best ensure their ongoing success. He shared his advice in his keynote presentation, “Within Your Grasp: Future Opportunities in the Office.”

“I firmly believe that this is the very best time to be a dealer,” Taylor said. “I’ve heard a lot of folks talking about print volume going down, the commoditization of the business, etc. If you open your mind and do some good things aggressively, I think the opportunity is great.”

Taylor highlighted some of the products and services currently driving the growth of Konica Minolta. He advised dealers to take another look at the “high-margin opportunities” as well.

Today, Taylor said, Konica Minolta is building a nationwide managed IT services organization with remote service capabilities, a business cloud infrastructure and onsite engineering resources. “I believe this is a business that you should be in,” he said. “If you have a smaller dealership or medium-sized dealership, you will need help … You have got to pick a partner as an MFP provider and partners in other areas — software, services — and you’ve got to trust them.”

Taylor shared the managed IT services success story of one dealership generating $15,000 monthly for 60 months from a single deal. With such successes occurring, he suggested, more dealers will be embracing the opportunity. “You don’t have to get into [managed IT services], but if you are not going to, you have to figure out how to sell against it,” he said. “I’m just telling you, our dealers are going to be good at selling this value to customers.”

Konica Minolta’s foray into managed IT services began with the acquisition of a dealership finding success in the IT services sector.

Likewise, the acquisition of another dealership — this one successful in enterprise content management (ECM) — led the manufacturer, now offering Hyland Software Inc.’s OnBase product, to embrace ECM as well. “The amount of data out there is doubling every 18 months,” Taylor said, noting that much of it is unstructured. “The capability to organize that data and make it available for businesses is huge … It’s a great, ongoing support business.”

The third opportunity highlighted by Taylor, production print, can be pursued by dealerships of “any size — small, medium or large,” he said, noting that a dealership “can build a $4 million to $6 million [production print] business quickly.” Acknowledging that many of the event’s attendees are from secondary markets, he noted that the commercial and industrial print volume is “not in New York City,” but is in locales where “you wouldn’t dream that it is.” Today, he said, the conversion of print jobs from offset press to digital is “dramatic and profitable.”

The final opportunity Taylor highlighted was the burgeoning 3D printer market. “We’re doing great with it,” he said. “The technology is increasing so quickly that if you get a base and gain credibility, when the new products come in at much greater speeds and much lower prices for the substrates, you’ve got a home run. So, get the base like we’re doing, get some experience and go after it; everybody wants to talk to you about it.”

Taylor encouraged dealers to find the right partners to take advantage of the opportunities he highlighted. “Trust your ideas, invest and go forward,” he said. “It is happening for us. It is happening for our dealers. It surely can happen for you.” n —Brent Hoskins

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Ideal Indoctrination Successfully transitioning a family-owned dealership by: Jim Kahrs, Prosperity Plus Management Consulting Inc.

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hen looking at the makeup of the copier/MFP industry, one realizes there are many family-owned and operated dealerships. When looking at the roots of many dealerships, it is easy to see why a technician or sales rep working for a larger company gets the entrepreneurial itch and decides to start his (or her) own company. Typically the business starts small and builds. As the owner builds the business, he also begins building a family. As the two mature, they often become intertwined. When you own a business and have children, the natural progression is to bring the children into the business at some point, either to learn the ropes, have a job or to simply help out. Dealerships have achieved different degrees of success in this process.

I am sure you have heard the stories at either end of the spectrum. There is the successful transition where the next generation comes in and takes over the business and brings it to a new, higher level. The revenues and profitability grow and the business heads in a very good direction. Then there is the unsuccessful transition where the next generation comes in and the business falls apart. So, what are the driving factors behind each scenario? For the balance of this article, I will outline the elements that lead to success or failure. Much of what will be covered has come from firsthand observation of what works and what does not. Let’s start with the elements that lead to success.

Starting at the Bottom A common thread in most situations that have progressed successfully is the way the owner’s children were indoctrinated to the business. They were typically brought in young and at the bottom of the totem pole. I have seen situations where they were brought in at 14 years old or younger and started with assignments like cleaning the bathrooms, sweeping the warehouse, filing service tickets, breaking up cardboard boxes, helping with deliveries or similar tasks.

Bringing in sons (or daughters) at this level accomplishes

a few key goals. This initial step helps them understand that business ownership has many levels. It is not just sitting in an office giving orders to others, taking long lunches and cashing checks. Being successful takes hard work on many levels. Next, this strategy helps the younger-generation worker connect to the front-line workers in the dealership as a peer as opposed to the boss’ son. Experiencing firsthand what is done at this level of the business gives him a better understanding and a connection to the folks on the front line of the business.

If this process leads to success, it is fairly easy to see what would not. I have seen situations where the owner brings his son into the business and immediately places him in a higher-level position, though the position has not been earned.

This almost always leads to failure, since there has not been sufficient training or preparation involved. The staff will often resent this automatic placement and will either openly or covertly work against him.

Avoiding Entitlement & Special Treatment Hand-in-hand with starting at the bottom, successful transitions occur when there is no feeling or display of entitlement on behalf of the younger generation coming into the dealership. For this transition to work, the younger person coming in must earn everything he gets. In fact, the most successful situations I have seen take this a step further. The owner of the business bringing his son on board holds him to a higher level of responsibility and accountability than anyone else in the organization; everyone knows and sees it. This can and should be discussed in advance. I have coached many of our clients to sit down with their children coming into the business and tell them clearly that they will be held to a higher standard. The morale of the group will suffer if this does not happen.

The entire organization takes notice the minute the owner’s son gets preferential treatment. From there forward, people look at the owner and the organization differently. I have had numerous dealership employees tell me that they www.offi cetechnol ogymag. c om | J u n e 2015 | 19

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are looking for another job because they do not feel they have any future potential with the organization or they think the company will crash when the son takes over the organization. The problem is that they will rarely say this to the owner.

They just quietly leave.

This can be seen very clearly when looking at the differences between how millennials and baby boomers communicate. The decision makers at many of our prospects are now millennials; we need to change how we communicate in order to reach them. Having and embracing the millennial viewpoint in the organization can be a huge help. I have seen the most success when both generations learn from and adopt strategies of the other. This new, hybrid manager can cross a lot of boundaries and better understand his employees and customers.

Another observable key to success is having the younger generation learn all parts of the business ... In doing so, you are creating a well-rounded individual.

Learning All Disciplines Another observable key to success is having the younger generation learn all parts of the business. Some of this is accomplished by bringing him in at the bottom, but it should go further. If your son comes into the business as a full-time technician and you have intentions of having him take over the entire business, it is wise to give him experience in all aspects of the business.

Once you think his skill as a technician is strong, I would suggest having him spend a significant period of time as a sales rep. In doing so, you are creating a well-rounded individual.

One of the biggest challenges we face in our industry is the disconnect between sales and service. Many dealerships have a level of animosity between the departments. This animosity comes from a lack of understanding and respect for what the other team does. Having spent significant time in each department puts a future manager in the unique position to fully understand both sides.

However, I would not stop here. I would have the immersion continue into the administration area as well. Someone who is being groomed to take over the business needs to have a keen understanding of what makes the business run day in and day out. The admin team holds everything together and makes sure that what the company does turns into profit. Along with this education in admin, it is critical that the younger generation be fully immersed in the finances of the company. Too many people think that profit is generated solely by selling more. Unfortunately, this is not the case. Profit starts with sales, as we need revenue as the first step. However, true long-term profit is created through good financial management. It is very easy to spend money, but one must understand how and when to spend money in order to generate net profit. Handing a company over to someone who does not understand finances can be destructive.

Embracing Generational Differences Some of the most successful transitions between generations have been brought about because of different generational viewpoints and skill sets. I have a fortune from a fortune cookie taped by my desk that reads: “When two men in a business always agree, one of them is unnecessary.� Successful transitions come about when the generations put their heads together to work out plans.

Having a Plan Those who have made the successful transition from one generation to the next have had a plan. Unfortunately, it does not typically happen by itself. The plan should include some key elements. First, there should be a rough timeline. For example, a goal to fully pass the torch and exit the business within 10 years. With a timeline in place, you have a means to measure progress and have some idea of what else is needed.

The next step is to have a training plan. As mentioned earlier, you will want the future leader of the company to have experience in all areas. You will likely also want him to have some formal schooling, often in the form of a college degree. Have this planned out and worked into the timeline.

Additionally, you will need to have a financial plan. If the goal is to turn the business over and move into retirement, you will need cash flow to maintain your lifestyle. There needs to be a plan for this, as your son will not likely have the money to buy the business in a lump sum. The business will need to spin off the cash needed to continue to support you while having enough cash flow to keep the business going and pay your son to run it. This can definitely be done; it simply needs to be planned out.

The concept of building a business and a family together and passing the business on to the next generation is an old one. There have certainly been varying degrees of success achieved. However, the concept is a viable one when you take the right approach. You will find that a little planning goes a long way. If you consider the important elements listed above and have a strong plan, the results can be fantastic. n Jim Kahrs has been in the office technology industry for more than 27 years and has held positions in sales, sales management, wholesale management and as a dealership executive.

He formed Prosperity Plus Management Consulting in July 2001. Kahrs can be reached at jkahrs@prosperityplus.com.

Visit www.propserityplus.com.

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EDUCATION CALENDAR June 17

Building My Business Webinar: “How to Acquire a Managed IT Services Company”

BTA Channel dealers are taking advantage of the managed IT services market opportunity in increasing numbers. Many are looking to make a strategic acquisition of a managed services provider/IT services company as a way to either accelerate the success they are having or speed their transition if they are not in the market today. In this webinar, Mitch Morgan and Chris Ryne of Growth Achievement Partners will be joined by their strategic partner in this space, acquisitions expert Mike Dudek of Zygoquest Group. They will share valuable insight into trends, strategies, examples of recent transactions and the keys to a successful acquisition process, whether you are planning to start your search today or in the future. Visit www.bta.org/Building MyBusiness to register.

August 5-6

FIX: Cost Management for Service 2.0

Las Vegas, Nevada FIX, BTA’s popular service workshop, teaches you how to compute the cost of your service labor hour (service burden rate) and improve your overall service department profitability. Workshop instructors Ronelle Ingram and Rock Janecek will cover first-call completion and proven management and customer service programs to improve morale within your service department.

Those struggling with MPS and IT issues can learn new management skills to help transition their staffs to the realities of solutions-based servicing. This is a highly interactive, energetic classroom experience. Come prepared to learn in a fun, relaxed atmosphere. Workshop attendees receive free registration to the Aug. 6-7 Capture the Magic district event, hosted by BTA West. Visit www.bta.org/FIX to register.

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Capture the Magic - Hosted by BTA West Las Vegas, Nevada BTA West will host Capture the Magic, open to dealers from across the country, Aug. 6-7 at The Venetian in Las Vegas, Nevada. The event will feature a keynote session by Nate Booth, a panel discussion focused on the millennial mindset and five additional educational sessions presented by subject-matter experts. In addition, there will be time to visit with 30-plus exhibiting sponsors, many of which will hold drawings for great prizes during the event. Dealer attendees can also enter on-site for a chance to win one of five $100 American Express gift cards and be entered into the BTA District Event Sweepstakes. The event will wrap up with a Cirque du Soleil performance of the attendee’s choice: Michael Jackson ONE or Zarkana. BTA member dealers receive 2-for-1 registration! Visit www.bta.org/BTAWestEvent to register.

For more information, visit www.bta.org/Education or call (800) 843-5059.

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

Dealer Members American Office Systems, Doylestown, PA DDL Business Systems LLC, Winchester, VA Elite Business Systems, Sioux Falls, SD ImpactOffice, Beltsville, MD Metro Sales, Minneapolis, MN The Polack Corp., Lansing, MI Service Associate Members Tesseract, Alpharetta, GA For full contact information of these new members, visit www.bta.org.

Beacon Promotional Products Beacon Promotional Products provides customers with quality products and services that support their sales and marketing objectives. When used correctly, custom promotional products are a proven marketing tool that can generate leads and improve brand recognition. These products can be used to increase sales and promote employee loyalty. Beacon combines smart design and innovative promotional products to deliver creative solutions to your corporate-identity and brand-awareness needs. You will receive cohesive project management, from creative services to production of marketing programs. BTA members receive a 10-percent discount on all items in Beacon’s Web store.

Visit www.bta.org/Beacon for more information.

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 Accutech is one of the largest wholesale suppliers of digital supplies and imaging products. It offers benchmark services and has fully staffed sales, purchasing, distribution, IT and customer service departments to assist with your day-today business needs. Accutech has dedicated, knowledgeable sales reps and customer service associates who know the business. The company provides national coverage with both East and West Coast distribution points and offers the power of online automation with its Accunet customer portal. www.accutechdata.com

BTA Service Associate member Tesseract was formed in 1985 to develop, market, sell and support specialized problem management systems for the service industry.

Its unique field service management system streamlines stock control, remote engineer access, call handling and service control. True software as a service, Tesseract is Web-based and delivers powerful management to companies’ field service systems and operations. Tesseract also provides training and consulting to help you immediately achieve the best possible results from your investment. www.tesseractusa.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

Lease Equipment Returns BTA hosts summit May 6 in Minneapolis by: Robert C. Goldberg, general counsel for the Business Technology Association

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ave you ever removed equipment under lease from a customer location without a return authorization? Have you removed leased equipment without notifying the leasing company? Have you ever made a lease payment on behalf of a customer? Have you placed leased equipment in your warehouse and neglected to place insurance on it? Have you placed leased equipment in your warehouse and failed to pay the property tax? I could go on, but you know these occurrences happen on a regular basis throughout the industry.

On May 6, more than 25 executives met in Minneapolis, Minnesota, prior to the BTA Mid-America-hosted Cruise to Success district event, to discuss the early termination of leases and the return of assets. The assembly included the leading leasing companies, equipment transporters, wholesalers, dealers and BTA officers. I Goldberg facilitates the discussion during the May 6 Lease Equipment Return Summit in Minneapolis, Minnesota. was privileged to facilitate the discussion.

A recurring call to the BTA Legal Hotline — (800) to accept an early return of the equipment, thus making it eas869-6688 — involves the early return of leased equipment. ier for the dealer replacing the equipment. Although the sumSometimes the call is from an end user who has failed to pro- mit did not reach a solution, it began a beneficial discussion on vide timely notice and finds himself (or herself) in automatic the issue of early returns. If, in fact, it is dealer opposition that renewal. At times, the end user may be placed in default for stands in the way of early returns with full payment of the rethe removal of the equipment and may find he has accelerated maining sums, then the dealer community should reconsider payments and penalties due. The call may come from a dealer its opposition. By the time an end user has sought to return who has paid the customer the remaining payments, but the equipment early, a new arrangement has been consummated. customer failed to send the payments in, maintain insurance The incumbent dealer has lost the customer. Standing in the or pay property taxes. The leasing company may call, explain- way of an early return only brings a slight amount of gratificaing it does not know where its asset is and believes it has been tion, but not in the relationship with the customer. Furtherwrongfully removed. more, in the next instance it may be you who seeks to return The problem exists because leasing companies refuse to ac- equipment you are replacing. Finally, it would be a good opcept the remaining lease payments and the early return of the portunity to visit the end user and advise that you made arequipment. The issue only arises in those instances where a rangements for the early return, express regret on losing the dealer and/or leasing company is being replaced. If there is an relationship and let him know you look forward to assisting upgrade to return and the finances are with the current lessor, in the future. then early returns are accepted. All participants at the summit Today, there are thousands of units sitting in warehouses agreed that full payment and early return maximizes the value waiting to be returned. Equipment gathering dust and depreof the equipment. When equipment is taken from a location ciating benefits no one. It is time for the dealer community to early and placed in storage, there are many potential adverse recognize that early returns with full payment events. The equipment will be transported an additional time according to the terms of the lease are in everyand may be damaged in the process. A desperate need for a part one’s best interest. BTA will continue to pursue may result in the cannibalization of the equipment. The equip- these issues and welcomes your thoughts. n ment could be stolen or damaged and not covered by insurance.

Robert C. Goldberg is general counsel for the Leasing company executives believe the problem exists beBusiness Technology Association. cause the incumbent dealer does not want the leasing company He can be reached at robert.goldberg@sfnr.com. www.offi cetechnol ogyma g. c om | J u n e 2015 | 23

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PRINCIPAL ISSUES

Leadership in ECM DocuWare holds annual conference May 19-21 by: Elizabeth Marvel, Office Technology Magazine

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ocusing on its leadership in the enterprise content management (ECM) arena, DocuWare hosted its DocuWorld 2015 conference May 19-21 at the Caribe Royale in Orlando, Florida. The conference’s theme, “Leadership in ECM,” was evident in comments from DocuWare executives during the general session on May 19.

Thomas Schneck, co-president of DocuWare GmbH, addressed the company’s industry leadership and growth in his presentation during the opening general session. “We are very proud of the fact that we were able to become the leading global provider of ECM for mid-sized companies,” Schneck said.

“And the way we measure that is by annual customer growth, thanks to your great efforts. We grew more new customers ... than any other vendor in the world that chose this market segment of mid-size companies. Year over year, more than 1,000 new customers signed on for DocuWare ... More than 60 percent [of our revenue] actually comes from selling to new customers ... DocuWare grew 16 percent in 2014, which is great.

That growth has further accelerated in the first quarter of 2015; we’re already at 25 percent.”

In his general session presentation, DocuWare GmbH CoPresident Jürgen Biffar spoke about five core segments of DocuWare’s leadership in ECM. “Over the past 27 years, DocuWare has developed the leading technology for enterprise content management,” Biffar said. “Today, we view innovation, architecture, security, integration and scalability as the core segments of technology leadership in ECM. In each and every one of those five segments, we are well ahead of the competition.”

He went on to describe the five segments, highlighting DocuWare’s strides in each to remain the market leader, beginning with innovation. “Since the founding of the company, DocuWare has been using innovation to set the mark in the ECM market,” Biffar said. “Today, our users make the most out of our browser-based technology, our cloud solutions, intelligent indexing and mobile applications.”

Biffar spent some time looking at DocuWare’s cloud- and browser-based technology, saying that the company is the first and only established ECM provider to offer true software as a service (SaaS) in the cloud, with more than 4,000 users currently using the software. According to Biffar, DocuWare’s SaaS is multi-tenant, service-oriented and scalable and, thanks to the cloud, it offers cost advantages that the company is able to pass along to its users.

In addition to Schneck and Biffar’s presentations, other

Clockwise from top: Attendees network in the Technology Pavilion during a reception held before the partner dinner on May 19; Jürgen Biffar; and Thomas Schneck.

DocuWare executives spoke about the company’s marketing initiatives, recertification training, technology trends, the DocuWare road map and the software’s newest offerings. Two dealerships using DocuWare were also featured as success stories: BTA members Impact Networking LLC, Waukegan, Illinois, and Copier Fax Business Technologies, Buffalo, New York. The conference also included keynote sessions by John Mancini, president and CEO of AIIM, and retired Navy Cmdr.

Kirk Lippold, who served as commander of the USS Cole when it came under a suicide terrorist attack by al-Qaida in the port of Aden, Yemen.

Schneck wrapped up his comments with encouragement for DocuWare resellers. “We strongly believe that the ECM market is a really exciting market to be in,” he said. “We believe that it will offer great growth opportunities for many years to come.

But also, I will say we are in a perfect position to really maximize our own opportunity here in this market — from our training to a sales standpoint.

Above all, the sales power that you contribute in the field is unmatched in the world.” n Elizabeth Marvel is associate editor of Office Technology magazine. She can be reached at elizabeth@bta.org or (816) 303-4060.

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PRINCIPAL ISSUES

Achieving Benchmarks Are you ensuring your dealership is on track? by: Steve Rolla, Pros Elite Group

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n March of this year, a group of distinguished dealership principals participated in a panel discussion at the BTA Southeast Winter Break event in Orlando, Florida. The dialog focused on the art of acquiring a company and the steps necessary to prepare a company for acquisition.

The panelists were Jeff Gau, CEO of Marco, St. Cloud, Minnesota; Jim Kreikemeier, president of Capital Business Systems Inc., Fort Collins, Colorado; and Rick Lott, co-owner of Zymphony Technology Solutions, Tampa, Florida. They responded to questions posed by panel moderator Jim Kahrs of Prosperity Plus Management Consulting Inc., as well as questions from the audience.

Two answers that the panel members gave were of particular interest to me. The first answer dealt with how to value a business that is a possible target for acquisition. Each of the panelists agreed that the only numbers that should be considered in valuing the business are the actual numbers that are available for the most current full year’s performance. There should be little to no consideration given to the selling entity’s claims of “we just had our best year ever.”

The second answer dealt with how to prepare your business if you are considering selling it. The panelists all agreed that the best thing a dealership principal can do to prepare to sell his (or her) business is to make investments to improve the profitability of his organization to derive the maximum value for the business.

A week prior to the BTA Southeast event, I attended a sales training seminar developed for dealers looking to get into managed IT services. The individual who conducted the seminar is highly regarded in the industry. Everyone attending the seminar, including me, was eager to learn how to build a successful IT services offering. As the instructor laid out the fundamentals for building this offering, he warned attendees that anyone entering IT services must have his core imaging business performing to our industry’s benchmarking model.

He added emphasis to that point by saying: “Do not even consider getting into IT services if your imaging company is not performing to benchmarked model performance.”

Together, the BTA Southeast event panel discussion and the managed IT services seminar reaffirmed what we have known since Tom Johnson released the Global Imaging Systems benchmarking model back in 1998: Improving your company’s value is all about execution to the benchmarks. It is not a lack of knowledge of the metrics that causes office technology

dealerships to perform below benchmark, as most dealers can recite the benchmarks (at least the service benchmarks). However, many dealers have not made the investment in developing the processes that ensure the level of execution necessary to achieve the benchmarks.

Today, looking at the service side of the business, dealerships are averaging 42 percent service gross profit and 30 percent or less supply gross profit and are doing $1 million in aftermarket revenue. However, the benchmarks are 52 percent service gross profit and 40 percent supply gross profit. By meeting the benchmarks, the dealership that is at 42 percent service gross profit and 30 percent or less supply gross profit would see another $100,000 on the bottom line. Assuming the typical three to four multiplier of earnings paid for dealership acquisition, this $100,000 profit contribution improvement would add $300,000 to $400,000 to the dealer’s pocket at the time of the sale. As you consider this, also consider the advice of the panelists at the BTA Southeast event: Dealers should work to improve their businesses as if they are preparing to sell them, regardless of whether there are any plans to do so.

Although many dealers may not understand how to execute to the service benchmarks, most know that the benchmark for service gross profitability is 52 percent and that the benchmark for first-call completion rate is 82 percent. However, when dealers are asked about the benchmarks for sales organization profit contribution (prior to administrative expense allocation) or sales rep and sales manager compensation as a percentage of equipment gross profit, many do not know the answers. www.offi cetechnol ogyma g. c om | J u n e 2015 | 25

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12 percent prior to administrative expense Back when the benchmarking model allocation is achieving benchmark perforwas established, sales rep compensation The very best mance. A recent survey of 200 dealers rewas looked at as a percentage of equipdealerships make vealed that these dealers were achieving ment revenue. The assumption then was quality investments in 3 percent sales organization profit contrithat equipment profits would never drop process improvement bution or less. Once again, this provides an below 40 percent in a well-benchmarked that lead employees to another opportunity to emphasize how a organization. Today, equipment profits at dealer should run his business — as if he or above 40 percent are rare. Dealers who execute to benchmarked were selling it tomorrow and working to have equipment profits below 40 percent performance. improve the overall value of his business. and think they are in good shape if they are Equipment sales are normally close to 50 achieving benchmarked sales rep compensation at 15 percent and sales manager compensation at 5 per- percent of the total revenues of an organization. A 10-percent improvement in sales organization profit contribution on a $2 cent of equipment revenue are sadly mistaken.

The only benchmark for sales rep compensation that a million dealership would yield the same $100,000 profit condealership should use is 37.5 percent of equipment gross prof- tribution that we saw earlier in the aftermarket. This would it. Sales rep compensation that is in excess of 50 percent of yield another $300,000 to $400,000 in value for that company.

In summary, the only thing that really separates a quality ofequipment gross profit will almost always lead to a negative profit contribution from the sales organization. Sales manager fice technology dealership from another is not the product line compensation (which includes the vice president of sales and it carries or the geography in which it operates. The very best dealerships make quality investments in process improvement all sales managers) is 13.5 percent of equipment gross profit.

A sales organization that achieves a profit contribution of that lead employees to execute to benchmarked performance.

One of the best lines I have ever heard in a motion picture came out of the movie “The Horse Whisperer.” In one scene, Robert Redford is confronted by an individual who is perplexed about what decision he should make. Redford calmly responded to the individual by saying (and I paraphrase): “Everyone who is perplexed knows in their heart, almost instantly, what they should do; the most successful and happiest people take less time to do it.” Most dealers know they are not running their companies as if they are going to sell them tomorrow. Most dealers also know they are not close to achieving benchmarked performance in the aftermarket or in their sales organizations. But the most successful dealers will take less time to do something about it. n Steve Rolla has been in the office technology industry for 43 years and is one of the few company presidents in the industry who has come from a service background.

Most in the office technology industry know him as the president of organizations that have achieved IKON’s CEO of the Year Award or the Global Imaging Systems Chairman’s Award. Rolla co-authored the first industry benchmarking model with Tom Johnson during their time together at Alco Standard and Global Imaging Systems.

Today, he is a partner in the Pros Elite Group and is responsible for the Pros Elite 100 Dealer Group.

In 2012, Rolla published the “Pros Elite Sales Playbook,” which outlines 13 critical sales management activities, associated benchmarks and the execution skills to achieve them.

He can reached at steve.rolla@beipros.com.

Visit www.beipros.com.

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PRINCIPAL ISSUES

Do Not Believe It All What is really going on in corporate America? by: Bob Sostilio, Sostilio & Associates International

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t is tempting to assume everything you read concerning the office technology industry’s new and disruptive technology/software, innovations and/or trends is applicable to your particular market. The reality may well be completely ambiguous. This recently became apparent to me as I read a Wall Street Journal (WSJ) article.

The article was about how a Brazilian buyout firm, using zero-based budgeting, plans to reduce the costs of its U.S. acquisition. It plans to focus on details “as minute as how to make photocopies.” The article also stated the company will be “requiring employees to get permission to make color photocopies.”

Both statements caught my attention, because from my own research I know that the average cost to make copies for a lessee of a color copier/MFP in the United States has dropped substantially over the years. Today, a color letter-size page hovers around $0.046 while a black-and-white letter-size page costs about $0.008. There is not much more to squeeze from that. Also, how is it that a major U.S. company (the one being acquired by the Brazilian firm), with more than $11 billion in sales and ranked in the top 30 privately held companies, is apparently without a document management or enterprise content management service?

Another story seemed to complement the first. Written by the WSJ’s business technology journalist Kim Nash, it stated: “Only a small minority of corporate boards have technology committees.” The article also stated: “A scant 5.2 percent of public company boards have created a technology committee” and instead rely “on business models built on data analytics, algorithms and software tools.” That fact came from a study of 1,013 public companies in North America by the National Association of Corporate Directors. Here again was statistical data from a non-document-centric source, noting that U.S. corporations lack the knowledge to make the right decisions when they commit their companies to, for example, cloud computing, mobile print or document management systems. Really?

These two sample articles demonstrate that some of the statistical data presented about our industry may not be reflective of your market.

Whose Data Should I Trust?

For the most part, articles about our industry are accurate. Many document industry consultants publish articles about the independent dealer channel and trends within the channel that contain statistical and actionable data for many

independent dealers working at the ground level. The statistical dealer survey data tends to compute the best of the wisdom and substantiate what is really happening within the various markets at any given time. The data is normally broken down into segments and slices that different size dealers can relate to. Still, as the two sample articles I have cited demonstrate, every so often I run across data without any basis in reality.

Another Good Example of Poor Data I saw another good example of this recently in an article published in a national business magazine. A sidebar said the magazine conducted a survey of its target subscribers and reported that “53 percent use 3D printers” and “52 percent owned at least one 3D printer.” It went on to say that more than “29 percent had their 3D printers for more than 10 years.”

I contacted the publication and author to inquire about the demographics of the sample, the sampling technique, the geographical locations of the businesses and vertical markets within those locations, such as manufacturing, education, retail, etc., and whether they had other types of printers. I also asked if they spot-checked any sites. I similarly told them I was most interested in the sample’s demographics by the number of employees per establishment.

It came as no surprise, but I was never given a response from the author or the magazine. I guess I tipped my hand that I knew something about statistical research and implied the author of the article did not. I believe the results were massaged to make a point they were promoting about the future of 3D printing. From my impromptu judgment sampling of 100 www.offi cetechnol ogyma g. c om | J u n e 2015 | 27

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companies here in my neighborhood in Ocala, Florida, nowhere near 50 percent use a 3D printer. I could not find more than two companies out of my sample base in a city of less than 57,500 people and 9,300 businesses. Both 3D printer owners were manufacturing companies.

printing, managed services and content management, require expansion of your current business within your economy of scale. Do not abandon your existing business model or clients, but rather execute your growth on their shoulders. As a dealership principal, you know who the best prospects for growth are and what you can commit to do. Use your knowledge of your market, past experience with “trends” and take some of these “national trend”-type articles as a guidepost to what may be beyond the horizon for your market. n Bob Sostilio is president and CEO of Sostilio & Associates International, an Ocala, Florida-based consulting firm serving the office technology industry.

He has more than 34 years of experience in the industry, including service in senior management positions with leading manufacturers and research organizations.

Sostilio can be reached at bsostilio@embarqmail.com.

Use your knowledge of your market, past experience with “trends” and take some of these “national trend”type articles as a guidepost ...

Where to Find the Truth?

It is easy to get excited or discouraged if you accept all you read as applicable to your market. It is no crime to be taken in by some author with a hidden agenda, but be inquisitive when it comes to your livelihood. Challenge authors when you question their conclusions. A good author will always share his (or her) assumptions and methodology. At Sostilio & Associates International, we post our assumptions and sample size information at the beginning of all research summaries.

Above all, view these “technology” stories as “expectations” of the authors. If you do follow their lead, do so with the ability to balance your product or service capabilities so when the trend or product eventually arrives, it is scalable within your business plan. Many of the trends, such as 3D

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SELLING SOLUTIONS

Customer Referrals How to give them; how to receive them by: Troy Harrison, Troy Harrison & Associates

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eferrals. They are the Holy Grail of the sales profession and every salesperson wants them. Most salespeople claim to receive quite a few, yet very few salespeople have a good grasp on how to handle a referral so everyone (the giver, the receiver and the referred party) gets what they want.

In fact, many referrals are passed in such a way that business opportunities are not realized and, worse, relationships are endangered. Here is a case in point.

I recently received an email from Isaac, a contact of mine: “Troy, I met with ‘Joe Smith’ yesterday for the first time. I immediately thought of connecting him with you. He is a local guy with a lot of experience and could be valuable to the right organizations that need help getting some sales rolling quickly.” Notice what is not there? I know that he has “a lot of experience,” but not what type of experience that is. Is he a sales guy, an operations guy, a consultant, etc.? I also do not know what the agenda for a meeting would be.

A day later, I received a voicemail from Joe: “Hi Troy, this is Joe Smith. We were introduced in an email. I have some clients, but I would like to have more and I thought you could send me some. Please call me back.” So now I know that he wants some clients — apparently my clients — but I still do not know what he does.

I responded back saying: “I received your message. To be honest, I am unclear on what you do, which would give me a better idea of why we should meet. From Isaac I know that you have a lot of experience (at something) and from your message I know that you want more clients. How about filling in some blanks?

I do not mean to be difficult, but my time is at a premium and any meeting needs to have a clear agenda, objective and win.”

His response: “I am open to suggestions.” I decided then that the meeting would never happen.

So what happened? Both Isaac and Joe made some of the biggest mistakes that can be made when referring one person to another. Salespeople need to understand that a referral is an expression of trust — and when trust is violated, it is difficult to get it back. In addition, it is important that everyone be on his (or her) game and be respectful of each other and the time involved.

Here is how to handle a referral if you want to make the best impression on all involved.

For the Referral Giver Know and have trust in the person you are referring. My guess is Isaac did not know what Joe did either; he just heard

the word “sales” and thought he would send him my way. In a later discussion, I found out that Isaac had only talked to Joe for about 10 minutes. That is not enough time to build the trust you need to have with the referral giver.

Be clear and articulate the mutual win. The best referrals contain a “mutual win” for both parties. I had a feeling I knew what the “win” would be for Joe in meeting me — he wanted me to send him my clients. (Again, for what? I do not know.)

What would be the “win” for me in meeting Joe? I do not know.

Neither Isaac nor Joe articulated that to me.

Make a mutual introduction. The basis of a referral is that the giver is going to do something to help a meeting happen.

There are a number of ways to do this. The best option is to convene a three-way meeting (with the referring party present). The next-best option is a personal phone call, and the final option is an email introduction. However, the email introduction should give context to both parties regarding what the other person does and why the meeting should happen.

For the Referral Receiver Be clear. Some people want to take a shortcut when they receive a referral and give the introduction a less-than-quality selling effort. Do not be that person. Instead, give your new contact a clear and concise message about how the two of you can add value to each other.

Name-drop. This is one instance in selling where name-dropping helps. Go ahead and use the name of the person who introduced you, even if the introduction is fresh. People are very busy today and the more context you can give, the www.offi cetechnol ogymag. c om | J u n e 2015 | 29

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could benefit from your services. better. Name-dropping in this instance is Ask for referrals when you are complineither tacky, nor is it bad manners.

Acknowledge the referral mented.

When customers thank us or comFocus on the mutual win. The best with a handwritten pliment us on our work, there is a tendency referral meetings are those in which both thank-you note. If you to just bask in the glory. Instead, thank the parties win. If you do not have a reason why are thinking that no one customer and then ask for the referral; you your newly referred contact wins by meetdoes this now, you are will never have a better opportunity. ing with you, then you are just coming at Referrals are wonderful and a great him with your hand out, and no one likes right; that is what makes way to build your business. Ask for them that. Even with a referral, if it looks like you it such a valued gesture. the right way, give them the right way and are looking for a handout, you will not get handle them the right way. If you follow the meeting — and Joe did not. these simple rules, you will receive referFollow up afterward. Acknowledge the referral with a handwritten thank-you note. If you are thinking rals for years to come. n Troy Harrison is the author of “Sell Like You Mean It!” that no one does this now, you are right; that is what makes it and a speaker, consultant and sales navigator. He helps such a valued gesture. Show your appreciation for one referral companies build more profitable and productive sales forces and you are liable to get more. with his cutting-edge sales training and Here are two bonus ways to get referrals from a customer: methodologies. For information on booking Do a business review. One of the best ways to get a referral speaking/training engagements, consulting or from a customer is to do a business review. This is a sales call to sign up for his weekly e-zine, call where you review, in very detailed fashion, the work that you (913) 645-3603 or email have done with that customer and the benefits the customer has accrued. After establishing that the customer has “won” troy@troyharrison.com.

Visit www.troyharrison.com. by working with you, ask if there is anyone else he knows who

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