March 2014 Office Technology by Business Technology Association

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CONTENTS Volume 20 • No. 9

FEATURE ARTICLES 10

Vertical Markets Strategizing to secure customers for the long term

COURTS & CAPITOLS TLA Overload Do not assume customers know this new language

by Brent Hoskins Office Technology Magazine

Selling strategically into vertical markets is nothing new. For years, dealers have been actively pursuing not only health care, but also such leading verticals as education, legal and local government. While vertical-market selling is nothing new, there appears to be a growing emphasis on the strategy among the industry’s MFP and printer manufacturers. Why should dealers now be optimally focused on having a vertical-market selling strategy?

by Robert C. Goldberg BTA General Counsel

With every new business model comes a new language. As the industry shifts into managed services, are you assuming that your potential customer knows this new language? Or, are you speaking to him (or her) in a foreign language of three-letter acronyms (TLAs)?

SELLING SOLUTIONS Sales Force Automation Choose an application your sales reps will use

Beyond Print Making the case for a new MPS business model

by Luis Gonzalez SalesScoreKeeper.com

Many dealers are showing increased interest in improving their current sales automation systems or are embarking on instituting a new sales automation process for the first time. Here are a few thoughts on how to get the most out of your sales force automation investment.

by Robert Palmer Palmer Consulting

Paper is still entrenched in many business processes, and paper and digital content will continue to coexist for the foreseeable future. Even so, an office equipment dealer will need to augment his (or her) core business with alternative revenue streams to create a sustainable business. MPS is the perfect vehicle for this transition. So, how can dealers escape the low end of the MPS market and move into true value-add territory? The answer is grounded in an entirely new approach for delivering MPS.

Key Performance Indicators Be sure you are measuring the right things

by Troy Harrison SalesForce Solutions

A true key performance indicator (KPI) should be a real measurement of how your company, department or people are performing at any given moment. KPIs should be based on real transactions that ask customers to make an investment — if not in cash, then in their time and credibility.

Your Dealership’s Health Set up a process to assess & evaluate

by Jim Kahrs Prosperity Plus Management Consulting

As we move into 2014, many dealership owners are reviewing their financial performance from 2013. This often leaves dealership owners wondering why their results were not as strong as they anticipated. The problem with the post-year reflection is that it can often turn into a “Monday-morning-quarterback” situation where you only look at the results when the game is completed, leaving you no time to affect any change. That said, I would like to outline some strategies for assessing the overall health of your dealership.

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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EXECUTIVE DIRECTOR’S PAGE

Applications for BTA Scholarships Due 5/1

ooking back, it is amazing to see the outcome of the generosity of BTA’s members. Since the 1984-85 school year, the BTA Scholarship Foundation has awarded 1,327 scholarships totalling $1,495,500. Some students have even won BTA scholarships for multiple school years. For the 2013-14 school year, BTA awarded $23,500 in scholarships to 21 students. Signing scholarship checks each year on behalf of BTA’s members is a gratifying part of my job as BTA Executive Director. Below are some excerpts from some of the thank-you notes we received from students awarded either $1,000 or $1,500 scholarships for the current school year. I have also listed the sponsoring BTA member dealership after each student’s name. n “I would like to thank the BTA Scholarship Foundation for this scholarship in memory of Dax Carter. This is the third scholarship I have received from BTA, and I can say without a doubt that the BTA Scholarship Foundation has truly made an enormous difference in my life.” — Justine Gab, Southwest Business Machines Inc., Dickinson, N.D. n “I would like to say a big thank you to your association. This money is helping me further my education and I greatly appreciate it. My grandfather was especially proud, since he has owned J.D. Young Company for more than 50 years.” — Annie Stuart, J.D. Young Company, Tulsa, Okla. n “Thank you for awarding me a BTA scholarship ... I know it will go a long way in helping me pay for my education. This scholarship not only relieves some of the financial load on me and my family, but has also given us some peace of mind heading into the college experience.” — Alex Ruhland,

Century Business Products, Sioux Falls, S.D. n “By awarding me a BTA scholarship, you have made my financial burden a little lighter, which allows me to focus more on my education. Your generosity has greatly motivated me to work hard in school and achieve my goals, so that in the future I can support others just as you have supported me.” — Taylor Brost, EO Johnson Office Technologies, Wausau, Wis. You can see photos we have received of BTA scholarship check presentations on the BTA website (www.bta.org/Scholarships). You will also find a promotional flyer you can download and share with your employees or post in your break room. The scholarship application deadline is approaching for the 2014-15 school year. Who is eligible? The student children of fulltime employees of current dues-paying retail dealership members. Students must maintain a class schedule of at least 12 hours of accredited college courses at a two- or fouryear college, university or technical/trade school. BTA scholarships may be used for tuition, books, school supplies and lab fees. An independent, impartial evaluator reviews the applications and selects the winners. Students completing applications must submit information in four areas: school activities; leadership positions; work experience, recognition and awards; and community involvement. The application process also requires a transcript and a two-page essay. Applications for the 2014-15 school year are due to BTA no later than May 1, 2014. You can obtain an application from Mary Hopkins at mary@bta.org or (816) 941-3100. By the way, BTA welcomes your tax-deductible contributions to the Scholarship Foundation. Mail your check to: Business Technology Association, 12411 Wornall Road, Kansas City, Mo., 64145. 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 Luis Gonzalez, SalesScoreKeeper.com www.salesscorekeeper.com Troy Harrison, SalesForce Solutions www.salesforcesolutions.net Jim Kahrs, Prosperity Plus Management Consulting Inc. www.prosperityplus.com Robert Palmer, Palmer Consulting www.palmercsg.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: 4774344sean, BrianAJackson, Getty Images, iStockphoto, Konstantin Kamenetskiy, Peshkova, Stockbyte. Cover created by Bruce Quade, Brand X Studio. ©2014 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 2013-2014 Board of Directors

Are You Preparing for Transformation?

oday, the market has changed, end users have changed and our world has changed. All point to one thing: It’s time for your business to change as well. Are you ready to transform your dealership? If so, join us May 15-16 at the InterContinental Chicago Magnificent Mile in Chicago for BTA’s Cruise to Success district event, hosted by BTA Mid-America. This year’s event, open to BTA member and non-member dealers from across the country, has a different format than in previous years. Collectively, the keynote presentation, educational sessions and dealer panel will focus specifically on helping you transform your business and reap the rewards of today’s opportunities. The event begins at 1 p.m. on Thursday, May 15, with three-on-one dealer/vendor meetings. These meetings give dealers the opportunity to visit with selected exhibiting vendors for 25 minutes each; attendees will meet with one vendor at a time, along with up to two other dealer registrants. Dealers will receive a $30 rebate for each meeting they attend, up to $120 if they attend the maximum of four meetings. At 3:30 p.m., the event will kick off with opening comments and a dealer panel: “Driving Your Dealership’s Transformation,” moderated by Jon Reardon, group director of Office Document Technologies at InfoTrends. Following the panel, Michael George, CEO of Continuum Managed Services LLC, will present his keynote address, “Sea Change: How the Cloud is Reshaping the Convergence of Office Equipment & Managed IT Services.” After the keynote, BTA will present its annual Channel’s Choice awards. A welcoming reception will follow from 6 to

7:30 p.m., giving attendees time to network with peers and exhibiting sponsors. The second day, Friday, May 16, will begin with a group breakfast at 7 a.m. Following breakfast, attendees will delve further into dealership change as they listen to industry experts present the “Five Critical Steps to Transformation.” The first session, “Step One: Understanding Market Dynamics,” will be presented by Reardon. “Step Two: Embracing Change in a Changing World,” is a threepart session, presented by Lindsay Dick, director of sales for Collabrance LLC, focusing on managed IT services; Bryan Dancer, president and owner of Allegiant Technology, focusing on telecom services; and Harry Kaminsky, executive director of channel development for DirectCloud WebTop, focusing on cloud services. “Step Three: Developing Your Business Plan,” will be presented by Jim Heffernan, president of Insights53 LLC. “Step Four: Transitioning Your Image,” will be presented by Darrell Amy, chief innovation officer of Dealer Marketing. Finally, “Step Five: Selling to Today’s Buyer,” will be presented by Mitch Morgan, a partner at Growth Achievement Partners. During the day, lunch and breaks will give attendees time to network with peers and 40 exhibiting sponsors. BTA dealer member registration for Cruise to Success, including a three-hour dinner cruise on Lake Michigan aboard the Spirit of Chicago at the conclusion of the event, is only $199; member dealer registrants receive a second employee registration at no charge. Non-member dealer registration with the dinner cruise is $249. For more information, see the ad on pages 2 and 3. To register, visit www.bta.org/BTAMid AmericaEvent. I look forward to seeing you in Chicago. n — Todd J. Fitzsimons

President Todd J. Fitzsimons Automated Business Solutions DBA Network Imaging 122 Spring St., Ste. B3 Southington, CT 06489 tjfitzsimons@ni-ct.com President-Elect Ron Hulett U.S. Business Systems Inc. 3221 Southview Drive Elkhart, IN 46514 ron.hulett@usbus.com Vice President Dave Quint Advanced Systems Inc. 2945 Airport Blvd. P.O. Box 57 Waterloo, IA 50704 dquint@asiowa.com BTA East Rob Richardson Allied Document Solutions & Services Inc. 200 Church St. Swedesboro, NJ 08085 robr@ads-s.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 Linda Hayes Purcell’s Business Products 222 E. 1st St. Campbellsville, KY 42718 linda@purcells.com BTA West Mike Ehlers Yost Business Systems 685 E. Anderson Idaho Falls, ID 83401 mike@yostonline.com Ex-Officio/Immediate Past President Terry Chapman Business Electronics Corp. 219 Oxmoor Circle, P.O. Box 531066 Birmingham, AL 35253 tchapman@businesselectronics.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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Vertical Markets Strategizing to secure customers for the long term by: Brent Hoskins, Office Technology Magazine

ith an eye on capturing a greater share of wallet from local doctors’ offices, clinics and hospitals, many office technology dealers have identified the products and solutions that can best help them win new deals in the medical community. They often have “go-to” people on their sales teams who can “talk the talk” with the decision makers. The health-care industry has proven to be a great vertical market for many dealerships. Of course, selling strategically into vertical markets is nothing new — and health care is just one example. For years, dealers have been actively pursuing not only health care, but also such leading verticals as education, legal and local government. While some sales reps undoubtedly have more vertical sales expertise than others, the inherent value of the strategy is understood industry-wide. “The vertical sale has been around a long time,” says Elizabeth Fox, vice president of global channel offerings at Xerox Corp. “It is a tried-and-true concept: Know your customer. A great vertical sales rep can walk in already knowing how clients in that industry define success, what keeps them up at night and which solutions could potentially deliver meaningful value.” While vertical-market selling is nothing new, there appears to be a growing emphasis on the strategy among the industry’s MFP and printer manufacturers. Corporate, public websites targeting end users, for example, now more prominently highlight the key verticals from both the hardware and software solution perspectives. An emphasis on verticals is also clearly directed to dealers at the national dealer meetings hosted by manufacturers. Why should dealers now be optimally focused on having a vertical-market selling strategy? Fox cites one of the key reasons. “Today’s customers expect a personalized experience,” she explains. “Think of it as the ‘consumerization’ of IT or the ‘consumerization’ of business to business. In our personal lives, we have these devices from Apple and others that

are customized to us. So, today, we expect a partner or vendor to be able to walk in and customize our business experience as well.” Peter Richardson, director of printer marketing in the Enterprise Business Division at Samsung Electronics America Inc., says another key reason dealers need to be more vertically focused is the increasingly competitive nature of the marketplace. “The competition is getting tighter,” he says, noting that end users are being aggressively pursued by various channels when it comes to not only hardware, but also software solutions, IT services and MPS. “So, the relevance of the dealer is being challenged. Any dealer who just stays in the old box-selling mentality is basically no longer relevant to end users.” Fortunately, Richardson says, dealers understand the need for transformation. “Dealers understand that their businesses need to evolve; that they now have to look at their businesses differently,” he says. “When we present vertical solutions and opportunities to our dealers, they have been very receptive to taking a new approach.” Jim Coriddi, vice president of the Dealer Division at Ricoh USA, notes that the vertical market selling strategy of the past, which was largely focused on the feature set of the hardware, has now advanced to a new level. “The importance of verticals — of having vertical knowledge — plays right into the mindset at Ricoh of being a services-led company,” he says. “We want our dealers to approach customers by learning more about their processes, gaining a deeper involvement and knowledge as to the inner-workings of their companies. Dealers can then bring solutions or services that truly improve the efficiencies of their customers’ businesses.” Are Ricoh dealers meeting Coriddi’s expectations in terms of becoming services-led with an eye on vertical markets? “We have certain dealers who are really very mature in the services area; they are leaders in terms of what they are providing,” he says. “Then, we have other dealers who are kind of ‘hanging on’ to their niche. In general, I think that our dealer network

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is doing very well from the standthings. Some people are point of acceptance, and we are natural warriors. They “There has to be a cultural doing okay as far as those who embrace change. They mindset first and foremost. have actually pulled the trigger are the ones who are goI think it is entrepreneurial; and made the investment.” ing to be in the lead.” being customer-focused. You To help those dealers who are The “next wave” of can’t be intimidated by new in the initial stages of ramping dealers well-positioned things. Some people are up their vertical sales stratefor success in vertigies, Coriddi emphasizes that cal markets “are those natural warriors ... They are Ricoh provides its dealers variwho may not embrace the ones who are going to be in the lead.” ous tools to help guide them change, but they are not — Elizabeth Fox in the transformation. “For afraid of it,” Fox says. Xerox Corp. example, we have a marketing “These dealers have some tool that we call Simplified Soaccess to technical or lutions that provides the sales rep with a guide into a par- business process resources. It doesn’t have to be dedicated ticular vertical,” he says. “This guide provides questions to and it doesn’t have to be someone on staff. For our dealers, ask that are very specific to the processes that exist in that it could be someone at Xerox who the dealer trusts and will vertical. The guide also provides role-plays for the sales rep call on with questions. It could also be a third party, perhaps and his or her manager to practice the dialog that will help a software company.” uncover process improvements in the vertical.” Fox acknowledges that while this “next-wave” dealerIn addition, Coriddi notes that Ricoh personnel are avail- ship does not have to have a technical person on staff to able to assist authorized dealers by meeting with their cus- make some strides in vertical markets, it is always helpful tomers to discuss, educate or otherwise support the sales in sales when there is at least one technology aficionado on process in terms of specific Ricoh services. Of course, Sam- staff. “This is the person everyone goes to with questions sung and Xerox offer their dealers individualized support as like, ‘I’m buying a new home theater. What are the top feawell. Citing Samsung’s “vertical sales teams,” available to as- tures I should look for?’” she says. “So, this is the person sist dealers in building vertical market strategies, Richard- who is not afraid of figuring out the answer to a new techson states: “Dealers are able to take the expertise and the nology question.” skill sets they have acquired through the process of working Certainly, there are dealerships with sales reps who are with us and then replicate them.” Referencing examples of either dedicated to a particular vertical or who are at least Xerox partnering with dealers to provide customized solu- champions in that vertical. “I have seen the most vertical tions to end users, Fox states: “Xerox has the tools and train- specialization around health care and education,” Richarding to ‘teach people to fish,’ but that sometimes takes time. son says. “I have also met dealers who say, ‘This is my healthSo, in the meantime, we absolutely have experienced per- care rep; he gets the hospitals. However, the small doctors’ sonnel available to assist our dealers.” offices still go to the SMB reps.’” What are some of the primary characteristics of dealWhile many dealerships have a few sales reps who speerships that are particularly well-suited for a services-led cialize, to some degree, in a vertical market, Richardson strategy, which, as Coriddi states, is most ideal for pursuing emphasizes that there are some forward-looking dealervertical markets? “You need the wherewithal — the profits ships that have fully embraced vertical selling. He cites the — to be able to invest in the infrastructure that must be put example of one Samsung-authorized dealership where 80 into place,” he says. “However, there also has to be a com- percent of all of the company’s business is in the education mitment by the dealership principal to apply that invest- market. “They have between 20 and 30 sales reps,” he says. ment for a longer-term gain. That commitment must also be “Rather than having a few education specialists, all of their made by sales management to drive salespeople to talk the reps have the capabilities and knowledge to engage educatalk every day. It cannot be something like, ‘Yes, we will pro- tion customers on their level.” vide some services for you if necessary.’ It has to be someWhile “80-percent vertical” may not be desired, or even thing that is part of the culture. It has be a part of how you possible, for most dealers, it appears the timing is right for all define yourself when explaining who you are to a customer.” dealers to give more thought to implementing a vertical sellFox offers a similar view. “There has to be a cultural mind- ing strategy if they have not already. “The payoff is it secures set first and foremost,” she says. “I think it is entrepreneurial; your position with the customer for the long term,” Coriddi being customer-focused. You can’t be intimidated by new says. “You have a better upfront understanding of what they 12 | w w w. o f f ic et ec hno log y m a g.c om | Ma r c h 2 0 1 4

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in quickly and, quite frankdo and can provide a solution ly, have some pre-designed that is much more embed“Our whole approach with solutions that might be the ded into their business. For being services-led is to help right fit.” the customer, the switching customers solve problems While he similarly ascost becomes much higher and become more efficient. serts that “vertical markets for them to move away from The vertical approach gives are a good way to focus and you the next time a competiyou that head start, because be effective,” Richardson tor knocks on their door ofyou will know going in what advises dealers to not strive fering a 10-percent lower to be everything to everyprice on equipment. So, I the industry challenges are ... ” one. “I have talked to dealthink vertical-market selling — Jim Coriddi ers who say sometimes the is a huge benefit for the longRicoh USA best thing to do is let go of a term viability of the dealer’s customer,” he says. “The fact profit and ongoing growth.” Having a services-led, vertical sales approach gives a is, sometimes you should not go after a deal. dealership the advantage, Coriddi adds. “Our whole ap- It is better to be really good at one thing than proach with being services-led is to help customers solve to be just so-so at a bunch of things.” n Brent Hoskins, executive director of the problems and become more efficient,” he says. “The vertical Business Technology Association, is editor approach gives you that head start, because you will know of Office Technology magazine. He can be going in what the industry challenges are, what the process reached at brent@bta.org or (816) 303-4040. challenges are and what the issues are, so that you can drill

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Beyond Print Making the case for a new MPS business model by: Robert Palmer, Palmer Consulting

o much is made today of the evolutionary nature of the office technology industry. While change is occurring in virtually all aspects of our industry, the fact is that the printing business has always been a market in transition. In its heyday, the office-printing market was basically hardware-driven. Toward the end of the 1990s, the market matured and it became more difficult for competitors to differentiate based on product design, specifications and features. At that point, vendors shifted their focus from hardware to pages. Of course, the installed base remained an important measuring stick for the industry, but the focal point moved from growing hardware share to capturing more pages. Indeed, the center of attention for OEMs and the channel alike was high-value documents, which meant color and high-coverage monochrome pages. The economic upheaval that occurred in 2007 put additional pressure on what was already a declining print market. Companies of all sizes looked for ways to reduce costs, streamline operations and strengthen the bottom line. Historically, print has been viewed as a necessary, but unmeasured, business expense — a critical business function, but not necessarily an integral business process. However, organizations were desperately searching for ways to optimize the infrastructure and printing became a natural place to look to take cost out of the system. The increased focus on the cost of print helped fuel the transition to managed print services (MPS). Interestingly, despite all these changes to market dynamics, it has not altered the criteria that most use to measure success in the office technology industry: machines in the field (MIF) and pages under contract. Expanding Beyond Print What is becoming increasingly clear is that basic MPS provides little opportunity for creating a sustainable business model. The problem, of course, is that office print volumes

are waning — fueled by the drive to reduce printing along with alternative methods for information consumption. Mobile technologies and cloud solutions now permeate business processes, and knowledge workers have instant access to the information that is most critical to their businesses. We have reached a point where individuals consume (view and print) what they need, when they need it and where they need it. This consumption model continues to put pressure on the need for print. Paper is still entrenched in many of today’s business processes, and there is little doubt that paper and digital content will continue to coexist for the foreseeable future. Even so, an office equipment dealer will need to augment his (or her) core print business with alternative revenue streams to create a sustainable business. MPS is the perfect vehicle for helping the channel with this transition. Unfortunately, most continue to position MPS primarily as a means for reducing print costs, which limits the opportunities for additional value-add services and increased profits. In other words, the low end of the MPS market — basic fleet management — has become commoditized. The Linear Approach to MPS So, how can dealers escape the low end of the MPS market and move into true value-add territory? The answer to that question is grounded in an entirely new approach for delivering MPS. Today, MPS is mostly implemented in a linear way. The process begins with an assessment, which is typically focused on device utilization, print volumes and total cost of operation. The assessment serves as a baseline for the MPS implementation, but rarely is it aimed at areas beyond document output. All too often the MPS engagement fails to move beyond this entry point. In an effort to capture competitive pages and drive up the MIF, the value of MPS is placed on helping customers save money on their hard-copy output. In most cases, other process improvements are not even considered. Or, they

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are targeted for consideration once the A New MPS Model print optimization phase is completed. MPS providers will need The most effective MPS engagements This linear approach limits the overall are those that drive productivity and to lead with document effectiveness of MPS and restricts opporprocess efficiencies in multiple areas of workflow and content tunities for providers to expand beyond the customer business. This requires a management, print into other value-add services and deeper dive into the customer document promoting a solution solutions. Businesses today face numerenvironment to develop an implementaous challenges related to workflow and that is geared around tion plan that is built around long-term content management. Print itself is a strategic objectives. Of course, achievprocess improvement ... document process, so it would make ing this kind of result requires signifisense to at least consider how changes cant changes to the MPS model. to the print infrastructure might impact other areas in the The industry has long held the notion that MPS should document environment. be implemented in stages or tiers; engage the customer first It is not easy for some dealers to make the leap from basic with basic fleet management services and then progress MPS to expanded value-add solutions, even in areas of doc- further up the chain into document processes, managed ument workflow or managed document services. It requires services and even business process outsourcing. Yet, only a a strong commitment and, often, a completely redesigned select number of providers have demonstrated the ability to business model, with changes in sales strategy, compensa- move beyond the typical basic MPS engagement for reasons tion plans and other areas. Nevertheless, if dealers are to already described. survive the transition from paper to digital, it is a transforFuture success will hinge on the ability to move beyond mation that needs to occur. the core business of print. MPS providers will need to lead with document workflow and content management, promoting a solution that is geared around process improvement rather than cost reduction. The requirements here are twofold: creating a sustainable business and gaining customer mind share. Office customers today face problems that reach far beyond printing, and they will be drawn to those providers that offer solutions to address issues such as content security, mobile and cloud integration, and paperto-digital conversion, just to name a few. While these trends may threaten those with the inability to transform their business models, they should be viewed as strategic opportunities to grow the business. Expanding beyond print is the most effective way for dealers to increase revenue and profits. At the same time, an MPS solution built on value-add services is a real differentiator â&#x20AC;&#x201D; one that can separate you from competitors and create a stickiness that will lead to long-term customer relationships. n Robert Palmer is an independent market analyst and industry consultant. With more than 25 years experience in the printing industry, he has covered technology and business sectors for prominent market research firms such as Lyra Research and InfoTrends. Palmer is a popular speaker and he presents regularly at industry conferences and trade events in the United States, Europe and Japan. He is also active in a variety of imaging industry forums and currently serves on the board of directors for the Managed Print Services Association (MPSA). He can be reached at robert@palmercsg.com. Visit www.palmercsg.com. 18 | wÂ w w. o f f ic et ec hno lo gy m a g.c om | Ma r c h 2 0 1 4

Palmer Mar 14.indd 2

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Your Dealership’s Health Set up a process to assess & evaluate by: Jim Kahrs, Prosperity Plus Management Consulting Inc.

s we move into 2014, many dealership owners are reviewing their financial performance from 2013. This often leaves dealership owners wondering why their results were not as strong as they anticipated or hoped they would be. The problem with the post-year reflection is that it can often turn into a “Monday-morning-quarterback” situation where you only look at the results when the game is completed, leaving you no time to affect any change. That said, I would like to outline some strategies for assessing the overall health of your dealership. Let’s start by considering what it really means to assess the health of a dealership. According to the Oxford English Dictionary, the definition of the word “assess” is “to evaluate or estimate the nature, value or quality of something.” Your assessment will involve evaluating the value and quality of your dealership as a whole, as well as in individual areas. In doing an assessment, there is one major concept from the Hubbard® Management System that I should point out called “Look, Don’t Listen.” This concept outlines how dangerous it is to listen to what employees and others have to say about what is happening in your business without actually looking yourself. Of course, your assessment will involve speaking with and gathering data from employees, vendors, customers and others, but you must be careful to dig deep enough to see for yourself what is going on; never take someone’s word for it. For example, when evaluating your inventory, it is easy to let the warehouse manager tell you that everything is in order and that there is very little obsolete inventory. But leaving it there would simply be listening. Have the manager provide you with a detailed report showing exactly what items in the inventory have been on hand for more than one year. This is truly looking and it will undoubtedly provide you with much better data than the simple answer given by your warehouse manager. There is another concept to which the Hubbard Management System has given particular attention: the concept of

“confront.” Per the System, to “confront” means “to look at without flinching or avoiding.” I can tell you from experience that the areas that do the most damage to a dealership are the ones that the owners or managers have been too nervous to look at closely, or the areas that have been avoided. Perhaps you have avoided looking closely at your sales team members’ activity levels because deep down you know they are not doing what they should and you are not sure how to handle it. In this example, there is a lack of “confront” for the sales area and you are most likely getting sub-par results from your sales team. Confronting problem areas can be very difficult, but it is critical to the assessment process and is a requirement for any change to take place. Any area that is ignored will not improve. So how do you apply these concepts of “Look, Don’t Listen” and confronting? You set up a process for assessing and evaluating the key areas of your dealership. I will cover a handful of these in the balance of this article. This is by no means a complete list. Where you start and what you cover will be dictated by the issues you are having. I suggest starting with the areas that are giving you the most trouble or the areas that are least successful for you. Finances It is critical to assess the health of your business from a financial viewpoint on a regular basis. This would include a monthly review of your income statement and balance sheet. I have found many dealership owners who do not review these critical documents on a monthly basis. Coincidentally, these are usually the dealerships that are not making the net profit they want; some are even losing money. When looking at the income statement, you need to assess the revenues of the business: Are they growing or shrinking? Are you getting good performance from all revenue categories or are some falling short (e.g., equipment sales or service)?

20 | w w w. o f f ic et ec hno lo g y m a g.c om | Ma r c h 2 0 1 4

Kahrs Mar 14.indd 1

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You must also look at the gross profit Customers margins by category. Which products or If you are not achieving Assessing your customers, as a services are most and least profitable? whole and individually, is a very imporyour goals or getting the There are too many dealership owners tant piece of the puzzle. Every account results you want, there out there who do not know their gross should have an annual profitability are reasons why. Doing profit margins and, thus, do not have analysis done to see if the dealership is a thorough assessment plans for improving their profitability. making money from the relationship. Next, you must look closely at every ... will help you uncover Too often there are customers that cost expense line of the income statement. us money and we do not know it. With a these reasons. Without a monthly review of your exproper assessment, you can decide how penses, it is difficult, if not impossible, to handle those unprofitable accounts. to achieve the net profit you desire. I have had many experiAlong with financial profitability, it is important to assess ences where a dealership owner has “discovered” expenses the emotional profitability of your customer base. Do you he (or she) had no idea existed. Once they hit the radar, have any customers who are so difficult to deal with they take they can be handled. If you use the income statement as a a toll on your staff? Though you make some money from these tool to assess your dealership on a monthly basis, you will accounts, it might be worth assessing their overall value and be able to make the changes necessary to drive a higher deciding if they are a good fit. net income. In assessing your customers, look closely at where you The balance sheet is the other key document that should are most successful. Are there patterns? Are you strong in be reviewed on a monthly basis. It is important to regularly certain verticals or geographic markets? If so, find ways to review the value of key assets like cash, accounts receivable expand on this success. Also look at the flip side: Are there and inventory. You need to know if the balances are increas- markets that you struggle with? Withdrawing from a “bad” ing or decreasing and why. The same holds true for key li- market could be a great strategy for success. I have seen this ability accounts like accounts payable, lines of credit, loans, with the print-for-pay market. Customers here can be a drag etc. If you do not pay attention to these, you could have a on a dealership as they tend to be very demanding, negotiate business that diminishes in value over time. Along with cre- pricing to bare minimums and can be slow to pay their bills. ating a healthy net income, you want to build positive equity in the business by properly managing your assets and Competition liabilities. Remember to confront. Do not let your balance A full assessment of the dealership would include assesssheet go on autopilot. ing your competition. Who do you lose to, who do you beat and why? There are patterns to your wins and losses. When Staff you discover these patterns, you can increase your success Another key area to assess regularly is your staff. There rate. In assessing the competition, you will need data. Make are three aspects of your staff that should be considered: sure that your sales team is collecting everything it can on productivity/results, skills and training. Have you looked at all competitors: brochures, proposals, etc. Keep these in orthe overall productivity and results created by each of your ganized files for reference. employees? Do they have production measures in place? For Again, this is not an exhaustive list. My hope is that by example, how many collection calls did your accounts re- going over a few key examples, I can help you get the wheels ceivable person make last month? This would be a key mea- turning. If you are not achieving your goals or getting the resure of production and results. sults you want, there are reasons why. Doing a thorough asNext, you want to honestly assess the skill level of all em- sessment of your dealership will help you uncover these reaployees. What are their strengths and weaknesses? This is sons. Once they are uncovered, you must take the next step another area that takes some confronting. You need to real- and implement plans that will correct any problems that are ly be willing to look closely and brush aside bias and rumor. found. If you can set aside the time to do this on a monthly baAn assessment of the training level of your employees sis and address one or two issues a month, you goes hand-in-hand with the skills assessment. Have your will be on a very fast track to improvement. n employees been formally trained in the areas that will lead Jim Kahrs is the president and founder of them to success? We tend to focus on training technicians Prosperity Plus Management Consulting Inc. and salespeople, but forget about the admin team. If you He can be reached at (631) 382-7762 or want to improve your overall results, look at where you can jkahrs@prosperityplus.com. train your people to be more effective. Visit www.prosperityplus.com. 22 | w w w. o f f ic et ec hno lo gy m a g.c om | Ma r c h 2 0 1 4

Kahrs Mar 14.indd 2

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2013-09-17 4:32AM PM 9/18/13 8:09

COURTS & CAPITOLS

TLA Overload Do not assume customers know this new language by: Robert C. Goldberg, General Counsel for the Business Technology Association

ith every new business model comes a new language. I have sat in countless presentations where the speaker used acronyms that I did not know, and I had to spend the next five minutes trying to decipher them. Often, I deciphered them incorrectly. As the industry shifts into managed services, are you assuming that your potential customer knows this new language? Or, are you speaking to him (or her) in a foreign language of threeletter acronyms (TLAs)? It is important to understand your customer and how he approaches the marketplace. It is also important to evaluate your own business and ensure that the proper pieces are in place for a transformation. The days of relationship selling are numbered. No matter how wonderful you are as a person, you may no longer finish first. The Internet has opened the information door for customers, giving end users more knowledge of the offerings in the marketplace. The ability to compare specifications, features and prices is unlimited. Your potential customers will demand to know how your product can make their operations more efficient, lower costs and fulfill their needs. Your goal is to become a trusted consultant who can be relied upon for expertise and knowledge. Showing how your current solution will meet today’s needs and grow along with your customer’s company in the future will solidify your position with that customer. Becoming a single-source provider of technology services will transform you from a salesperson into an advisor and valued resource. I recently sat with a dealer who has fully transitioned to a managed services model. It was a three-year process. His plan was not to convert existing customers, but to only offer a services solution to new customers. This allowed the continuation of cash flow and did not disrupt the dealership’s current relationships. When original customers inquired about additional equipment or services, the dealer presented the new model. It was a bundled solution that could not be cherry-picked. I asked the dealer if he would supply equipment under the previous break-fix model if it was requested. His response: “You would have to put a gun to my head.” This dealer knew his goal, established a written plan outlining how to get there and refused to deviate from that plan. The end result was success.

As the language and the approach change, so must your documentation. Selling services presents different risks and responsibilities. The BTA template for managed print services is a good start in developing your company’s document. Many dealerships have moved to a single, generic document with numerous addendums that can be used for various services. This approach creates uniform terms and conditions to compliment the services desired as set forth in the various addendums. There can be addendums for print services, IT services, document management, data security, system backup, cloud services, anti-virus protection and others. This approach maintains uniform terms and conditions, and allows for growth by simply adding an additional one-page addendum. Managed services allows the trusted advisor to earn a bigger footprint in the end-user’s office environment. Not trying to “sell” everything initially allows time to build trust and slowly take on more responsibility. Furthermore, it permits a more orderly transition. What is essential is to reevaluate your business, plan for the future and implement the necessary requirements. BTA has numerous programs to help you along the way. n Robert C. Goldberg is general counsel for the Business Technology Association. He can be reached at robert.goldberg@sfnr.com.

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Goldberg Mar 14.indd 1

2/27/14 9:48 AM

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

Dealer Members Les Olson Company, Salt Lake City, UT Stuart’s of El Dorado, West Monroe, LA University Office Technologies, Ann Arbor, MI Service Associate Members Barrister Global Services Network, Hammond, LA Ervin Equipment Finance, Ann Arbor, MI For full contact information of these new members, visit www.bta.org.

Seeking information and insight regarding office technology industry trends and developments? BTA can help. Through an alliance with InfoTrends, the Weymouth, Mass., market research firm, BTA members can simply submit their questions via email for an InfoTrends’ analyst to address. BTA’s “Ask The Analyst” feature is FREE to the association’s dealer members. It’s simple — just visit www.bta.org/ AsktheAnalyst. You will be provided with an email address to submit your question and an InfoTrends analyst will respond to you directly via email. Your question and the response you receive will be archived on the BTA website as a resource for other dealer members. For more information, visit www. bta.org/AsktheAnalyst. 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 Service Associate member Continuum provides a leading SaaS-based managed services platform that managed services providers (MSPs) use to efficiently back up, monitor, troubleshoot and maintain desktops, servers and other endpoints for small and medium-sized businesses. The company’s managed services platform provides an intelligent remote monitoring and management solution, a comprehensive 24/7 service desk and an advanced backup and disaster recovery offering branded Continuum Vault — all integrated with a network operations center (NOC), delivering a single, unified managed services experience. www.continuum.net

BTA Vendor Associate member Impression Solutions Inc. (ISI) is a full-line distributor for Kyocera and OKI printing solutions. ISI offers a complete line of printers as well as printer accessories, supplies and services. The company maintains a full inventory of printer products in its distribution center that are ready for immediate shipment. In addition to offering printer-related products at or below manufacturer direct pricing, ISI provides a full range of service, financing and marketing support. www.impressionsolutions.com A full list of BTA Vendor and Service Associate members can be found online at www.bta.org.

www.offi cetechnol ogymag. c om | M a rc h 2014 | 25

Highlights Mar 14.indd 1

2/27/14 3:03 PM

SELLING SOLUTIONS

Sales Force Automation Choose an application your sales reps will use by: Luis Gonzalez, SalesScoreKeeper.com

utomating your sales force is a crucial component in the success of growing your business in today’s competitive environment. Many dealers are showing increased interest in improving their current sales automation systems or are embarking on instituting a new sales automation process for the first time. Here are a few thoughts on how to get the most out of your sales force automation (SFA) investment. The most important factor in choosing your SFA application comes down to: Are your sales professionals going to use it? If the main component of the application you are looking at is CRM — tracking sales calls, appointments, contacts, etc. — you will have a high probability of low adoption. The SFA application must deliver value to the sales professional. When looking for an SFA application, focus on what benefits it offers the salesperson and how he (or she) can use it to make more money. Provide your salespeople with a tool that not only helps them manage contacts, but also provides indispensable time- and money-saving features. This article addresses some of the components you should look for in your SFA application. Pricing Tool — Your SFA application should have a pricing tool that maintains all of your company’s price books, including equipment, leasing and maintenance. Not only will this speed up the time it takes for a rep to prepare a quote, but it will also allow him to price different scenarios to ensure he maximizes the sale for both your company and the customer. From your company’s perspective, this feature provides your sales team with accurate and easily accessible pricing, ensuring customers are given correct pricing and quotes. Proposal Creation — Once you have created a quote for your customer, it should take no more than a few clicks to create a proposal that looks great. Simple and quick proposal generation is a major asset for the sales team, and creating a standardized, professional, company-approved proposal should take minutes, not hours. The biggest benefit to your company is guaranteeing that your sales team is presenting customers standardized proposals with what you want to say, how you want to say it and how you want it to look. Plus, there is no question that a professional-looking proposal will increase your sales professionals’ odds of closing more business.

Customer Fleet Management/Analysis — To provide a comprehensive document solution to your prospects, your sales professionals need to be able to collect data about their devices, analyze that data and provide the most cost-effective solution. This should not be done on spreadsheets. Your SFA application should have the ability to capture data from the customer’s fleet (via a third-party tool or built-in data capture) and organize the data for easy analysis of the cost and the age of the current fleet, and — most importantly — allow analysis for how to create the most effective solution for that customer. This should be accomplished as part of a standardized method, completed with just the click of a button. Your SFA application should then be able to provide you with reports, analysis or an executive summary that explain your customer’s current situation and where you want to take his company. From data collection and organization to analysis and professional quote presentation, your SFA application should improve and simplify your sales process and business document system. Forecasting — Knowing what you are selling, to whom and when is an integral part of managing your sales team. Once again, an SFA application equipped with the right components should make it effortless for your sales team to accurately forecast its sales for the month, the quarter or the year. Data from your quoting tool and fleet management should be able to create a forecast that can help your sales leaders manage quotas and ensure they are hitting their goals. Documentation — I have yet to meet a salesperson who loves to close a sale just so he can do mounds of paperwork. Again, your SFA application should do that for you at the click of a button. If you are using the SFA application as intended, at this point you have entered almost all the data necessary to create the paperwork needed to close the transaction: sales agreements, lease contracts, movement forms, etc. Your SFA application should be able to produce all of these documents in minutes and, more importantly, should create them in a standardized format and customized style that portrays the professional image of your company. Lead Generation — Your SFA application should have the capability to generate leads for your sales professionals.

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Gonzalez Mar 14.indd 1

2/27/14 9:54 AM

Luis Gonzalez founded Miami Office Whether it is uploading data from a lease Supplies (MOS) in south Florida in 1986. MOS list to track and market lease expiration, The success of any SFA specialized in the office equipment space for or creating an email or mailing campaign application is the level of 25 years as an independent dealership. It was from the contact information in the sysadoption ... the level of acquired by Sharp Electronics in 2007. From tem, a solid SFA application should help adoption will be directly 2007 to 2011, Gonzalez was branch president your sales professionals prospect and genrelated to the value the and director of sales and marketing for Sharp erate leads. Business Systems. He was most recently If the primary focus of your SFA appliSFA application brings to senior vice president for Sharp’s Business cation is to track calls, appointments and your sales professionals. Solutions Group. In 2011, Gonzalez founded activity, then good luck with adoption. It SalesScoreKeeper.com, a software design and is not going to happen and will be a nevdevelopment company specializing in automation of the er-ending battle with your sales team. commission process for business-to-business sales companies. The success of any SFA application is the level of adoption Gonzalez and Jim McMeel of Compass Sales Solutions that you can create from your sales team; the level of adoption will present “Pricing-Configuring-Proposingwill be directly related to the value the SFA application brings Commissioning: Automate the Entire Process” to your sales professionals. The items above create value for from 10 to 10:50 a.m. on March 12 your sales professionals and, therefore, foster greater adopat ITEX 2014 in Las Vegas. tion. The byproduct of this enhanced adoption will then be the He can be reached at (888) 786-7270 full use of the CRM piece that you are looking for. Getting your or luis@salesscorekeeper.com. sales professionals to update the CRM/SFA application makes Visit www.salesscorekeeper.com. more sense. n

www.offi cetechnol ogymag. c om | M a rc h 2014 | 27

Gonzalez Mar 14.indd 2

2/27/14 9:54 AM

SELLING SOLUTIONS

Key Performance Indicators Be sure you are measuring the right things by: Troy Harrison, SalesForce Solutions

recently spoke at a conference in Arizona and at the evening reception on the first day I had the opportunity to visit with a business owner who was very proud of his performance based on his key performance indicators (KPIs). He recited survey result after survey result that were all very positive. I could not blame him for being proud. I asked him, “So, what is your customer retention rate?” “Eighty-five percent,” he said proudly. Of course, an 85-percent retention rate means a 15-percent customer loss rate — which sounds bad. That is because it is bad. However, it is actually worse than you think. His company runs on contracts of three to five years, which means that in any given year, only 20 to 33 percent of his customers are even empowered to make a decision to stay or leave. Hence, his real customer retention rate hovers somewhere between 25 and 55 percent; that represents the percentage of customers who are able to make a positive decision to stay and, in fact, do stay. Oddly enough, retention rate was not one of his KPIs. It occurs to me that too many businesses measure the wrong things. Let’s talk about doing things correctly. A true KPI should be a real measurement of how your company, department or people are performing at any given moment. By “real,” I mean that it should be something that you can hang your hat on. Unfortunately, too many businesspeople (like my contact above) hang their hats on customer surveys. Survey results are not a real KPI. Customer surveys ask about an experience in the abstract (i.e., detached from other business-decision-making criteria). Here is an example: I am a loyal Southwest Airlines customer. I have a one-hour rule: If Southwest can get me within a one-hour drive of my final destination, I will fly Southwest over another airline that can get me closer. That is because Southwest consistently delivers on my expectations. The airline gets me where I am going on time, my baggage shows up (with one past exception), and the employees are pleasant and responsive. Every now and then, however, I have to go somewhere

Southwest cannot take me. One such instance happened about a month ago. After I flew on another airline, the company sent me a survey asking about my experience. I responded honestly — my experience was fine. Yet, as I am writing this, I am in the airport waiting for a Southwest flight, having chosen Southwest over that airline (as well as a few others). So, did I lie on my survey? Nope. I do not lie on surveys. However, the survey did not require me to make a purchase to validate my results. So, though I am sure I helped the company’s KPIs, I am still buying from the competition. Repeat after me: Market research is not real until you ask someone to write a check. I have noted before that one of the most well-researched product launches of the 20th century was the Edsel, yet the Edsel was a flop. The Edsel sounded good to buyers until they were asked to buy. Hence, your KPIs should be based on real transactions that ask customers to make an investment — if not in cash, then in their time and credibility. Here are a few examples: Customer Decision Rate: Your customer decision rate (CDR) should measure the customer’s desire to buy from you (or continue to buy from you) in the framework of other potential buying decisions. As you have seen above, my acquaintance’s CDR landed somewhere between 25 and 55 percent. Eighty-five percent is bad; that number is ugly. Incidentally, this number should be different than your proposal close rate, because it should only pertain to current customers. Your current customers are your best barometer of your ability to keep your customers happy; new customers are different. Customer Internal Growth Rate: This should be a measurement of how much, over time, your customers’ business with you grows. Again, this should be separate from your new-customer selling efforts. Are your salespeople able, on a regular basis, to expand your business within current customers — or are those customers making the decision that you have not earned the right to do more business with them? Retailers have a measurement called “Same-Store Sales” that measures how much their existing stores grow their revenue,

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Harrison Mar 14.indd 1

2/27/14 10:02 AM

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CLX-3160/2160 CLX-3170/3175 CLX-3185 CLX-3305 CLX-4195 CLX-6200/6210/6240 CLX-6220/6250 CLX-6260 CLX-8380 CLX-8385 CLX-9250/9258/9350/9358 SCX-3200/3205 SCX-3405 SCX-4016/4116/4216F SCX-4100 SCX-4200 SCX-4300 SCX-4500/4501 SCX-4521/4321 SCX-4600 SCX-4720 SCX-4725 SCX-4728/4729 SCX-4824/4826/4828 SCX-4833/5639/5739 SCX-5112/5115/5312F SCX-5530/5330 SCX-5935/5835/5635 MFP SCX-6320/6220/6120/6520 SCX-6345 SCX-6555/6545 SCX-7128/7135/7145

TOSHIBA E-STUDIO

12/15/120/150 16/160/T1600 20/25/T2500 28/35/45/T3500 55/65/80 161 163/165/203/205 200L/202L/230/232/280/282 202/203/203D MFP 205/255/305/355/455 (T4530) 242/212/182/181 (T1810) 350/352/450/452 600/620/720/850 T120 T203L/233/283 T1340/1350/1370 T1550/1560 T1650/1710/2050/2500 T2060/2860/2870 T3560/4560 T5560/6560

SHARP

FO 55 ND FO 2081 MX 3500 MX M283/363 MX M200 D MX M260 SF 1014 SF 2025/2030/2530/2040/2540 SF 2050/2052/2060/3062/2260 SF 7300/7320/7350/7370

TONER • CARRIERS • BULK • CHIPS • COMPATIBLES • MPS

XEROX

1012 5113/5114/5614 5318/5320 PHASER 4150 PHASER 7500 WC 3315/3325 WC 535/545 WC 4118 WC 4250/4260 WC 5020 WC 6015

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