Strategies for Success: Part 2 Dealers share insight into growth opportunities

Compiled by: Brent Hoskins, Office Technology Magazine

What do you believe will be the greatest opportunities for office technology dealers in 2020? What do you believe will be the best strategies for success in pursuing those opportunities? Recently, Office Technology magazine asked these questions of dealers via an email survey. The first set of responses appeared in the February issue. Following are the remaining responses received. Perhaps comments shared by your fellow dealers will provide some guidance to you for the year ahead.

Opportunities: “Though no one can go back and make a brand-new start, anyone can start from now and make a brand-new ending.” — Carl Bard. There are so many directions to look toward as opportunities — IT, document management, workflow, cloud and backup, along with hardware/ software. Any one of those could be a game changer for a dealership. You should look at the one(s) your dealership can take on within your core business and still keep momentum. Strategies: It may seem simple, but get to know your people, market and manufacturer(s) better. This is hard work, but do not forget to enjoy the business, people and clients you have all around you. Spend some time reflecting on what motivational speakers have said over the years. You cannot inspire without being inspired. DJ Hastings, president Hogland Office Equipment, Lubbock, Texas

Opportunities: Basically, we need to continue to drill down within our client bases to find out more about how their businesses run and find problem areas where we can help either with hardware and software solutions or with additional training to better utilize their existing equipment. The other area is through acquisitions of other businesses that will blend into our business models; this may be the fastest growth opportunity. Strategies: A continued changing of ownership’s mindset; we need to focus more on our customers’ needs and business

processes, and worry less about how many boxes we need to sell. If we become more of a consultant in our customers’ eyes, we become more like a teammate than just a sales organization, making hardware purchases easier — or a smaller part of the transaction from the customer’s point of view. David Forsberg, president Progressive Business Technologies Inc. Omaha, Nebraska

Opportunities: Document management and all services related to document management, including document conversion and document conversion services. Also, managed print and managed IT services. Strategies: We have been doing this for quite a long time — since 2000. The difference now is that this is more part of the sale and the sales reps have finally gotten to the point where they are comfortable selling all these other services, mainly because they feel it is protecting their clients and accounts. Rick Salcedo, president & CEO KDI Office Technologies, Aston, Pennsylvania

Opportunities: Cloud-based solutions with an annuity tied to the device. Also consider expanding into IT-driven sales products. Strategies: Collaborate with current office technology dealers on what they are selling. Understand the introduction of new products into the market. Have the right training for sales staff members and, possibly, a tech, depending on the products.

Ian Nash, vice president of technology A.F. Smith Trading Co. Ltd., Hamilton, Bermuda

Opportunities: I believe the biggest opportunities for BTA dealers are in production. We are finding opportunity around quality of print versus volume. The five-color Ricoh process is a really big deal for anyone who outputs documents and has traditionally outsourced that process.

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Strategies: We believe all reps at every experience level, through normal, everyday prospecting and targeting net new, can sell two units a year. At an average selling price of $65,000, that represents three to four months of quota for a down-the-street rep and $2.7 million in revenue for the 20 reps at ProCopy. We talk about production in every meeting and every one-on-one. Focus, like it is for everything, is the key. We went from $250,000 in production sales in 2018 to $1.1 million in 2019. Mike McGuirk, president ProCopy Office Solutions Inc., Tempe, Arizona Strategies: We have hired dedicated sales personnel to drive the sales process for our service and solutions offerings. We determined MFP reps cannot sell services and solutions. There are too many moving parts, the sales cycle is different, etc. We have built an internal IT department to support our MNS [managed network services] and document management software customers. We are partnering with third-party firms to sell security and cloud-based phone systems. Bob Evans, partner Function4, Sugar Land, Texas “The primary strategy ... is to ensure we have a thorough understanding of each customer’s working environment, workflows and office equipment needs ... ”

Opportunities: (1) Adding to our technology stack to better support the needs of our clients through quick and nimble reactions to the emerging market trends that create value for our clients and profit for our company.

(2) Backfilling our existing client relationships with managed services by consolidating lines of business within organizations in pursuit of operational efficiency and greater ROI for our clients.

(3) Bundling lines of business (systems, telecommunications, MPS [managed print services], managed IT) secures the seat of trusted business advisor for a dealer at the client’s table. That, I think, is the biggest opportunity for all office technology dealers as we face competition from master MSPs, Comcast or any other large, national, technologydriven sales corporation for our markets’ operating expense dollars in addition to box sales. Strategies: (1) Become fully persuaded that consulting from a position of trust to high-level decision makers will be the only way to survive the commoditization of everything dealers have to offer.

(2) Incorporate every aspect of our technology stack into our business operations as the ultimate proof of concept. (3) Both client value and dealership profitability must exist in each transaction. If any selling situation becomes a race to the bottom with a potential client, politely leave the room; it is a waste of knowledge assets to participate in a profits bloodbath. Derek Mills, president Tri-Copy Office Equipment Inc., Fayetteville, Georgia

Opportunities: I believe it is still solutions and services — managed network services, MPS and document management software. These are the growth opportunities. Growth in MFP hardware and service is going to continue to get more and more difficult. The trend of declining placements and volumes, inkjet technology and competitive pressure will continue to have a negative impact on pricing for both. Opportunities: Managed network services — there is lots of potential and high margins. Never-ending problems cause customer demand. Strategies: Talented staff members; leverage existing customers; look at methods to capture all of a client’s business; M&A also adds scale and cost benefits; blending all services to client, print, image and IT; and find a good vertical in your market and exploit it.

Terry Willcox, vice president & owner Seminole Office Solutions Inc., Longwood, Florida

Opportunities: Additional products being added to your existing portfolio that you can sell and service to your existing customer base as well as net-new customers, such as VoIP phone systems, and IT network (cybersecurity) and email security. Strategies: Picking the right partners to help you grow and support the new products. Also, coming up with a solid go-to-market plan.

Kevin Fitzpatrick, president and owner DMC2 Inc., Maryland Heights, Missouri

Opportunities: We believe there are significant opportunities for additional value-added services we can offer existing customers, including network support, remote monitoring and workflow solutions. As the office evolves, our customers are looking to us to provide sound strategies for connectivity, efficiency and security. We also recognize an opportunity to expand our rental program, which is popular with traditional construction companies, as well as many within the oil and gas industry. Strategies: The primary strategy for added services is to ensure we have a thorough understanding of each customer’s working environment, workflows and office equipment needs, in order to identify areas of opportunity that we — or our customers — may not have been aware of.

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To capitalize on new rental opportunities, we want to make some adjustments to our marketing strategy and utilize our existing base to help with referrals and networking within that community. Jeff Thompson, president Business Equipment Service Loveland, Colorado Opportunities: So many dealers seem to be dismayed and even distracted by all of the shiny opportunities of diversification, whether it is MNS, MPS, office automation, etc. Yet, the copier/ MFP business is alive and well. When your competitors are distracted by diversification, they are creating opportunities for you to grow. Strategies: Stay focused. Know your strengths and stick with them. Be careful to not allow the pursuit of diversification to take your eye off of the “ball” as it pertains to growing market share in the copier/MFP business. David Polimeni, president & CEO RITE Technology, Sarasota, Florida Opportunities: I believe the greatest area of opportunity for dealers is to diversify their service offerings. They should specifically look at providing solutions like RPA [robotic process automation], low code, managed IT, cybersecurity and ERP. The marketplace for these solutions and services is growing rapidly and it is important that dealers get on board. The sooner they implement these new services and solutions, the better off they will be. Strategies: To pursue more advanced solutions and services, owners need to hire the correct leaders to build out their departments. They should look for leaders who have past experience in the solutions, especially from the technical side. Owners of office technology dealerships are scared to expand into areas they do not know, but they need to realize that they do not need to know how to do everything. Instead, they need to hire experts to build out their departments, and then they can execute plans and strategies and sell. Frank Cucco, CEO Impact Networking, Lake Forest, Illinois Opportunities: I interpret this question to be about what new things we should research, because it is certainly not time to dump MFPs, MPS or MNS. Those are still revenue-producing opportunities. The first step is to decide if you want to go low-tech or high-tech. Strategies: My first go-to for research is other BTA dealers. Go to BTA events. Find out what other dealers are trying. I have even queried BTA staff members about other dealers’ involvement in other industries. What products are successful? There are some pretty smart people out there and they are not just buying other dealerships to grow.

Google other trade associations. If you are interested, go to one of their trade shows.

Research local businesses. Does their work sound interesting? Do they have the recurring revenue streams that we all like so much?

Join your chamber of commerce or another local business group and attend their “business visits” or mixers. Ask attendees about their businesses. As you know, if you ask a businessperson about his (or her) business, you typically open a floodgate.

Sometimes an opportunity is just something a salesperson runs across that does not look like an opportunity at first. The best strategies for success are what they have always been: hard work, hard work and more hard work. It has always been so.

Note: Not too long ago we started investigating an opportunity in video surveillance. Yes, I know — it sounds like a stretch from copier/MFPs and networks. I contacted Brian Smith at BTA and he gave me the names of several dealers he thought might have some experience in the field. It was a big help and gave me confidence to move forward. One dealer’s information prevented us from losing money on the first couple of deals, which usually you would chalk up to learning. Turns out, video surveillance systems are exactly like the networks we have been installing and servicing for more than 30 years — just with massive bandwidth and new application software called VMS (video management system). You know upfront you will have to learn new buzzwords: field of view (FoV), ID distance, H.264 & H.265 (compression protocols), field complexity — and the list goes on. For us, this was a good high-tech direction. We are still looking for low-tech opportunities. Robert F. Moore, owner Lockwood Moore Inc., Reno, Nevada Opportunities: To bring more adjacent services and value that “surround the box.” This helps lock in clients (by going deeper and wider), as well as helping them save time and money (economies of scale) by consolidating multiple vendors to a few business “partners.” Strategies: First, ensure your MFP/service delivery “core” is solid and profitable. From there, identify partners that can help bring value to your clients. Dealers cannot be all things to all organizations, but if they are really good at a handful of “Owners of office technology dealerships are scared to expand into areas they do not know, but they ... do not need to know how to do everything.”

complementary services, it will help protect their bases and grow their businesses. Dean Swenson, president The Swenson Group Livermore, California Opportunities: One key area that office technology dealers can capitalize on is the inherently service-based nature of their businesses. Many IT companies have struggled to transition from break/ fix to the service model we are already built for. The transition to becoming a complete technology solution provider is a necessary and natural progression. Strategies: Invest in staff members with backgrounds in managed IT services and cloud services. Outsource the functions in which you have yet to build expertise and focus on services. Companies that neglect aspects of technology delivery will struggle against those that have complete offerings. Martin Perkins, director of managed services Allen Business Machines, Fort Wayne, Indiana Opportunities: A4 products and apps that force end users to stay with the manufacturer the dealership represents. Strategies: Staying in touch with customers; account reviews; and relationships with specialists in both software solutions and larger product solutions (color) rather than copy/print centers and print for pay. This gives an account the ability to save costs and control its output. Doug Petri, director of sales Quality Digital Office Solutions, Mount Joy, Pennsylvania Opportunities: This is for those dealers who stay independent. In a time of significant acquisition activity — five private equipment companies and multiple manufacturers — the consolidation of the industry is going through another phase. Furthermore, Xerox is finally “Xeroxifying” Global Imaging, as all former Global companies are losing key customer-touch functions such as dispatch, billing, supply chain and management of the local service teams. As in past phases, ultimately these “rollups” will result in large, homogenized organizations, but with the ability to deliver excellent customer service decaying and local company cultures being blown away. We have seen it before. It always ultimately results in opportunity for the dealerships that stay independent and stay local — the ones that keep their cultures and their focus on customers. Strategies: Stay independent. Manufacturers are concerned whenever an acquisition takes place, as it often results in a request for lower dealer pricing and a move away from key manufacturer relationships. I have spoken with several manufacturers’ executives who recognized that, over the long term, experience has shown that rollups are rarely good for them.

With this in mind, go to your manufacturers, express your real intent to stay independent, and outline ways, in a mutually contributing discussion, that together you can grow both the dealership’s and the manufacturer’s revenue. Continually focus on the customer service activities in your business. Make sure a live voice answers the phone; respond quickly and effectively to customer needs, problems and concerns; and deliver fast and effective service response. Invest in the capability to deliver and support key business process applications.

Focus on your employees. Make sure they know what your long-term plans are regarding staying private. Even lay out a succession plan. If you do not have one, develop one. Develop marketing materials that communicate and reinforce the benefits to customers of dealing with a privately held, independent dealership. Paul Archer, president Automated Business Products, Centennial, Colorado Opportunities: There are so many adjacent, related options for dealers to choose from that it can get confusing and distracting at times. There is opportunity in all of the available options — from ink to MNS, from document management to security, from A4 to VoIP, from furniture to postage, and from whiteboards to digital signage. The list of “opportunities” can seem endless. However, these opportunities are only attractive if market demand, dealership capabilities and management bandwidth are in alignment. Strategies: Regarding the opportunities noted above, ensure there is market demand, dealership capabilities and management bandwidth for any given opportunity. If any one of the three are missing from the equation, then proceed with due caution. Carter Hertzberg, COO Nauticon Office Solutions, Gaithersburg, Maryland Opportunities: Office technology dealers today must find ways to differentiate their messages as organizations and the actual value that is delivered by their sales representatives in the field. I believe that — even as much as our industry has moved toward strategic selling through advanced technologies — that message tends to get “lost in translation” in terms of the image of the dealership and the message from its sales representatives. Customers still tend to look at us like we are “just copier dealerships” and “Stay independent ... Go to your manufacturers, express your real intent to stay independent, and outline ways ... that together you can grow ... ”

our reps as “just more copier sales reps.” We have to change that viewpoint. So, I believe the biggest opportunity for office technology dealers is to develop stronger portfolios of more diversified offerings that add value for end users. Our core business expertise needs to expand, and dealers need to invest in other areas in order to compete with the consolidation and larger portfolio offerings of our competitors. Strategies: The normal areas of focus for a dealer when “expanding the portfolio” are usually in production, MPS, large format and solutions. It is great to invest in those areas to add more value for clients, but our strategy needs to move even further out to include display graphics, audio/visual, security/security cameras, managed services, mailing solutions, ink-based products and more. We have to be able to deliver more to our clients and become more ingrained in their businesses as a whole. Most of all, we have to jump into whatever we add by hiring experts in the fields that we are expanding into. This investment in the right people to put us into consultative roles is imperative to building trust with our clients, showing that we can deliver on what we are providing. Educating our salesforce members is where that would begin, as they have to take the message to the masses. Ultimately, the best strategies are useless without the right people to pull them off. Whatever the portfolio consists of, the opportunity for success is elevated by a more educated salesforce and service organization.

Scott Whitt, vice president of sales Hendrix Business Systems Matthews, North Carolinan Brent Hoskins, executive director of the Business Technology Association, is editor of Office Technology magazine. He can be reached at (816) 303-4040 or brent@bta.org. “So, I believe the biggest opportunity for office technology dealers is to develop stronger portfolios of more diversified offerings that add value for end users.”

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