May 2007 Office Technology by Business Technology Association

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Piecing Ideas Together.

The BPCA was founded in 1963 with the vision of forming a best practices organization that unites leaders of independently-owned office equipment dealers. The concept is quite simple - bring the leaders of these companies together so that they can share ideas, learn from each other, and take their businesses to the next level. Our members will attest that it’s well worth the investment by making each of them better leaders and bringing more value to their dealerships. Feel like there’s something missing from your organization? Let BPCA bring together all the pieces of the puzzle.

“Better Dealers Through Learning and Idea Exchange.”

If you’d like more information about our organization and how to join, please send us an email or give us a call. Phone: 800.897.0250 Email: info@businessproductscouncil.org Website: www.businessproductscouncil.org Membership Director BPCA c/o BTA 12411 Wornall Road Kansas City, MO 64145

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CONTENTS Volume 13 No. 11

FEATURE ARTICLES 10

Network Printers How prominent are they in your product line?

COURTS & CAPITOLS The Dealer Wins Xerox’s move boosts dealership values

by Brent Hoskins Office Technology Magazine

by Robert C. Goldberg BTA General Counsel

Some predicted that the arrival of the connected digital copier would result in a widespread displacement of single-function network printers. Instead, “copier” OEMs have added printers to their product lines. Is it time for you to take a closer look at the printer market?

In the last 20 years, the value of the BTA Channel has been confirmed as IKON, Global Imaging and others have purchased independent dealerships. The purchase of Global by Xerox re-confirmed the value of the independent channel, verifying the value of an established customer base.

Awards of Excellence BTA recognizes dealers, manufacturers at ITEX Show by Brent Hoskins Office Technology Magazine

PRINCIPAL ISSUES Your Web Presence Is it an asset or a liability?

While the ITEX Show provided dealers the opportunity to attend a number of education sessions and visit 250-plus vendors in the exhibit hall, it also provided the Business Technology Association the opportunity to recognize some of the industry’s best.

‘Together We Click’ Kyocera hosts National Dealer Meeting April 10-12 by Brent Hoskins Office Technology Magazine

Themed “Together We Click,” Kyocera Mita America’s National Dealer Meeting provided the OEM the opportunity to reinforce its commitment to the dealer channel, announce plans for future product offerings and share organizational goals. The event was held April 10-12 in Las Vegas.

by Darrell Amy Dealer Marketing Systems

The reality of today’s marketplace is that virtually every potential and current client will visit your Web site. Some will drop in during the sales cycle, others to place service calls and order supplies. What they find when they arrive may play a large role in how they respond to your sales efforts.

SELLING SOLUTIONS Sales Team Success Developing the right go-to-market strategy

by Tom Callinan Strategy Development

In order to manage the performance and expectations of sales professionals, you first need a qualified manager. There are similar skills, knowledge, behaviors and motivators you will find in the great majority of successful managers, who do not need to be the center of attention.

The Xerox Surprise Global purchase price expected to be $1.5 billion Compiled by Brent Hoskins Office Technology Magazine

For most in the industry, the April 2 announcement came as a complete surprise. Early that Monday morning, Xerox told the world that it had reached a definitive agreement to acquire Global Imaging Systems Inc. for $29 per share in cash — about $1.5 billion. 4 | www.of ficetechnologymag.com | May 2007

DEPARTMENTS 6

Executive Director’s Page

BTA President’s Message

Advertiser Index

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EXECUTIVE DIRECTOR’S PAGE

Global Acquisition Benefits BTA Dealers t has been a while since the office technology industry has seen such an impactful move as Xerox’s plan to acquire Global Imaging Systems. The reactions and opinions expressed by dealers and other industry observers have been diverse. However, many of the comments I’ve heard point to one key winner — the independent dealer. How so? Consider that as manufacturers lose out with Global transitioning to Xerox products, some will be seeking independent dealerships for acquisition — dealerships that are now more valuable to those manufacturers. Consider, too, that as those “displaced” manufacturers seek additional, new distribution, there will be opportunities for many dealers to take on another line. I’ve been thinking for some time that it is a great time to be an independent dealer. Xerox’s acquisition of Global makes it even better. What is your reaction to the April 2 announcement? To find out, I sent an e-mail to a number of Office Technology readers. I asked: “ What do you believe will be the short-term and long-term impact of the acquisition of Global Imaging Systems by Xerox on the office technology industry in general and, specifically, on the U.S. independent dealer channel of distribution?” Following is a sampling of the responses. “Short-term, it will ‘scare’ many Global custom ers to th e independent dealer channel. Global customers presently feel they are being serviced locally and once Xerox takes over, I think that feeling will go away. Long-term, Xerox-Global will be another ‘giant’ in our industry that will try

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to dictate pricing, service and product to the customer. With Wall Street watching, we really don’t know what to expect. Certainly, Wall Street only cares about the bottom line, not customer satisfaction and loyalty.” — Ed Potrzeba Jr., president, Upstate Office Equipment Inc., Westmoreland, N.Y. “Global Imaging has a very good core company in our market that they have allowed to continue operating pretty closely to the way they were before the acquisition. In the short-term, that may stay the same, but in the long-term, I doubt if Xerox will leave them to operate as they have in the past. I cannot see how changing them to be more like Xerox would make them a stronger or better competitor. We are hoping they bring the Xerox way of doing business and change the name of the company. I believe in the local customer’s mind, we have gone from two competitors — Xerox and Global — to one competitor with a larger operation. I think that diminishes them in some ways.” — James G. Kreikemeier, president, Capital Business Systems / Modern Methods, Cheyenne, Wyo. “Short-term will be confusion and unidentified direction, followed by longterm attrition of the strong network of dealer management that Global has built. This will help the U.S. dealer channel with new opportunities to pick up manufacturer lines dropped by Xerox.” — Byron Norrie Jr., president, Skyway Technology Group Inc., Tampa, Fla. For additional reader comments on Xerox’s acquisition of Global see Page 22 in this issue and an expanded Executive D ire ctor ’s Pa ge on th e BTA Web sit e, www.bta.org. — 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 Darrell Amy, Dealer Marketing Systems www.dealermarketingsystems.com Tom Callinan, Strategy Development www.strategydevelopment.org Robert C. Goldberg, General Counsel Business Technology Association

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 Gary Hedberg Accounting Manager gary@bta.org Mary Hopkins Accounting Clerk mary@bta.org Cathy Kenton Membership Sales Representative cathy@bta.org ©2007 by the Business Technology Association. All Rights Reserved. No part of this publication may be reproduced by any means without the written permission of the publisher. Every effort is made to ensure the accuracy of published material. However, the publisher assumes no liability for errors in articles nor are opinions expressed necessarily those of the publisher.

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BTA PRESIDENT’S MESSAGE ®

New Model Taught in BTA’s ProFinance any of y ou have attended the Business Technology Association’s ProFinance class. You have learned how to analyze your current business practices and e valuat e your dealership’s strengths and weaknesses. You have also learned about the important issues addressed in the class — profitability benchmarks, asset management, expense controls and employee productivity. Those of you who have not attended ProFinance have at least some awareness of the class. You have heard recommendations from fellow dealers that you should attend. A comment from a recent attendee, Wayne Cernie, president of BSA Business Solutions, Phoenix, illustrates the power of this class: “I came expecting a financial re v i e w or pro cess. I got an ‘e xtrem e makeover’ of ideas about our business … I will strongly recommend to any owner I meet: ‘Attend this class.’” You may also know that ProFinance is led by John Hey and John Hanson of Strategic Business Associates. Their credentials are impressive. Mr. Hey began his career with the DC Hey Company in 1973, becoming president and owner of the Minneapolis-based dealership in 1985. Mr. Hanson joined the dealership in 1985 as vice president of finance. During the next 12 years, they grew the company from $5 million to $150 million. In 1988, the dealership was sold to Alco Standard (IKON). And, finally, you likely know that the core of ProFinance is the “Hanson-Hey” model, used for the strategic planning and redirec-

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tion of your business. The model is designed to set minimum standards of performance with the short-term goal for all participants of achieving a minimum profitability level of 14 percent operating income. (The original model was created by Tom Johnson, founder of Global Imaging Systems Inc.) So, you have heard about the class. You know Mr. Hey and Mr. Hanson. And you are aware of the model. But did you know the model has changed? Mr. Hanson offers an explanation. “The reason for the change is that the industry has changed dramatically,” he says. “When the first model was created, we sold boxes and provided services and supplies for it. That industry is gone. So, we needed to move toward solutions, printers and, to some degree, IT. With these changes came the need to change the model.” Among the resulting changes to the model and its 2007 financial template: Recognizes the need to separate solutions into three components; Introduces an IT/infrastructure category; Adds business color detail for both the B&W and color copies made on B2C equipment; Includes sections for B&W and color printers, and wide-format equipment. If you want to learn more about the new model and how adherence to it can increase the profitability of your dealership, I encourage you to attend ProFinance. Watch www.bta.org for the dates and locations of upcoming classes. Are you a BTA member? Be sure to use your $250 coupon toward this class. If you are a past attendee of ProFinance, you can attend for the second time at half price ( for returning attendees the BTA discount coupon does not apply). — Dan Hayes

2006-2007 Board of Directors President Dan Hayes Purcell’s Business Products 222 E. 1st St. Campbellsville, KY 42718 dan@purcells.com President-Elect Shannon Oliver 25 Wheaton Circle Greensboro, NC 27406 soliver@triad.rr.com Vice President Ronelle Ingram Steven Enterprises Inc. 17952 Sky Park Circle Ste. E Irvine, CA 92614 ronellei@msn.com BTA East Thomas Chin Accolade Technologies LLC 604 Hampshire Road Mamaroneck, NY 10543 tchin@accotech.com BTA Mid-America Mike Blake Corporate Business Systems LLC 2018 S. Stoughton Road Madison, WI 53716 mblake@corpbussystems.com BTA Southeast Bill James WJS Enterprises Inc. 3315 Ridgelake Drive P.O. Box 6620 Metairie, LA 70009 bjames@wjsenterprises.com BTA West Rock Janecek Burtronics Business Systems Inc. 216 S. Arrowhead Ave. P.O. Box 1170 San Bernardino, CA 92408 rjanecek@burtronics.com Ex-Officio/General Counsel Robert C. Goldberg Schoenberg Finkle Newman & Rosenberg Ltd. 222 S. Riverside Plaza Ste. 2100 Chicago, IL 60606 robert.goldberg@sfnr.com

US Bank May 07

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You Deserve Peace of Mind

In today’s competitive market, choosing the right business partner is an important decision for your company’s success. You need someone who understands your business and can offer you the peace of mind you deserve.

U.S. Bank® Office Equipment Finance Services takes pride in creating peace of mind by:

Contracting agreements up front to ensure there are no surprises.

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Recognizing it’s Your Customer. Our Responsibility.

With a focus on office technology for more than 25 years, you can trust we are committed to your long-term success. Call 1-800-328-5371 or visit our website usbank.com/oefs to find out how U.S. Bank can give you peace of mind.

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Network Printers How prominent are they in your product line? by: Brent Hoskins, Office Technology Magazine

o you remember the prediction? It came soon after the arrival of the digital copier and the rise of connectivity. The connected digital copier, with its printing capabilities, was going to result in a widespread displacement of single-function network printers in the workplace. That was the battle cry: “Push those printers off of the desktop!” At the time, perhaps, it seemed like a possibility. “It was the fond hope of the copier manufacturers that everybody would throw those things out the window,” says David Bates, vice president of product marketing for Xerox Corp.’s Office Group. “But, the MFPs didn’t ever really push out the singlefunction printers.” Peter Hendrick, vice president of marketing for Kyocera Mita America Inc., says the emphasis on displacing printers with MFPs was short-lived. “In the businesses where this was accepted, it was quickly realized that it was changing printing behavior in a way that wasn’t amenable to their business needs,” he explains. “I think it was a relatively quick trend with the truth realized that the MFP is out there for a purpose, but the personal, desktop printer also fulfills a clear need.” That clear need is convenience, where finishing capabilities are not required. That’s the vast majority of print jobs, says Tom Codd, director of marketing for Hewlett-Packard’s LaserJet, adding that most print jobs are four pages or less and, emphasizing HP’s printer heritage, pointing to the reality that print volumes long ago surpassed copy volumes. With an MFP, he adds, “you get a lot of paper handling, stapling, saddle-stitching, the ability to do enlargements and reductions, the ability to position staples on different corners of the

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page — things that certain customers just don’t use too often.” Codd also promotes the value of single-function printers by speculating on the risk for an office that relies, for example, on two MFPs for printing, rather than a f leet of single-function printers along with the MFPs. “If one of them has a problem, then you have just lost 50 percent of your printing capacity,” he says. “Half of the people don’t get to print anymore or they have to walk clear to the opposite end of the floor to the other device.” Undoubtedly, representatives of traditional copier (MFP) manufacturers have opinions regarding the significance of MFPs in the workplace and the prevalence of the need for finishing capabilities that are different than the views espoused by representatives of printer manufacturers. However, they now recognize the need for convenience printing and, likewise, the importance of a balanced deployment of output devices in the workplace. Today, MFP manufacturers have increasingly added single-function printers to their product lines. Are dealers, in turn, embracing those printers, adding them to their product lines as well? Many have, but others, it appears, have not. Whatever the case, a notable emphasis on printers within the dealer’s product line is often slow in coming. “I think the dealers walked by many printers and installed a copying machine somewhere in the building and later replaced it with an MFP,” says Bates. “And, year after year, they walked by all of those printers and really did not participate in those sales cycles or offer solutions for those people printing on those devices.”

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AFTER EIGHT WINS IT ’S HARD TO BE HUMBLE The people have spoken. And for the eighth time, Toshiba was voted #1 for Overall Performance by the BTA. Toshiba was honored with four Channel Choice Awards, the most of any equipment manufacturer, including awards for Superior Performance, Digital Product Line, Corporate Support and Marketing Distribution. While we may be tempted to brag, we’ll just let the dealers do it for us. To become part of the winning Toshiba team, call us at 949-462-6601.

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are far more services, if you Any lasting hesitancy may “There are far more get your arms around the be attributable, in part, to services, if you get your whole account, than if you th e dealer ’s copier sales arms around the whole just service MFPs,” he says. legacy. “Or it may be that “That’s where I think dealth e y don’t know th e I T account, than if you just ers will make money with people who buy the printers, service MFPs. That’s where printers — in managing the but they know the procureI think dealers will make whole fleet.” ment people who buy the their money with printers Codd agrees. “If I had one copiers,” says Bates. “They — in managing the whole fleet.” message to give to dealers, I al s o may b e in a stat e of — David Bates would say that the money is denial that those printers Xerox Corp. made in helping people by are going to exist forever.” doing assessments for them, While dealers and their helping them manage their fleets and making them more sales reps should strive to win the loyalty of IT people in order to place printers — since printers are going to “exist forever” effective — providing these services as a channel partner,” — there is another reason for dealers to pursue the IT depart- he says. “That’s where the money is going to be made.” In recent months, many BTA dealers have heard plenty ment and printer placements, says Bates. “All of the printer about one of the key opportunities cited — fleet management manufacturers want the MFP business,” he explains. “And, if the dealer doesn’t know the IT person, he must consider that or, more specifically, management print services (MPS). At its all MFPs are going to end up on the network, and it is the IT national dealer meeting this spring, for example, Kyocera person who is going to make that decision. So, if the dealer Mita emphasized MPS and hosted education sessions doesn’t ‘own’ all of those MFPs, it is going to be an uphill battle focusing on the topic. What is MPS? “It is basically taking over a customer’s entire output fleet, not only for the cost of the to maintain control of that account.”’ For some dealers, a common question may come to mind: product, but also for the cost of the consumables and the “I understand that single-function network printers should service — providing one cost-per-click invoice to that cusbe sold because of the unquestionable demand for conven- tomer,” says Hendrick. “So, management of all output is now ience printing. I also understand that winning the loyalty of outsourced to one single company.” He shares a recent experience to illustrate the value of and placing printers through IT personnel will also protect my MFP base and accounts, pursued by printer vendors and MPS. “Recently, I was in an office trying to explain MPS to them,” says Hendrick. “I said, ‘You’ve got three MFPs in your others, but how can I make any money selling printers?” Manufacturers acknowledge the reality that printer office, how do you get them serviced?’ They said they call margins can be low. Says Bates: “The whole business propo- their local dealer. Then I said, ‘You’ve got four monochrome sition is very, very different in the two models. A copier and two color printers in the office, how do you get them dealer who is used to anywhere from 15 to 30 points on a serviced?’ They said, ‘We don’t know.’” Upon further investigation, says Hendrick, he learned product isn’t going to make that on printers.” Says Codd: “It is true, especially in low-end printers, the lower you are in from the company’s receptionist that when a printer needs service, she either attempts to determine who serviced the our line, the thinner the margins get.” Again, what are the rewards — financial or otherwise — of printer last and calls them or she turns to the Yellow Pages. printer placements if they are not necessarily coming from “This is the type of situation where the dealer could say, ‘Let margins on the hardware? They are the new revenue sources us manage all of your printers and MFPs,” explains Henassociated with printers, the opportunity to potentially drick, using a Kyocera dealer in his example. “The dealer capture all of the printed pages within a workplace, the could say, ‘You have Kyocera MFPs and printers from other resulting aftermarket revenue and the protection of the deal- vendors, let us manage the entire fleet under one invoice with a single cost per page. Your consumables and service ership’s customer base from the inroads of competitors. Dealers can realize added revenue through software-based are included in the cost.’” Over time, he adds, a level of trust will build. “Then, solutions and services, ranging from installation to supplies auditing, and through fleet management, says Bates. “There through an evolutionary approach, the dealer can replace 12 | w w w . o f f i c e t e c h n o l o g y m a g . c o m | M a y 2 0 0 7

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the current printers with his service that the customer “The sales rep passing printers, in this case the didn’t have previously.” by XYZ’s building may more ‘cost effective’ Kyocera Beyond the opportunities think, ‘The lease on their printers,” says Hendrick. “It with printer sales associated is a longer sales cycle, but with MPS, Bill Cassidy, assoMFP is not up for two you’ve then got that cusciate director of product years; I don’t have an tomer for life.” marketing at Kyocera Mita, opportunity there.’ The MPS approach also cites some key characterisHowever, that company helps the dealership break tics of printers that dealers buys printers all the time.” from its traditional sales should consider for down— Bill Cassidy strategy and establishes a the-street sales activity. “An Kyocera Mita America Inc. new type of relationship with MFP is a time-based prothe customer. “Traditionduct; there is a lease and you ally, the customer sees the copier dealer come in selling an have a window when you can replace it,” he says. “But printers MFP and asks such questions as, ‘What is your lease term? are needs-based. The sales rep passing by XYZ’s building may What is your cost per copy? How much does your toner think, ‘The lease on their MFP is not up for two years; I don’t cost?’” says Hendrick. “But with MPS, the dealer is walking have an opportunity there.’ However, that company buys in with a bundled package that includes all print, whether it printers all the time.” is from a printer or an MFP, and is providing a level of In addition, says Cassidy, sales reps may need to adjust

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their thinking in terms of up? Perhaps it is time for you “... It is very easy for you the quantity of units they to consider these questions. to stay in your comfort may be able to place at one “If you come from a copier zone and say, ‘Yes, time or over time to a single background, it is very easy customer. “Typically, in the for you to stay in your comeverything should be a down-the-street environfort zone and say, ‘Yes, everycopier-based MFP.’ But ... ment, they are selling one thing should be a copierthere are a lot of users — MFP at time,” he says. “So, based MFP,” says HP’s Codd. a lot of potential customers sometimes, when they first “But, the fact of the matter — where all they want to do is print.” begin selling printers, sales is, there are a lot of users — — Tom Codd reps will think, ‘Ok, I’ll sell a lot of potential customers Hewlett-Packard one printer here,’ not real— where all they want to do izing the size of the opporis print.” tunity. A lot of reps who have been moving printers for Brent Hoskins, executive director several years have found, ‘Once I moved that first one, that of the Business Technology second, that third, that 20th printer was a very easy sell, Association, is editor because now all the customer does is call me up.’” of Office Technology Are you currently offering your customers single-function magazine. He can be printers? If so, how prominent are they in your product linereached at brent@bta.org.

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Awards of Excellence BTA recognizes dealers, manufacturers at ITEX Show by: Brent Hoskins, Office Technology Magazine

hile the ITEX Show held March 21-22 in Las Vegas provided dealers the opportunity to attend a number of education sessions and visit 250-plus vendors in the exhibit hall, it also provided the Business Technology Association (BTA) the opportunity to recognize and honor some of the industry’s best. During the show, th e association presented its annual Channel’s Choice and Dealer of the Year awards. At an awards banquet held on March 21 at the Aladdin Resort and Casino, Toshiba America Business Solutions Inc. (TABS) was presented with the 2007 Channel’s Choice Superior Performance award , primar y product line. The company received Channel’s Choice awards in three additional performance categories as well — Corporate Support, Marketing Distribution and Digital Above: Toshiba America Product Line. Business Solutions Inc. “TABS is thrilled to be recognized with four 2007 (TABS) President and BTA Channel’s Choice awards,” said Mark Mathews, CEO Rick Taylor accepts vice president and general manager of the Elec- the four 2007 BTA Chantronic Imaging Division of TABS. “This underscores nel’s Choice awards TABS’ commitment to producing superior-quality received by the compaproducts and services that best meet the cus- ny, joined by Electronic tomers’ needs, which strengthens our partners’ Imaging Division (EID) Vice President and Gentrust and confidence in promoting our brand.” Muratec America Inc. was also presented with a eral Manager Mark 2007 Channel’s Choice award during the banquet Mathews (left) and EID — for Outstanding Performance, secondar y Vice President of Marketing Steve Rhorer. Right: Muratec Vice President of Sales and Marketproduct line. “We understand that the customer is ing Jim D’Emidio accepts the company’s 2007 Channel’s Choice award. the dealer,” said Jim D’Emidio, vice president of He is joined by Muratec President and CEO Yutaka Moriwaki. sales and marketing, noting that the company only sells through the BTA Channel of distribution. “So, every day Nordstrom’s of office equipment, because if you have a when we go to work, we try to figure out how we can make problem with us, we’re going to take care of you. We thank their experiences with us even better. We call ourselves the our dealers for choosing us as their leading secondary

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product line vendor.” Channel’s Choice award recipients are determined every year based on the results of a survey distributed to independent office technology dealers, designed to recognize the best suppliers in several different performance categories. Both TABS and Muratec America Inc. are past BTA Channel’s Choice award winners. On March 22, during a breakfast hosted by BTA and BTA Southeast at the Las Vegas Convention Center, BTA presented its 2007 Dealer of the Year awards in three revenue categories. Winners are determined through an evaluation process, based on such factors as gross sales, adherence to a business plan and efforts to reduce employee turnover. This year’s winners are: Hagan Business Machines of Meadville Inc., Meadville, Pa. (less than $3 million in annual revenues); Copy & Camera Technologies, Lafayette, La. ($3-$10 million in annual revenues); and

The 2007 BTA Dealer of the Year winners accept their awards. Clockwise from above left: Hagan Business Machines of Meadville co-owner Craig Guy (left), BTA President Dan Hayes, BTA Executive Director Brent Hoskins and Hagan Business Machines co-owner Jay Verno; Copy & Camera Technologies COO Mark Landgrave (left) and BTA President Hayes; and NovaCopy Sales Engineer Hernan Cortez (left) and BTA President Hayes.

BTA Board, Japan’s NOMDA Officers Meet While in Las Vegas attending ITEX 2007, members of the Business Technology Association (BTA) had the opportunity to meet twice with representatives of Japan’s Nippon Office Machine Dealers Association (NOMDA). The meetings allowed the leaders from each organization to learn more about the respective market served by the other. “These meetings presented us with a great opportunity to understand the nature of the dealer channel in Japan and to answer their questions about dealer distribution in the U.S. market,” said BTA President Dan Hayes. “We made a commitment for BTA and NOMDA to work together in the months to come, exchanging information, etc.” The meetings were facilitated by Hiro Udea, COO of Imaging Fidelity, who served as interpreter.

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During the ITEX Show, members of the BTA Board of Directors met twice with representatives of Japan’s Nippon Office Machine Dealers Association (NOMDA) to discuss various industry issues. Back row from left: Incoming BTA board member Jerry Jackson, BTA President-Elect Shannon Oliver, BTA board members Rock Janecek and Bill James, and Hiro Udea, COO, Imaging Fidelity. Front row, BTA board member Thomas Chin, BTA President Dan Hayes, NOMDA Chairman Akira Akutsu, NOMDA Vice Chairman Ryotaro Matsumoto and NOMDA Managing Director Takashi Uetake.

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NovaCopy Inc., Nashville, Tenn. (more than $10 million in annual revenues). Hagan Business Machines of Meadville has been serving the Crawford, Mercer and Venango counties in Pennsylvania since 1985 and is owned by Jay Verno and Craig Guy. With 16 full-time employees, the dealership, which has been exclusively distributing Toshiba products since 1994, has achieved record sales in the first half of the 2006-07 fiscal year. Serving southern Louisiana for more than 45 years, Copy & Camera Technologies is owned by brothers Mark and Jeff Landgrave. With 31 fulltime employees, the Canon dealership has experienced average growth of 12 percent for the past 10 years.

BTA General Counsel Robert C. Goldberg (left) accepts the Presidentâ&#x20AC;&#x2122;s Award from BTA President Dan Hayes.

With locations in Nashville and Memphis, Tenn., and Dallas, NovaCopy Inc. is a Konica Minolta and Panasonic dealership under the leadership of CEO Darren Metz. With 145 full-time employees, the NovaCopy leadership team is striving to take the dealership to $100 million in gross sales by 2010. In addition, during the breakfast, BTA President Dan Hayes presented the Presidentâ&#x20AC;&#x2122;s Award to BTA General Counsel Robert C. Goldberg for his many years of service to BTA and dedication to assisting the BTA Channel. Brent Hoskins, executive director of the Business Technology Association and editor of Office Technology, can be reached at brent@bta.org.

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‘Together We Click’ Kyocera hosts National Dealer Meeting April 10-12 by: Brent Hoskins, Office Technology Magazine

hemed “Together We Click,” Kyocera Mita America’s National Dealer Meeting provided the OEM the opportunity to reinforce its commitment to the dealer channel, announce plans for future product offerings and share organizational goals. Drawing 1,400 attendees, including representatives of approximately 400 dealerships, the event was held April 10-12 at the Mandalay Bay Hotel and Casino in Las Vegas. During the opening General Session, KMA President and COO Michael Pietrunti began by highlighting the company’s continued growth. “Last year, I set forth an aggressive sales target and stated that Kyocera Mita America would become a $1 billion company Clockwise from top: by fiscal year ’09,” he said. “Thanks to you, we Attendees visit the meeting’s Product are well on our way.” Fair; Katsumi In FY ’07, said Pietrunti, the KMA Group’s Komaguchi, presicombined, year-over-year sales revenue grew dent of Kyocera Mita by more than 4.8 percent, fueled in large part Corp.; and Michael by the company’s Latin America Division, Pietrunti, president which grew 25.3 percent. While the year repre- and COO, Kyocera sented a fifth consecutive year of revenue Mita America Inc. growth, it did come at a “slightly slower rate” than in the previous four years, said Pietrunti. He cited the which we compete, in FY ’07 we were not able to participate state of the global economy and increased competition as in the broader B2C market. This is mainly due to the fact that the rate of migration from monochrome to color in the B2C factors in the slowed growth. Regarding the slowed growth, Pietrunti also noted that market has been much faster than we anticipated.” In FY ’08, Pietrunti said KMA will launch eight new B2C KMA must expand its color product portfolio. “A key market factor affecting our business is the rapid transition from older color MFPs, along with six monochrome MFPs. He said there monochrome devices to new color printers and MFPs, which will also be 11 new monochrome and color printers launched will continue to create replacement and upgrade opportuni- during the year. The first of the new B2C MFPs was introties for all KMA dealers,” he said. “And while our own B2C duced at the meeting — the KM-C4035E, offering 40-pageMFP sales have grown at a very rapid pace in the segments in per-minute (ppm) monochrome and 35-ppm color output.

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Pietrunti also provided an update on from Katsumi Komaguchi, the new presâ&#x20AC;&#x153;Based in large part on the companyâ&#x20AC;&#x2122;s five-year growth plan, ident of Kyocera Mita Corp., the parent sharing some of KMAâ&#x20AC;&#x2122;s objectives for FY company of KMA. In his presentation, your candid feedback â&#x20AC;&#x2122;08. They include: he highlighted two of the parent comwe have improved our Continuing to strengthen KMAâ&#x20AC;&#x2122;s dispany â&#x20AC;&#x2122;s basic growth objectives â&#x20AC;&#x201D; to logistics operations. tribution in the top 25 U.S. markets; speed up its management process and Next, weâ&#x20AC;&#x2122;ll be focusing Extending KMAâ&#x20AC;&#x2122;s presence in the to promote unique technology. On the on our customer printer market; technology front, he noted that Kyocera relations operations...â&#x20AC;? Strengthening KMAâ&#x20AC;&#x2122;s distribution collaborated with IBM on the developand support in Latin America. ment of a new architecture platform for There are also efforts underway intended to make KMA its products. â&#x20AC;&#x153;With IT oriented customers for the next genan easier company with which to do business. â&#x20AC;&#x153;Based in eration in mind, we considered IBM to be our best partner large part on your candid feedback we have improved our to develop new architecture, with the capability to meet logistics operations,â&#x20AC;? said Pietrunti. â&#x20AC;&#x153;Next, weâ&#x20AC;&#x2122;ll be focusing ever-changing market needs and with the possibility for on our customer relations operations, including our credit superior customization,â&#x20AC;? he said. department, hotline and other vital support services. We Brent Hoskins, executive director of the will make every effort to ensure that everyone who deals Business Technology Association and with you also truly â&#x20AC;&#x2DC;clicksâ&#x20AC;&#x2122; with you.â&#x20AC;? editor of Office Technology, can be During the opening General Session, attendees also heard reached at brent@bta.org.

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The Xerox Surprise Global purchase price expected to be $1.5 billion Compiled by: Brent Hoskins, Office Technology Magazine

or most in the office technology industry, the April 2 announcement came as a complete surprise. Early that Monday morning, Xerox Corp. told the world that it had reached a definitive agreement to acquire Global Imaging Systems Inc. for $29 per share in cash. The total purchase price is expected to be about $1.5 billion. Founded in 1994, Global has nearly 200,000 customers across the United States. The company focuses on smalland mid-size businesses (SMB) through its 21 U.S. regional core companies. Xerox projects that the acquisition of Global will increase its distribution to SMB customers by more than 50 percent. In a conference call with industry editors and analysts the morning of the announcement, Jim Firestone, president of Xerox North America, explained why he believes the acquisition makes sense for Xerox. “Our distribution in the small and medium business marketplace is limited,” he said. “We see a $16 billion growth opportunity from the SMB market. And it’s a segment that includes more than 99 percent of the businesses and half of the private sector employees in the United States. And yet, despite the strength of our brand and our offerings ... Xerox doesn’t participate in close to 80 percent of the document decisions made by small and medium businesses, according to our internal research. This acquisition positions us to capture more of that untapped opportunity, put Xerox at the table, allowing us to compete and win in more buying decisions than ever before.” Similarly, Tom Johnson, chairman and CEO of Global Imaging Systems Inc., shared why he believes the acquisition “makes sense for Global, for our employee and, most importantly, for our customers.” First, he said, it brings stability to the company and its employees. “Second, we are adding a world-class product line to our organization, which will significantly benefit our

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“This acquisition positions us to capture more of that uptapped opportunity ... allowing us to compete and win in more buying decisions ...” Jim Firestone “... This transaction allows us to continue to aggressively pursue the mid-market, where our footprint and our focus continue to flourish.” Tom Johnson Increases Xerox’s SMB distribution capacity by more than 50 percent. Provides access to about 200,000 SMB users currently served by Global. Adds more than 1,400 “feet on the street” selling Xerox systems. Total purchase price expected to be about $1.5 billion.

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Your Perspective “I believe the short-term impact will be minimal since my understanding is that all current management will stay in place. This move by Xerox will only strengthen the independent channel and, hopefully, as time goes on, seed new start-ups with ex-Global employees. The long-term effects in 12-18 months should be a windfall for the independent dealer. Xerox will ultimately fumble, leaving the independent dealer with an abundance of low-hanging fruit. The consolidation of the market and serious pressure put on the manufacturers to find new sources of distribution will also strengthen the independent dealer’s position in the industry. There is no better time than the present to be an independent dealer!” — Frank Cucco, president, Impact Networking LLC, Waukegan, Ill. “It came as a shock to us and the multiple they paid is very surprising. Tom Johnson is a smart guy with a smart team and seems to have crafted a good deal. We expect a lot of turmoil in the marketplace due to this acquisition. We’ve already seen Canon pull the plug on Global and expect other manufacturers to also react. That will mean opportunity for stable, independent dealers and we’re looking forward to it!” — Marty Whalen, president, Martin Whalen Office Solutions, Bradley, Ill. “In general, I think most independents will see this as good for them. It just moved the bar way up for what their dealerships are worth. Manufacturers affected will probably get more aggressive trying to buy dealers and fight for distribution from those that want to remain independent. They will also be strengthening their direct operations. Manufacturers that can’t balance direct and dealer channels will rapidly lose independents that will sell or change lines. If independent dealers get decent price support we will still be a very attractive alternative. Most of our customers don’t care about any of this stuff. I also believe that the vast majority of dealers prefer to stay independent.” — Ray Balanger, president, Bay Copy, Rockland, Mass. “In the short-term, I expect that companies like Konica Minolta will struggle with their growth projections, due to the impending loss of revenue from the Global companies that will flow to Xerox. In the long-term, my hope is that they realize the importance of the smaller dealer community and provide programs and pricing to allow us to compete with the larger companies. My gut feeling is that they will take another direction by increasing small dealer prices and purchasing larger dealers.” — Tom Grimes, president, Advanced Business Machines, Rockford, Ill. “I believe the independent dealer that stresses local ownership and a commitment to their community will benefit by this acquisition. It should especially help in growing your market share, targeting small- to mid-size customers who will be responsive to the message: ‘We are a locally owned business that cares about you!’” — David Rodstol, president, David Rodstol Inc., Wenatchee, Wash.

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customers,” he said. “Third, this transaction allows us to continue to aggressively pursue the mid-market, where our footprint and our focus continue to flourish. It also allows us to continue our disciplined growth through both acquisition and organic expansion.” Johnson said Global’s vision of the future remains unchanged. “Only now we are partnered with a world-class corporation that supports our business model and recognizes that the hallmark of Global’s consistent performance is not a sudden inspiration, but rather disciplined, focused commitment to great customer service and sharing best practices,” he said. “For this partnership — a great culture and the increased opportunities for employees — we are really excited about the future.” Once the transaction is complete, Global Imaging will operate as a wholly owned subsidiary of Xerox. Tom Johnson and Michael Shea, president and chief operating officer of Global, will continue to lead the company, report directly to Firestone and work in tandem with Xerox’s North American Partners Group. Global will keep its headquarters in Tampa, Fla. Its 4,500 employees will continue to operate as part of Global in the company’s 21 regional core companies. Expected to close in May, this acquisition is Xerox’s third in the past year. In July 2006, Xerox closed on the $175 million cash acquisition of Amici LLC, a provider of electronic-discovery services that support litigation and regulatory compliance. Xerox acquired XMPie for $54 million in November of last year. XMPie is a provider of software for personalized, multimedia marketing campaigns. Since it was founded, Global has acquired more than 80 businesses and has operations in 32 states and the District of Columbia. It held its initial public offering in 1998. For the company’s fiscal year that ended March 31, 2006, the last year for which results have been reported, Global delivered full-year revenue of $1.03 billion, an increase of 11 percent from the previous fiscal year. Income from operations was $114 million and net income was $62 million, up 9 percent from fiscal year 2005. What are the reactions of others in the industry to the news of Xerox’s planned acquisition of Global? In an e-mail survey, Office Technology magazine asked dealer readers: “What do you believe will be the short-term and long-term impact of the acquisition of Global Imaging Systems by Xerox on the office technology industry in general and, specifically, on the U.S. independent dealer channel of distribution?” For a sampling of responses, see the sidebar on this page and the Executive Director’s Page on Page 6 in this issue.

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COURTS & CAPITOLS

The Dealer Wins Xerox’s move boosts dealership values by: Robert C. Goldberg, General Counsel for the Business Technology Association

and if dealers represent more than one line, or many years the Business Tech... The value of every focus more intently on their products. Mannology Association has been able to independent dealership ufacturers are going to be looking to demonstrate that the BTA Channel rose significantly. increase their dealer networks and will be of distribution is the most efficient and The purchase of Global offering incentives to take on their lines. profitable means for business equipment Dealers that have looked to add Canon or and systems manufacturers to bring their Imaging ... re-confirmed Ricoh products will find their phone calls products to market. Slowly, the remaining the value of the suddenly returned . Canon “C ” Series direct selling companies embraced the independent channel. dealers may find the full line becomes availBTA Channel and shared in the success able. If you are in a territory where Global the dealer network brings. represented Ricoh, Canon or Konica Minolta, you should conIn the last 20 years, the value of the BTA Channel has been confirmed as ALCO Standard, IKON, Danka, TOPAC, Global sider aggressively seeking one of those lines. Independents are and others purchased independent dealerships. These pur- in the drivers seat. Following the Global purchase, I received numerous calls chases were made at substantial amounts, rewarding dealers from representatives of manufacturers both in the United for the successes they had established in their markets. Most recently, manufacturers have been purchasing dealerships pri- States and Japan. There was considerable concern and many marily to protect their installed base from the competition. rumors. Several manufacturers indicated they would be much This cycle will continue, but ultimately, manufacturers will more aggressive in purchasing independent dealerships. They begin selling their direct operations because they will not could not risk losing additional market share to competitors. Xerox indicated that Global would become a wholly owned enjoy the same success obtained by an independent dealer. Recently, the value of every independent dealership rose signif- subsidiary, under the same management team, and would icantly. The purchase of Global Imaging by Xerox re-confirmed continue to seek acquisitions. If you are considering the sale of your business, this may be the value of the independent channel. Although Xerox has relationships with independent dealers and agents, the bulk of its an excellent time to pursue a buyer. However, before you do so, sales were through Xerox’s direct channel. Independent dealers prepare your business to look its best. Review your financial always enjoy competing with Xerox, IKON and Danka. The value- statements and make certain they properly represent your true added proposition independents present to potential customers financial situation. Recast your financials to reveal what the financial results would be without you as an owner. Collect your is always a convincing argument resulting in many sales. The purchase of Global increased the value of every inde- receivables and check your inventory. Those machines purpendent in several respects. First, the substantial premium chased in order to qualify for the trip to Hawaii need to be sold. Xerox paid for Global’s stock verifies the value of an established Like selling your home, make your business look its very best. customer base and the infrastructure necessary to grow and Finally, you lose nothing by making the first call. Your business support it. Second, every independent instantly became more has a value and it will not be reduced as a result of you indivaluable to its current supplier(s). Xerox has publicly stated that cating you may be interested in selling. It is a wonderful time to be an independent dealer. Thank you in 18 months it will have all Global locations offering the full line of Xerox products. The transition will come much faster than again, Mr. Johnson, you have made every dealerthat. Xerox is not about to have its wholly owned subsidiary ship more valuable, and if you look to purchase us selling competitive products. At the same time, other manufac- it will cost you more. Robert C. Goldberg is general counsel for the turers are going to question continued sales to Xerox — sales Business Technology Association. He can be they know will ultimately be replaced with Xerox products. reached at robert.goldberg@sfnr.com. Manufacturers must look to their existing channel to sell more

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PRINCIPAL ISSUES

Your Web Presence Is it an asset or a liability? by: Darrell Amy, Dealer Marketing Systems

ere is a shocking fact: 67 percent of potential buyers visit a company’s Web site before purchasing a large ticket item. What is even more shocking about this fact is that it is from a Yahoo! research report that was done in 1999. The reality of today’s marketplace is that virtually every potential and current client will visit your Web site. Potential clients will drop in at some point during the sales cycle, while current clients will visit to place service calls, order supplies or request help. What they find when they arrive may play a large role in how they respond to your sales efforts. Dealer Web sites can either be an asset or a liability. The following are three scenarios that can sabotage your sales efforts if your Web site is a liability: The DOA Solution Sale — Maybe you own a dealership that has expanded into the managed print services business to differentiate from the competition and gain extra revenue. Your newly-trained sales rep secures an initial appointment with a top-level Digital-The Fruth Group’s home page, www.teamdaz.com. decision-maker. Everything goes well. The potential client is Web site link. What the prospect saw on the site didn’t gel engaged and open to an assessment of his (or her) document with the sales rep’s value proposition. The prospect got nervous and canceled. output fleet. The Current Customer — One of your current clients After the sales rep leaves, the potential client looks at the rep’s card to find the Web address. He opens his browser and walks up to the copier and sees a flashing message: “Out of hits the dealership’s Web site. Immediately, he gets a sinking Supplies.” He replaces the toner cartridge and realizes that he feeling in his gut. Nothing on the site supports what the rep needs to order more. He then visits your Web site to place the was talking about. All he sees are copiers. “I knew it,” he sighs. order, but he fools with your Web interface for two minutes “These guys are just copier salespeople in sheep’s clothing — and gives up in frustration. Two weeks later, the last toner carthey probably don’t know what they are talking about.” The tridge runs out and one of your employees has to rush out to sales rep calls for the second appointment and wonders why hand-deliver toner to the customer, displaying your “outstanding customer service.” he (or she) cannot seem to get a return phone call. The Lost Appointment — Your salespeople work hard to get appointments. Some are using new solutions-based sales The Importance of Dealership Web Sites These scenarios happen every day in dealerships, costing strategies to get appointments with top-level decision-makers. Finally, after hours of prospecting, a potential client agrees money in lost sales opportunities and diluting the customer to see the rep. However, the morning of the appointment, he service experience. The rules of business have changed. While face-to-face intergets an e-mail canceling the appointment. What happened? Upon receiving the e-mail from the rep confirming the action is still critical in the sales and customer service process, appointment, the potential client clicked on the dealership’s the Web plays a critical role in the success of your business.

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While you may have spent tens of thousands of dollars decorating your showroom, only a small fraction of your clients will ever visit your office. However, virtually every one of your potential and current clients will visit your Web site.

managed print services agreement and are open to an assessment. The site content should reinforce the message that the sales rep delivered during the appointment. Knowing that the client is going to visit the Web site, the sales rep could be proactive. In a â&#x20AC;&#x153;Thank Youâ&#x20AC;? e-mail to the client that confirms the upcoming assessment date, he could insert a link to the managed print services section of your Web site. This page would support the sales repâ&#x20AC;&#x2122;s message and even provide references or case studies from other happy clients that have gone through the assessment process and are now in a managed print services agreement. Similarly, an appointment to upgrade a current customer to a color copier could be followed up with an e-mail with a hyperlink to the section on your site that presents the business benefits of color and features several current clients that have purchased color systems. Home Page: The home page of your Web site can reflect messaging for each of your key selling points. In the following example, Digital-The Fruth Group of Phoenix (see home page on Page 24) uses their home page to showcase their four key business initiatives: color, document management, managed print services and network services. Potential clients visiting this site are able to connect the content of the sales call with one of these four initiatives and drill down to learn more. The home page should also put the potential client at ease. Every buyer has a high barrier of skepticism. One way to knock

The home page should also put the potential client at ease. Every buyer has a high barrier of skepticism. One way to knock down this wall is with references.

The Two Critical Questions In thinking about your Web presence, there are two key questions you should ask: Who is the audience? What do you want them to know? Letâ&#x20AC;&#x2122;s explore two key audiences and consider what you might want them to know about your dealership. Audience 1: Potential Clients â&#x20AC;&#x201D; Your Web site plays an important role in the sales process. While there may be a few people surfing the Internet to buy a copier, most of the people that visit your site stop by because they are at some point in the sales process. Pre-Appointment: The site content should support the key benefit statements that your salespeople use to secure appointments. For example, if the salesperson talked about the dealershipâ&#x20AC;&#x2122;s ability to streamline the flow of information through the clientâ&#x20AC;&#x2122;s business process, the home page should touch on this thought and provide a link to expanded content. If the sales rep talked about new color-enabled technologies, the message could link to content about the benefits of color. Post Appointment: The sales rep has had a great appointment with a potential client. They are excited about the idea of a

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Pretend that you are a current client down this wall is with references. The The service call entering a service call or meter reading. home page of the Digital-The Fruth Group What do you like about your interaction site rotates images and quotes from confirmation e-mail with your customer service area? What current clients, helping establish a foundathat is automatically would you like to change? Did you learn tion of credibility and commonality with generated could include more about new technology or solutions? its customers. information about your After the interaction, do you feel better or Pretend that you are a potential client printer service program worse about your choice of office techvisiting your Web site. Is the content or printer supply sales. nology providers? informative? Do you leave the Web site more confident or more nervous about the Dealership Web Sites 2.0 dealership’s ability to deliver? What would you change? The Internet is always evolving. The latest buzz is about Audience 2: Current Clients — Today’s consumer now expects to access customer service through a Web interface. Web 2.0. This is simply geek-speak for the fact that the way we While face-to-face interaction is still important, the online interact with Web sites is continually evolving. There is an experience you provide to clients is critical. In fact, many entire community of developers rethinking how we interact times clients perceive Web interaction as better customer with the Web. What was good enough two or three years ago is service because they did not have to go through the hassle of now sub-standard. What is good today will not be good enough three years from now. calling someone. Your dealership Web site should be an ongoing conversaVirtually all back-office dealer software packages offer some type of Web-based interface for service call submission and tion in your dealership. One client I recently worked with set a meter reads. Similar services facilitate supply ordering. These corporate initiative to re-think their Web site once every three functions are important to customers and should be a part of years. Now, while I might have a biased view of this as the presyour dealership. I will leave it to the vendors to discuss the ident of a dealership Web content development company, the concept is solid. With the growing importance of the Web, we merits of each of their packages. What is often overlooked is the marketing message that is all need to continually improve on our Web presence. There is no way all of the aspects of Web site content could presented to current clients when they visit your site. No doubt your dealership has invested considerable amounts of be covered in just one article. There are still many questions to money in new business initiatives like document management be answered: How often should content be updated? or managed print services. The critical question is this: How What about blogs? many of your current clients know you offer these services and How do we drive traffic to the site? how they can benefit from them? What about product catalogs? Your Web site is the perfect opportunity to educate your What do I need to know about search engine optimization? current clients on your new offerings. When a client visits your Over the coming weeks, I’ll post answers to these questions Web site to submit a service call, enter a meter reading or place a supply order, you have the perfect opportunity to and more on my blog: solutionssuccess.blogspot.com. You can view these articles and even subscribe to e-mail updates when feature your new offerings. Once again, the home page plays an important role. In addi- new articles are posted by submitting your e-mail address tion to offering easy access to your client services, the home page when you visit. Darrell Amy is president of Dealer Marketing Systems, which can spotlight your new offerings. Current clients can begin to be provides consulting, sales training and marketing comfortable with these new ideas by reading about them on services to help dealerships succeed in the solutions your site. This may generate sales inquiries or at least prime the business. Amy conducts the new BTA pump for the next follow-up call from their sales rep. ProSolutions training seminar and is The internal pages in your customer service area can also also actively involved in dealership feature messaging aimed at cross-selling new services and marketing efforts across the country. solutions. The meter read page could have a graphic about He can be reached at (214) 224-0050 or new color MFPs. The service call confirmation e-mail that is damy@dealermarketingsystems.com. automatically generated could include information about your Visit www.dealermarketingsystems.com. printer service program or printer supply sales. 26 | w w w . o f f i c e t e c h n o l o g y m a g . c o m | M a y 2 0 0 7

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SELLING SOLUTIONS

Sales Team Success Developing the right go-to-market strategy by: Tom Callinan, Strategy Development

n order to manage the performance and expectations of sales professionals you first need a qualified manager. There are similar skills, knowledge, behaviors and motivators you will find in the great majority of successful managers. High performing managers do not need to be the highest paid employees in your company and they do not need to be the center of attention. You can find these needs in high performing salespeople — salespeople who do not usually make great managers. High performing sales managers get satisfaction out of helping others achieve success and they cannot wait to provide recognition. To support their team, they are good coaches, have a level of organization, can follow a process and have good communication skills. Most good managers are not at a new company every other year; think about it — if they had the behaviors and motivators noted, would they feel comfortable switching companies every other year? People who are motivated by management do not move back and forth between sales and management positions. A sales position is a route into management — a route all managers need to follow. But if they are motivated by management, a sales route is probably one they do not want to retrace. With all of this said, some companies hire managers that have “reasons” why you are their third employer in five years. They hire managers that have flipped back and forth between management and sales — a pretty clear indication that they experienced marginal success. Do not make these mistakes. We all make bad decisions. If you are not making bad decisions, you are not making enough decisions. I believe one approach to making more correct decisions is to minimize risks. It is my belief that the negative scenarios described would significantly increase the ratio of wrong decisions, so I avoid them. If I ignore these warning signs, I may make a correct hire 30 percent of the time. But that is too low of a success ratio for comfort.

I realize all I have done is provide you with a scenario to avoid. The ultimate situation is to internally develop managers. But that is not always practical , s o at tim e s y ou n e ed to go outside to make a hire. You will need to be objective; swapping one “C+” player for another will only retard your growth plans. Most of the time you would have been better off with the original marginal player — who had established himself in your culture — and worked to develop somebody else in your organization to take over the management role a year from now. When you do have to go outside, this is probably one of those times when you should spend some money and get somebody with experience at hiring managers to help with your decision. Once you have a competent manager, your go-to-market model will determine the model you use to select your sales representatives, and will ultimately set the approach you use to manage these reps. One model has your newly hired sales reps out making cold calls in their territories and then updating your customer relationship manager (CRM) with the information they uncover. The carrot for the rep is that he (or she) has unlimited earnings potential. The stick is activity; the manager drives activity like a cowboy driving a herd of cattle. Other industries that use this sales model are Yellow Pages, office supply companies, commercial real estate firms and second-tier phone service providers. Our second model provides newly hired sales reps with lists of accounts that are a mixture of current customers and prospects. The company’s CRM has been updated with relevant information that provides a good picture of past progress in the account. The carrot for the rep is the account base and information, providing a springboard to success. The stick is expected progress; the manager drives further progress in the base of accounts using account reviews and the rep is expected to be prepared, strategic, tactical and organized. Many industries w w w . o f f i c e t e c h n o l o g y m a g . c o m | M a y 2 0 0 7 | 27

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employ this model, including large IT hardcurrent customer, I had to stay away Many of us have tried ware and software providers and top-tier because they belonged to another rep), to adjust; we made phone service providers. minimal training other than speeds and The third model is a variant of the feeds and I was told it is all about activity. a conscious decision second model — the account and prospect The training classes for the new reps to hire better reps so list is vertically focused. Many companies were always interesting. There were we adjusted our that use the second model also use the veralways guesses on how many new reps compensation plan to tically focused model for their major would not return from lunch on the first pay more base salary ... account team. Many IT hardware and softday and that would parlay into how many ware companies certainly fall in the catewould make it through the first month. gory of using both models. Other companies build their The sales model you use will determine the type of candiproducts for a vertical market. Some industries use a solely date you will attract to the position. Sometimes we become vertical focus, like the medical and chemical sales industries. biased; we reflect on our own success and believe that we It would be tough to sell orthopedic appliances to a radiologist somehow resemble the norm. That would be far from the or a chemical that decreases cost of oil refinement to a waste truth. I, unfortunately, saw literally hundreds of reps join and management company. leave the company I worked for prior to my decision to leave When I started in the industry, I was hired into the “only the and start my own dealership. I am sure most of you have had a strong survive” model. This was a more draconian variant of similar experience. Yet, somehow, we forget that the odds of the first model — draw against commission, no base of finding successful sales reps from the use of the first model are accounts, ZIP code to cold call (and if I did stumble upon a one in 500, yet we continue to use the exact same recruiting process, hoping to increase our success ratio. Many of us have tried to adjust; we made a conscious decision to hire better reps so we adjusted our compensation plan to pay more base salary and recruited more professional sales candidates. Turnover remained ridiculously high, so we became resolved to the fact that it was just the industry. I will tell you that you were on the correct path, you just did not make enough of the necessary territory and management The Old Model changes to retain those higher level sales professionals. • Pay reps based on gross profit By now, you will not be surprised when I suggest that you • Re-sell to the existing customer base follow model two and three in your go-to-market strategy. I have • Sell the most expensive device, not the best device for the job written extensively on territory structure and believe that pro• Reps give discounts on service instead of retail cost viding a sound territory is a critical foundation to success in sales. The New Model Note that more than half of this article is on having the • Pay reps to encourage solution selling correct manager and the correct go-to-market (territory) • Pay on page volume and gross profit model. If you do not have these two aspects correct, sales • Focus on new and higher-volume customers • Provide the right incentives to new reps and seasoned veterans management becomes very difficult. So, your go-to-market strategy is sound, you are hiring BEI Services’ new Sales Compensation higher quality sales professionals and you are confident in Model Service allows you to monitor your sales leadership. Now what? People get into sales for two machines and pay your reps based on the total solution, not just selling boxes. reasons — as a starting point into management or, more commonly, for an opportunity to make a great income. BTA Members receive a 15% cash rebate.* Your interview process identified the skills, knowledge and motivators of your new employee, as well as areas of developFor more information on how to improve your compensation plan, visit ment. You had further opportunity to uncover developmental BEI Services at www.beiservices.com or contact Wes McArtor areas in your on-boarding and training of the new employee. at wes@beiservices.com or (307) 587-8446. Now you sit down with him and review his personal develop*15% cash rebate distributed quarterly by BTA. mental and annual income plans. 28 | w w w . o f f i c e t e c h n o l o g y m a g . c o m | M a y 2 0 0 7

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his income goal? Regardless, what is These two documents will become the The account reviews driving his success or lack of success in foundation of your management process provide the manager achieving this goal? with the employee. The selection and with perspective into The income discussion is the manager’s training process may have shown that he opportunity to discuss pipeline growth needs additional understanding of business the work ethic of each and quality of account reviews. Tie these entities, financial statements or help with rep, as well as his together and, ultimately, tie activity to presentation skills. The developmental plan understanding of income. Note that we are not managing may include joining Toastmasters (with strategy, tactics ... daily activity ; there are no two-a-day company support), a series of training sesmeetings or weekly forecasting events. If sions with the company finance leader or a book that will cover both legal entities and financial statements. you hire using model two or three, you cannot manage (coach) Each month, the manager will review the new employee’s to a model that makes the sales rep feel like he is in a remedial progress toward his goals and, when appropriate, add new areas education class; more importantly, you will not need to manage with that approach. to the plan. You get to spend one hour per week in account reviews so The income plan will clearly define how he can attain his annual income goal. Clearly, you must start with a realistic you gain perspective on the rep’s work ethic; if he is not goal. You tie the drivers of your sales compensation plan into preparing for these meetings with you, it is a sure bet he is not line items on the income plan. If you pay commissions and preparing for the rest of his daily activities. You have the rep’s bonuses on revenue and gross margin, you detail out revenue pipeline statistics, so if his pipeline is not growing, he clearly is requirements and a normal margin (historical margin if the employee has tenure with your company) that the employee will need to achieve to hit his income goal. Each month you update the income plan based on the previous month’s results and the current month’s forecast. You also look at the pipeline to determine the sustainability of — or the probability of improving on — the current revenue trend. Each week of the month, the manager is spending one hour with each of his reps strategically discussing accounts that are part of the rep’s target list. This is not a forecasting session, but rather you are building a mid- and long-term pipeline. These sessions are called account reviews. They will clearly indicate if the sales rep is making progress in his accounts and one of the outcomes of these sessions will be appointments for the rep as well as for the manager. Another outcome will be employee development, as the manager improves the rep’s account strategy skills while he himself learns from exposure to each rep. The account reviews provide the manager with perspective into the work ethic of each rep, as well as his understanding of strategy, tactics, business process and your products and services. The individual developmental plan provides the manager with insight into the rep’s commitment to improving. And the income plan keeps the rep and manager focused on a goal. The event that brings all of the effort together is the monthly review and plan (RAP). After the manager reviews the month’s forecasts to actual sales and validates the current forecast at this once-a-month meeting, the income plan is discussed. Is the rep on track to achieve w w w . o f f i c e t e c h n o l o g y m a g . c o m | M a y 2 0 0 7 | 29

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not focused on the correct activities. opment plan and have supported him You tied everything into Review his calendar to help him identify wherever he needed it. You tied everythe rep’s income goals areas of improvement. Does he need help thing into the rep’s income goals and did and did everything in with phone skills or in delivering a concepeverything in your power to help him tual presentation? You have tied his current achieve his goal. If he does not respond, your power to help him results, forecast and pipeline to an income you made a hiring error. Remember, even achieve his goal. If plan, so it is clear to him that he will not if you are really good at minimizing risk, he does not respond, attain the income he desires. You have a you will make errors. you made a hiring error. developmental plan that clearly states what When you have a good sales manager, he needs to do to improve and clearly deploy a sound territory model, hire the demonstrates your willingness to support his development. correct sales employees and then manage and lead the sales At this point, you lay out goals for the next month; you may team, there are many benefits. Management becomes fun; you also need to switch gears and go to a more remedial schedule can see people develop. Your sales productivity will increase — a 30-minute update in two weeks or even a week. Tie the and your employee turnover will decrease. As you develop your rep’s goals with how you — or anybody else in the company — sales team over time, you will have a significant competitive will support his required development. Tie the goals and activ- advantage over the competitors in your area that continue to ities into his income plan. You may have agreed that the use a model one strategy. You will enjoy above average growth income goal needed to be adjusted so make certain the goals in revenue and profits. tie into an achievable income target. The manager is acting Tom Callinan is the managing principal of Strategy like a real coach, even using other resources to help develop Development, a management consulting and advanced sales the employee. Isn’t this how most good employees would like training firm. From 1998 to 2005, he was an to be treated? executive with IKON Office Solutions. Prior If the rep needs you to baby-sit him — if you need to meet to that, he was the founder and CEO of with him each day to ensure he is working — cut him loose. Copifax Inc. He can be reached at You have provided the rep with a sound territory; you have callinan@strategydevelopment.org. supported him with account reviews and an individual develVisit www.strategydevelopment.org.

ADVERTISER INDEX 29 • Ames Supply Company

21 • ESP

31 • Panasonic Digital Document Company

(800) 323-3856 / (630) 964-2440 / www.amessupply.com

(800) 645-9721 / www.realpowerprotection.com

(800) 742-8086 / www.panasonic.com/notbeige

28 • BEI Services

7 • FMAudit LLC

5 • Print Audit

(307) 587-8446 / www.beiservices.com

(573) 632-2461 / www.fmaudit.com

(877) 412-8348 / (403) 685-4932 / www.printaudit.com

2 • Business Products Council Association

13 • IBPI

11 • Toshiba

(800) 897-0250 / www.businessproductscouncil.org

(480) 393-1694 / www.ibpi.net

(949) 462-6601 / www.copiers.toshiba.com

14 • CompTIA

17 • InkCycle

9 • U.S. Bank

(630) 678-8300 / breakaway.comptia.org

(800) 736-8877 / www.toolsfortraction.com

(800) 328-5371 / www.usbank.com/oefs

3 • Docucate

32 • Kodak

(800) 255-1933 / (949) 752-8222 / www.duplousa.com

(800) 944-6171 / www.kodak.com/go/ScanStationResellerOTM

19 • Duplo U.S.A. Corp.

25 • Niche Equipment

(800) 255-1933 / (949) 752-8222 / www.duplousa.com

(877) 446-4243 / www.nichee.net

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Panasonic May 07

4/20/07

4:40 PM

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IT’S NOT BEIGE. You probably know by now that Panasonic copiers are turning some heads. Look what we’re up to now! Introducing the new C3 Color Series from Panasonic. All of the innovative features of our C3 are now available in four simply brilliant colors to suit virtually any ofﬁce personality. It’s eye candy for the ofﬁce! And that’s not all. Panasonic was recently ranked “#1 Copier in Overall Customer Satisfaction Among Business Users.” For more information visit panasonic.com/notbeige or call us at 1-800-742-8086.

Panasonic received the highest numerical score in the proprietary J.D. Power and Associates 2006 Business Copier Customer Satisfaction StudySM. Study was based on a total of 1,524 responses, measuring 10 manufacturers and measures opinions of business customers at small, medium, large businesses who purchased or leased a new copier in the previous 21 months. Proprietary study results are based on experiences and perceptions of those surveyed from January 2005 - September 2006. Your experiences may vary. For J.D. Power and Associates award information, www.jdpower.com.

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Office Technology Magazine Business Technology Association 12411 Wornall Road Kansas City, MO 64145 (816) 941-3100 www.officetechnologymag.com www.bta.org

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