ENX MAGAZINE FEBRUARY 2020 ISSUE FOCUSES ON 21ST CENTURY HIRING

Page 1

FEBRUARY 2020

VOLUME 27 NO. 2

Connecting People, Ideas and Products in the Document Technology Industry since 1994

engage ‘n exchange

Motor City Magnificence:

Detroit Dominance Enables Applied Imaging to Surpass $100 Million

From left, Casey, John and Kyle Lowery, Applied Imaging

HIRE THE INTEGRITY, NOT THE SKILLS: DEALERS SHARE HR PATHS FOR FINDING THE RIGHT FIT

AMID CHAOS AND TURMOIL, a Defiant Clover Imaging Group Battles Back HYTEC DEALER SERVICES Uses Dealer Programs, Technical Proficiency to Dominate Circuit Board Space UNDERSTANDING TODAY’S NEW PROSPECTIVE EMPLOYEE: Candidate 2.0 WHEN MONEY IS THE PRIME MOTIVATION: Next Level Impacts CEO Keith Roher on the Art of Wooing Sales Reps

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CALL TO DISCUSS THE FUTURE LEVERAGE VISUAL EDGE IT TO ENSURE FUTURE SUCCESS Make the Call to Learn How Your Dealership Can Build a Growth Foundation for Tomorrow Michael Brigner Senior Vice President mbrigner@visualedge.com

Our Managed IT Services Portfolio:

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Michael Cozzens Vice President of Business Development mcozzens@visualedge.com

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David Ramos Chief Strategy Officer dramos@visualedge.com

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Mark Gibson

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Vice President/General Manager - Managed IT Services mgibson@visualedge.com



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VOLUME 27 NO. 2

Connecting People, Ideas and Products in the Document Technology Industry since 1994

engage ‘n exchange

FEBRUARY 2020

Motor City Magnificence:

Detroit Dominance Enables Applied Imaging to Surpass $100 Million

From left, Casey, John and Kyle Lowery, Applied Imaging

HIRE THE INTEGRITY, NOT THE SKILLS: DEALERS SHARE HR PATHS FOR FINDING THE RIGHT FIT

AMID CHAOS AND TURMOIL, a Defiant Clover Imaging Group Battles Back HYTEC DEALER SERVICES Uses Dealer Programs, Technical Proficiency to Dominate Circuit Board Space UNDERSTANDING TODAY’S NEW PROSPECTIVE EMPLOYEE: Candidate 2.0 WHEN MONEY IS THE PRIME MOTIVATION: Next Level Impacts CEO Keith Roher on the Art of Wooing Sales Reps

In This Issue

22

DEALER SPOTLIGHT

Motor City Magnificence: Detroit Dominance Enables Applied Imaging to Surpass $100 Million By Erik Cagle

STATE OF THE INDUSTRY 16 Hire the Integrity, Not the Skills: Dealers

Share HR Paths for Finding the Right Fit By Erik Cagle

CHANNEL INSIGHT 30 Amid Chaos and Turmoil, a Defiant Clover Imaging Group Battles Back By Erik Cagle

BUSINESS PROFILE 34 Hytec Dealer Services Uses Dealer

30

Programs, Technical Proficiency to Dominate Circuit Board Space By Erik Cagle

CANDIDATE 2.0 38 Understanding Today’s New Prospective Employee: Candidate 2.0 By Sally Brause

PERSPECTIVE 42 When Money Is the Prime Motivation: Next Level Impacts CEO Keith Roher on the Art of Wooing Sales Reps

34

By Erik Cagle

ASSESSMENTS FOR HIRING 46 Who Makes the Grade? Tips on Using

Talent Assessments in the Selection and Development Process By Larry Breed

ADVERTISERS INDEX 48 DISPLAY TRADE SHOW NEWS 52 Not to Be Missed: Here’s Why You Need to

42 6

Be at ITEX 2020

www.enxmag.com | February 2020

We Saw It In ENX Magazine


Maintain Your Legacy Flex Technology Group is on a mission to build a legendary national technology and office solutions organization by acquiring successful entrepreneurial dealerships. If you’re a dealer with proven leaders, a solid marketplace reputation, strong financial performance, and the ability to provide superior employee and customer experiences — we want to talk to you.

FTG Provides Options and Flexibility • Achieve liquidity today • Retain business name and go-to-market strategy • Continue building your business while achieving additional liquidity • Reinvest in Flex Technology Group and their platform • Flexibility to have multiple partners with different exit options


Contributors

Staff

LARRY BREED Precision Hiring & Development is a talent-assessment service helping businesses make more informed hiring and development decisions. Larry Breed started the company in 1991, after a successful 25-year career with Lanier Worldwide, Inc. Please feel free to contact Larry at (800) 875-7599 or lbreed@precisionhiring.com for a complimentary professional sales talent assessment to evaluate.

Susan Neimes Publisher & Managing Editor

SALLY BRAUSE Sally Brause is the Director of Human Resources Consulting for GreatAmerica Financial Services and also heads up its PathShare HR Services group. She has been sharing this expertise with office technology dealers since 2008. Sally is certified as a Senior Professional in Human Resources (SPHR) and has been certified as a Compensation Professional through World at Work. Brause has a master’s degree in Organizational Leadership and participated in the Wharton School of Business’ Leading Organizational Change program.

Erik Cagle Editorial Director

NOMINATE YOUR CANDIDATE FOR DOCUMENT TECHNOLOGY INDUSTRY

DIFFERENCE MAKERS

We’re seeking tales of the movers and shakers who have left an indelible mark on their companies and the industry at large. Share with us the whys and hows behind their success.

Ronelle Ingram Contributing Editor

2020

magazine

Christina Kim

engageDEADLINE: ‘n exchange NOMINATION MARCH 13, 2020

Editor

engage ‘n ex engage ‘n exchange

BRIEF PROFILES OF THOSE SELECTED WILL BE FEATURED IN n exchange

engage ‘n exchange

THE MAY ISSUE OF ENX MAGAZINE.

Susan Neimes - susan@enxmag.com Erik Cagle - erik@enxmag.com 10153 1/2 Riverside Drive, Suite 729 Toluca Lake, CA 91602 tel. 818-505-0022 • fax. 818-505-9972

Submit your nomination at www.enxmag.com or email to: susan@enxmag.com engage ‘n exchange

nge8

engage ‘n exchange

www.enxmag.com | February 2020

La Revista del Distribuidor Dealer Source

Corporate Office

Note: Anyone featured as a 2019 Difference Maker is not eligible for inclusion this year.

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México & Latin America

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ENX Magazine is published monthly by Affinity Business Communications, Inc. Any inquiries should be sent to: enx@pacbell.net or mailed to the corporate office. Copyright ©2020 by ENX Magazine printed in the U.S.A. All reproduction in whole or part is prohibited without written permission. Cover photo from depositphotos.com

We Saw It In ENX Magazine


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NBS / ENX | February 2020


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All supplies & Parts available for prompt delivery! ENX Magazine | www.enxmag.com

All prices, rebates, and availability are subject to change without notice. Please call us to confirm.

Nuworld is not responsible for typographical errors or inaccurate specifications. Registered trademarks are properties of their respective owners.


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Erik Cagle

State of the Industry

Hire the Integrity, Not the Skills: Dealers Share HR Paths for Finding the Right Fit

W

arren Buffett, the chairman and CEO of Berkshire Hathaway and a man who has a cursory knowledge in making money, once observed, “In looking for people to hire, you look for three qualities: integrity, intelligence and energy. And if they don’t have the first, the other two will kill you.” There are several indisputable facts regarding today’s job marketplace. First, it has never been easier to find employees. Due to the wide-reaching ability of social media and job-posting platforms such as LinkedIn, Glassdoor, etc., a company can post an available position Monday morning at 8 a.m., and by 8 p.m., be deluged with a stack of applications. The quality of the candidates, or the likelihood of a potential fit among them, are separate issues. Secondly, the job market is currently favoring the buyer (i.e., the candidate). According to the Bureau of Labor Statistics, there have been more positions than unemployed people for 20 consecutive months. Further, the number of unemployed persons per job opening stood at .8 in October of 2019. That figure reached a high of 6.4 in July of 2009 before beginning the 10-year tumble coming out of the Great Recession. Thus, the extreme majority of people in the market for a new position are already employed, but seeking greener pastures—which represents great opportunity to find individuals with marketable talent, but also offers a cautionary tale regarding those already on your employment rolls. This month’s state-of-the-industry report focuses on one of the biggest challenges confronting not only office technology dealers, but the business community as a whole: finding and maintaining quality people. And what we’ve found is that many businesses place a high value on integrity and cultural fit. With many dealers enjoying the current growth swell that has marked the past three to five years—companies that find themselves positioned to add more human capital as opposed to addressing turnover—a willingness to invest in not only finding but developing the ideal individual begins with ensuring his/ her values match those of the company. Skills can be taught; integrity must be inherent.

WE DO LEADERSHIP TRAINING AND PROCESS TRAINING, AND ARE ALWAYS FOCUSED ON MAKING SURE EMPLOYEES FEEL THEY’RE BEING CHALLENGED AND NOT GETTING BORED. Matteo Recanatini, Offix

We have a cadre of dealers who outlined how they sift through the résumé rubble. They offer insight into their hiring process to ensure they are maximizing their investment in time in onboarding, not to mention maintaining, only optimal candidates. Offix of Gainesville, Virginia, finds its primary markets (Richmond and Norfolk, Virginia; Washington, DC) to be hotly contested from a recruitment standpoint, particularly for sales and accounting positions. Matteo Recanatini, director of marketing for Offix (himself a product of headhunter recruitment), notes the dealership relies on several channels to ferret out new talent, including LinkedIn and ZipRecruiter. Offix also offers what Recanatini believes is a “very healthy” referral incentive for employees who suggest candidates that ultimately join the firm. “Talent begets talent, and if we give an incentive to our talented employees, we find people like them who are successful,” Recanatini notes. The dealer’s process begins with the HR department screening candidates on basic criteria. Those chosen are passed to a supervisor who selects those best tailored for a 15-minute phone call; what Recanatini describes as a “skin-deep assessment.” Candidates who survive the cut move forward to a panel interview, which consists of the person that position would report to, along with that person’s supervisor and several other key staffers who are cross-departmentally involved with the position. It is here where Offix also determines the cultural fit, in addition to checking off the job proficiencies. Sales hires and other key positions are also tested through third-party tools. These candidates take a timed 30-minute test at any point prior to the panel interview. The varied list of questions helps measure a number of areas. The responses are then generated into a roughly 40-page assessment guide. continued on page 18

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www.enxmag.com | February 2020

We Saw It In ENX Magazine


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Hire the Integrity, Not the Skills: Dealers Share HR Paths for Finding the Right Fit “There are a lot of conceptual maps that show where your candidate fits within different criteria,” Recanatini explained. “We use that to ask questions, drill down to areas that may be interesting to us or may be a reason for concern. One of the advantages it affords us is to have a sweet-spot map. Over the years, we have learned which candidates have worked out very well in terms of skill sets, skill gaps and cultural fit. Every supervisor has their sweet-spot map for particular positions, and we use that to overlap the sweet spots with the candidate’s profile.” Recanatini readily admits it is difficult to find true talent, and notes the company would prefer to have the position remain open rather than “churn through people because we’re desperate to fill it.” Once an employee has joined the team, the dealer holds weekly one-on-one reviews—30-minute conversations driven by the employee—to gauge how they feel about their experience at Offix and ensure they are not having any issues. This also provides employees the opportunity to freely express any ideas or suggestions. Rewarding and nurturing are key to extended employment tenure, and Recanatini believes employees feel valued as a result. “We do leadership training and process training, and are always focused on making sure employees feel they’re being challenged and not getting bored,” he noted. “We treat people fairly and consistently, and have very transparent policies and procedures.” The hiring process for imageOne is executed with a high degree of rigor and a sense of urgency, which enables the company to find great people. Josh Britton, vice president of operations, notes the Oak Park, Michigan-based dealer relies on a host of sourcing methods simultaneously, including online job sites and industry-specific forums. The dealer also taps its strong network across the country—OEMs, fellow dealers, association peers, partners and customers—as a referral resource. “We’ll supplement our open-market efforts with trusted relationships we have with recruiting professionals, especially when we’re in a high-growth phase—which we’ve been in a couple of times during the past few years—and need that additional muscle,” Britton noted. The dealer leaves no stone unturned in its quest to find the right candidate, and isn’t afraid to conduct a robust amount of interviews, which can be fairly comprehensive in duration and depth. The interviews are supplemented by a number of different assessment tools that evaluate culture, values and organizational fit.

WE BELIEVE THAT BY INVESTING HEAVILY ON THE FRONT END OF THE PROCESS, WE ENABLE BOTH THE COMPANY AND THE CANDIDATE TO MAKE THE BEST DECISION. Josh Britton, imageOne

“We believe that by investing heavily on the front end of the process, we enable both the company and the candidate to make the best decision,” Britton noted. “Nothing has been more impactful to our growth and success than having the right people in the right seats. “There’s rarely, if ever, any element of surprise for our candidates on what it’s going to be like working here. We’re totally transparent. It’s not unusual for us to include a case study, assignment, or day-long shadowing in the overall process with a candidate as part of our transparency efforts.” One of the keys to help ensure a smooth onboarding for new hires is imageOne University, a four-to-six month onboarding program that helps indoctrinate the new hire into the corporate culture. According to Britton, it covers the rituals, rhythms and foundational tools that transcend the employee’s duties; a playbook that speaks to becoming successful at imageOne. “This is one of the many culture-driven practices at imageOne that have led to the ‘winning culture’ awards we receive each year,” Britton added.

WHEN A MANAGER PRESENTS FRASER’S VALUE PROPOSITION TO A CANDIDATE, IT IS GENUINE AND SUPPORTED. Lauren Christman, Fraser AIS

Given that many of the quality candidates who interview are gainfully employed and looking at multiple job options, timing and expediency are critical to the process for Fraser Advanced Information Systems of West Reading, Pennsylvania. Lauren Christman, human resources generalist, feels that puts the onus on the dealership to provide quality interactions with the candidates. While Fraser taps the more-popular job-posting channels such as LinkedIn and Indeed, employee referrals continue to produce the most-effective results throughout the process. As such, the dealer revamped its referral program in 2017, which led to a spike in employee participation and had a salutary effect on both the quantity and quality of referrals generated. That has been critical to the company addressing its continued growth. Fraser works to ensure that its culture and values system are tangible and can be felt by both candidates and the incumbent employees alike, as opposed to a list of core values hidden on a bulletin board in the breakroom. “When a manager presents Fraser’s value proposition to a candidate, it is genuine and supported,” Christman said. “Fraser’s culture is our differentiator, proven by our Net Promoter Score and driven by our core competencies.” The dealer backs the talk track with perks such as its Sacks of Cash reward for positive customer or peer feedback. Its activities committee hosts a series of fun events, backed by team-building continued on page 20

18

www.enxmag.com | February 2020

We Saw It In ENX Magazine


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Hire the Integrity, Not the Skills: Dealers Share HR Paths for Finding the Right Fit exercises and an annual awards banquet to supplement its compensation and benefits package. As employment is a two-way street, Fraser also provides opportunities that can help prevent its top producers from being poached, including a generous tuition-reimbursement program and top-flight training for all employees. Other retention tools include its bonus and incentive programs, and a career path that enables team members to grow their roles. The results speak to Fraser’s efforts. Christman notes that 20 employees have been with the firm for 20-plus years, and three company veterans have logged more than 40 years on the job. “That’s something many companies cannot relate to,” she added. Finding new employees is a process that begins from the inside out at Eakes Office Solutions of Grand Island, Nebraska. Employee referrals are the preferred starting point, but many candidates are found courtesy of the dealer’s relationships within the communities it serves—business associates, friends and family members. Leads from these sources tend to produce the best employee candidates, notes Kevin Fries, human resources manager. Social media is a secondary source for Eakes. The dealer’s marketing head populates the jobs throughout the most-common platforms, but while they generate likes, retweets and shares, Fries notes the company doesn’t have any trackable data on its success in this regard. With unemployment levels in Nebraska hovering near or below the national average, Eakes felt compelled to elevate its game in retaining its quality hires and incumbents. Fries and the executive team developed an employee value proposition (EVP), aimed at ensuring all employees are on the same page. The dealer has aggressively marketed the EVP to the business community and ensures its employees are “living and breathing it here internally,” according to Fries. “We have a long history and tradition in our communities, but as an employer, we’re kind of an unknown commodity,” he noted. “So we have really ramped up our efforts to market what our employee value proposition is to the rest of the world.” Eakes has a firm grasp on the changes that have taken place from a human resources perspective during its 75-year existence. Compensation and benefits are only the start; Fries notes the company has branded its benefits package and has performed extensive research into the qualities and traits necessary to maintain the modern employee. One of the narratives commonly recognized by the business community is the career trajectory of the millennial employee,

WE’RE DOING A LOT OF ENGAGEMENTTYPE OF SURVEYS AND TOUCH POINTS WITH OUR EMPLOYEES, TO GET A FEEL FOR IF WE’RE DOING THE RIGHT THINGS FOR OUR PEOPLE. Kevin Fries, Eakes Office Solutions

20

www.enxmag.com | February 2020

and the penchant for changing jobs every couple of years. Thus, this enables their careers to remain fresh while avoiding stagnation. That tasks the employer with ensuring its employee pool continues to feel challenged and invigorated with its duties. Recently, Fries was made aware of a customer service employee who wanted to expand her skillsets and knowledge base, and take the next step in her career. Eakes valued her performance and was able to move her to another division that had an opening. Thus, promoting from within can play a large role in the dealer’s ability to maintain its valued resources. “We’re doing a lot of engagement-type of surveys and touch points with our employees, to get a feel for if we’re doing the right things for our people,” Fries observed. “We stay engaged with people as much as we can, find out where their pain points are and try to do what we can to fix those, whether it’s adding more benefits or touch points with them so that they feel like they’re a valuable piece of the puzzle here.”

WE EMPLOY THE BEST IN THE INDUSTRY, AND WE WANT TO MAKE SURE WE ARE PROVIDING OUR STAFF THE RESOURCES TO BE SUCCESSFUL. Rebecca Graham, Novatech

Like many of its contemporaries, Nashville, Tennessee-based Novatech is able to tap into a wealth of personal connections and professional referrals to attract some of the top talent in the industry. The dealer also relies on an active, targeted presence on LinkedIn, which it uses to market the core beliefs and values pertaining to what it means to be a part of the Novatech family, according to Rebecca Graham, human resources manager. Graham believes one of the dealer’s greatest selling points is its solid reputation within the industry. Promoting that at every turn is critical, and the company is making a considerable marketing push to extol the virtues of its managed office platform. Novatech has invested much time and many resources in perfecting this offering and selling it as a service. “We want to make sure we are promoting managed office solutions at every opportunity,” Graham noted. Providing employees engagement across the business, offering opportunities for training and development, and actively listening to their needs and ideas are all elements of Novatech’s retention plan. Graham believes it is important that employees feel valued and that they are heard, all the while providing them growth avenues and the tools to be successful. In the end, it’s all about its team members feeling confident that they have found their career home at Novatech. “We employ the best in the industry, and we want to make sure we are providing our staff the resources to be successful,” she added. ♦ We Saw It In ENX Magazine


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Erik Cagle

Dealer Spotlight

Motor City Magnificence: Detroit Dominance Enables Applied Imaging to Surpass $100 Million

T

here is no denying that John Lowery had enjoyed much success in the years since 1984, when he founded Applied Imaging with his wife, Sandy. Theirs was the traditional from-the-ground-up story—they borrowed $5,000 from Lowery’s father and used a line of credit from the equity in their home to finance their dream. By 2003, the company had grown to a $9 million business, serving the Grand Rapids, Michigan, market by selling Ricoh fax machines

The Lowery family executive leadership at Applied Imaging. Shown from left are Casey Lowery, director of sales; John Lowery, president; and Kyle Lowery, director of production print 22

www.enxmag.com | February 2020

before gravitating toward copiers, MFPs, production print and managed services. There were setbacks along the way. A move into Kalamazoo did not fare well, and Lowery ended up selling the branch to another dealer. While Lowery would eventually return to that city, he couldn’t shake the feeling that Applied Imaging had become “stuck.” In 2003, Applied Imaging turned the corner. Lowery enlisted the services of John Hey and John Hanson of Strategic Business Associates, who helped shed light on understanding metrics and best practices. He joined the Copier Dealers Association, and began to leverage his resources by putting the best people in positions in which they could thrive and help drive growth. In 2009, Lowery made his first acquisition, and revenues jumped from $17 million to $22 million. In all, Applied Imaging has done 10 acquisitions that have played an instrumental role in the company’s growth, but perhaps none more so than the 2011 deal that onboarded a foundering business in Brighton, Michigan. Lowery relocated it into the Detroit marketplace, and in a seven-year stretch, that branch alone grew to $40 million. The 2018 acquisition of Hasselbring-Clark of Lansing also helped the company realize its dream of eclipsing the $100 million plateau, which it did in 2019. We Saw It In ENX Magazine

During the height of Applied Imaging’s ascension, it was growing 25-30% per year, most of which was organic. While the Ricoh line has been pivotal to Lowery’s success, the company has also flourished with Canon and Kyocera. Aside from copiers and MFPs, managed IT has grown to $8 million, with the potential of reaching $40 million in five years. Document management yields about $3 million per year and continues to thrive. How was business in 2019? What were the keys that dictated your success? LOWERY: When we were at $58 million three years ago, Ricoh came to us and said they were thinking about selling their customer base in Michigan—the SMBs, not the major accounts— and wanted to know if we were interested. In acquiring them, we were able to pick up 6,500 contracts worth an estimated $18 million. That same year, we acquired Hasselbring-Clark in Michigan, and they were a $7 million dealer. We also expanded our sales force in the Detroit area and took advantage of an opportunity to move into Toledo, Ohio, a year later. Between those and adding $9 million in business from 2018 to 2019, it catapulted us to a little over $100 million. So the wheels were set in motion earlier. Hitting such a monumental sales mark obviously called for a party. LOWERY: We rolled the dice

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Motor City Magnificence: Detroit Dominance Enables Applied Imaging to Surpass $100 Million use the equipment. Ours showed them everything they needed to know about the copier. The customer concluded, “You’ve got a great company and your people are unbelievable.” The real key to who we are is built by the culture we have in the organization. When our people get out in front of the client, their love and passion for the job just permeates everything they do. Delivering great service comes naturally.

Applied Imaging President John Lowery (far right) presents awards to employees during ImagePalooza

on hitting our number and rented out the entire Grand Traverse Resort & Spa, taking up all 420 rooms for the weekend. We booked it before hitting the number. We invited all of our employees and their spouses, 750 people in all. On Friday night, we had a mega-1980s band and everyone dressed in period costumes. There were musicians from the bands Asia, Foreigner and the ex-Journey singer. We had a company meeting Saturday morning, then everyone went out on excursions—wine tours, ziplining, bike riding, brewery tours and the casino. In the evening, everyone came back for cocktail hour and dinner, with entertainment from comedian Tom Papa. We had a ridiculously fun time, and it was a great way to say thanks to the employees. We’d been working on this for a long time, and we wouldn’t have been able to do it without our people. It cost us a lot of money, but our employees got us to where we are now. It was just a great way to build team unity. Won’t it be tough to top that celebration when you hit $200 million? LOWERY: That’s what they always say. Every year we hold a meeting around July, called ImagePalooza. We always wonder how we’re going to top it, but the next year is always better. It seems the more employees we get, the more excitement 24

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and energy that we have. We usually add in a little something to make it more fun. The first year our theme was, “The FarOut Affair.” Everyone dressed as hippies, an artist did henna tattoos and we even had VW buses, one of which was made to look like a coffee shop with coffee and brownies. Honestly, they were normal brownies. We had a Crosby, Stills and Nash-type band and served beach burritos. Last year, we had a Motown theme. When we get to $200 million, we’ll have to come up with something big. We work hard to create an environment in which people feel energized, engaged and enabled. In doing so, we make it fun, which is one of our elements of Applied Chemistry. If people are having fun, they’re a lot more productive. I would put our productivity up against any dealership out there. What sets Applied Imaging apart from the competition? LOWERY: It’s not any one thing—it’s everything. At the heart of it is the level of service that we deliver. A brand-new customer left a voicemail the other day, raving about how our delivery person was so friendly and helpful, and showed them how to use the machine. The delivery people from the customer’s previous two vendors never said a word to them or showed them how to

You’ve had much success with traditional marketing, especially radio advertising. What other methods of marketing have worked well for you? LOWERY: Advertising drive-time radio in the morning has been huge. Ian Crockett goes out with our marketing team to interview people for the radio spots. It’s not us talking about how good we are, it is customers talking about what we’ve done for them. That’s really been instrumental to our success. We also do a lot of events that help promote our brand and culture. One of the most popular is our tailgate party for the annual Michigan-Michigan State college football showdown, which we’ve done for 11 years now. This year, we held it a day before the game, with 750 clients visiting us in the western Michigan and Detroit offices. It’s really grown from the first year, when we had about 180 guests. Over the years, we’ve

John Lowery, Applied Imaging continued on page 26

We Saw It In ENX Magazine



Motor City Magnificence: Detroit Dominance Enables Applied Imaging to Surpass $100 Million that when someone calls into Applied Imaging, they never get transferred. We don’t want to leave anyone hanging on hold; we take ownership of that call. We receive about 11,600 service, supply or sales call requests per month, and every single one of those is satisfied when they call in. To me, that is an impressive stat. People like the human touch. Applied Imaging made the Inc. 5000 list of fastest-growing companies. What have been your keys to organic growth?

In a nod to its partnership with the ArtPrize international art competition, Applied Imaging employees showcase a colorful exhibit

had cheerleaders and former players from both schools show up. Longtime Michigan broadcaster Frank Beckman has attended. It’s like any other tailgate party, where you can drop in, have a sandwich, chili dog and a beer, talk trash and have a really fun time. We do a great job of promoting it. We’ve also done some Hubspot campaigns that have turned into great lead-generating opportunities. We have 60 service vehicles on the road, all wrapped with our logo, which helps with branding. People often mention how they’ve seen our vehicles everywhere. You’ve opened three branch offices in the last two years. What has been the reason behind your success in Michigan? LOWERY: We do a lot of business through our website, and we work hard to make sure it’s effective. That’s important, because 65-75% of the time, people visit our site before calling. The site is easy to navigate and contains case studies, which paints a picture of who we are as a company and what it’s like to be a client. We built a world-class facility three years ago that has a Google-like feel to it, which has been a great marketing tool. We just purchased a 65,000-square-foot building in Detroit that has the same feel. 26

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On the second floor, we have a customer loyalty center, with a 100x200 video wall. You can see every call that comes in and what the average wait time is on the call. About eight years ago, we did a study that found about 75-80% of the calls that come in are for either service or supplies. So, we combined our dispatch people and supply folks. That helped them cross-functionally learn each other’s jobs. We wanted to make sure

LOWERY: We had not planned to be in Detroit, but we hired technicians and, for about four years, we serviced accounts in the area. We felt it was a pretty good market for us, and decided to move into the Detroit area. That Brighton branch was doing about $1.5 million when we started, but now we’re at $40 million. We have about 4% market share and believe we can get to 10%, because there are some great organic opportunities in that city. At 10% share, we can get to around $110 million just in the Detroit area alone. Toledo, Ohio, is another market that offers great potential. Some people think it’s an old community, but there are a lot of companies and manufacturing

A prize wheel with the chance to win gift cards was among the features at ImagePalooza continued on page 28 We Saw It In ENX Magazine


Rhinelander Mississauga

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Motor City Magnificence: Detroit Dominance Enables Applied Imaging to Surpass $100 Million happen. We think we will add about $20 million in acquisitions this year. Our goal is to get to $112 million without any acquisitions, and the acquisitions will push it close to $135 million. Based on what we know about those companies, we can add another $20 million in the years that follow. Suddenly, $200 million is not that far away.

Applied Imaging employees pose for a group photo during the company’s ImagePalooza celebration

in the automotive space. We think we can grow it from $4 million to about $10 million. In some of these markets we’ve entered, dealers either weren’t doing a good job with production print, or they hadn’t sold it at all. We have a really robust production print group, our Pro Team that does a fantastic job. Michigan and northern Ohio holds great opportunities for us. What was the impetus behind launching ShredHub? How has it fared so far? LOWERY: It’s important to encourage those people within your organization who are entrepreneurial; otherwise, they will look elsewhere. We have a sales rep who fits that description, so I asked him and one of my sons to start a division that sells wide-format to serve the AEC marketplace. We researched it and thought it was an OK idea, but they came back and said, “John, we think your idea stinks.” They thought we should be in the shredding business. I told them to put together a pro forma to determine what they think they can do, what the ROI would be and when we could expect to break even. They were a little aggressive in their projections, but (last December) we broke even. We bought a truck, got certified and have been doing it for a year and a half. We thought it was a 28

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natural addition to our business—we’ll help you create the document, then we’ll help you successfully destroy and recycle it. Now we have two trucks for on-site shredding. It’s been a nice business with recurring revenue. We think it’s something we can scale to a pretty good size here in Michigan and the other markets that we serve. Will you be active in the M&A space in 2020? If so, what qualities of a dealership would fit well with your business? LOWERY: We’ve worked on deals in which the firm was losing money or the environment was bad. If our gut feeling tells us that it’s going to be good or we think we can turn it around, we’ll pull the trigger. We bought some companies that weren’t making money at all and we were able to turn them around, which was the case in Brighton. We’re looking for dealers that will get us into a new market and either carry our product or another good product line. The cultural fit is really important; their values should overlap with ours, which makes the assimilation process easier. We feel like we speak Midwest pretty well, so the opportunities for us could be beneficial in a lot of markets. We have teed up about $50 million in acquisitions, and there’s a lot of work to do to make it

What was your dealership’s greatest accomplishment in 2019? LOWERY: Hitting $100 million was a huge milestone for us, and something we’d been talking about since 1997. Also, we have a couple of people who are departing from our leadership team, and I am looking to transition the business to my boys, Casey and Kyle, who are active in the business. We recently put the finishing touches on a six-year plan that outlines how that’s going to happen. We’re starting to execute on the plan now. What was the biggest challenge you faced in the past year? LOWERY: Prior to reaching the $100 million mark, we’d committed to doing the party. It came down to the wire; we reached it about a week before the Sept. 30 end of our fiscal year. It would’ve been crazy to have the party without hitting the mark. We had a big celebration that day with champagne. I did a video, during which I actually hid the computer to do the billing on the last hours that put us over $100 million. It was very intense in the second half of the year. We were focused on what our total pipeline was and how we were going to achieve those results. A year ago, we added Salesforce, and that really helped us in terms of being able to have vision into what the pipeline had with all the deals taking place. It’s really been a great tool for forecasting and helping us move our business forward. What are your goals for the next 12 months? LOWERY: Our financial goal is $112 million, and integrating our acquisitions is really critical. We have the changes

We Saw It In ENX Magazine


coming to our leadership team, and the transition is taking place now, with the new people taking part in our leadership meetings. It took us 32 years to get to $100 million, but I think we can get to $200 million within five years. Looking out 10 years from now, I can see us being a $400 million dealership. What do you like most about your job? LOWERY: I love the people and can’t think of a single day I didn’t enjoy coming in to work. We believe that either you’re an aging company or a growing company. Our foot is on the gas pedal all the time. We’ve got a great group of people who love to dig in and compete. The business is much more interesting now than at any point in the past. There are so many opportunities for growth, solutions and other streams of revenue. Outside of work, what do you do for fun? LOWERY: Sandy and I have 10 grandchildren between our three kids, and we love spending time with the family. Last weekend, we attended seven games—either basketball or hockey.

Applied Imaging's Grand Rapids, Michigan headquarters since 2016

Outside of golfing and skiing, fly fishing is a great hobby. We fish for trout in rivers and big lakes in Montana, Idaho, Wyoming and all over Michigan. Fly fishing is difficult; it gets your mind off of work because you have to concentrate on what you’re doing. Community

service is also important to me. Whether it’s going out and doing something for a charity or being on the board of directors of an organization, it’s all about doing things to help the community move forward. We try to give back as much as possible. ♦

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February 2020 | www.enxmag.com

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Erik Cagle

Channel Insight

Amid Chaos and Turmoil, a Defiant Clover Imaging Group Battles Back “Everything under heaven is in utter chaos; the situation is excellent.” – Mao Zedong

I

f Jim Cerkleski assembled an old-fashioned scrapbook that covered the gamut of everything that transpired during 2019 with Clover Imaging Group (Clover Imaging) and its former parent company, 4L Technologies, he might have been tempted to toss it in the garbage before mid-year. After all, 4L was buckling with a debt load of approximately $640 million, and rumors circulated that the company had few alternatives, would be declaring bankruptcy and perhaps closing its doors.

Chairman Cerkleski and his management team had other aspirations. As the demise rumors continue to swirl, Clover Imaging acquired the assets of bankrupt LMI Solutions. And in response to a manufacturer trying to undercut reman prices, Clover Imaging counter-punched with a Silver Bullet program that provided dealers with up to 30% off current pricing for converting OEM imaging supplies accounts to Clover remanufactured cartridges. Touché! Finally, in late November, Cerkleski and Clover Imaging’s executive leadership team announced it had struck a deal, backed by Norwest Equity

THE MANAGEMENT TEAM HAD A PLAN; WE KNEW WHAT WE WERE DOING THE WHOLE TIME. ACQUIRING ONE OF THE REMAINING THREATS IN THE REMANUFACTURING INDUSTRY WAS REALLY IMPORTANT. – Jim Cerkleski But Cerkleski, the executive chairman of Clover Imaging, knew his company didn’t ascend to the elite level of printing cartridge remanufacturers by going down without a fight. Clover Imaging was blessed with good bones—a quality managed print program, not to mention a hard-charging division in Amplify that helps partners develop effective websites and drive inbound marketing—to complement its reman cartridge platform. Perhaps most importantly, Clover Imaging lays claim to a workforce that was fully invested in what the company was looking to accomplish. Despite the utter chaos envisioned by Chairman Mao, 30

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Partners (NEP), to purchase the business unit from 4L Technologies. The deal capped the realization of a three-year quest for Clover Imaging to dictate its own destiny. A new dawn and era has been ushered in, and for Cerkleski, the excitement offered by the future is even more compelling and gripping than the fear and uncertainty that followed the firm the past three years. And, as he will attest, the sleepless nights are a thing of the past. Cerkleski was able to squeeze out a little time to recount the trials and victories that shaped 2019 for Clover Imaging, and provide a snapshot of the company’s fear-free future. We Saw It In ENX Magazine

Jim Cerkleski, Clover Imaging

2019 was an exciting year for Clover, culminating with its acquisition by the executive leadership team. Can you talk about the enthusiasm it has generated, and share a sneak peek at some of your plans? CERKLESKI: Everybody is enthusiastic and I think the focal point is the financial stability of the company. One day we’re staring down $640 million in debt, then we wake up the next day with a debt structure of about $100 million. Well, the monkey is off of our back. We’re getting back to the basics of business without the distractions that we’ve had for the last three years. We started this process of potentially selling the company in 2016. You can imagine the burden it puts on a management team, the finance team and our employee base. I think the enthusiasm we have now is incredible. We made the decision as a team to still have our annual leadership summit. Coming off the news of an imminent bankruptcy and with news swirling around about the company, having the leadership summit was probably the best

continued on page 32



Amid Chaos and Turmoil, a Defiant Clover Imaging Group Battles Back thing we ever did. It was important to get in front and tell our leadership team what’s really happening and why they want to stick with this company. I can’t emphasize enough how great the leadership team was in keeping everybody fully informed during the process. A lot of people could have walked out on this company, but not a single person left. It’s about the whole organization having faith in knowing the leadership team was going to produce a result beneficial to everybody—our customers, vendors and employees. Everybody won in this restructuring, and not a single vendor lost one penny. Going forward, it’s all about servicing the customer.

in the imaging supplies market, you acquired the assets of LMI Solutions. Can you talk about the message this sent to the office technology dealer/ reseller space? CERKLESKI: It was extremely important to our management team to get that deal done, given the noise in the marketplace that indicated Clover was in imminent bankruptcy danger. That put a lot of people in their place, those naysayers who said we were done and going out of business. The management team had a plan; we knew what we were doing the whole time. Acquiring one of the remaining threats in the remanufacturing industry was really important.

A LOT OF PEOPLE COULD HAVE WALKED OUT ON THIS COMPANY, BUT NOT A SINGLE PERSON LEFT. IT’S ABOUT THE WHOLE ORGANIZATION HAVING FAITH IN KNOWING THE LEADERSHIP TEAM WAS GOING TO PRODUCE A RESULT BENEFICIAL TO EVERYBODY—OUR CUSTOMERS, VENDORS AND EMPLOYEES. – Jim Cerkleski One of the watershed moments for Clover Imaging this past year was its partnership with Norwest Equity. Can you provide some insight into the genesis of the relationship and why NEP was the right fit for what you want to accomplish? CERKLESKI: NEP has a deep understanding of this niche sector and shares the same confidence we have in the aftermarket imaging supplies industry and consumers’ demand for environmentally-conscious products like ours. Its knowledge of the space is probably the greatest out of any private equity firm that performed due diligence on our business. NEP was excited, and felt it was important that we were getting back to our roots. The right capital structure is really important to this investor, which doesn’t believe in putting a lot of leverage on businesses. That is what we wanted in a new partner. The business was bought at a very fair valuation, and that ultimately got us across the finish line. At a time when much speculation was circulating regarding Clover’s viability 32

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It also underscored our confidence in the future of the remanufacturing industry. We see great opportunity in the sustainability movement and our ability to offer businesses a circular solution that lessens the environmental impact of print. From collecting empty cartridges to remanufacturing them and then offsetting paper consumption through reforestation, we offer a solution that helps companies become more environmentally sustainable and cut printing costs. This past summer, when the financial struggles of 4L Technologies came to light and the company began exploring its strategic options, Clover Imaging pledged business as usual and delivered on that promise. Can you talk about the focus, determination and leadership that have been the underpinnings of Clover Imaging? CERKLESKI: During all of this chaos and turmoil, we were going through this restructuring while our teams were able to acquire the assets of LMI and integrate them and the customer base into Clover’s system. Since we didn’t run on LMI’s

system, we integrated everything into our systems in less than 20 days. It goes to show the capabilities of the management team at Clover and everybody executing on every level. And there wasn’t a single customer disruption. There was unbelievable execution by our leadership team on the operations and customer service sides. That leadership and the management behind our company was the lightbulb for me to double down and invest back in this space. During the course of the year, Clover rolled out some aggressive programs, such as Silver Bullet and Jumpstart, aimed at end-user conversion and 0% financing terms. How have they been received by resellers? CERKLESKI: Our Silver Bullet program was launched to counter HP’s Quick Silver program. We are telling customers, “Don’t forget, 80% of the marketplace is OEM, so go ahead and convert that to remanufactured and put an additional 20 to 30 points of margin in your pocket.” With our Silver Bullet program, dealers are actually getting higher margins and their customers are winning. Our program has been extremely effective in that we’ve converted hundreds of end-users from multi-year contracts. You recently revamped Clover Imaging’s website to make it easier for dealers to garner leads and increase revenue. In what ways is the new site more effective, and what kind of feedback have you received from resellers? CERKLESKI: For the past nine months, we’ve been working on revamping our website with the goal of making it a onestop resource for our partners. We’ve added relevant content, downloadable marketing collateral, blogs, industry news, multimedia and information about all of our products and services. It’s been really well received. Internally, reps can use it as a sales tool, while externally, our partners are able to see all the stuff we can give them to help them sell quicker and easier. We’ve also added a lot of functionality. Our goal

We Saw It In ENX Magazine


is to make it as streamlined as possible for them to purchase product, and an example is estimated delivery date by ZIP code. Now partners can get really granular in knowing exactly when their customers will receive product. We also added cost per page for laser products to better illustrate cost savings. Also, our improved chat service makes it quick and easy for someone to ask a question when they’re in the buying process. Amplify has been generating a lot of buzz for the work it has done to strengthen the websites, lead generation and marketing endeavors for numerous companies. What is the secret sauce behind its blueprint? CERKLESKI: Blue Technologies, which has done close to a million dollars since its relaunch, is a great example of customers that are really leveraging sales and marketing together with their businesses. This dealer has a great plan as far as what its salespeople are doing out in the field, and we’re supporting them through Amplify’s efforts. We’re doing that for 46 companies throughout the industry. We’ve helped Impact Networking and other large industry leaders, and we’re really just trying to drive content, sales leads and brand awareness in the marketplace. Amplify is really there to help our customers sell the entire depth of their business portfolio. The biggest thing our customers say is that from day one, they’re working with a marketing agency in Amplify that understands their business. Most dealers will hire a local marketing agency and need to spend the first month of the relationship explaining what they do and how they do it. When we walk into that first meeting, we know all the questions to ask and can pretty much put together a plan after a couple of meetings. How do you see Clover evolving technology- and strategy-wise over the next few years? CERKLESKI: We’re going to continue to focus on MPS and helping our dealers. I think one of the really exciting solutions we are rolling out is our auto supplies management. The proprietary solution that we’ve built is really a game changer. It works for both our

MPS partners and our transactional partners. It’s what I like to call “MPS light.” I think that strategy of ours will catch on more and more with those dealers that have technology capabilities, but don’t want to go full bore into having to dispatch a technician to turn a screwdriver. A lot of the A4 printer manufacturers are building devices to be throw-aways. HP’s most-popular printer, the M404, has a dealer cost of $180. Dealers are buying them and putting them into large installations for $250. It costs that much to do a service call. You can just replace the printer. Thus, auto supplies management becomes so important, more than it does for an MPS platform.

time during the last two years in board, restructuring and operational meetings. Now we can really spend time and focus on our customers. A second objective is paying down debt, which is the most important thing we can be focused on as a restructured company. We have very low leverage, low debt, but we want to go into 20212022 debt-free, which would make us very nimble so that we can be positioned to make acquisitions. For 2020, I don’t think you’ll see us making any deals, unless it’s an LMI-type of situation in which the company is highly stressed. We’ll be focusing on educating our partners on the value of our MPS platform and how it will help them

MOST DEALERS WILL HIRE A LOCAL MARKETING AGENCY AND NEED TO SPEND THE FIRST MONTH OF THE RELATIONSHIP EXPLAINING WHAT THEY DO AND HOW THEY DO IT. WHEN WE WALK INTO THAT FIRST MEETING, WE KNOW ALL THE QUESTIONS TO ASK AND CAN PRETTY MUCH PUT TOGETHER A PLAN AFTER A COUPLE OF MEETINGS. – Jim Cerkleski The AI and machine learning that our IT team is doing for our partners has been amazing. We provide a data analysis of their supply chain, and they can’t believe the information that we’re able to provide for them. The AI platform that we developed for Clover Imaging and turned into a technology service that we are able to provide our customers is absolutely a game changer. Microsoft praised Clover Imaging for what we’ve developed internally during the last 10 years, and suggested we sell it into the Microsoft world. They have started looking at the solution we developed with them to take it to their customers. We’re building a group beyond our normal IT team that will sell this solution to the office products industry, the BTA space and anybody that has inventory to distribute. What are your goals for 2020 and what will you look to accomplish? CERKLESKI: We want to focus on getting back to our partnerships, really spend time with clients and understand their needs as either an MPS provider or a transactional provider. The senior management team spent far too much

We Saw It In ENX Magazine

lock in transactional business. We think there’s a great opportunity to further penetrate the $700 million federal/ government market. And we’re taking the message of our environmentallyfriendly printer cartridges directly to businesses and consumers. What a difference one year can make. Can you compare and contrast Jan. 1 and Dec. 31? CERKLESKI: So many people in our organization are sleeping a lot better now. The stress level of what we went through during the last 12 months, compared to where we are now, changes your entire mindset. Unless you live and breathe it, it’s impossible to understand the stress that we were under. Every day was a fire drill. Now we can focus on the things we need to accomplish, which is really exciting. That holds true for a lot of our people, not just the senior management team. Those pressures were so immense; they roll downhill and distract everyone. The pressure is off, it’s a new day and we can channel all our energies into what is really important to the business—our customers. ♦

February 2020 | www.enxmag.com

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Erik Cagle

Business Profile

Hytec Dealer Services Uses Dealer Programs, Technical Proficiency to Dominate Circuit Board Space In Orlando, Florida, there’s a magical place where the unimaginable is possible and dreams can become reality. Its customers always rave about the experience, and more likely than not, a huge smile crosses their face with almost child-like glee in the aftermath. Should they ever return—and most vow they will—they can be assured of complete and utter satisfaction.

W

e’re talking, of course, about the happiest place in the world of printed circuit boards (PCBs): Hytec Dealer Services. Parking is free, but clients never actually step onto the property or pay $8 for a Coke. There’s nothing goofy about this 35-year-old provider of component-level support and solutions to nationwide dealer field techs. Hytec’s proficiency is a highly specific and technical one. Ever since its beginning as a spinoff from Delta Business Systems, when it performed circuit board repairs for Canon and Sharp equipment, Hytec has sought to make life easier for its dealer partners and their field techs in the trenches. Today, the company provides repair and replacement board services for virtually every manufacturer serving the office technology universe. In fact, Hytec is authorized by Canon, Sharp, Toshiba, Ricoh and Konica Minolta, but it also supports Kyocera and HP—with an eye toward becoming authorized in the future—notes Emily Rodriguez, sales manager for the company’s dealer division. The authorized status is no small matter when it comes to circuit board repairs and replacements. This is critical in enabling field techs to improve and maintain their first-call effectiveness. “We get the manufacturer’s schematics and engineering support, and have access to all of their technical publications, modifications and software that they’re sending out. Not to mention we’re using genuine OEM parts,” Rodriguez noted. “That keeps the dealer UL-compliant and makes for a better product, better repair and a solution that’s going to last longer in the field. 34

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We collect the repair diagnostics and share them with the manufacturers on a quarterly basis. So their engineering departments and support groups can look at the data that is critical for determining if they need to make modifications on a specific product.”

Nuts and Bolts of Boards

Hytec is hardly a one-trick pony. Roughly 75% of its business covers circuit boards, staplers, fusers and server repairs. The company also offers replacement hard drives for imaging products, along with data security services—Hytec Drive Secure—for wiping hard drives clean and, if needed, destroying the drives in a large industrial shredder (more on this shortly). In addition to supporting office technology dealers, Hytec has branched out into other verticals with the same servicing needs, including banking (ATM machines), retail and medical, among others. Making life easier for customers by acting as a one-stop resource in these technical areas, particularly for multi-line dealers, is one of Hytec’s chief objectives. Just last year, the company inked an exclusive distribution agreement with AMETEK Electronic Systems Protection to provide their line of power filters. “We thought it was a good combination to provide full-circle support to dealers with solutions to protect equipment from outside electrical influence, along with technical support for troubleshooting problems and repair options,” Rodriguez said. All of Hytec’s “magic” begins with its 130-plus crew of talented professionals housed in the company’s 60,000-square-

Emily Rodriguez, Hytec Dealer Services

foot facility. Their task? Providing the service and support that enables dealer partners to reduce costs in their own service divisions. Rodriguez credits company President Eric Auman with the way Hytec has grown and flourished by listening to the needs of customers while educating and training its force to deliver quality service, backed by the latest technology. Of course, it certainly helps to have tenured team members, and Hytec’s technical department members boast an average of 10 years with the firm. This is critical in a niche industry that calls for a particular technical acumen. “We have been able to develop specific skill sets that are not really learned elsewhere, because our industry is so different and unique,” she said. “We’re always striving to see how we can improve our game. When we’re on the road at trade shows or visiting dealers, we listen to their pain points and ideas to make their jobs easier. Then we bring those ideas back and work on different ways to serve them more effectively.”

We Saw It In ENX Magazine

continued on page 36



Hytec Dealer Services Uses Dealer Programs, Technical Proficiency to Dominate Circuit Board Space

The front office crew of Hytec Dealer Services (front row, from left): Aixa Ledee, account representative, northeast region; Emily Rodriguez, sales manager, dealer division; Bonita Keith, account representative, northwest region; Jennifer Amatucci, vice president, business development. Back row: Derek Haberman, account representative, southeast region; Rene Karr, account representative, southwest region; Eric Auman, president and CEO

One of the top selling points behind the Hytec value proposition is absolutely free. The company offers technical support, gratis, to client techs in the field. Rodriguez points out that the offering in no way tramples on the feet of manufacturer support; the Hytec support merely speaks to component-level repairs and electrical issues on the board. The managers, supervisors and team leads who answer the phone at Hytec are technically proficient and don’t need a manual to help remediate issues. Since the company has all of the machines of their authorized OEMs in house, they can refer to the specific boards to help walk the tech, by phone, through the troubleshooting process. “Sometimes, it’s not even a board— it’s a switch or a connector—and that’s something our techs can suggest and fix the problem right over the phone,” Rodriguez said. “Other times, if it is the board, our techs can help them pinpoint what specific board needs to be ordered to fix the issue.”

Tailored Solutions

Hytec has devised a pair of programs that foster smoother interactions with its clients and ensure the necessary repairs and replacements are dispatched correctly and efficiently. Through the Advance Exchange program, dealers can receive a repaired circuit board by the next business 36

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day, either shipped to the dealer or the technician in the field, backed by Hytec’s stock of roughly 80,000 repairable parts in its inventory. Dealers receive a prepaid return label for the defective parts to be sent back within a 30-day window, giving the field tech ample time to remediate the issue. Customers can also track their account and returnable commitments through the Hytec website. Additionally, customers can avail themselves of the Board Bank program, in which Hytec manages the customer’s inventory from its warehouse. Boards sent in for repair are returned to the client on an as-needed basis, reducing the dealer’s overall board inventory and the upfront inventory purchasing costs. Dealers can view their inventory on hand and monitor transactions to and from their Board Bank. On the strength of its rigorous testing, Hytec is able to provide a one-year warranty on all of its board repairs. That’s where its commitment to quality and customer satisfaction shines through. “For years, dealers purchased stock and held inventory for if and when PCBs would fail,” Rodriguez related. “They would carry that cost upfront. Over the years, Hytec has built an extensive inventory to have available for dealers to fulfill by the next business day. This drastically reduces the need for them to purchase new inventory.

“We partner with the manufacturers to support their green initiative of the reuse of PCBs with their authorized repair programs. Dealers can now rely on authorized repair opportunities when genuine OEM parts are used and repaired, and are updated to the latest revision, through our coordination with the manufacturers to be able to provide cost saving solutions to the dealer network.” Hytec Drive Secure is a protected process ensuring that hard drives that are to be either wiped clean or completely destroyed are done so to the DoD standard. Hytec, which is bonded and insured for providing the service, then provides the dealer/end-user with a certification that states the information on the board has been completely eliminated of data. The same holds true for the company’s industrial-sized shredder; a certificate of destruction is provided following the physical demolition of the hard drive. Rodriguez notes that the company has witnessed something of a decline in this field, as modern devices have the capability to automatically wipe a hard drive clean. However, Hytec has found a more-engaged client base in trucking companies that remove MFPs and printers when the lease expires. This client group is more likely to offer the data-destroying service to end users. Moving forward, Hytec seeks to forge partnerships with other leading industry manufacturers, as well as complementary part/component providers such as AMETEK. The firm will also be seeking out further technical support tools that furnish dealers with additional ways to reduce costs. Hytec has been working with manufacturers recently on wideformat and production machines to ferret out complementary areas in which to offer field support. “When we partner with our customers, we can always work to create additional savings,” she said. “They have been instrumental in creating new programs or services, such as online reporting. We’ll continue to build those relationships and look to bring them services and programs to help benefit their organizations.” ♦

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Sally Brause

Candidate 2.0

Understanding Today’s New Prospective Employee: Candidate 2.0

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Digital Age Represents a Behavioral Shift in How People Find Jobs, and Not All Approaches Are Alike

eet Sarah. Sarah is a hard worker who comes in early, stays late and willingly gives her discretionary effort to get the job done no matter what. She’s a steward of the values aligned with the culture of the company for which she currently works. She’s a team player and, by all accounts and measures, someone you definitely want on your team. What’s the problem with Sarah? Well, she’s employed elsewhere and simply isn’t looking for other employment opportunities. Now meet Jose. He’s been successfully performing in his role for the past five years, but over time, things have started to pile up for him. Several team members have turned over, causing disruption to the business, and underperforming team members have gone unaddressed. Jose’s direct manager is highly assertive, consistently avoids taking ownership and recently turned Jose’s process improvement idea away because he “didn’t have the time for it.” If there was a breaking point in Jose’s willingness to remain in his current role, this was it. He’s beginning to think it’s time to explore other career options.

Say Hello to Candidate 2.0

Both Jose and Sarah are candidate 2.0—the high-caliber candidate in today’s digital age—and very likely the candidates you want to join your team. Candidate 2.0 represents a shift in behavior in terms of how prospects find jobs. Many of your customers do their research and are 70% through the buying process before you even know they exist. The same is true for candidate 2.0! They will likely know a lot about your company before they ever express interest in one of your job openings. 38

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Your challenge is to get on their radar and stand out above other employment opportunities they may be considering.

What Today’s Market Looks Like

Nowadays, the job market is predominantly candidate-driven for a few key reasons: • The steady state of unemployment is the lowest we’ve seen in 50 years. • The immediate access to information via the internet gives candidates more power to make informed decisions. • Technological advances have led to hyper-connection—people will make their decisions based on the online experience as well as the experience of others.

What does this mean for you, the employer? If you want to attract Sarah or Jose, you’ll need to shift your talent acquisition strategies.

Start by Answering Their Questions Before They Ask!

Borrowing a concept from They Ask, You Answer by Marcus Sheridan, you can place yourself ahead of other potential employers by being proactive. Your goal is to embrace the questions your top candidates may be asking and be open and honest in answering them. Below is a list of questions candidates typically have and considerations for how to answer them.

Candidate 2.0 Questions Answer Considerations What is the job? Highlight what a day in the life of Sarah’s new job looks like and what makes the role special and exciting. Ask your top performers what they enjoy most about the role, and use this knowledge to attract other top performers. Successful people want to know the yardstick for How will success be measured? performance, so be prepared to share expectations. Are there career Highlight stories of how employees have advanced in advancement their careers while working for your company. Better opportunities? yet, create and share career paths for the various roles. What is your company Be transparent. What values and beliefs are important? culture? How do employees describe the environment? Why do your very best employees choose to stay? What types of people don’t fit in? What flexibility for work/ Jose will work hard and put in the hours needed to be life balance exists? successful, but he may want the flexibility to leave work to meet other life demands. Does your company allow for this? If so, under what conditions? What does the hiring Having a well-defined and structured hiring process process look like? leads to the greater likelihood you will hire a successful employee. Share this step-by-step process with candidates and commit that you will be timely in both your communication and decisions. continued on page 40 We Saw It In ENX Magazine


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Understanding Today’s New Prospective Employee: Candidate 2.0 Candidate 2.0 Questions Answer Considerations What is the compensation Be prepared to answer this question because it will for this role? come up at some point in the process. Feel free to include general insight into what is included in total compensation, such as commissions, bonus opportunities, contests, spiffs and awards. Many companies share a range for the role, or if you’re hiring for a sales role, share what an average employee can expect to make and what a high-performing employee can expect to make. The key is set realistic expectations. What company benefits This is the place to showcase all you offer! Think do you offer? beyond the medical and dental benefits to things like volunteer time off, company celebrations, sporting teams sponsored, etc. How does this company Giving back to the communities where employees live make a difference? and serve is meaningful to them. Highlight how your company positively impacts the lives of employees, customers and communities. Will I be able to make an Jose and Sarah want to know they make a positive impact? difference. Share how they can do that in their roles! What is the leadership As you read earlier, a primary reason Jose is leaving is style at the company? due to his leader. Be transparent about your leadership philosophy and how you expect leaders to behave when leading their teams.

Help Candidate 2.0 Find Your Company

The great candidates, like Sarah and Jose, are walking past your digital storefronts every day. Some are reaching out to you, and others are waiting for you to reach out to them. Your prospective candidate should have a very robust awareness journey in which they are engaging with your company, even if only at the superficial level. A consumer often needs up to eight touch points with a brand before making a purchase decision. Similarly, candidates may need multiple interactions to learn about you as an employer before deciding to apply.

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That is why you need to create relevant and interesting content as part of your storefront that candidates can engage with on their awareness journey.

Let’s Look at Potential Journeys Our 2.0 Candidates Could Take

Sarah: Remember, she’s happy in her job and not looking on job boards to see what other opportunities are available. She will find out about your company through other channels. Below is Sarah’s awareness journey.

Jose: He follows a different awareness journey since he is ready to find a different job.

Tie Your Employer Brand into the Awareness Journey

In today’s competitive hiring environment, having an employer brand is becoming increasingly critical. In fact, 80% of talent leaders agree that employer brand has a significant impact on their ability to hire great talent. Your employer brand is the market’s perception of your company as an employer and describes your employee value proposition to candidates and employees. The good news is there are a

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lot of ways to get your employer brand in front of Jose and Sarah, as depicted above. CAREERS PAGE. If you don’t already have a prominent careers page on your company website, you should. Jose and Sarah will undoubtedly go to it, as that type of page is the number-one resource candidates rely on when researching companies. Make sure your careers page can be easily found from the home page, highlights your culture and fosters an easy job application process. And of course, post the answers to the top questions most candidates want answered when seeking you out as an employer.

makes a difference, community involvement, culture, awards won and what a day in the life of your company is like. BRAND AMBASSADORS. Every one of your employees can be a walking billboard for you as an employer. Teach them how to connect with potential candidates or others who can refer candidates to your company, and prepare them to talk about career opportunities. Who better to answer questions about the leadership of the company, the benefits, how they can make an impact and the culture?

JOB POSTINGS. Stand out from the myriad of other listings by highlighting your company culture, what make the job so interesting and what they get in return for their contribution.

THOUGHT LEADERSHIP. The Candidate 2.0 group is full of learners. They seek out knowledge to make them even better. You have experts in your company who should write blogs and articles to share content that candidates find useful.

SOCIAL MEDIA. LinkedIn, Twitter, Facebook, YouTube and Instagram are all great places to answer candidate questions such as how your company

COMPANY REVIEWS. Candidates proactively seek these out, so pay attention to what is being posted about your company online. These reviews

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may rate your company or comment on many of the questions candidates want answered. If your company receives a negative review (which happens to every company at some point), respond authentically to the concern.

Make a Long-Term Relationship Your Goal to Hire More Candidate 2.0s

Like Sarah, some candidates are not ready to make an immediate career change. But if and when they are, you want your company to be top of mind! How do you do this? By nurturing your candidates throughout their journey. Make their experience top priority— switch your mindset: instead of quickly converting applicants into hires, create a full experience that delights them. This takes place when the experience is personalized and intentional, creating a positive attitude toward you, the prospective employer, and ultimately, the successful acquisition of Candidate 2.0! ♦

February 2020 | www.enxmag.com

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Erik Cagle

Perspective

When Money Is the Prime Motivation: Next Level Impacts CEO Keith Roher on the Art of Wooing Sales Reps

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rom the perspective of an industry dealer, sales representatives pose no challenge in assessing the characteristics that drive them. It doesn’t take a Rorschach test to understand that all they’ll see in the ink blots are dollar signs. And despite the laser focus behind their motivation (or perhaps because of it), the office dealer rep can be toughest to maintain from an HR perspective. The promise, or prospect, of greener pastures keeps them constantly eyeing the neighbor’s yard. Yet, like any other employee, a salesperson wants to feel valued and appreciated beyond the compensation package.

work, so that means it’s a buyer’s market for currently employed job seekers. Outside of compensation and benefits, how can dealers paint an attractive picture to prospective employees? ROHER: It depends on the type of candidate they are trying to attract. We have a client that likes to grow its own base, and they’re searching for college graduates who have a year or two of real-world experience. For that type of candidate, a number of companies have been toying with offering student loan relief that is tied to a number or a gate they need to achieve.

NUMBER ONE, YOU CAN ACCEPT THAT IN THIS INDUSTRY—AND NO ONE WANTS TO HEAR IT—YOU’RE GOING ANYWHERE FROM AN 18-24-MONTH PERIOD WHERE YOU’LL HAVE A TURN. IT’S JUST A NATURAL EVOLUTION. – Keith Roher We’ve turned to Keith Roher, CEO of advisory/recruitment firm Next Level Impacts, to share a few ideas that transcend the monetary component of the employment proposition. A former top executive with Zeno Office Solutions, Roher offers some insight into how dealers can make themselves more attractive to the top-performing salespeople, from altering their compensation structure to changing the approach for evaluating interview candidates. National statistics note that there are more available jobs than there are people out of 42

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The debt relief may be paid out over the year, perhaps quarterly, with limited strings attached. This entails getting to know the candidate beyond the typical questions. You find out what the candidates are striving for in life. When they start talking about long term and purchasing something big, there’s always a ‘but’…there’s the money thing. When you ask them if they’ve paid off their student debt, 90% of the time the answer is no. They’ll say it’s a low-interest/ no-interest loan that they’ll pay off over the next 10 years. I tell them “No, don’t give them We Saw It In ENX Magazine

Keith Roher, Next Level Impacts

any interest. What if we could pay it off now?” That way, they can spend time growing their net worth. But the first step is paying off that college debt. This is something a dealer needs to factor in when the presidents and VPs are doing their annual budgets. For one, it’s a nice talking point, and two, if college debt relief is mentioned in the listing, it will get someone’s attention. For the more mature reps, some of the bigger dealers want us recruiting from the competition for experienced people. For them, and I’m not a fan of this, more and more dealers are offering flexibility for working remotely. The company car is also a big incentive for reps. Brad Rollins at Dahill did a good job of that for many years, and they were nice cars like BMWs. Again, there was a number tied into it, and more often than not, it worked well for Brad. We’ve heard about how millennials like to constantly

continued on page 44



When Money Is the Prime Motivation: Next Level Impacts CEO Keith Roher on the Art of Wooing Sales Reps change careers to avoid being mired in the same position and stagnating. How do we, as dealers, keep our employees inspired and challenged?

the latitude and flexibility. The reward threshold could be a number, a revenue or profit gate, or a gate for the number of appointments they set for the month.

ROHER: I’m torn. There’s no option: you have to have millennials, and in the next two years they’re supposed to represent about 70% of the workforce. Number one, you can accept that in this industry—and no one wants to hear it—you’re going anywhere from an 18-24-month period where you’ll have a turn. It’s just a natural evolution. Yes, there are some people you will be able to promote and get them into the management ranks. But those roles are few and far between, and some of them aren’t ready for it. They’ll be looking for the shiny next object, and then they will bounce on you. It goes back to the cultural standpoint—keeping it fresh

In your opinion, what aspect of a dealer’s hiring process most commonly needs to be revisited? ROHER: The assessment testing slows down the process. Not that you want to hire fast, but some of these dealers are hard-core maniacal when it comes to assessment tests. I believe there’s some value to them, but to drag out an interview process and go back and forth because of a test…I’m just not sold on it. I did it for a long time, and there are pros and cons. They’re great coaching tools that all dealers should use posthiring, but not in making the decision. I can see if you’re on the fence about a candidate and they score just horribly.

I THINK THE INDUSTRY’S ENTIRE COMPENSATION PLAN NEEDS TO BE OVERHAULED. EVERYONE’S STILL USING A SIMILAR PLAYBOOK FROM 10 YEARS AGO. IT’S DEFINITELY A BUYER’S MARKET. – Keith Roher and fun, and maybe exercise a little less micromanaging. I had a rep who was with me for 25 years at Zeno, and she would write $1 million a year in business. When I was building Zeno, I was a stickler for everybody having to be in the office. I had to see them every day. Over time, after maturing some as a manager, I realized that we obviously can’t treat every rep the same. When I got this person to come over from a competitor, her big thing was working from home. She said she’d be in the office, but she liked working from home and got more done on the phone. I said prove yourself, and once you’re consistent, I don’t care. That was it. The moral of the story is, give reps gates, then reward with little things like the ability to work remotely. They value not having to come into the office the first thing every morning for a meeting that could have easily been handled in an email. Reps enjoy 44

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That’s a good sign not to hire the person. But I have dealers who will interview youngsters and love them. But a week later, when the candidate doesn’t score well on the assessment, the dealer will say, “Oh, we can’t hire him.” I put more weight on a field test, where the manager goes out in the field with the candidate. Too often, they’ll do an assessment test and not a field test, which I feel is a mistake. Let’s say the test comes back and the candidate’s closing skills are below the industry benchmark. My question is, what’s the closing-skill ratio of the manager in charge of that rep, based on the benchmark? If it’s low, then how is he going to develop the sales rep you end up hiring? If they base their decision on the assessment, then I feel they need to rethink and be retrained on how to use it. As we are well aware, salespeople are generally driven by income potential.

With other industries offering higher salaries, how can we sweeten the overall compensation package? ROHER: I think the industry’s entire compensation plan needs to be overhauled. Everyone’s still using a similar playbook from 10 years ago. It’s definitely a buyer’s market. Let’s say I have a client that needs to place five reps in different markets, and like many dealers today, they’re open to going outside of the industry to find them. When you start going after ADT, Cintas, SaaS or managed services reps, these salespeople are getting between $45,000 and $65,000 in salary. Meanwhile, I’ve got dealer clients with salaries still starting at $36,000 or $40,000, and that factors in a car allowance. Some dealers are gravitating toward paying a higher salary with less on the gross profit, which is more competitive. When dealers budget going forward, I think they would have more success in getting a betterquality candidate if the salaries were higher. What I usually see out there is $50,000 for entry level, maybe less in the Carolinas. But when you hit Florida, Texas, California and the Northeast, it becomes more difficult to poach away reps from another industry. When they hear $40,000 to $45,000 for salary, the answer is “no way.” We’re walking them through the commission piece, the upside and why it’s more aggressive. That’s easy for us because we know the business. But when you’re asking a 25-year-old from another industry to come on board at a starting base of $45,000 when he already has a $62,000 base, it doesn’t resonate. Social media, particularly LinkedIn, has bolstered our ability to find candidates, but it also ushered in the age of résumé saturation bombing. At what point does it become most advisable to enlist the services of a recruiter? ROHER: Look at your EBIT line and your year-over-year performance for the last three years. Even if you are flat, then you’re doing well. But we know

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there’s no way you’re flat. Unless you’ve done acquisition, you’re probably going backwards. The number-one focus needs to be increasing rep productivity, and that’s what I stress to dealer owners. If you have 10 salespeople and they’re averaging $50,000 a month over a 12-month period—which is the magic number—then look to get them to $51,500. The benchmark for hardware is usually 42%, so imagine if all 10 reps were getting an additional $1,500 a month. That’s $15,000 a month and $180,000 a year. When you do the math on that at 42%, this amount ($75,600) drops to your bottom line. That needs to be the focus of your company. To improve rep productivity, there has to be development. A lot of dealers I work with have their own internal recruiters. If you have a recruiter, he or she is calling and going to college/job expos; they’re good for that. But when you’re trying to recruit from a competitor or another business technology-type sales organization, that’s when you need to hire the professionals. This is

…WHEN YOU’RE TRYING TO RECRUIT FROM A COMPETITOR OR ANOTHER BUSINESS TECHNOLOGY-TYPE SALES ORGANIZATION, THAT’S WHEN YOU NEED TO HIRE THE PROFESSIONALS. – Keith Roher what I’ve spent my life building. I understand what dealers are looking for and I know how to ask the right questions. Anytime I hire new recruiters, I sit in on calls with them for 90 days until I let them do their own recruiting. But whoever a dealer chooses, they first need to look at their EBIT line and top-line number. What makes Next Level Impacts special is we are good at rooting out passive candidates. There’s a lot of selling on our part. Not to pat ourselves on the back, but I don’t think there’s another recruiter that can do what we do for the copier business in terms of pulling people over from other industries. We’re selling the comp and the commission piece hard. I’m able to help candidates break it down. But there’s a lot of work involved.

Are there any talking points or trends we should be following as 2020 garners steam? ROHER: For the copier community to continue to try to thrive, there has to be a sexier service these guys can offer beyond copiers and printers. When I talk to dealers, they say, “No, these are the basics, the fundamentals, and we’re sticking to them.” But their top- and bottom-line revenue suggests taking a different approach. A lot of youngsters coming out of college who want to get into sales are really excited about an area such as cybersecurity. They love the sophisticated technology. The best part is, dealers don’t have to be the ones truly supporting it; they can rely on third-party providers. To me, that’s a cool talk track to use. ♦

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45


Larry Breed

Assessments For Hiring

Who Makes the Grade? Tips on Using Talent Assessments in the Selection and Development Process

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Psychological assessments and personality tests have been around for years. I first learned about them in a Lanier sales training class a long time ago. That’s when I first learned that I was (and still am) a task-oriented extrovert who is motivated by results and ROI.

ore importantly, I learned how to recognize the basic buying styles of my prospects, as well as how to adapt my sales approach to theirs to build relationships that led to more sales. A talent assessment can save interviewing time and help you make better hiring decisions by minimizing guesswork and gut-feeling decisions in the screening and selection process. A sales talent assessment can determine if a candidate has the attitude, work ethic, behavior, personality, motivation and driving forces needed to be successful in sales, and what type sales position they are the best fit for. Take a look at some of the information included in a sales talent report for office systems sales people: A. BEHAVIOR/PERSONALITY—HOW they sell? Do they have the same sales behaviors that 71% of top office systems salespeople have in common? What type of sales position is the best fit for their selling style and personality? B. MOTIVATION/DRIVING FORCES—WHY do they sell? What are the driving forces that get them up in the morning and cause them to work hard? Do they have the same motivation that 72% of the top office technology salespeople have in common? C. SALES KNOWLEDGE/SKILLS—CAN they sell? What do they know about prospecting, first impressions, qualifying, presentations, buying styles, influencing, closing and account management? And here are some ways to use talent assessments in the selection and development process: 46

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1. Screening and selection: poor selection is the number-one cause of turnover. Most people are hired for their knowledge, skills and experience (what they know and can do). However, most people are fired for their unacceptable attitude and behavior, neither of which can be determined completely and accurately from résumés, interviews and reference checks. A good talent assessment can help you reduce interviewing time and expense, make more informed hiring decisions and reduce expensive turnover. 2. Training and development: companies waste a lot of time and money training the WRONG people. Training: A turnover study by two major universities found that companies spent five times more on training as they did on selection, while 76% of turnover was due to poor selection and only 24% from poor training. It might be time to rethink your training budget and allocate some of it to hiring the right people to train. Traditional sales training typically includes product knowledge (what we sell) and selling skills (how we sell). Both are important, but rarely are sales people trained in sales psychology (how and why buyers buy). Sales reps who understand their selling style and different buying styles, and incorporate that knowledge into their sales strategies, will gain a significant competitive advantage. A good professional sales talent assessment can help salespeople understand their natural selling style, the different buying styles of prospects and how to adapt their selling styles to sell more effectively to all types of buyers.

Coaching: Most sales professionals who experience an occasional sales slump haven’t forgotten how to sell, but might have merely lost sight of the attitude, behavior and work habits required to be successful. A sales talent assessment and coaching report can diagnose the cause for a slump and recommend a strategy to move forward. 3. Retention: the lifetime value of a major account can be huge, but it pales in comparison to the lifetime value of a top sales performer. Making a poor hiring decision with a new rep that leaves after a few months is expensive and disappointing, but the cost of losing a top senior sales performer can be astronomical. A sales talent assessment is invaluable in coaching, motivating and retaining top sales performers. 4. Sales management: good sales managers are worth their weight in gold; but poor ones can do more harm than good. Unfortunately, success as a sales rep does not automatically guarantee success in sales management. This can result in a double loss by exchanging a top sales producer for a mediocre sales manager. A sales talent assessment can help you and your sales reps objectively identify their sales and management strengths and challenges before you make a change. “People tend to leave because of their managers, not because of their companies.” (Gallup) Another major cause of turnover is job stress often caused from being miscast (not a good fit) or mismanaged (poor direction, mentoring, etc.). Given the cost to recruit, hire and train sales people, it makes a lot of sense to use a thorough

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sales management talent assessment with your current and future sales managers. This can help them understand their own skills and those of the individual members of their sales team to maximize everyone’s productivity. 5. Team-building: the most-effective teams have members who understand themselves, as well as each other. By understanding the keys to communicating with others based on behavioral styles, team members can become more effective and increase overall productivity. A team talent assessment will help you detail the strengths, weaknesses, problem-solving abilities, communication preferences and potential areas for conflict within each of the behavioral styles on the team. By recognizing, understanding and appreciating these factors, the team can achieve increased productivity and overall team cohesiveness. 6. Job benchmarks: setting standards can help manage expectations. Business owners everywhere are seeking better ways to find the talent necessary for their business success.

Jobs, and the specific talents of the people who fill them, are the unique building blocks of that success. But how can you discover the specific talents required for a job and match them with the talents inherent in a person? All positions have unique requirements for on-the-job behavior. For example, the employee behavior required for a customer service job’s work environment would likely include tactful decision-making, the ability to contact many people, patience, diplomacy and having a cooperative nature. In addition, all jobs have inherent rewards and a predominant culture that drives performance excellence. When the job’s rewards and culture match those of the person who will be performing the job, the result is excellence. Using job benchmarks has benefits that help keep you and the people you hire happy. • JOB SATISFACTION—job-related talents are directly related to job satisfaction. • HIGHER PERFORMANCE—people are better positioned to achieve success when they are engaged in work suited

for their natural behavioral styles and values. • LOWER TURNOVER—people are less likely to leave an enjoyable and challenging job. When it comes time to benchmark your company’s positions, here’s a helpful approach you can follow: 1. Identify the job to be benchmarked and select one to three subject-matter experts who know what it takes to be successful in the position. 2. Have each person complete a job benchmarking questionnaire about the knowledge, skills, behaviors and attitudes they feel are necessary to be successful in the particular job. 3. Have the group meet to discuss and agree on what knowledge, skills, behaviors and attitudes are required for job satisfaction and superior performance. 4. Use your benchmark to screen, compare and select future highperforming employees. The right talent in the right job equals top performance and employee satisfaction, which is exactly what every company wants. ♦

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Trade Show News

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www.enxmag.com | February 2020

We Saw It In ENX Magazine


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