February 2018 Office Technology

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CONTENTS Volume 24 • No. 8

FEATURE ARTICLES The Dealer Perspective

10 Views shared on ‘The

Great Industry Reboot’

P R I N C I PA L I S S U E S Modifying Our Thinking

34 Stubbornness is found

between the plan & failure

by Christine Dunne Keypoint Intelligence-InfoTrends

by Ray Stasieczko BEI Services

In the January issue, Keypoint Intelligence’s Randy Dazo discussed “The Great Industry Reboot.”

While that article focused on manufacturer initiatives and interviews, this article will center on office technology dealer perspectives on the industry’s transformation.

I want to discuss some thoughts based on my observation of the differences between the imaging channel and the IT services channel. Because the two channels are quickly moving closer together, I believe it is time for the imaging channel to modify its sales and service processes.

The Year Ahead: Part Two

20 Dealers share strategies for success in 2018

Empower 2018

36 Laserfiche holds event

Jan. 9-12 in Long Beach

Compiled by Brent Hoskins Office Technology Magazine

by Elizabeth Marvel Office Technology Magazine

What do you believe will be the areas of greatest opportunity for office technology dealers in 2018? What do you believe will be the best strategies for pursuing those opportunities? Recently, Office Technology magazine asked these questions of dealers via an email survey.

Overnight Growth

27 Should you consider buying another dealership?

Focusing on how its software and solutions can help transform processes in businesses and the public sector, Laserfiche hosted its Empower 2018 conference Jan. 9-12 at the Long Beach Convention & Entertainment Center in the company’s hometown of Long Beach, California.

Great Service

37 Standing out among

competitors is a process

by Jim Kahrs Prosperity Plus Management Consulting

by Troy Harrison Troy Harrison & Associates

Recently, it seems there have been announcements of dealership acquisitions on an almost daily basis. All of this activity has led many dealers to ask the question: “Should I be considering an acquisition?” The simple, off- he-cuff answer is “yes.”

COURTS & CAPITOLS 30

The New Tax Laws The Tax Cuts and Jobs Act will affect every taxpayer

by Robert C. Goldberg BTA General Counsel

Although Congress still needs to clean up the Tax Cuts and Jobs Act that was signed at the end of 2017, it is clear it will affect every taxpayer. Each member should consult with his (or her) accountant or tax advisor regarding the significant changes in the tax code.

Everyone says they have the best service. When everyone says it, it is meaningless. And, yet, there are businesses — lots of them — where service is their main differentiator from competitors. Making your “great service” stand out is a three-step process.

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

31 • BTA Highlights

• BTA Education Calendar • BTA Member Benefits

6

Executive Director’s Page

8

BTA President’s Message

38

Advertiser Index

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EXECUTIVE DIRECTOR’S PAGE

Dealers Share Best Strategies for 2018

W

hat do you believe will be the areas of greatest opportunity for office technology dealers in 2018? What do you believe will be the best strategies in pursuing those opportunities? Recently, I asked these questions of dealers via an email survey. Thirteen of the replies appeared in the January issue of Office Technology. The remaining 24 replies received appear on this page and continue on page 20. I hope the responses will help guide you in your business.

Opportunities: Thebest opportunities are digital document management and workflow.

Strategies: Off r a full turnkey solution from basic storage to enterprise solutions for the SMB market. Th se services may include: workflows; OCR; scanning services; Microsoft SharePoint; scalable document software; Google Drive and Microsoft One Drive — all built into the MFP, so that printing and storage is done simultaneously, allowing access from multiple devices, locations and people.

— Mike Gray, president, On Demand, Houston, Texas Opportunities: Without a doubt, software solutions are the greatest opportunities.

Strategies: Uncover how clients are currently handling those challenges/opportunities with regard to their document management, or lack thereof.

— Jerry Jehn, president, Waltz Business Solutions, Crestview Hills, Kentucky Opportunities: I think the greatest opportunities for dealers will be in solutions provided to customers, such as print management, document management, etc.

Strategies: The best strategy to do this will be to work closely with customers, explaining the current technology available to

them and how it can help their businesses.

— Tom Dimon, vice president, Northern Business Systems, Fairbanks, Alaska Opportunities: As dealers, we need to look more at managed IT services and software/solutions for customers in 2018.

Strategies: We are working on building an IT and solutions team, along with having support from our manufacturer.

— Earl W. Philpot, president, Precision Duplicating Solutions Inc., Lexington, Kentucky Opportunities: I believe managed services will continue to be the greatest opportunity throughout 2018. Thecopier market is still strong, however, many offices are looking for ways to drive processes and productivity without breaking the budget. Managed services off rs your dealership a partnership with the client and a certain “stickiness” too.

Strategies: The best strategy for success is to train, train and train your staff. Look at your people and make sure you have the right people in the right positions. Understand that just because someone may be great at one thing, doesn’t automatically mean they will pick up new services and run with them. Training your people to drive business that fi s your dealership model will allow for a better success story.

— Sam Stone, president, Stone’s Office Equipment Co. Inc., Richmond, Virginia Opportunities: The dealer’s greatest opportunities are going to be the sale and service of the latest technology: copiers, printers, scanners, phones, computers, IT services and networking equipment.

Strategies: Bundle everything into a neat package within a single equipment and service contract, build customer loyalty by providing state-of-the-art solutions and provide aff rdable payments to the customer.

— Dan Castaneda, general manager, International Copy Machine Center, El Paso, Texas n — Brent Hoskins

Executive Director/BTA Editor/Office echnology Brent Hoskins brent@bta.org (816) 303-4040 Associate Editor Elizabeth Marvel elizabeth@bta.org (816) 303-4060 Contributing Writers Christine Dunne, Keypoint Intelligence-InfoTrends www.keypointintelligence.com Robert C. Goldberg, General Counsel Business Technology Association Troy Harrison, Troy Harrison & Associates www.troyharrison.com Jim Kahrs, Prosperity Plus Management Consulting Inc. www.prosperityplus.com Ray Stasieczko, BEI Services www.beiservices.com

Business Technology Association 12411 Wornall Road Kansas City, MO 64145 (816) 941-3100 www.bta.org Member Services: (800) 505-2821 BTA Legal Hotline: (800) 869-6688 Valerie Briseno Marketing Director valerie@bta.org Brian Smith Membership Sales Representative brian@bta.org Photo Credits: Bigstockphoto. Cover created by Bruce Quade, Brand X Studio. ©2018 by the Business Technology Association. All Rights Reserved. No part of this publication may be reproduced by any means without the written permission of the publisher. Every effort is made to ensure the accuracy of published material. However, the publisher assumes no liability for errors in articles nor are opinions expressed necessarily those of the publisher.

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BTA PRESIDENT’S MESSAGE

BTA, AIMED Merger Effective February 1

B

y now you may be aware of the merger of the Business Technology Association (BTA) and the Association of Independent Mailing Equipment Dealers (AIMED), which became effective Feb. 1 with all active AIMED dealer members becoming BTA members. On behalf of the BTA Board of Directors, it is with great pleasure that I welcome our newest members.

Long known as the only organization dedicated to the interests of independent mailing equipment dealers, AIMED has provided countless opportunities for its members to experience tremendous growth in profit and business value by working together. The merger with BTA is simply the next chapter of AIMED’s support of its dealer channel, now providing its dealer members the opportunity to take advantage of BTA’s extensive resources.

AIMED, which was founded in February 1976, will continue to have focused programs and initiatives for mailing equipment dealers under the leadership of its board of directors, including the continuation of its annual conference. This year, the conference will take place in conjunction with BTA’s Capture the Magic event, hosted by BTA West, which is scheduled for Dec. 6-7 at The Venetian Las Vegas. More details will be announced in the coming months.

Most of AIMED’s founding members were ex-Pitney Bowes service technicians who launched their own businesses, supporting mailing machines in their local markets.

Striking out on their own as independent business owners off red tremendous opportunities, but also signifi ant challenges.

The founders sought to work together to find ways to create a level playing fi ld on

which to provide good services at fair prices for their customers.

In the early years, AIMED’s members were a very creative group. When it was diffi ult to find someone to sell them parts for the machines they serviced, several members became manufacturers. One member found a way to mold rubber feed tires, another made sealing brushes and another formulated sealing solution. Selling to and supporting each other was a key part of surviving in the early days.

Eventually, thanks to the persistence of its members and the support of Bob Goldberg (yes, Bob has served as AIMED’s general counsel as well), AIMED won many battles to create a more level playing fi ld where its members could not only survive, but thrive as business owners. Eventually, companies such as Friden (now Neopost), Hasler (now part of Neopost) and FP Mailing Solutions entered the U.S. postage meter marketplace and came to AIMED to find dealers for their sales and distribution networks. AIMED members transitioned from being independent service companies primarily selling used equipment to full-service suppliers of new and used equipment.

Fast forward to 2018. Like some aspects of the office technology industry, the overall market for mailing equipment has matured and declined with the increasing use of electronic communication. Consequently, AIMED dealers have worked diligently to adapt and innovate, diversifying beyond the mailing machine to off r a wide variety of other equipment, products and services.

Given the transitioning nature of the industries served by AIMED and BTA, this merger makes perfect sense. Again, we welcome AIMED’s dealer members to BTA and look forward to an exciting future, working together for the mutual benefit f all. n — Dan Castaneda

2017-2018 Board of Directors President Dan Castaneda International Copy Machine Center El Paso, Texas dan@icmc-elp.com President-Elect John Eckstrom Carolina Business Equipment Inc. Columbia, South Carolina johne@cbesc.com Vice President Bob Evans Function4 Sugar Land, Texas bobevans@function-4.com BTA East Jim Donnellon Donnellon McCarthy Enterprises Cincinnati, Ohio j.donnellon@dme.us.com Tim Seeley Jr. Seeley Office Systems Inc. Glens Falls, NY tseeleyjr@seeleyoffice.com BTA Mid-America Erik Crane Copy Products Inc. Springfi ld, Missouri ecrane@copyproductsinc.net Greg Quirk JQ Office Equipment of Omaha Inc. Omaha, Nebraska gquirk@jqoffice.com BTA Southeast Tim Renegar Kelly Office Solutions Winston-Salem, North Carolina trenegar@kellyofficesolutions.com David Polimeni Rite Technology Sarasota, Florida dpolimeni@ritefl.com BTA West John Hines Copiers Northwest Inc. Seattle, Washington jhines@copiersnw.com Mike Brandon ABC Office Equipment Co. Inc. Spokane, Washington mbrandon@abcoe.com Immediate Past President Rob Richardson Allied Document Solutions & Services Inc. Swedesboro, New Jersey robr@ads-s.com Ex-Officio/General Counsel Robert C. Goldberg Schoenberg Finkel Newman & Rosenberg LLC Chicago, Illinois robert.goldberg@sfnr.com

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The Dealer Perspective Views shared on ‘The Great Industry Reboot’ by: Christine Dunne, Keypoint Intelligence-InfoTrends

I

n the January issue of Office Technology, Keypoint Intelligence’s Randy Dazo discussed “The Great Industry Reboot” that has occurred over the past two to three years within the office technology industry. While that article focused on print equipment manufacturer initiatives and interviews, this article will center on office technology dealer perspectives on the industry’s transformation.

The dealer perspectives come primarily from Keypoint Intelligence’s United States Office Channels Survey conducted in November 2017. The web-based survey questioned 179 IT decision-makers within dealerships and other office technology outlets on their familiarity with OEM initiatives, their opinion of their potential impact and ways they are rebooting their businesses — among other topics.

What is “The Great Industry Reboot”?

As a refresher, “The Great Industry Reboot” is a phrase coined by Keypoint Intelligence to explain the signifi ant office technology industry transformation that has taken place over the last few years. It describes a convergence of industry shifts that have prompted nearly every manufacturer to realize the need for change, realign and reset its strategy and, in some cases, undergo signifi ant change.

Th se industry shifts include the move from analog to digital, and the move toward selling software, solutions and, eventually, services. While these changes have created innumerable opportunities, they have also created challenges that are forcing the need for new strategies.

n Brother: Its new B2B strategy delivers “Workhorse” devices along with a new organization dedicated to these new customers and channels. n Canon: The company’s “One Canon” strategy focuses on developing better solutions and services for customers and channels, while also improving efficiencies within the organization. n HP: HP’s strategy is to “disrupt the office” with its own, newly acquired A3 technology; PageWide inkjet technology; and a new focus on office technology channels. n Konica Minolta: The company is doubling down with a highly diverse portfolio of IT services, production and manufacturing solutions, and has a new focus on the “Workplace of the Future.” n Lexmark: The company’s acquisition by the Chinabased consortium of Apex Technology & PAG Asia Capital has given it the strength and investment power to expand, as well as be more flexible with partners. n Ricoh: Ricoh is refining and reforming its structure to grow and become more profi able, focusing on strategic initiatives to transform and position its organization for the future. n Sharp: Its acquisition by Foxconn provides Sharp a seat at the table with big players like Apple, Amazon, Google, Intel and Microsoft — allowing it to deliver products and services in the “smart office.” n Xerox: Divestiture of its services organization allows it to focus on core technologies; it delivered 29 new products in 2017 along with new workplace assistants and apps.

Examples of manufacturer reboot initiatives During the first phase of our industry reboot research, we interviewed senior-level executives on their companies’ transformative initiatives. Following is a synopsis of their eff rts:

What do office technology dealers & IT resellers know about reboot efforts?

Overall, Keypoint Intelligence’s latest survey found a fairly high level of familiarity with diff rent print manufacturers’ reboot initiatives among independent office technology

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dealers and IT resellers (see Fig. 1 on this page).

Knowledge of HP and Xerox eff rts was particularly high (75 percent and 69 percent, respectively), while the majority of channel partners also claimed awareness of eff rts by Brother (66 percent), Canon (63 percent), Samsung (61 percent), Sharp (59 percent) and Epson (56 percent).

The emphasis on HP and Xerox likely reflects the strength of their marketing divisions, as well as the particularly dramatic changes these entities have undergone in recent years. While office technology vendors do not necessarily need to know the latest strategies of brands they do not sell, this information can only help them in competitively positioning their particular off rings.

Furthermore, it can inform them of other product or service categories they may eventually choose to start off ring.

What do independent office technology dealers know about reboot efforts?

When looking at office technology dealer responses in particular, it appears that, on the whole, they are more informed about manufacturer reboot initiatives (see Fig. 2 on this page and Fig. 3 on page 14). For instance, while just 46 percent of all office technology dealers and IT resellers were familiar with Konica Minolta’s new strategies, 60 percent of small office technology dealers and 63 percent of large office technology dealers said this was the case. This could reflect the fact that office technology dealers tend to have relatively tight relationships with manufacturers that help them stay abreast of industry news and initiatives.

It is also worth noting that decision-makers at large office technology dealerships (i.e., companies generating at least $10 million in annual revenue) were more likely to report awareness of manufacturer strategies. This may partly be due to the tendency of larger dealerships to have more resources to track industry developments. The behavior of smaller entities, meanwhile, may depend more on the proclivity of the dealership principal. Furthermore, larger dealerships may be more likely to go head-to-head against OEM direct sales teams and/or have the means to invest in new technology.

How do independent office technology dealers & IT resellers believe reboot strategies will impact their businesses?

Office technology dealers and IT resellers were asked how the manufacturers’ new strategies will or could impact their businesses (see Fig. 4 on page 14). For most of the initiatives, the most common response was they will not

have an impact on their businesses. To some extent, this is a reflection of whether the outlet carries the brand in question. Nevertheless, there appears to be more at play here.

Whether office technology dealers and IT resellers are satisfi d with their current portfolios of off rings and/or do not believe the new areas present the same level of opportunity demands further investigation.

That said, overall, respondents were more likely to say the strategies will have a positive impact on their businesses as opposed to a negative impact (usually at more than a 2-to-1 ratio). Perhaps they appreciate the possibility of having new products, services and processes at their disposal, even if they do not immediately take advantage of them. The fact that a good chunk of respondents (about one-fifth overall) do not know how the OEMs’ new strategies could impact their businesses is understandable, and perhaps representative of an opportunity for OEMs to better communicate their endeavors to channel partners.

How do independent office technology dealers & IT resellers believe reboot strategies will impact the industry?

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While office technology outlets may acknowledge various OEM initiatives will not impact them directly, overall they are slightly more likely to say the initiatives will impact their industry (see Fig. 5 on page 16). For instance, 52 percent say HP’s eff rts will impact their businesses, compared to 56 percent who believe they will impact the industry. This particular survey question did not ask respondents about the type of impact taking place — whether positive or negative. The list of manufacturers viewed as most impactful — HP (56 percent), Brother (53 percent), Xerox (51 percent) and Samsung (42 percent) — is largely consistent with the level of familiarity attached to the manufacturers’ new initiatives, as well as the manufacturers’ perceived impact to the office technology dealers’ and IT resellers’ businesses. This suggests that increased marketing and communication may play a role in the perceived importance of a particular initiative or brand.

Similar to the previous question, there is a substantial percentage of channel partners unaware if new manufacturer strategies will impact the industry. This is not that surprising, particularly given some of the new categories manufacturers are getting involved in (e.g., robotics, predictive analytics and managed IT). While certain initiatives will undoubtedly impact the larger information technology market, it may be difficult for dealers and resellers to see the overall correlation between the initiatives and the print business specifi ally. Furthermore, some of the OEM initiatives are more abstract or unclear than others, potentially making it more difficult to determine their likely impact.

What areas of print are independent office technology dealers & IT resellers investing in?

It can be helpful to consider the survey questions above amidst a backdrop of where office technology dealers and IT resellers are focusing their efforts and investments (see Fig. 6 on page 16). When asked where in the print space they see investments or growth in their businesses (in the next three years), respondents most commonly reported one-shop print/copy solutions and services. In other words, they are investing in resources to become more complete document solutions providers. This could include technology like production print devices, software for document management and staff with managed print expertise.

Color printing also ranks highly, reflecting the signifi ant

opportunity for the increased revenue and profit associated with color devices and supplies. While this particular initiative is much more popular among office technology dealers as opposed to IT resellers, contractual supplies selling appears to be a greater area of focus among IT resellers. This may correspond with the fact that strict supplies selling does not necessarily require servicing or consultative expertise — capabilities that some resellers may lack. Indeed, the greater interest in production printing and wide format printing among dealers speaks to their deep knowledge of print technology.

Another notable finding is expectations around e-commerce. Around one-third of all respondents cite this as a growth area for their businesses; this is especially the case for large dealerships (41 percent) and resellers (41 percent). With Keypoint Intelligence’s latest multi-client study showing that more than half of U.S. SMBs purchase ink and toner online, it is clear that customer buying habits are shifting toward e-commerce. Dealerships and other location-based resellers can balance their brick-and-mortar advantages with online services that cater to customers. Online selling also represents an opportunity for office

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technology outlets to expand beyond their traditional customer bases.

What areas outside of print provide the greatest opportunities for revenue growth?

Office technology dealers and IT resellers were also asked about growth opportunities outside of print. As shown in Fig. 7 on page 18, they are most likely to see opportunity in the areas of workflow and business process solutions (38 percent), managed IT services (37 percent) and security services (35 percent). It is first worth noting that more respondents considered print/ copy solutions and services (50 percent) and color printing (41 percent) growth opportunities in the previous question — underscoring the continued importance of print to the office technology channel. That said, workflow and business process solutions appear particularly opportune for small office technology dealerships (48 percent) and small IT resellers (45 percent). Large offi e technology dealerships, meanwhile, see the greatest opportunity in the area of managed IT services (44 percent), while large IT resellers are most bullish about security services. The emphasis on services among larger vendors coincides with their greater capacity (in general) to hire service IT experts and technicians.

Vertical market expansion appears to be another relatively promising area for small office technology outlets. Indeed, it would not be surprising if organizations within their geographic coverage areas had a need for sector-specific solutions for growing and improving their businesses. Smaller outlets can tout the advantages they provide in terms of a presence in and familiarity with the region.

For instance, they may understand how a specific type of logistics software could cater to oil companies in Houston, Texas. Another notable finding is the perceived importance of mobility to small IT resellers. Indeed, with the proliferation of mobile device use in businesses, it is only natural solutions for these devices are growing in demand. And, given their IT heritage, IT resellers are often more likely to have the ability to design this kind of solution. This particular survey question also reinforces the importance of acquisitions to large office technology dealerships as a source of revenue growth.

How do office technology outlets plan to differentiate their businesses in the next few years?

Keypoint Intelligence also asked respondents about their plans to diff rentiate their businesses in the next three

years (see Fig. 8 on page 18). Respondents were most likely to be planning investments around expansion of services (41 percent), solution sales (38 percent), sales training (37 percent) and internet sales (36 percent). The focus on solutions and services is consistent with the emphasis on print/ copy solutions and services, and workflow/business process solutions discussed above. Many office technology outlets understand that solutions sales that go beyond printer/MFP selling and servicing are important for maintaining and growing the relevance of their businesses. It is worth noting the high focus on services expansion and sales training among small office technology dealerships. Indeed, these organizations are perhaps less likely to have already made these kinds of investments given their size and resources.

Yet, they have a services heritage given their experience servicing print devices.

The fact that large office technology dealerships have strong investment plans for both services expansion and solutions sales (as well as solutions specialists) is likely a testament to their customer demands. Larger dealerships tend to serve larger customers; larger customers tend to have a wider breadth of needs. Larger IT resellers are least

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likely to be investing in services expansion and solutions sales, which may tie into previous investments, as well as a smaller emphasis on services among resellers.

Fig. 8 also shows that small IT resellers are most likely to say they are investing in internet sales. It is interesting to compare this percentage (47 percent) with the percentage that plan to invest in e-commerce within the print space (16 percent; see Fig. 6). This disparity suggests that online selling is considered a larger initiative for this group as opposed to a specific strategy for the print division. The opposite is true for small office technology dealerships. Th y are more likely to be investing in e-commerce for print (35 percent) as opposed to internet sales in general (29 percent). Th se results are also likely a reflection of the areas of focus for these diff rent channel categories.

What do all these results mean?

The data presented in this article provides much food for thought for dealers, IT resellers, manufacturers and others active in the office technology industry. One clear takeaway is that while the independent channel mostly views “The Great Industry Reboot” as positive, some manufacturers could do far more to get the messaging recognized. In fact, as the office communication world changes, it is vital that the channel receives guidance on direction from its leading suppliers.

In addition to strengthening communication, manufacturers have an interest in helping channel partners in their diff rentiation processes — whether they are within the IT services space, e-commerce arena or another priority area of focus. Providing their partners with tools to tackle these new spheres can help them address the price and margin pressure many are feeling in their core businesses.

Of course, dealers and resellers can also seek out more resources from their partner manufacturers, as well as make an eff rt to stay educated on key industry developments. Furthermore, they can continually reevaluate their current relationships to ensure they make the most sense for their businesses. Indeed, channel partners continue to have much choice in who to partner with. With this in mind, it is important that manufacturers continue to nurture channel relationships and build on their partners’ core competencies. n Christine Dunne is a consultant for InfoTrends’ Office Technology & Services Group.

For more components of Keypoint Intelligence’s latest

channel and industry reboot research, contact Randy Dazo at randy.dazo@keypointintelligence.com or Dunne at christine.dunne@keypointintelligence.com.

The United States Office Channels Survey, for instance, addresses such topics as the level of satisfaction with brands, business inkjet trends, perceived business threats, the impact of the internet on traditional channels, device retirement trends and the mix of OEM versus third-party supplies carried.

Dazo can also be contacted for insights into the OEM interviews conducted as part of this study.

As mentioned above, this included conversations with senior-level executives at Brother, Canon, HP, Konica Minolta, Lexmark, Ricoh, Sharp and Xerox.

As part of its advisory services, multi-client studies and consulting work, Keypoint Intelligence provides actionable intelligence on a wide variety of other office technology-related topics — including vertical markets, marking supplies, document software, print hardware, scanning trends, industry news, industry events, and market sizing and forecasts.

Visit www.keypointintelligence.com.

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The Year Ahead: Part Two Dealers share strategies for success in 2018 Compiled by: Brent Hoskins, Office Technology Magazine

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hat do you believe will be the areas of great opportunity for office technology dealers in 2018? What do you believe will be the best strategies in pursuing those opportunities? Recently, Office Technology magazine asked these questions of dealers via an email survey. Following are a number of the responses received.

Responses also appear in the Executive Director’s Page column on page 6. In addition, responses appeared in the January issue. Perhaps comments shared by your fellow dealers mirror your plans — or provide new ideas.

Opportunities: After years of talking about it, “solutions” is finally a nice niche in a dealer’s life. It still isn’t the catch-all it was promised to be two years ago. Like the unicorn and the paperless office, a solution for every account simply does not exist. But, we have sold between $480,000 and $600,000 the past two years, which was like adding an additional productive territory.

Strategies: We only became successful when we added a dedicated sales rep whose sole purpose is working with the sales reps on solutions. We pay the rep a nice finder’s fee and the solutions guy takes over the sale. The big win for the rep is how much more difficult we are to replace in his account.

Mike McGuirk, president ProCopy Office Solutions Inc., Tempe, Arizona Opportunities: The greatest opportunities are software solutions; color output; production print; and managed network services.

Strategies: The best strategy for software solutions is to hire people who understand the solutions you want to sell; you should limit the products to what you know — don’t try and be the company that sells everything. Th se people should be both pre- and post-sales. In color output, make

sure you understand what the customer wants to accomplish. For production print, you have to have people who understand workflow and who are very good at accomplishing what these customers are needing; it is not just the system, it is what they want from that system. And, for managed network services, have people who can handle all levels of what the customer needs. You need a strong help desk and the ability to respond to customer needs quickly.

Barry Simon, president Datamax Inc., Little Rock, Arkansas Opportunities: 2018 will be the year the dealer channel will continue to cross lanes into the managed services space, unifi d communications and cloud services. Xerox Corp. has doubled down on true managed print services and has mounted a full-court press on recruiting more distribution through the multi-brands. I expect to see the Xerox channel being a factor in managing non-Xerox A4 products.

Strategies: Dealers need to recruit and retain CIOs to earn the trust of their clients’ data and how it could be better managed. Clients are more focused on how they can use technology as a strategic advantage that delivers measurable business outcomes. One of the ways we can evolve is to recruit, train and develop good people — better than we ever have before.

Brett Butler, president & CEO Excel Office Services Inc., Culver City, California Opportunities: I believe managed IT, solutions, professional services and production print all provide growth opportunities for us in the upcoming year.

Strategies: Our strategy to enter into the managed IT space was to partner with an MNS provider. This has provided us with the expertise to manage our customers’ IT needs.

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As we continue to grow this business, we looking back, it becomes crystal clear. will add the staff or acquire an IT comIt was a giant leap when PCs started Cloud computing, pany to provide these services internalshowing up and replacing mainframe big data, mobility ly instead of white labeling through our computers. Here is another one for you: and social media ... partners. Our strategy for our solutions Remember how efficient the pager made are each having a business has been to hire a dedicated us? Do you remember the pager? It’s a tremendous impact solutions sales and service staff and to little bit like talking about a typewriter focus our off rings on document manor a fax machine. It is technology that on the business agement, workflow and security. Our has made those items a distant memoenvironment ... solutions business has provided us with ry. Things are moving forward at warp additional revenue from our current speed and we — if we are going to exist customers and increased our success rate in acquiring new in a relevant way — need to get on board or else we will just customers. Our strategy for our print business has been to be part of yesterday’s news. focus on vertical markets where volumes are increasing — Theway people communicate now is in large part through primarily production print, health care and education. social media. Believe it or not, social media is the major way Bob Evans, partner we have access to real-time news. I could give a list of exFunction4, Sugar Land, Texas amples, but I think you all get it already. Facebook, Twitter and a whole host of other avenues are the ways people comOpportunities: Leveraging our managed services model municate, and they are playing more of a role in business and concentrating on business process improvements are communication too. Be prepared. our greatest opportunities.

The term “big data” is second nature to us now, but when Strategies: Education and training is key. Two key pieces: Marc Andreesen, the founder of Netscape, addressed a group Have a dedicated expert and have others who know the ques- of business leaders back in 2013 — just five years ago — he did tions to ask to identify key prospects. not even mention the term. The reason why is simple: It did Tom Minuti, president not exist. It is now something that intrudes into every area of Copy Products, Upper Darby, Pennsylvania our lives. When you do any kind of search on the internet, for the next several weeks you keep seeing ads for the product Opportunities: I believe the greatest area of opportuni- you searched for. It is not a coincidence. Need I say more? ty for the office technology dealer in 2018 is to dig the heels Regarding cloud computing, at one time you had to buy in on technology. We have in front of us what happens to be both computers and software to run your business. Now the biggest thing to hit the American business environment it can all be done by subscription via the cloud. This, too, — even bigger than the introduction of the PC. What is go- is one of those aspects that nobody saw coming down the ing on right now is the convergence of four forces, any one of pipeline 10 years ago. Now the way most businesses are run which would be huge on its own. Cloud computing, big data, has something to do with cloud computing. mobility and social media have all burst on the scene in the One last thing: Once upon a time it was just the “big boys” very recent past and they are each having a tremendous im- that had to worry about the emerging technology. Once they pact on the business environment and, actually, on the tra- had it figured out, the SMB players would be able to jump on ditional business model. Th se phenomena are what have board. Guess what? That is not the way it works anymore. collectively been called “The Perfect Storm.” If you think The solutions are coming out of the SMB space. It becomes you will be relevant in your little corner of the world just be- our job to recognize the need and to come up with a solution. ing better at selling and servicing MFPs, I suggest that you With the incredible speed of progress, if you are comfortable will see much greater pressures on what you have called the just sitting back and waiting, that is the vantage point you “traditional model.” I do not intend to tell a doomsday story will have when the rest of the business world passes you by. here, and there will be some organizations that have really Strategies: Thebest strategy for success in pursuing these refined that process and unseating them will be difficult. opportunities is to align yourself with someone who will Th re are others, though, that are not really trendsetting in help you wade through the deep water and eventually get you their areas; the existence of those companies is going to be floating on your own. Th re are many of them out there; you threatened. Some of these threats will be from lack of vision; can check the BTA website for partners who can help. others will be from a lack of resources.

John Eckstrom, president & CEO As the changes are taking place, it is often difficult to see Carolina Business Equipment Inc. the kind of impact they are having as it is happening, but, Columbia, South Carolina 22 | w­ w w. o f f ic et ec hno lo g y m a g.c om | F e b r ua r y 2 0 1 8

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Opportunities: The real opportunity must make the most of the pages we are The real opportunity is to change the conversation. For years aff rded to manage, and maximize the we have chased the copier upgrade and benefit from them and from the relationis to change the it’s really not about that and hasn’t been ships with our clients. This approach conversation ... They about that for a while. Clients don’t care has proven positive and we have an ap[clients] want to know what brand or manufacturer we reprepearance of more than box slingers. what technology is sent. Th y want to know what technolManaged services, managed security required to improve ogy is required to improve a business services and hardware-as-a-service inprocess, how it fi s in their technology comes had admirable increases for us a business process ... floor plan and what the client experilast year, but they were not really a big ence looks like. Our ultimate goal is to enough piece of the overall puzzle. We assist the organization in its total technology strategy to believe these are enormous areas of opportunity for the ensure optimal compatibility and support. business to capitalize on and we intend to fully invest in Strategies: Our strategy is our people. It starts by hir- those areas. We will continue to evolve our technology stack ing the right people and placing them in positions that al- to align with the business communities we serve and to polow them to flourish. This requires us to have great training, sition the company for the enablement of broader-based and accountability and overall transparency. We spend a lot of future technologies. Managed security services is a great time focusing on the “why” and the purpose of what we do. entry point into clients and a very good conversation starter.

We are playing one big game called “business,” and if you The old break/fix model does not work for us, as we prefer have the right people with an understanding of strategy, the robust revenue streams that can fuel growth, greater experrest really falls into place. tise and advanced technologies. So, we have invested in adChelsey Bode, vice president, ditional personnel for this piece of the business, as well as Pearson-Kelly Technology, Spring field, Missouri more robust services that we deliver. We expect high returns in revenue growth and income in this area as we continue to Opportunities: Each year this question runs through the move up the food chain and satisfy customer demand for a minds of dealers in the channel: “What can we do to maxi- responsive service provider that understands business chalmize our opportunities in the coming year?” The answer is lenges and best practices to protect their IP and businesses. often similar: “Improve this, get better at that, sell more of Strategies: As stated, the strategic plan here relies on inthese … ” Yet, each year brings its own clean canvas to add a vesting in people, processes and partners to improve our delivmix of colors to paint the picture. erables and our market presence. We don’t want to be the best For us, the focus is the same from a strategic perspective, shop no one has heard of, so we have embarked on a pretty but diff rent in the tactics to achieve it. We are in a services- in-depth marketing plan over the last few months to increase led business, yet product sales often determine our mea- name and brand recognition, as well as market presence in surement of success. Product sales continue to drive front- the IT space. We have worked on developing sensible incenend activities in the race to outperform historical results or tive plans for sales and other staff members to bring us new out-maneuver competition. Meanwhile, back-end services opportunities in the MS space, and I believe we’re starting to provide the business with the returns. So, while sales must make headway with our hardware sales team members. Some continue to deliver results, our focus is on further develop- of them are introducing these services into their clients and ing consistencies and efficiencies in the services space. are seeing the rewards from doing so, both monetarily, as well The print-centric division is continually up against the as through reduced competitive pressure from the print side. race to zero from a competitive perspective and is pressed Improved partner relations and a better understanding of to “press on.” The MFP and managed print business is still all the programs available in this space are also key compostrong, although there is a definitive decline in output. The nents. It’s much diff rent than the typical MFP world where hardware manufacturers have increased their capabilities they throw out a special at the end of the month or quarter to to provide “solutions” as they relate to device-centric work- get you to buy big and buy more. This space is all sell through; flows, and we maximize that opportunity with dedicated we inventory very little and that helps keep costs down and specialists in tune with the strengths and weaknesses of ensures we have the latest products (or near latest) moving the apps and introduce them to clients early in the process. through to our client environments. But, it requires that you We gain a credible vantage point by sharing knowledge and are up on all the latest programs available to maximize the are rewarded when we strike a nerve in their current envi- benefi s and can turn them through quickly when the client ronments. We have not entered the production space, so we has a need. Th re is margin in IT product sales if you have a www.offi cetechnol ogymag.com | F e b ru a ry 2018 | 23

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relationship and are providing services. greatest opportunity. As we all know, I believe the strategy The challenge of knowing when you can market consolidation is happening at a get it and on what devices and/or opporvery rapid pace. For many, this will cause of supplying the best tunities is the artist component of sales, concern and, for some, it should. Howcustomer service with as always. Some things go out just above ever, I believe it is a great time to cement professionally trained cost; for some things we can get in excess yourselves further in your home markets. personnel will keep our of 50-percent margins. For us, the key is Strategies: Any time a competitor current customers bundling products into a managed plan; in your market gets purchased, there is profi s are increased at least 30 percent immediate confusion from the existing with us ... or more by providing the products as a employees and the company’s customer part of our services. base. It is a perfect opportunity to show We will continue to improve our deliverables and posi- your stability and tell your story. Disruption in the existing tion the business to be as agile as possible to improve/in- relationship has already happened and it may be the best crease our services to our clients. We are a services-led busi- time for a dealership to capitalize on this disruption. Capiness (and industry) and, so, that will be our focus; increase talizing on this won’t be easy, however, there will never be the services we deliver and the clients we deliver them to a better time. It may also be a time for your dealership to while maintaining consistency and efficiency in doing it. be a consolidator in your market. I know this sounds someNot largely diff rent from years past, just diff rent. what counter to what I’ve been saying, however, if you have Ron Hulett, project manager a well-run organization that can acclimate an acquisition U.S. Business Systems Inc., Elkhart, Indiana quickly and profi ably, it will be an opportunity to enhance your already-known reputation in your market. In either inOpportunities: I believe the greatest opportunities for stance, consolidation could be just the opportunity to take 2018 will continue to be adding more new customers in the your dealership to the next level.

MFP area, as well as new customers to our MSP area. Here, Tim Renegar, president MPS is not embraced by the end user as it probably is in othKelly Office Solutions, Winston-Salem, North Carolina er parts of the country. Adding net-new MFP customers is becoming better for us because a lot of the small businesses Opportunities: In 1999, according to Wikipedia, Kevin that were mom-and-pop operations closed or sold their cus- Ashton coined the term “the internet of things”; this, simtomer bases to companies that claimed to have expertise in ply put, was how all devices and services would connect the MFP arena, but are being compared to what they previ- or share data. I feel that the greatest opportunity for dealously experienced as a customer, and they are not getting erships in 2018 is within the internet of things and the “inthat warm, fuzzy feeling they were accustomed to. tranet of business.” Today, we may rarely make phone calls Strategies: I believe the strategy of supplying the best on our mobile devices, but they are still called phones. Today customer service with professionally trained personnel will our devices do many other things than just make copies. I keep our current customers with us and, hopefully, they will think the greatest opportunity is revealing the other amazwant us to monitor and maintain their networks for them. ing things this thing called a copier does within the internet You could call it a “one-stop shop” I suppose, but I have seen of things and, yes, you can still use it for prints and copies. some of our current customers prefer to have one company Strategies: Most every manufacturer mentions soluhandle what they want protected and/or serviced. tions selling today; this requires more than a rep reading Jeff Eaves, president a brochure, spec sheet and lab report. This requires deeper Appalachia Business Communications of Kingsport Inc. technical training to understand the internet of things, but Gray, Tennessee also the intranet of business, the flow of documents and the information flow in a business. Th n, make it so simple that Opportunities: For the office technology dealer, the op- it can be implemented as fast as a third grader takes to an portunities for 2018 are many. Our traditional areas for electronic device. If not, we will be stuck being called what growth are still strong — MPS, MNS, production print, so- Rick Farnell calls “feature preachers.” lution sales and wide format/specialty printing all off r treD.J. Hastings, president mendous new and improved revenue streams for the dealer Hogland Office Equipment, Lubbock, Texas channel. Also, don’t forget our core business, copier/printers, which still represent a valuable stream of revenue that lots of Opportunities: I still see IT services and embedded solucompetitors would love to have. This leads me to our potential tions as great business opportunities for 2018. SMB companies 24 | w­ w w. o f f ic et ec hno lo g y m a g.c om | F e b r ua r y 2 0 1 8

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still need consulting to streamline their Strategies: I believe the best strategy I believe we have business processes. Many use documents is to do your homework and either join a to start a business process and still do it peer group for the industry you are going to become more in a traditional way. If we can “capture” to pursue or hire someone to prepare a diversified by offering these needs and use embedded solutions strategic business plan. Th re are plenty network services, and ECM software, we will certainly bring of resources out there including BTA and, possibly, other more eff ctiveness to their processes and that can give you details on the industry. areas like telecom help these customers improve them.

You need to have a good business plan.

Strategies: It certainly requires a Chap Breard, president and/or security. correct business plan. We cannot do MOEbiz, Monroe, Louisiana everything by trial again and again. It costs a lot of money that we cannot aff rd. With respect Opportunities: On the west coast of Florida, we have to IT services, this off ring is still poorly exploited in Bra- seen some pretty severe ups and downs over the last few zil, especially for the SMB market. It is necessary to form a years. As a dealer in a market of heavy housing and building well-structured team to understand the reality of compa- construction, we are concentrating our eff rts on general nies, or find a partner that off rs a solution that takes into contractors, architects, engineers and subcontractors such account the characteristics of our market, especially if you as plumbers, roofers, window installers, etc. In addition, fioff r Level 3 support by this partner directly to the cus- nancial institutions funding this growth are a great opportomer. The language is a barrier because the vast majority tunity for us in 2018. of solutions marketed in the United States are available in Strategies: We are going with “people buy from people English only. they know and trust” and are continuing to participate in To meet embedded solutions, investing in a professional who drives the customer’s business processes is critical.

I note that we are no longer just hardware suppliers, but business consultants. Thus, dividing the market into vertical and horizontal segments, training the prospecting and sales teams in these markets, and helping them become more involved with the characteristics of each market will make us good consultants with more profi able businesses and more satisfi d customers.

Marcos Eland, CEO Edocx, Brasilia, Núcleo Bandeirante, Brazil Opportunities: The greatest opportunity in 2018 for our company is to continue working with clients to understand how their businesses operate and what we can do to streamline processes through device integration.

Strategies: We have to get comfortable asking our customers questions about their processes so we can understand their “whys.” We need to teach our team vertical-market jargon so they can easily converse with customers. This will allow them to understand what product off rings are needed to help customers’ offices operate more eff ctively.

Debra Dennis, vice president of support services CopyPro Inc., Greenville, North Carolina Opportunities: I believe we have to become more diversifi d by off ring network services and, possibly, other areas like telecom and/or security. I believe the convergence of technology is going to have end users looking for companies that can handle all of their technology. www.offi cetechnol ogymag.com | F e b ru a ry 2018 | 25

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or join local organizations, such as local builders associations, business alliances and local trade organizations.

Mick Dean, vice president SaraMana Business Products Inc. Sarasota, Florida

predicted a winner in the stock market and still have hope that the Phil Mickelson will win the U.S. Open to complete his career grand slam. So, I’d prefer to answer the second question first, regarding our strategies.

Our product off rings include: Konica Minolta, Xerox and Lexmark. Th choice of those partnerships has made a great impact on our success. We take pride in our longevity, particularly since we are located within an hour of the corporate headquarters of Ricoh, Konica Minolta and Kyocera, in addition to two of the largest independent dealerships in the nation. Th re’s no magic here. We simply give better fi ld and customer service than anyone else in our state. That great service will always keep you in the game, even when your price might be a little higher than the direct manufacturer or mega dealer that just can’t off r the personal relationship that small or mid-size authorized dealerships focus on. Whether it’s a single-location MFP customer, a production print customer or local area major account, we’re simply built and prepared to respond with whiteglove service and flexible solutions to meet our customers’ expectations. I realize that’s not a sexy answer to the question, but it’s what has continued to be our foundation over the past 30 years.

Opportunities: As far as the areas of greatest opportunity for the office technology dealer in 2018, we believe that all elements of information security will be at the forefront of most client conversations. Almost everyone in every corner of our country is aware of the many breaches relating to documents, system hacks, phone calls, medical records emails, etc.; the list goes on and on. Th refore, discussions relating to security should be well received by current and prospective clients alike. Fortunately, our industry has a wide variety of high-quality security-related products and applications to help carry those conversations from inception to implementation. Obviously, that brings us back to how we will pursue those opportunities in the coming year.

Simply stated, the personal relationships that we have built over the past 30 years have earned us the trust factor that clients need in order to move forward, which ensures they will invest in our security recommendations.

Art Schwartz, president Image Systems for Business Somerset, New Jersey n Brent Hoskins, executive director of the Business Technology Association, is editor of Office Technology magazine. He can be reached at brent@bta.org or (816) 303-4040.

As far as the areas of greatest opportunity ... we believe that all elements of information security will be at the forefront of most client conversations.

Opportunities: (1) MNS: We got into this with an acquisition in 2013 and it has worked out great. We went from $60,000 in 2013 to $1.5 million in 2017, with good profi . It was not easy, but it is doable. (2) MPS: I still think this can be at least 15 percent of our business and it is the easiest sale with the most upside.

Strategies: For MNS, acquire a company or start one from scratch. Engage a consultant in this business for guidance. Integrate this into your sales focus. Hang on and be patient; it takes a while, but it will change the perception of your business in the marketplace and it will increase engagement with your staff.

Dean Boring, president & CEO Boring Business Systems, Lakeland, Florida

Opportunities: In this time of consolidation, I would suggest either growing to $100 million in annual revenue organically or through buying other dealerships ASAP. If growing to $100 million-plus is not in your plans, consider selling to someone who is [at $100 million]. This industry is consolidating rapidly and we expect an 80-percent decrease in the number of independent dealerships by 2022. Some principals will have great liquidity events, while others will be marginalized by intense competition and either close or sell for peanuts.

Strategies: When considering a sale of your business, if you have the capabilities to prepare financials, business plans and detailed reports on the business yourself, you may save the brokerage fee and contact the aggregators themselves. Th y include NovaCopy, Trivest, Marco, Pacific Office Automation, Visual Edge, Dex Imaging and Loffler. You will probably get the best outcome working with a consolidator active in your state or contiguous states. If you need help preparing documentation on your business, engage a broker that is active in our industry, such as Chartwell, Zygoquest or Prosperity Plus. Avoid business brokers that have not done deals in our industry or be prepared to spend a lot more time bringing them up to speed.

Darren Metz, CEO NovaCopy Inc., Memphis, Tennessee Strategies: Before giving my answer and my opinion, I must disclose that I am very poor gambler, have never 26 | w­ w w. o f f ic et ec hno lo g y m a g.c om | F e b r ua r y 2 0 1 8

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Overnight Growth Should you consider buying another dealership? by: Jim Kahrs, Prosperity Plus Management Consulting Inc.

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ecently, it seems there have been announcements of dealership acquisitions on an almost daily basis. At Prosperity Plus, we assisted in three transactions that closed in November, two in October, two in September and another 11 earlier in the year. All of this activity has led many dealers to ask the question: Should I be considering an acquisition? The simple, off- he-cuff answer is “yes.” However, buying another business is a complex transaction that can have significant downsides if it is not done correctly. In this article, I will outline the benefits and potential mistakes that can be made when doing an acquisition.

Let’s begin with a look at why there has been so much activity. In my opinion, it is driven by three key factors. The first is the fact that the industry has been stagnant. Growth is very difficult to come by in a stagnant market. To grow organically, you must take customers away from competitors one at a time. This is a slow and difficult process, as most customers tend to stay with their current vendors. By acquiring a business, you can achieve overnight growth.

Thesecond factor is the availability of “cheap” money. The combination of low interest rates and more readily available money from banks and private equity firms has made acquisitions possible to those who do not have the necessary cash sitting in an account waiting. Just a few years ago, getting a loan was like pulling teeth.

Thethird factor is the sheer number of baby-boomer dealership owners. Th se folks are looking for exit strategies, and selling their dealerships is often the best option.

Before getting into the benefi s and potential mistakes, I want to provide a blanket warning. An acquisition is a complex transaction that must be handled correctly. Going into this without the proper knowledge and assistance can lead to very costly mistakes. Every transaction has signifi ant legal, accounting and tax implications. The variables in each transaction are almost endless. I have heard people equate buying or selling a business to purchasing or selling a piece

of real estate. Nothing could be further from the truth. While real estate has its own nuances, there are not anywhere near as many variables as there are in a business sale. If you are going to go down the road of buying or selling a dealership, be sure to take the correct approach.

So, what are the benefi s of buying another dealership? As mentioned above, you can achieve an increase in revenue overnight.

Many dealers have attempted to grow their businesses by opening offices in new territories. While this can grow revenue, it is a slow and expensive process. The overhead starts on day one with rent, utilities, payroll, etc. However, the revenue does not come in at the same pace. New customers are acquired one at a time. It is quite common for a startup branch to lose money for a year or two before the revenue catches up to the expenses and, in some cases, it never catches up. In general, increased revenue benefi s a dealership by making it easier to achieve manufacturer quotas and rebates; it allows additional staff to be hired and, if handled correctly, increases the bottom line.

This leads us into the second benefi . A successful acquisition can add signifi ant profit to the bottom line. In many cases, there are expenses that can be eliminated from the acquired company (or your company) as there will, undoubtedly, be overlapping functions. Th se economies of scale create a situation where the revenue you bring over is more profi able for you than it was for the seller.

I could write an entire article on the potential savings, but will outline just a few. Very often, admin functions can be brought together, eliminating the need for admin personnel and resources. Software licenses can typically be scaled back. Marketing and advertising can be consolidated. Insurance can be consolidated or eliminated. Websites will be consolidated, and so on. If the company you buy is in the same geographic territory, the opportunities for savings are even greater as occupancy costs can likely be eliminated as well.

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potential for bringing in new talent. consider all of the information and data Every company has its key people. It is honestly and without bias. Too many If you are buying common for a strong employee to be dealers have made the mistake of goa company that underutilized in a small dealership. ing forward with an acquisition even competes in your When buying another company, you though they learned through the promarket, especially one could very well be bringing in your next cess that it was not a good fi . In essence, that sells the same vice president or general manager. It is they talked themselves into it and saw also common to bring over one or more the process through simply because product line(s), there strong salespeople or service technithey started it. Do not be afraid to walk is hidden value. cians. I have seen many situations away mid-process if things do not look where employees brought over in an acor feel right. Forcing a square peg into a quisition have quickly transitioned into the most valuable round hole creates a situation where everyone loses. people in a large company.

Another mistake I have seen too often is folks looking to One benefit that is often overlooked is the elimination of only buy companies they can get for a huge discount or a a competitor. If you are buying a company that competes fire-sale price. Keep in mind, if the business is being sold bein your market, especially one that sells the same product low market value, there is a reason. It is much easier to make line(s), there is hidden value. When we ask sales reps why a fast return on your investment when buying a strong comthey lose deals, the most frequent answer is price. While pany and paying a fair price for it. In fact, I would rather pay I do not buy this in all cases, it is true that going head-to- above market value for a strong, profi able company than head with a competitor can often erode margins. If you buy half of the market value for a poorly producing company. a competitor that you have been competing against, you Look at it like you would when hiring salespeople. Would may have an easier time holding your margins. The poten- you hire a rep who has a horrible track record, low sales, tial profit here is 100-percent speculative, so it is difficult to lots of jobs and poor communication skills just because you quantify, yet it will be there. could get him (or her) for half the salary of a good rep? If you The last benefit that I will touch on, though certainly not are going to buy a distressed company, be sure to go in with the last potential benefit available, is diversifi ation. Th re your eyes wide open and be prepared to handle the problem are two sides to this: diversifying within the same industry areas that will come up. with a diff rent vendor and diversifying with diff rent prodHandling the acquisition process incorrectly is a misucts all together. If you buy a dealership that represents a take that leads to many problems. Most people who have diff rent manufacturer, you can quickly provide the protec- not bought a company before underestimate the amount of tion that comes from having options. You can leverage the time, eff rt and expertise that goes into successfully closmanufacturers off each other. Bringing on a second manu- ing a sale. If things are handled poorly, it can end up costfacturer without any installed base is an expensive propo- ing time and money, and could be the diff rence between sition. You will need to train your sales and service teams, getting a deal done or not. Common mistakes that people stock equipment and parts, etc., all without any addition- make are: not having an independent valuation done; telling al revenue to offset the costs. Bringing on a second line employees too early; telling vendors too early; agreeing to through acquisition allows a transition without additional things that they should not have (e.g., “we’ll keep all of your costs and brings revenue with it. Acquisition can also be a employees”); using an attorney who is not familiar with good tool for diversifying into new off rings. Many in our mergers and acquisitions; not planning for the tax implicaindustry have used acquisition as a quick entry into the IT tions in advance; and many more. and managed services world.

The due diligence process is another area where mistakes Now that we have considered the benefi s, what are the can be made. When buying a business, you will be given an potential mistakes that can be made? As with the benefi s, opportunity to conduct a thorough inspection. The purchase there are more than can be listed in an article, but I will out- agreement will state that the buyer has conducted its own due line a few of the more important pitfalls to avoid. diligence and is satisfi d with the outcome. By agreeing to this, The first is buying a company that is not a good fi . For an you lose the ability to come back later and claim you did not acquisition to deliver positive results, it must be a good fit know something. Your only future claims can be against things for all parties involved. This includes the buyer, the seller, that were misrepresented. Because of this, you must conduct a key vendors, all employees, etc. The process of buying an- thorough due diligence to uncover any potential issues. other company is long and involved. Both sides learn much The last mistake we will cover is the post-purchase intealong the way. If you are going to be successful, you must gration process. Because the process of finding a business, 28 | w­ w w. o f f ic et ec hno lo g y m a g.c om | F e b r ua r y 2 0 1 8

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want to have an integration plan worked evaluating it, negotiating an off r, going However, shoring up out and you will want to follow it closely. through due diligence, negotiating legal As I mentioned in the opening, the documents and closing can be long and the customer base is level of acquisition activity seems to be arduous, many acquirers look to take a the most important at an all-time high. A perfect storm of breather after the close. This can be a post-close item ... conditions has led us here. If done corvery costly move.

Get out and see all rectly, any dealership can improve its In order to get a return on your inof the customers as overall condition by acquiring another vestment, you need to hit the ground company or companies. If you keep the running. Many decisions need to be quickly as possible ... above ideas in mind, you will be able to made and actions taken post-close. Here build a plan that will lead to success. n are just a few questions to consider: How Jim Kahrs is the founder and president of Prosperity Plus will you integrate accounting and CRM systems? How will Management Consulting Inc. Prosperity Plus works new employees be onboarded? Where will new employees with companies in the office technology industry be based? How are you handling A/R and collections? building revenue and profi ability, and However, shoring up the customer base is the most imporplanning for a successful exit strategy. Kahrs tant post-close item. This should start on day one. Get out and see all of the customers as quickly as possible, starting with and Prosperity Plus have assisted in more than 180 business sales and valuations. the highest priority customers first and working methodically He can be reached at (631) 382-7762 or through the list. Th y need to hear about the acquisition from jkahrs@prosperityplus.com. you and the leaders of the company you have acquired, not Visit www.prosperityplus.com. your competitors. To make the most of an acquisition, you will

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www.offi cetechnol ogymag.com | F e b ru a ry 2018 | 29

Kahrs Feb 18.indd 3

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COURTS & CAPITOLS

The New Tax Laws The Tax Cuts and Jobs Act will affect every taxpayer by: Robert C. Goldberg, general counsel for the Business Technology Association

A

lthough Congress still needs to clean up the Tax Cuts and Jobs Act that was signed at the end of 2017, it is clear it will aff ct every taxpayer. Following are some of the major revisions to the tax code of which you should be aware. n Moving Expenses — Under the previous law, an employee could exclude qualifi d moving expense reimbursements from gross income. Thus, a star sales manager recruited from another state could have his (or her) moving expenses paid by his employer and the amount would not be considered income to the individual.

This will no longer apply — at least for tax years 2018 to 2025. n Sexual Harassment Settlements — It seems every day another prominent individual is terminated as an employee due to claims of sexual harassment or sexual abuse. In several instances, charges were resolved by confi ential settlement agreements entered in the past. Generally, a taxpayer is allowed to deduct ordinary and necessary expenses paid or incurred in carrying on any trade or business. Under the new tax bill, no deduction is allowed for any settlement, payout or attorney fees related to sexual harassment or sexual abuse if such payments are subject to a nondisclosure agreement. n Business Entertainment — Previously, no deduction was allowed with respect to an activity generally considered to be entertainment, amusement or recreation unless the taxpayer could establish that the activity was directly related to the active conduct of the taxpayer’s business. If the taxpayer could establish that relationship, then the taxpayer could deduct 50 percent of the amount deductible. The former tax law did not allow a deduction with respect to the cost of a facility used in connection with entertainment, amusement, recreation or any club dues for a club organized for business, pleasure, recreation or other social purpose. The new law retains the prohibition on deductions, but eliminates the ability to deduct the 50 percent of the amounts established as relating to business activity. n Transportation Expenses — Employees have had the ability to deduct benefi s such as parking transit passes, vanpool benefi s and qualifi d commuting benefi s from their incomes. The new tax law disallows deduction for any expenses

associated with a transportation benefi , except those provided for safety, for an employee’s commute between his residence and place of employment. n Elimination of Certain Itemized Deductions — Under the former tax code, employees could claim itemized deductions for certain miscellaneous expenses. Many of these expenses were not deductible unless they exceeded 2 percent of the employee’s adjusted gross income. The tax bill suspends all miscellaneous itemized deductions that were subject to the 2-percent floor. The deductions eliminated include: casualty and theft losses from property used in performing employee services; business liability insurance premiums; depreciation of a computer an employee’s employer requires use of for work; dues to professional societies; home office; job search expenses; passport fees for business travel; subscriptions to trade or business journals; tools and supplies used for work; and union dues. This limitation applies to individuals for the years 2018 to 2025. n State and Local Taxes — The new law caps the amount deductible by individuals for state and local taxes at $10,000.

The eduction is unchanged for businesses. n Pass-Through Entities — Th re is good news if your business is a limited liability company, partnership, sole proprietorship or a subchapter S corporation. A new deduction of 20 percent of “qualifi d business income” is established.

Qualifi d business income is defined as all domestic business income other than investment income, short-term capital gains or long-term capital gains. Thededuction is limited to 50 percent of the taxpayer’s W-2 wages paid by the pass-through entity. Thelimitation does not apply if taxable income exceeds $315,000 for a married couple filing jointly.

The examples above highlight areas of change and are not provided as tax or legal advice. Each member should consult with his accountant or tax advisor regarding the signifi ant changes in the tax code. BTA will continue to highlight the provisions that impact members most. n Robert C. Goldberg is general counsel for the Business Technology Association.

He can be reached at robert.goldberg@sfnr.com.

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EDUCATION CALENDAR February

27-28 ProFinance 2.0 Glen Allen, Virginia Over the last 16 years, the principles of ProFinance have dramatically improved the performance of hundreds of dealerships. Now, with color, connectivity, software, managed print services (MPS) and managed network services (MNS), the business has changed — and ProFinance has changed with it. ProFinance 2.0’s industry model, which includes more than 30 key benchmarks (including those for MPS), will help you and your team achieve double-digit operating income.

John Hey and Todd Johnson of Strategic Business Associates will share their knowledge from 25-plus years of building some of the largest dealerships in North America and their experience advising many of the most successful companies in the industry. Learn proven sales and service plans, effective management bonus programs and critical organizational strategies. Register today and bring your key decision makers to ProFinance 2.0. It is an investment that will give you and your team valuable knowledge and will provide immediate take-home value. Visit www. bta.org/ProFinance to register.

March

15-16 Spring Break - Hosted by BTA Southeast New Orleans, Louisiana The 2018 Spring Break event, hosted by BTA Southeast, is open to office technology dealers from across the country. The event will feature: two keynote addresses focused on fanatical prospecting and sales EQ led by Keith Lubner, channel enablement and acceleration expert at Channel Consulting Corp. and Channel EQ; three educational sessions led by industry leaders; two dealer panels focused on millennial superstars in sales and achieving service benchmarks; time to network with peers and exhibiting sponsors, including during a welcoming reception and breaks; and a masquerade party and dinner in the historic French Quarter. Visit www.bta.org/ BTANewOrleans to register.

April 9-11

BTA Sales Management Workshop Owings Mills, Maryland The BTA Sales Management Workshop is a career development “must-have” for sales management at all levels, and provides the knowledge, skills, processes and tools to immediately increase effectiveness and achieve higher levels of success. Taught by well-known industry trainer and facilitator Kim Ward of Learning Outsource Group (LOG), the workshop focuses entirely on the “how-to” skills that will help each attendee reach his (or her) full potential as a great sales leader and coach, as well as best practices to build and sustain elite, high-performance sales teams.

Visit www.bta.org/SalesManagement to register.

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

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

Dealer Members American Document Solutions, Randolph, NJ Axis Business Technologies, Colorado Springs, CO Midwest Imaging Solutions, Fridley, MN The Office People, Charleston, SC Vendor Members Domus Inc., Philadelphia, PA EveryonePrint, Saddle Brook, NJ Max USA Corp., Mineola, NY Mile High Meetings & Incentive, Littleton, CO For full contact information of these new members, visit www.bta.org.

BTA Scholarship Foundation

For the benefit of its dealer members, each month BTA features two of its vendor members in this space.

Headquartered in Carrollton, Texas, Virtue IT strives to produce remanufactured printers that meet the quality expected from new units. With thousands of parts in stock, the company can support the printers it offers. Whether you are looking for laser printers, dot matrix printers, line printers, POS printers or bar-code thermal printers, Virtue IT can provide you a highquality, competitively priced solution tailored to your specific needs. If you need new or remanufactured printers and parts, look no further than Virtue IT. https://virtueit.com

Each year, the Business Technology Association (BTA) awards one $3,000 and a number of $1,000 and $1,500 scholarships to qualifying children of full-time employees of dealerships that are current BTA retail dealer members.

Since the 1984-85 school year, BTA has awarded 1,422 scholarships to deserving students, totaling $1,606,500. The BTA Scholarship Foundation is supported by continuing contributions from individual dealers, as well as manufacturers and distributors.

To download a scholarship application, visit www.bta.org/Scholarships. The scholarship application deadline is May 1, 2018.

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

EveryonePrint is a mobile print solution that enables users to print from their laptops, mobile devices or any other device to any managed printer with ease. Whether it is corporate users or guest users, EveryonePrint can bridge the connection to any existing print infrastructure and print fleet in one simple solution without the requirement of replacing existing hardware or infrastructure. EveryonePrint is a simple, highly scalable solution intended for organizations of all sizes. Thousands of companies and organizations worldwide use EveryonePrint, from schools and small offices to global enterprises servicing millions of users every day. www.everyoneprint.com

For information on BTA member benefits, visit www.bta.org/MemberBenefits

A full list of BTA vendor members can be found online at www.bta.org.

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Highlights Feb 18.indd 1

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MEMBER BENEFITS Included with $430 BTA dealer membership: Legal Services • Industry advice & guidance via the BTA Legal Hotline • Sample legal agreements & contracts customizable for your dealership • Contract reviews • Data security & patent troll guidance & brochures • National industry campaign against fraudulent telemarketing of copier/MFPs & computer supplies

Publications • Monthly Office echnology magazine • Weekly BTA Hotline e-newsletter

Channel Trends & Statistics

MEMBER BENEFITS

Business Support Services

• Ask the Analyst service • Monthly Building My Business webinars • Sample job descriptions • Sample compensation plans

Discount Promo Codes • $400 in discounts with a one-year membership or $950 in discounts with a two-year membership to apply toward education or BTA events

BTA Scholarships • The opportunity to apply for educational scholarships of $3,000, $1,500 & $1,000 awarded to children of dealers & the children of their full-time employees. Applications due each year by May 1.

• Channel’s Choice Summary • Compensation Report • Financial Benchmarking Report • Service Productivity Report

BTA Navigator Program

Available to members at reduced fees:

Business Support Services

Channel Trends & Statistics • 2016 Business Equipment Quota Index (BEQI) • Buyers Lab bliQ — competitive intelligence & sales tools • InfoTrends reports

BTA Events & Educational Offerings • Registration to BTA’s district-hosted events & national conference • Classroom training programs covering all aspects of your business, including training for sales reps, sales managers and service managers, as well as a financial benchmarking worksho to help grow your business • Online workshops, including an in-depth sales workshop consisting of 13 modules for your entire sales team, a new sales rep training workshop, and one-to-one telesales training and coaching • CompTIA exam voucher discounts • IT University online courses • Logical Operations’ User Productivity Courseware & Axzo Crisp Series

Available to members at competitive rates: Insurance Programs

• Business executive life • Business liability • Disability, long- and short-term • Retirement programs

• OEM co-op reimbursement program for BTA dues & educational workshop tuition. Check with your supplier!

• Background checks • Business valuation services • Collection services • Credit card processing • Credit report & business information services • Employee assessment tools • On-hold messaging service • Payroll processing • Recruitment services • Relationship management/CRM • Telemarketing/lead generation

Discounted Programs • BTA Marketplace discounts & value-added offerings • BTA member rewards program • Car rental discounts • Device monitoring & management • Gas & electricity volume purchasing agreements • Hard drive security solutions • Marketing solutions • Mobile discount programs • Product evaluations & side-by-side comparisons • Shipping & freight discounts

• Health discount card providing medical, dental, vision, hearing, lab & prescription discounts • Medical, life, health, dental & vision plans through an insurance brokerage service • Section 125 cafeteria plans • Term life • Workers’ compensation

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PRINCIPAL ISSUES

Modifying Our Thinking Stubbornness is found between the plan & failure by: Ray Stasieczko, BEI Services

I

want to discuss some thoughts based on my experience observing the differences between the imaging channel and the IT services channel. Because the two channels are quickly moving closer together, I believe it is time for the imaging channel to modify its sales and service processes.

After spending 25 years in the imaging channel, I have learned a few things — things to do, things not to do and things to prepare to do. Before joining the BEI Services team, I had an opportunity to participate in the delivery of managed IT services. During this experience, I became aware of the biggest diff rence between managed IT services companies and managed print services (MPS) companies — the imaging channel. The diff rence is that managed IT services companies pay much closer attention to profi ability.

Acknowledging this diff rence, the imaging channel should likewise pay closer attention to profi ability through the deliverables life cycle. In addition, imaging channel dealerships must completely understand pass-through service cost and adopt much better time accountability management. As imaging channel dealerships deliver IT services, they will perform a multitude of service tasks. So, in order to properly price and bill a reoccurring service agreement with acceptable profit margins, they must have time accountability, a true awareness of cost and the ability to manage through the agreement’s life cycle. IT services is a service-led sale; it is never led with hardware.

The fact is, the imaging channel dealership spends more money and resources managing a customer’s cost than managing its own cost to deliver what that customer needs. Back when print was growing and businesses were out of control in how they managed and accounted for the activity of print, the imaging channel was the customer’s savior. However, we must all admit that customers do not care about print as they did in 1990; they do not want to spend time managing a product or service that is less than 2 percent of their technology spend. Th imaging channel cannot change the evolution of print needs, so it must change how it delivers to address customer needs.

Th re are some within the imaging industry who have begun discussing new approaches using old ideas. I fear that imaging channel dealerships are still putting more emphasis on the customer’s spend than their own cost to deliver what customers buy. This approach will be detrimental to their profi ability. The imaging channel has got to reign in the service cost to match the reigning in of service revenue by the declining demands of the customer. So, jumping into seat-based

billing, device-as-a-service or any other sales-driven strategy without a complete understanding of the cost of service and, more importantly, the increasing cost to the organization by not modifying the cost as print’s retail reoccurring revenue declines, is unwise.

What if we in the imaging channel modifi d our thinking and, instead of creating sales strategies with no system to manage cost, we came up with a service strategy that was the foundation for what we sell? We need to think like IT service providers and build our deliverable around what we service profi ably, instead of selling things and then trying to fit those things into a problematic service platform. When we become consumed with the quick glory of selling something to collect revenue, we sacrifi e the long-term satisfaction of profi ability.

As the market continues driving down the end-user’s hardware cost, the current sales engine will squeeze more and more from the service profi . For example, today, everyone will admit that A4 is growing in popularity. The 35-page-perminute A3 unit has a dealer cost of thousands more than the new A4. Taking advantage of the cost diff rence, sales reps have now been positioned to increase hardware gross profit tremendously and, of course, at the same time, leave it where it is or, worse, lower the customer’s service cost. Why? Because sales reps are not held responsible for a customer’s overall profi ability and most are paid off gross profit from hardware.

This is a recipe for disaster if not corrected. As hardware continues to lower in cost, we must shift the diff rence to service.

Thedays of flipping bases for growth are behind us. That approach made all the sense in the world when upgrades brought in more money. However, when they bring in less, you must question the sanity of the system and modify it. Reoccurring

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find the stubbornness to modify. The time service revenue is where the imaging and to recognize the merits of this discussion is IT services channels make their profi . The It will not only take now. Many in the industry understand the IT services deliverable is much more comfortitude, but also strong need for modifi ation to the “what, how and plex than print services and much less forleadership to drive the why” of the imaging channel. None of these giving when priced incorrectly. next needed modifi ation. three things should be so sacred they cause In the managed IT services deliverable, That modifi ation us to fail because of a stubbornness to modyou cannot sell your way out of unacceptify. This article is intended to help spark the able profi . You must instead manage your must be ... to a imaginations and determination of those way through acceptable profi . You manservice-first mentality. who intend to substitute the word “survive” age profit when you understand the cost of with the word “thrive” in both their vocabinaction and possess the fortitude to modify as needed. IT service providers must modify with the same ularies and their actions. A company becomes obsolete when it zest as the equipment they sell and support. It is a constant is focused on bringing the past to the future instead of bringing process. Imaging channel dealers have gotten lazy in the com- the future to the present. Let’s not let imaging channel dealerplacency of their deliverable. It will not only take fortitude, but ships be like Kodak, Blockbuster or Sears. n Over the last 25-plus years, Ray Stasieczko has also strong leadership to drive the next needed modifi ation. called the imaging channel home. Currently, That modifi ation must be the transition from a sales-first he is business development manager at mentality to a service-first mentally. I think it is time. The imBEI Services. Stasieczko can be reached at aging channel dealership puts service first in how it sells and ray.stasieczko@beiservices.com. how it determines the cost of what it sells.

Visit www.beiservices.com.

Between the business plan and business failure is where you

N O M I N AT E Y O U R C A N D I D AT E F O R

2018 DIFFERENCE MAKERS

2018

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Who are the Individuals Making the Key Contributions to the Industry or to Your Organization?

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NOMINATION DEADLINE: MARCH 15, 2018

BRIEF PROFILES OF THOSE SELECTED WILL BE FEATURED IN THE MAY ISSUE OF ENX MAGAZINE. Note: Anyone featured as a 2017 Difference Maker is not eligible for inclusion this year.

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www.offi cetechnol ogymag.com | F e b ru a ry 2018 | 35

1/26/18 12:15 PM

PRINCIPAL ISSUES

Empower 2018 Laserfiche holds event Jan. 9-12 in Long Beach by: Elizabeth Marvel, Office Technology Magazine

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ocusing on how its software and solutions can help transform processes within businesses and the public sector, Laserfiche hosted its Empower 2018 conference Jan. 9-12 at the Long Beach Convention & Entertainment Center in the company’s hometown of Long Beach, California. The event drew more than 3,000 Laserfiche end users, resellers and technology experts.

The conference included four days of educational sessions, many of which allowed attendees to learn more about how Laserfi he products can enhance their businesses; software training sessions; and two featured speakers who talked about how they have eff ctively used Laserfi he to streamline workflows. Doug Haubert, city prosecutor of Long Beach, spoke about how he used Laserfi he to create the city’s Gang Prevention Strategy, which has suppressed gang activity in the city. Phil Bertolini, CIO and deputy county executive of County of Oakland, Michigan, spoke about using Laserfi he solutions to streamline his county’s government.

Th re were also plenty of networking opportunities, including user group meetings, a reception and a special musical event featuring the lead singers of Sugar Ray, Everclear, Kool and the Gang, and more. The company also presented its Run Smarter awards during the Jan. 11 general session.

During Empower 2017, company executives announced the Laserfi he Digital Transformation Model, which consists of five phases: (1) digitizing documents; (2) organizing documents; (3) automating processes; (4) streamlining processes; and (5) transforming processes. Empower 2018 focused on step five of the model — transforming processes — and transforming them to do social good.

“I believe all of us are here for the same purpose: to find new and innovative ways to use technology to make our organizations more efficient, smarter, and better able to serve our constituents, partners and customers who depend on us,” said Chris Wacker, CEO of Laserfi he, in his opening comments during the general session on Jan. 10. “In this information age, it is apparent that one way to improve our performance and to remove the tedium and monotony from our daily processes is to assign those tasks to machines. In short, to develop your vision and imagination for using the tools of Laserfi he.

“At Empower 2017, we introduced the Laserfi he Digital Transformation Model to help guide your organization through the digitization and automation processes,” Wacker continued.

“This year, we have elaborated on the ... model and have added

Left to right: Chris Wacker, Karl Chan & Justin Pava. more tools to enable your organization to do more, more quickly.”

Karl Chan, president and CTO, introduced some of these new tools during the Jan. 10 general session. “The first is the mobile app,” Chan said. “The Laserfi he mobile app gives us access to documents on the go. In addition to searching for your documents in folders, documents that have geographic information can now be overlaid on top of a map. With our location-aware Laserfi he App, searching for documents is as easy as arriving on location.

“Second are the updates we’ve made to Workflow,” Chan continued. “We’ve completely redesigned Laserfi he Workflow. It’s 100-percent web-based and it’s amazing. It’s easier for everyone to create workflows and to manage complex logic in a simple fashion.

“Third is analytics,” Chan said. “We’ve improved our analytics tools to help you quickly identify issues and then have the right tools to diagnose those problems to move quickly to solutions.”

Another innovative feature that users will see in an upcoming version of Laserfi he is robotic process automation (RPA).

Justin Pava, principal technical product manager, talked about RPA during the Jan. 10 general session. “Robotic process automation is the next-generation automation solution,” Pava said.

“It works by training software robots to complete repetitive manual work that a human would normally have to do ... you will be able to train robots to open emails and attachments, log into applications, move files and folders, copy and paste data, fill in forms — and that’s just a start ... We’re excited to bring robotic process automation into our technology ecosystem and look forward to bringing it to you in the near future.” n Elizabeth Marvel is associate editor of Office Technology magazine. She can be reached at elizabeth@bta.org or (816) 303-4060.

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Laserfiche Feb 18.indd 1

1/26/18 11:50 AM

PRINCIPAL ISSUES

Great Service Standing out among competitors is a process by: Troy Harrison, Troy Harrison & Associates

I

t happens every day and the scenario goes something like this: “So, why should I buy from you? ,” asks the skeptical customer. “We’ve been buying from Company X for years.”

“But we have great service,” says the earnest salesperson, smelling the sale. Or, if he decides to put a little extra oomph behind it: “We have the best service in the business!”

The earnest salesperson confi ently smiles at the skeptical customer, knowing that at any moment the skeptical customer is going to reach for his (or her) checkbook. Instead, the skeptical customer yawns and says, “Yeah, but everyone says that. Why should I buy from you?”

And, with that, another sale dies before its time.

Why do we do this to ourselves? Because we — or our bosses — do not have a better idea. Want the truth? Everyone says they have the best service. When everyone says it, it is meaningless. And, yet, there are businesses — lots of them — where service is their main diff rentiator from competitors. Th re are also buyers — again, lots of them — who make service the main criteria in their buying decisions. Sales result when salespeople communicate “great service” to a buyer who wants to buy “great service.” Making your “great service” stand out from your competitors — and making it mean something — is a three-step process.

(1) Define your great service. Preferably, you will do this by off ring something that your competitors do not. Start out by getting your key people together. Include salespeople, customer service people, department managers and anyone else whose primary responsibility is dealing with customers. Go around the room and ask each person to come up with one specific thing your company does to add value to its product or service off rings and write it down. Th n, next to each thing, write down the benefit to customers. Only list those things you really do consistently — not the things you only do on your best day when all the stars are aligned properly and the boss is in a good mood.

Now, go over each item and ask which competitors do the same things. When two or more competitors do it, erase it. You should be able to come up with one or more things that make your company unique, are specific and have tangible benefit to the customer (if not, get to work and figure out something you can do). You have now defined your service off ring.

(2) Offer proof. A good way to do this is with a specific written service policy. A better way to do it is with written references from happy customers who have received quality

service from you. Either way, salespeople should carry a “brag book” and be prepared to prove their “great service” promise.

(3) Have consequences for not living up to your service promise. The most common form of this is a money-back guarantee, but it does not have to be the only consequence.

Other forms of consequences for failure to provide service could include merchandise or merchandise certifi ates, some sort of gift to the customer (such as a catered lunch for their employees) or another “make good” gesture. The consequences need to be part of your written service policy, and they should be presented to the customer as part of the service presentation rather than decided on after the fact.

In real life, there are several excellent examples of how this type of service promise can help build a company. Perhaps the best one is Domino’s Pizza. The concept was that, if you called Domino’s for a pizza, you would have it in 30 minutes or less (thus defining its “great service” proposition). Domino’s made that service proposition part of its advertising (off ring proof with its written policy), and gave you the pizza free if it took longer than 30 minutes (the consequence for failure). This simple promise grew Domino’s from a single college-town pizza joint to one of the largest fast food companies in the United States.

Domino’s was eventually forced to drop this policy due to a couple of lawsuits resulting from overzealous delivery driving, but it is still rare to get a Domino’s pizza in more than 30 minutes.

Let’s put the three-step process to work for a hypothetical www.offi cetechnol ogymag.com | F e b ru a ry 2018 | 37

Harrison Feb 18.indd 1

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p.m.” does not mean much to me, but the business. Whenever I go new car shopping, air conditioning repairman’s promise that I will always ask the salesperson: “Why Service promises do not he will be there “at 4 p.m., and, if you don’t should I buy here when there are several have to be elaborate. mind, allow me a half hour either way,” other dealers selling the same car? ” Th Since your company does. Make it matter to your customers salesperson will enthusiastically reply gets a lot of phone calls and it will matter to you. that they have — you guessed it — “great ... how about a promise Of course, every business does not necesservice.” No sale. But what if the car dealsarily have to have a service promise. Busiership put some meat into the promise? that a real human ... nesses that diff rentiate from their compeThe dealership could start a program will answer the phone? tition on price (like Walmart), by product where the salesperson could honestly re(like Apple) or by emotional appeal (like a ply: “Because buying a car here gets you extra privileges in our service department. When a car that sports or entertainment business) do not usually provide serhas been purchased here is brought in for routine mainte- vice promises, but since yours does, make sure to define it. nance, we guarantee that the maintenance will be finished Your salespeople and your customers will thank you. n Troy Harrison is the author of “Sell Like You Mean It!” within X time or it is free, no matter what. With or without an and “The Pocket Sales Manager,” and is a speaker, appointment, we move you to the head of the line if you buy consultant and sales navigator. your car here. Here is a copy of our service policy.” That is a He helps companies build more service promise that means something. profitable and productive sales forces.

Service promises do not have to be elaborate. Since your To schedule a free 45-minute Sales Strategy company gets a lot of phone calls for service and/or support, Review, call (913) 645-3603 or email how about a promise that a real human being who is empowered to help will answer the phone? The cable TV company’s troy@troyharrison.com.

Visit www.troyharrison.com. promise that “our person will be there between 8 a.m. and 6

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