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CONTENTS Volume 19 • No. 7
FEATURE ARTICLES 10
Hiring Right Strategies for achieving success the first time
COURTS & CAPITOLS Background Checks They are essential, but there are limitations
by Brent Hoskins Office Technology Magazine
There is one reality that should be on the mind of every dealer whenever a position is being fi lled in his (or her) dealership: A hiring mistake can be costly. In order to avoid incurring both the hard and soft costs associated with a bad hire, there are several key strategies for hiring success that dealers can follow. Collectively, they will help you hire right the first time, rather than going through a cycle of hiring and firing multiple people for the same position in a relatively short period of time.
by Robert C. Goldberg BTA General Counsel
It is essential to find out as much as one can about an individual prior to making an employment offer. There is an abundance of information available, but the courts and the Equal Employment Opportunity Commission have placed limitations on the use and consideration of certain facts.
SELLING SOLUTIONS Ready for 2013? Give your sales force an annual checkup
Opportunities & Strategies Dealers share expectations, advice for the new year
by Troy Harrison SalesForce Solutions
Well, it is the beginning of a new year; time to celebrate your 2012 successes (right?) and plan for greater success in 2013. What that really means is that it is time to give your sales force an annual checkup. You do that for your own health, so why not do it for your business’ sales health, too?
Compiled by Brent Hoskins Office Technology Magazine
In 2013, what do you believe will be the greatest areas of opportunity for office technology dealers? What do you believe will be the best strategies for success in pursuing those opportunities? Recently, Office Technology magazine asked these questions of its readers via an email survey. Among the responses received, it may come as no surprise that managed services was among the most frequently cited opportunities. However, there are a variety of other areas of focus as well.
P R I N C I PA L I S S U E S Dealers Helping Dealers Strong peer groups add to a successful equation
by Chip Miceli Des Plaines Office Equipment
For those dealers in the office equipment/service industry, your primary calls to action may be remaining competitive and staying ahead of constantly evolving technology. However, participation in a strong peer network is also an important action for you to consider.
MNS Compensation The right plan will help ensure ongoing success by Luis Gonzalez SalesScoreKeeper.com
As office technology dealerships make the shift to managed network services (MNS), they definitely move into uncharted waters as far as compensation models go. The biggest difference from past compensation models is that dealerships are now selling services without a hardware component. The sale is not a hardware-driven event; it requires dealers to pay on a monthly revenue stream. Here are a few ideas that you may want to consider when assembling a compensation plan for MNS.
D E PA R T M E N T S Business Technology Association
• BTA Highlights
Executive Director’s Page
BTA President’s Message
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EXECUTIVE DIRECTOR’S PAGE
Dealers Share Top 2013 Opportunities
n 2013, what do you believe will be the greatest areas of opportunity for office technology dealers? What do you believe will be the best strategies for pursuing those opportunities? Recently, I asked these questions of Office Technology magazine dealer readers via email. My hope is that the responses will provide insight and new ideas for other dealers. Below are three of the responses received; a number of others appear on pages 18 and 20. All responses received can be found online at www.bta. org/2013Opportunities. Opportunities: “I believe the greatest opportunity for copier dealers will be in managed network services. This is a growing business for us and one with recurring revenue. Managing a network is something IT companies don’t do; they do blocks of time.” Strategies: “You will need a separate sales team, a break/fi x person and a partnership with a network operations center to do level one and level two support. Remember, the program must be profitable. Getting into this business to be ‘price oriented’ will not help your business in the long run.” — Chip Miceli, President, Des Plaines Office Equipment Co., Elk Grove Village, Ill. Opportunities: “I believe the greatest opportunities for office technology dealers in 2013 will be in newer, non-traditional areas such as 3D printing. NovaCopy is on course for a $40 million year (2012) and it was nearly all traditional office technologyrelated. With 3D printing added to the mix, I foresee even greater revenues. Evolution is constant and the progression of 3D technology into our lives is occurring every day. When approached by 3D Systems to represent its brand in Tennessee and Texas, I
immediately saw the future and openly embraced the technology ... With 3D printing, one moves a light year ahead and introduces new opportunities and solutions.” Strategies: “3D printing strategies revolve around our new customers, who are different from the usual decision makers commonly known to office technology companies. These customers work in R&D and inside manufacturing plants. They are defense contractors and architects. These are the people who create, but are seldom seen. Enhancing marketing to create avenues for these customers to find us will be one of our main strategies. Providing product videos and white papers, easy quote tools and a 3D printing service bureau are other strategies that the end user seeks that we will provide. I hired a seasoned 3D professional to head NovaCopy’s 3D division and her insights are starting to pay off. We have begun hiring a specialized sales team throughout our offices to focus on this new customer ... We are already geared to handle businesses of any size. The ball is in motion and the opportunities are unfolding.” — Darren Metz, CEO, NovaCopy, Memphis, Tenn. Opportunities: “We have really seen much more interest in the areas of bundling solutions in the sale, document imaging and print release software. Customers are asking us to come in and look at their operations, to assess and come back with a proposed solution to help them better manage their processes and time by implementing some office workflows.” Strategies: “With our new [building] expansion completed, we now have the room and additional showroom resources to fully demonstrate these solutions. Also, we will be hiring additional account reps this year.” — Tom Ouellette, President, Budget Document Technology, Lewiston, Maine — Brent Hoskins
Executive Director/BTA Editor/Office Technology Brent Hoskins email@example.com (816) 303-4040 Associate Editor Elizabeth Marvel firstname.lastname@example.org (816) 303-4060 Contributing Writers Robert C. Goldberg, General Counsel Business Technology Association Luis Gonzalez, SalesScoreKeeper.com www.salesscorekeeper.com Troy Harrison, SalesForce Solutions www.salesforcesolutions.net Chip Miceli, Des Plaines Office Equipment www.dpoe.com
Business Technology Association 12411 Wornall Road Kansas City, MO 64145 (816) 941-3100 www.bta.org Member Services: (800) 505-2821 BTA Legal Hotline: (800) 869-6688 Valerie Briseno Membership Marketing Manager email@example.com Mary Hopkins Database Administrator firstname.lastname@example.org Teresa Leerar Bookkeeper email@example.com Brian Smith Membership Sales Representative firstname.lastname@example.org Photo Credits: iStockphoto. Cover created by Bruce Quade, Brand X Studio. ©2013 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 2012-2013 Board of Directors
Plan Your Getaway, Attend Winter Break
s I prepare this column, much of the country is reeling from heavy snowfall in recent days and the temperature in my city, Birmingham, Ala., is hovering in the 40s. Yes, new MFPs need to be placed, other MFPs need to be serviced and software needs to be installed, but in the throes of winter, the prospect of a nice break is appealing. I’m sure you will agree that the appropriately named Winter Break district event is the perfect answer. Visiting Orlando, Fla., on Feb. 8-9 is very inviting. Hosted by BTA Southeast at the Rosen Centre Hotel, this educational and networking event will not only provide a great reprieve from the winter elsewhere, but it will also feature a full agenda that is certain to prove beneficial to attendees. (By the way, the temperature in Orlando at the moment is 72 degrees.) The event begins at 1 p.m. on Friday, Feb. 8, with a keynote address, “Services-Led, Technology-Enabled: The Road Ahead,” to be presented by Martin Brodigan, chairman and CEO of Ricoh Americas Corp. Martin will share his views on how BTA dealers can best thrive in today’s market and position their companies to take full advantage of tomorrow’s opportunities. Following the keynote, the agenda that afternoon will feature two other sessions: “Why is Service Quality So Difficult to Manage?” with John Hamilton, Service Strategies Corp., and “MPS Operational Excellence — The Key to MPS Profitability,” with Doug Johnson, Supplies Network. That evening, an opening reception will take place, with the opportunity to visit with 30plus exhibiting sponsors — companies like DocuWare, InkCycle, Muratec and OKI.
The agenda resumes the next day, Saturday, Feb. 9, with three additional educational sessions: “Adapting Leadership to Capitalize with Managed Services,” with Milton Bartley, ImageQuest; “You Be the Judge: How Would You Resolve These Challenging Human Resources Issues?” with Sally Brause, GreatAmerica Financial Services; and “Parlaying MPS & Mobility,” with Greg Walters and Jennifer Shutwell, Walters & Shutwell. There will also be a round-table discussion focused on the topic of alternative revenues. Winter Break will conclude with an evening of dinner and entertainment at Sleuths Mystery Dinner Shows. Two front-runner educational workshops will be held in conjunction with Winter Break. On Feb. 6-8, the inaugural offering of the new BTA Field Service Foundations Workshop (www.bta.org/FieldService Foundations) is scheduled. Plus, ProFinance 2.0 (www.bta.org/ProFinance) will take place on Feb. 6-7. Those who attend either of these front runners will receive free full registration to Winter Break. Have you attended a BTA district event in recent years? If not, I encourage you to register today for Winter Break. Developed and hosted by BTA member dealer volunteers, this event is designed with you in mind. I am confident that you will find each of the educational sessions to be informative and compelling. In addition, the event will provide an unparalleled opportunity to network with your fellow dealers and many of our industry’s leading vendors. If you are ready for a break from your winter, then register today for Winter Break at www.bta.org/BTASoutheastEvent. You can find additional details on the event online or in the ad that appears on pages two and three in this issue. I look forward to seeing you in sunny Orlando. — Terry Chapman
President Terry Chapman Business Electronics Corp. 219 Oxmoor Circle, P.O. Box 531066 Birmingham, AL 35253 email@example.com President-Elect Todd J. Fitzsimons Network Imaging LLC 122 Spring St., Ste. B3 Southington, CT 06489 firstname.lastname@example.org Vice President Ron Hulett U.S. Business Systems Inc. 3221 Southview Drive Elkhart, IN 46514 email@example.com BTA East Rob RichardsonS Allied Document Solutions & Services Inc. 200 Church St. Swedesboro, NJ 08085 firstname.lastname@example.org BTA Mid-America Dave Quint Advanced Systems Inc. 2945 Airport Blvd., P.O. Box 57 Waterloo, IA 50704 email@example.com BTA Southeast Debra Dennis CopyPro Inc. 3103 Landmark St. Greenville, NC 27834 firstname.lastname@example.org BTA West Mike Ehlers Yost Business Systems 685 E. Anderson Idaho Falls, ID 83401 email@example.com Ex-Officio/Immediate Past President Tom Ouellette Budget Document Technology 251 Goddard Road, P.O. Box 2322 Lewiston, ME 04240 firstname.lastname@example.org Ex-Officio/General Counsel Robert C. Goldberg Schoenberg Finkel Newman & Rosenberg LLC 222 S. Riverside Plaza, Ste. 2100 Chicago, IL 60606 email@example.com
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Hiring Right Strategies for achieving success the first time by: Brent Hoskins, Office Technology Magazine
oe Sales seemed like he was the right person for the job. He came across as professional and polite, had some good sales experience and provided quick responses to your questions in his interview, so you hired him the same day you met him. You sent him out into the field his first week on the job with the expectation that he would provide a nice boost to your sales revenues. However, two months later, unable to optimally perform his duties, you let him go. He fell short of your expectations. Your search for the ideal rep continued. Is this scenario far from the typical hiring process in your dealership? Is there some aspect of it that sounds a little familiar? Have you had the exact same experience? Whatever the case, there is one reality that should be on the minds of all dealers whenever a position is being filled: A hiring mistake can be costly. “On the low end, some say the cost of a bad hire may be $50,000, and at the high end it may be three times that much,” says Sally Brause, director of human resources consulting at GreatAmerica Financial Services (www.great america.com/PathShare). “I spoke to one dealer recently who said the cost of bad hires at his dealership in one year was more than $1 million. It can be very costly.” Brause cites recruiting expenses and compensation as examples of hard costs associated with a bad hire. However, she says, a lot of the cost comes in soft dollars. “For example, how much time did the manager and others in your organization spend trying to train and develop this person, taking their focus away from the top performers?” she asks. “You also have to think about the impact on your customer community. If you hire the wrong sales rep or service tech, he (or she) can do a lot of damage to the reputation that you have worked hard to build.” In order to avoid incurring both the hard and soft costs associated with a bad hire, there are several key strategies for hiring success that dealers can follow. Collectively, they will help you to hire right the first time, rather than going
through a cycle of hiring and firing multiple people for the same position in a relatively short period of time. Consider the scenario of Joe Sales, and the seemingly quick interview process. Instead, says R. Thomas Bruguiere, vice president of recruitment for the sales, service and management recruiting firm Crawford Thomas (www.crawfordthomas.com), the interview process should be more thorough and include “multiple interactions” with employees of the dealership, not just with one person. Bruguiere recommends an initial face-to-face interview with the hiring manager. “This should be a meeting to assess the individual and his résumé, ask basic interview questions, make sure he is a good fit for the position and to let him know exactly what the position entails,” he says. “This should be a ‘get-to-know-you’ meeting.” Following a successful first meeting, a good second meeting, Bruguiere says, is to have the candidate see a “day in the life” at the dealership. When hiring a sales rep, for example, he says the candidate should come in and “meet multiple individuals” within your company and participate in a “field ride” with a designated sales rep, “actually going out into the field prospecting and cold calling.” The rep taking the candidate on the field ride — ideally someone who is similar in age and background to the candidate — should be told by the hiring manager, “‘I will want you to give me your honest opinion about the candidate,’” Bruguiere explains. “‘I will want to know if you think the candidate would be successful in this position.’” Brause says she, too, is a proponent of having a current employee take the sales rep candidate on a field ride. “I am a big believer in that for a couple of reasons,” she says. “From the candidate’s perspective, I want him to see ‘the good, the bad and the ugly.’ I want him to have a realistic preview of the job. The last thing you want to do is tell the candidate that everything about the job is terrific and have him say on day one, ‘You mean I have to knock on doors and cold call?’”
10 | w w w. o f f i c e t e c h n o l o gymag.com | January 2013
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The second benefit of the lar defined outcomes for the field ride is the information end of the second week and “ ... Are you giving this new that can result from the infirst month. “The mistake hire a brand new territory? teraction between the emthat I see a lot of dealers ... You cannot expect an ployee and the candidate. “A make is having an orientaindividual to go into a new lot of times what will haption and training plan that pen is the candidate views focuses more on the activity territory and start selling the employee as a peer, as and not on the outcome.” $50,000 in equipment in a opposed to someone who In addition to a lack of matter of a month. It takes is truly interviewing him,” an on-boarding process, it time for him to build up his pipeline.” Brause explains, noting that appears that Joe Sales’ ter— Jessica Crowley the candidate will likely mination was also due to lower his guard. “As a result, unrealistic expectations. OfCopier Careers the candidate will share ten, says Jessica Crowley, disome good, insightful information that may be considered rector of recruiting for Copier Careers, the dealer is not fully in the hiring process.” taking into consideration the nature of the job from the new Whether it includes a field ride with a sales rep candidate or hire’s perspective. “For example, are you giving this new hire an MFP repair completed by a service tech candidate, it is im- a brand new territory?” she asks. “If so, that will take some portant that the dealership has a formalized hiring process so time to build up. You cannot expect an individual to go into a that it can effectively compare candidates. Says Brause: “First new territory and start selling $50,000 in equipment in a matand foremost, have a consistent process that you follow with ter of a month. It takes time for him to build up his pipeline.” every applicant.” Says Bruguiere: “Clearly define an interview Schwartz cites a related perspective that dealers should process for your organization and stick to that process.” consider when hiring sales reps. “Nowadays, it is a sophisPaul Schwartz, president of Copier Careers (www.copier ticated, consultative sale and the ramp-up time is much careers.com), a sales, service and management recruit- longer than in the past,” he says. “So, likewise, it should take ing firm dedicated solely to the office technology industry, dealers longer than in the past to figure out if they have agrees. “Decide your process up front,” he says. “Decide what someone who is actually successful or not, given that sales is important to you. Then, lock down that process and treat cycles might be three, six or even nine months.” it like you would treat a sale, where there are stages to it.” Just as dealers should not be too quick to hire someone, they Looking again at the scenario with Joe Sales, it appears should not be too quick to fire them either, Bruguiere says. “It he may have been sent into the field too quickly with little becomes a waste of time and money,” he says. “I see a lot of job orientation or training. Bruguiere says he has seen this dealers invest so much of their time, resources and efforts in occur within the BTA channel. “The reason some dealers hiring someone and then the first month that person does not struggle with retention is simply due to the fact that they do produce more than $30,000, he is thrown out the door.” not have proper on-boarding schedules,” he says. “They give A final reason that the job did not work out for Joe Sales new hires a quick orientation, throw them to the wolves and was that he was not “ideal.” Given that “ideal” can be deexpect them to be superstars. So, you need a detailed train- fined as “perfect,” the hiring manager cannot expect to only ing and on-boarding process.” hire ideal candidates; it is not a matter of lowering expectaBrause agrees. “You have spent a lot of time trying to get tions, but, instead, embracing a realistic viewpoint. “If you the candidate on board; do not derail the good momentum have a list of the 10 traits you believe the perfect candidate on day one with a fire drill,” she says, recommending that would possess, I think you are being shortsighted if you do the on-boarding (orientation and training) process should not consider candidates with eight or nine of those traits,” focus on expected outcomes. “At the end of week one, what Schwartz says. “That is close to perfection. Actually, I think does the person need to be able to do? What skills does he you are setting yourself up for failure if you think the candineed and what knowledge does he need to have? Find ways date has to be perfect. Nobody is perfect.” to measure that.” There are at least two other strategies that will not only asPerhaps at the end of the first week the new hire needs sist dealers in achieving success the first time when hiring, but to have an understanding of the company’s history and cul- will also minimize employee gaps for any particular position. ture, have a memorized “elevator pitch” about the value the The first is: Always be recruiting. “The last thing that company brings to the customer, and be able to create a sales you want is to be left high and dry, with a sales territory presentation, Brause suggests. She notes there could be simi- open and your competition on the prowl,” Bruguiere says. 12 | w w w. o f f i c e t e c h n o l ogymag.com | January 2013
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I am an absolute believer “You should have a goal to that each dealership brings meet with one or two people “You ... need to understand something unique to an emevery week, even if you do your competitive advantage, ployee,” she says. “You really not have an open position. not just as a company, but need to understand your That way, you have a stable of as an employer. Go to your competitive advantage, not two to three people who are current employees and find just as a company, but as an in the loop who you could employer. Go to your curcall in at a moment’s notice.” out why they like working for rent employees and find The second of these adyour company ... Then, build out why they like working ditional strategies for sucthat into an overall brand ...” for your company, what is cess is to ensure your com— Sally Brause unique about it. Then, build pany is always seen as an GreatAmerica Financial Services that into an overall brand attractive place to work. and spread the message “Make sure you have something to sell, not just hardware, but solutions as well,” through your website, advertising, etc., so Crowley says, noting that you also need to have the in- that everyone knows your company is a great frastructure in place to support those solutions. “You place to work.” Brent Hoskins, executive director of the want to make sure you are not just attracting peoBusiness Technology Association, is editor ple to sell boxes or finding technicians who are only of Office Technology magazine. He can be looking to do break/fi x.” reached at email@example.com. Brause offers similar advice. “When I work with dealers
14 | w w w. o f f i c e t e c h n o l ogymag.com | January 2013
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Opportunities & Strategies Dealers share expectations, advice for the new year Compiled by: Brent Hoskins, Office Technology Magazine
n 2013, what do you believe will be the greatest areas of opportunity for office technology dealers? What do you believe will be the best strategies for success in pursuing those opportunities? Recently, Office Technology magazine asked these questions of its readers via an email survey. Among the responses received, it may come as no surprise that managed services was among the most frequently cited opportunities. However, there are a variety of other areas of focus as well. Perhaps the comments shared by your fellow dealers mirror your plans — or provide some new ideas. Opportunities: “For our company, one of the greatest areas (of opportunity) will be to continue to grow in the production space with upper-end color and black and white. A second area of growth is to expand our managed print services area, as we continue to see increased revenues from capturing printer contracts. Lastly, we will enter the managed IT services area for the first time and anticipate this will add net new revenues and accounts.” Strategies: “The biggest strategy is getting the right people in the right positions. We have found that as we move into these specialty areas of our industry, we have to select individuals who are very focused on the products and processes. Our previous successes and future depend on the products, people and programs that we offer.” Hunter McCarty, COO RJ Young Co., Nashville, Tenn. Opportunities: “Developing and building out a managed network services (MNS) solution to work in conjunction with software sales; MNS will help dealers keep up with the progression of copier/MFP marketing in the United States today.” Strategies: “Dealers will need to work hard to understand how MNS will help them develop trusting relationships with end-user customers’ network managers as a means of
working collaboratively with those managers to apply the most efficient output devices possible on those networks. After understanding the dynamics of MNS in their marketplaces, dealers must work to determine if it is in their best interests to build their MNS businesses from scratch or acquire a current provider of MNS services.” Mark Miller, President Eakes Office Plus, Grand Island, Neb. Opportunities: “In 1981, our company was established as office supplies, furniture and copiers. In approximately 1994, we added IT services with Novell Netware. Now, IT services is about 67 percent of our total revenues. Of that 67 percent, 20 percent is total managed IT services (we are their total IT department), up from 0 percent two years ago. Many IT services businesses are now trying to get into managed print. I believe that our greatest opportunity will be growing total managed IT.” Strategies: “Mining our copier/MFP leases and existing MPS customers to convert them to our total managed IT services will be our best strategy. We have had two (40-plus partner) accounting firms abandon their IT departments and move to our plan. We have doubled our number of prints under MPS within the last year and I see a lot of growth still to come. We do MPS right; it is not just a third-party lease bundled with a service contract for pennies per print. We own all of the MPS equipment, meet with our customers quarterly and truly remotely manage all of the devices.” Russ Bennett, President Bennett Office Technologies Inc., Willmar, Minn. Opportunities: “I believe that there is plenty of great technology that we can offer. The opportunities to add value by helping match technology to specific customer needs are numerous. Dealers can get out of the commodity business if they are able to simplify and implement just some of what is available.”
18 | w w w. o f f i c e t e c h n o l o gymag.com | January 2013
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Strategies: “I think you will want to pick what areas you will focus on and build a value proposition around them. Having a sales staff that can get to and present well to C-level people is critical. You must also make sure you have the right talent in your technical staff to fully implement and support whatever you sell.” Ray Belanger, President Bay Copy/Bay State Business Products Rockland, Mass.
“The dealers will still have to practice the basics, which are to cut costs, practice what they preach ... and keep in touch with the customer through calls ... ”
Opportunities: “Selling solutions and software is going to be our position and hardware is the byproduct.” Strategies: “Training, training and more training of sales and service team members so they are aware of every aspect of the software they are selling and how it fits into the everyday business of the customer. This is where the manufacturer is going to have to be looking in the future with its educational programs. The dealers will still have to practice the basics, which are to cut costs, practice what they preach within their own businesses and keep in touch with the customer through calls, calls and more cold calls.” Loren Davis, President Davis Business Machines Inc., Helena, Mont. Opportunities: “I do not think 2013 is going to be any different than 2012. I do not see any major changes out of Washington, D.C., and I do not see the economy making any vast improvements (or declines, for that matter).” Strategies: “In my opinion, dealerships need to focus on maximizing their current customers by increasing their product offerings with products such as MPS, MNS, document management, VoIP and other technologies. Dealerships can reap the benefits of new revenue streams by developing these product offerings. Because the economy is stagnant, this is a great opportunity to provide cost-saving technologies to current customers that dealers already have rapport with. Dealers who continue to focus on lease upgrades and competitive takeaways are making a big mistake. There is simply too much parity in our industry anymore and, for the most part, most of us (dealers) offer good service with quality products, which only leaves price.” Joseph Dellaposta, Vice President WPS Inc., Hagerstown, Md. Opportunities: “The greatest areas of opportunity in 2013? Bringing clients expanded service offerings will continue to be our focus in 2013. Organizations still struggle with managing the out-of-control costs of print, copy, scan
and fax. Leveraging our strengths to help clients gain efficiencies, lower costs and gain control makes the future look bright for us.” Strategies: “The managed IT space is a natural step for us. Clients continue to lean on us for what is new in technology and how they can use it to gain advantages in the marketplace. It is really a fun time to be in our industry.” Gary Thomas, President Thomas Office Machines, Muncie, Ind.
Opportunities: “Document management and solutions.” Strategies: “Good products, but mainly a team capable of moving from selling boxes to solutions. That is the hardest nut to crack, as the sales cycle shifts tremendously and is now much longer (of course, depending on the sale).” Roger Worme, General Manager Regional Business Systems Inc., St. Michael, Barbados Opportunities: “Acquisitions, in both the copier/MFP and IT spaces.” Strategies: “The best strategy is to make sure all your manufacturing partners, leasing partners and industry people know you are looking for acquisition opportunities. In addition, there must be a minimum of one person charged with the responsibility of calling companies that fit your strategic acquisition plan. The bottom line is that there must be a plan in place to proactively accomplish this.” Larry Weiss, President Atlantic Business Products, New York, N.Y. Opportunities: “Probably the largest area of opportunity for most dealers would be growth through acquisition. With the industry being so mature and with the current economic conditions, it appears landing new business is going to be tough.” Strategies: “It is time for dealers to begin discussions on some type of merger that would allow multiple services to be offered under a single roof, sharing common overhead.” Jerry Jackson, President All South Copiers, Kennesaw, Ga. Opportunities: “In our country, I believe it will be to begin shifting the market to MPS, which has not taken off as well as in the United States and more developed countries.” Strategies: “Developing sales and service teams to educate customers.” Jason Dodge, Vice President of Service Bahamas Business Solutions Ltd., Nassau, Bahamas n
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MNS Compensation The right plan will help ensure ongoing success by: Luis Gonzalez, SalesScoreKeeper.com
s office technology dealerships make the shift to managed networked services (MNS), they definitely move into uncharted waters as far as compensation models go. The biggest difference from past compensation models is that dealerships are now selling services without a hardware component. And, if they do have hardware, there are extremely thin margins — certainly not enough margins to attract a traditional copier/MFP salesperson. In the past, with managed print services (MPS) there was always the upside of possible hardware sales from printer consolidation. But with MNS there is no component that would lead to a copier/MFP sale. The sale is not a hardwaredriven event; it requires dealers to pay on a monthly revenue stream and possibly over the term of the contract. Here are a few ideas that you may want to consider when assembling your compensation plan for MNS. n Pay on Gross Profit — It would be extremely difficult to calculate monthly gross profit (GP) for a single account, but you could still pay sales reps on GP projections that are figured at the time the account is contracted. A sliding scale percentage of the invoice, which is triggered by the account or contract GP, can be the most effective way to pay a sales rep. This method would also allow you to make adjustments during the contract period where you could raise or lower the amount of commission earned based on the actual GP of the account. This could motivate sales reps to maintain their accounts and make sure their accounts grow with profitable sales activities. n QBR Qualifiers — In the world of MNS, service levels and customer feedback become a vital part of not only growing accounts, but also maintaining them as customers. Quarterly business reviews (QBRs) are a perfect way to ensure that your reps build relationships with their accounts. Requiring your sales reps to conduct in-depth QBRs with your MNS customers as part of their commission terms is a great way to trigger commission payments and to ensure the reviews are being conducted. n MNS Out Cost — Just like in the office technology business, you should consider having an “out cost” on offered
services and products. This out cost can help to ensure that your services have the built-in GP needed to pay sales reps for commissions. Something that you must be careful about is paying commission on products or services that do not have a commission component built into their pricing. The commission paid out on this could end up eroding the company’s ability to make the GP forecasted. The key is to always make sure the company GP is calculated by taking commissions that will be paid to sales reps and sales managers into consideration. n Monthly Commission Payments — I think it should not go unsaid that MNS commissions need to be paid monthly and should not be paid on a one-time basis. MNS selling is truly account-based selling and it should be compensated in that fashion. A mixed compensation plan that pays a small bonus up front for signing the account would be a great incentive, but the bulk of the commission earned should come as the account is billed for services rendered. This not only protects your company’s cash flow, but also allows you to reassign the account to a new sales rep if the original rep happens to depart for any reason. n Pay for Account Growth — As your MNS business
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it can be a great way to keep and attract grows, there will be additional products new sales reps by offering a new way to and services that you will want to introPaying for growth is make money. n duce and sell to your current customers. an excellent way to Luis Gonzalez founded Miami Office To make sure that those items will be make sure that your Supplies (MOS) in south Florida in 1986. sold, adding a growth component to your compensation plan MOS specialized in the office equipment MNS compensation plan is a good idea. aligns with your space for 25 years as an independent This growth qualifier could be to maindealership. It was acquired by Sharp tain the current commission year over company’s goal of Electronics in 2007. From 2007 to 2011, year, or to even keep the account from growing the business. Gonzalez was branch president and being reassigned. Paying for growth is director of sales and marketing for an excellent way to make sure that your Sharp Business Systems. He was most recently senior vice compensation plan aligns with your company’s goal of president for Sharp’s Business Solutions Group. growing the business. If the sales rep is doing his (or her) In 2011, he founded SalesScoreKeeper, a software job inside the account, the growth qualifier will ensure he design and development company has the knowledge and relationship required for account specializing in automation of the growth to come naturally. commission process for One thing is certain — the success of selling MNS business-to-business sales companies. through your current sales reps (or even your future MNS Gonzalez can be reached at (888) 786-7270 reps) will come from the way sales reps are compensated for or firstname.lastname@example.org. what you want them to sell and how you want them to sell it. Visit www.salesscorekeeper.com. MNS is not only a great opportunity for the dealership, but
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BTA HIGHLIGHTS BTA would like to welcome the following new members to the association:
Dealer Members Crabtree Companies, Eagan, MN Image Communication Technology, Houston, TX Laser Rite Document Solutions, Sarasota, FL Northern Copy Products, Watertown, NY Secant Technologies, Kalamazoo, MI SMD Copy Systems, Minneapolis, MN Vendor Associate Members Memjet, Eagle, ID For full contact information of these new members, visit www.bta.org.
Industry Analysts Inc.â€™s New Sales Rep Training
For the benefit of its dealer members, each month BTA features two of its Vendor or Service Associate members in this space. BTA Vendor Associate member Esha Corp. is a national wholesaler of OEM and compatible computer and printer supplies with more than 20 years of experience in the industry. The company has direct relationships with many technology manufacturers and distributors of printer and computer supplies and accessories. Esha prides itself on its three tenets: service, pricing and selection. Esha is here to offer better service than the big stationers, unmatched selection and aggressive pricing. The company is headquartered in New Jersey with distribution centers across the country. www.eshacorp.com
Industry Analysts Inc. is a market research, training and producttesting firm focused on the office equipment industry. The company now offers training courses for new sales reps with no industry experience that are designed to provide background information on the industry, technology and how to be an effective salesperson. The goal of these two courses is to teach a new hire how to do his (or her) job. They are a great way to get new reps up to speed so they understand what is expected of them and how to be more effective. BTA members can receive discounts of up to 15 percent on these courses. Visit www.bta.org/IANewRepTraining for additional information.
BTA Service Associate member Coco Training & Consulting Inc. (CTC) specializes in education and coaching. Through the companyâ€™s webinar-based training programs, attendees can learn about sales and management leadership, sales career training and more. CTC also offers executive coaching, where CTC President Larry Coco works sideby-side with business owners and senior staff to create a clear vision and strategy for their companies, teach them how to manage proactively and communicate more effectively, and show them how to surpass well-defined goals. www.cocotraining.com
For information on BTA member benefits, visit www.bta.org/MemberBenefits.
A full list of BTA Vendor and Service Associate members can be found online at www.bta.org.
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COURTS & CAPITOLS
Background Checks They are essential, but there are limitations by: Robert C. Goldberg, General Counsel for the Business Technology Association
n today’s world, it is essential to find out as much as one can about an individual prior to making an employment offer. There is an abundance of information available, but the courts and the Equal Employment Opportunity Commission (EEOC) have placed limitations on the use and consideration of certain facts. In years past, employers were forbidden to inquire if an applicant had his (or her) own transportation or to ask how he would get to work each day. It was believed that the lack of automobile ownership was being used to discriminate against minority candidates. The key is the need to relate the question and information to the position being sought. There must be a bona fide occupational basis for the information to be considered. It is an employee’s obligation to get to work. How he gets there is irrelevant. Recently, the EEOC issued new guidelines on the use of background checks. Again, the fear is that background checks are being used to discriminate against racial and ethnic minorities. Statistics indicate that certain minorities have higher conviction rates than others. Always remember that in reaching an employment decision, an employer can only consider convictions — not arrests. In the office automation industry, there is a clear need to perform background checks for technicians and, perhaps, salespeople as well. Technicians are often dispatched to schools, hospitals, nursing homes and other establishments where certain individuals are precluded from entering. In many jurisdictions, a convicted child molester is forbidden from coming within a certain distance of a school. If a dealer were to dispatch a technician to a school who was restricted for this reason, both the individual and dealership could be in violation. The same issue could arise with a salesperson making a presentation or proposal at a forbidden site. The new EEOC guidelines address how criminal background checks can be used in employment screenings in the workplace. The guidelines ask the employer to consider the nature of the crime, the time that has passed since conviction and whether or not the crime committed has any bearing on the employment position. These guidelines are not clear-cut rules and may result in different conclusions by different individuals based on the same facts. In October, the EEOC alleged that Dollar General Corp.’s use of criminal background checks violated the Civil Rights Act of 1964, as it had a disparate impact on African-American
applicants. In its claim, the EEOC contends that African Americans were excluded from employment by Dollar General due to prior convictions that were unrelated to the positions being sought. A conviction for assault six years in the past may not be relevant to a warehouse opening. In establishing a violation, the EEOC relies on statistical data to establish a pattern and, thus, “intentional” discrimination is not a factor in order to prove its case. To create a solid record for reaching employment decisions, it is absolutely essential that job descriptions be established for each of your positions. Sample job descriptions can be found on the BTA website, www.bta.org. In that manner, the nature of an offense can be balanced against the requirements of the position. Clearly, an administrative individual convicted of fraud or embezzlement could be excluded. In order to protect your dealership, it is suggested that you keep a record of all criminal background checks performed and the justification for both reviewing the applicant’s criminal background, as well as the reason for rejecting the individual based upon that information. As an employer, you have the right to screen employees in order to keep the workplace safe, fight theft and protect the safety and security of customers. n Robert C. Goldberg is general counsel for the Business Technology Association. He can be reached at firstname.lastname@example.org. www.officetechnologymag.c o m | J a n u a r y 2 0 1 3 | 25
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Ready for 2013? Give your sales force an annual checkup by: Troy Harrison, SalesForce Solutions
ell, it is the beginning of a new year; time to celebrate your 2012 successes (right?) and plan for greater success in 2013. What that really means is that it is time to give your sales force an annual checkup. You do that for your own health, so why not do it for your business’s sales health, too? Of course, the biggest obstacle to the annual checkup is knowing what to check. Being a sales manager in this industry can be a challenge. Potentially, there are a lot of moving parts to your job. The good news is that, when we are talking about positioning ourselves for an outstanding 2013, there really are not that many things to consider. As a manager, you only have two variables to work with in order to generate results and only two methods by which to maximize those variables. The two variables are quantity of sales activity and quality of sales activity. The basic equation looks like this: quantity of sales activity x quality of sales activity = results. In other words, the more you do something and the better you do it, the better your results will be. Your job, as sales manager, is to maximize the number of activities performed in your sales funnel, as well as the quality of those activities. To do this, you have two things to work with — your people and your processes. Your people should be working at their maximum reasonable effort, thus generating a high quantity of calls, appointments, proposals and sales. They should also be skilled enough so that those calls are quality sales calls, thus maximizing your opportunities for prospects to proceed through the sales funnel and become customers. Evaluating Your People The first thing to ask yourself as part of your checkup is: “How many of my people are capable of achieving my 2013 goals?” I like to rate salespeople in three categories: green, yellow and red. This may be obvious, but let me explain. Green salespeople are salespeople who are either currently meeting goals (and we expect they will continue to do so) or who are properly ramping up to meet goals (in the case of new salespeople or salespeople who have been on a performance improvement plan). These are the ones that you are not worried about; you would still like to work with them to improve their performance, but you are not losing sleep over whether or not they are going to be with you. Your main task with these salespeople is to continue to develop their skills and work to retain them.
Yellow salespeople are in doubt. Their performance is not meeting goals and you are unsure if they are capable of meeting goals. You should be troubleshooting these people; in fact, any salesperson who is yellow should currently be on a performance improvement (or probationary) plan. These could also be salespeople who are new enough that they do not yet have an established performance pattern. Red salespeople are not going to make it. You have been working with them and you realize that it is simply not going to work out. Projecting their achievement out into the future, they simply do not have a moment where they will reach company goals. If you have any of these people, you should be in the process of releasing them. Ideally, your sales force will be at least 60 percent green; at most, you will have 20 percent yellow and 20 percent red. For a typical medium-sized branch with five salespeople, you should have at least three in the green category. When a salesperson crosses from yellow into red, he (or she) should not be employed for much longer. Now that you have done the big picture categorization, it is time to look at each one of your sales reps individually. Are you doing a formal evaluation of your sales reps annually? If not, this is a good time to implement that process. If your company does not have an evaluation form that it uses, there are many available on the Internet to download for free; get
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one and tailor it to your needs. For instance, if you need one sale per In looking at your salespeople, it is time week, figure your closing ratio from proIn looking at your to evaluate their performance with our two posals to sales. If it is 50 percent, then you salespeople, it is time variables — quantity of activity and quality need two proposals per week. How many to evaluate their of activity. You should have sales activity initial appointments yield a proposal? performance with metrics in place; if not, I will discuss those How many calls get an appointment? It is our two variables — later in this article when we talk about not difficult to get these numbers with a sales processes. little bit of study. This creates a road map quantity of activity Start with quantity of activity. For each for sales achievement, as performed by a and quality of activity. salesperson, compare his activity numcompetent salesperson who can use these bers from 2012 (use the entire year, if posnumbers to achieve your goals. sible; that levels out spikes and drops from big weeks and For those of you who have these numbers, you should be resmall weeks) with your activity metrics. Is he making enough validating them annually. Your metrics are only as good as your prospecting calls? Initial appointments? Proposals? If not, ratios are accurate. Ratios can change over time; for instance, you know that there is untapped potential available simply when voicemail became prevalent, it took more calls to get an by getting him up to standard. Do not neglect this with your appointment because salespeople were able to get a hold of top performers. Your instinct is to leave your top people alone. fewer prospects by phone. Similarly, when the economic downRemember, however, that every call a top performer makes is turn happened, closing ratios on proposals moved downward. more valuable than a call by your average performer, simply Once again, take the activity results of only your green because it has a higher likelihood of turning into a sale. That salespeople to re-validate the ratios and numbers. Are you is what makes them your top performers. If they are not maxi- seeing big changes in the ratios? It might be time to revise mizing their time, you are losing potential sales. your metrics. Do not use yellow or red salespeople in this; they Evaluating the quality of their activity is more difficult and will skew your ratios downward. What we want is to mirror more subjective, and it requires you to put time into making and match the results of your successful people. joint calls with your reps. For each rep, create a strengths and One other word here: Do not revise your metrics downweakness matrix. What is he especially good at? What does he ward. Instead, revise your goals upward. For instance, if you struggle with? What can you do to alter and improve the qual- are finding that your closing ratio is improving, the idea is not ity of his activity? Again, do not neglect strengths. Sometimes to allow your salespeople to perform less sales activity. That it can be more beneficial and profitable to build on a strength means that your results (sold deals) should get better. than to fix a weakness, especially if his weaknesses are not After you have terminated any red salespeople, do not worpreventing him from hitting your goals. For yellow salespeo- ry about the “best time” to hire. The best time to hire is always ple, it is a bit different; you will want to focus on fixing what- now. Get your hiring processes started. ever weaknesses create a barrier to results. This is also a good time to think about any other needs you Create a professional development plan for each green and might have from management or even programs (such as lead yellow rep (remember, the plan for red reps is termination). development programs) you would like to set up with other Make the development plan a part of the evaluation we dis- departments. Get those on the agenda as soon as possible. cussed earlier and work toward achieving those goals on a We all wish that we could hit the ground running for the new consistent basis. Yellow reps should have a deadline for hitting year with 100-percent green salespeople who are ready, willing goals and making the transition to green. and able to knock it out of the park. For many of you, that will not be possible, but now is a good time to take a look and see Your Evaluation Processes where you really are for 2013 and put the right steps in motion. n Now, let us take a look at your processes. You should be reTroy Harrison is the author of “Sell Like You Mean It!” and evaluating and validating your sales metrics at least once a president of SalesForce Solutions, a sales training, consulting, year. If you do not have these, the simple version is that sales and recruiting firm. He was among the speakers at the October metrics are the amount of each activity that your sales rep 2012 Fall Colors Conference, hosted by BTA performs in a given time period (I prefer to manage by the Southeast. For information on booking week). I like to keep it simple by using: calls for appointments, speaking/training engagements, consulting initial appointments, proposals and sales (sold deals). These or to sign up for his weekly e-zine, contact are the major junctures in the sales process. Work backward Harrison at (913) 645-3603 or from the number of sales needed in a given time period and TroyHarrison@SalesForceSolutions.net. then use your expected ratios to get your numbers. 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Dealers Helping Dealers Strong peer groups add to a successful equation by: Chip Miceli, Des Plaines Office Equipment
or those dealers in the office equipment/service industry, your primary calls to action may be remaining competitive and staying ahead of constantly evolving technology. However, participation in a strong peer network is also an important action for you to consider. Although underused by many dealers, a confidential peer group provides a nurturing haven to discuss the large (and not-solarge) issues associated with running your business. From questions about competitive rates for new hires, to the best ways to promote a product, to the types of advertising that produce the best results, to training techniques that work, there is likely not a dealer who, at one time or another, could not benefit from a peer who has “been there.” There are many scenarios where input from experienced peers can prove beneficial. Perhaps a distributor/partner shows interest in becoming a dealer and, therefore, your competitor, leaving you to wonder how best to proceed with that relationship. Or maybe you are considering expansion and want to pick someone’s brain about the merits of building versus entering into a long-term lease. Maybe you are looking for the best methods to promote a product. Or it could be you desire a new strategy to negotiate a better deal with your Konica Minolta or OKI Data partner. Maybe you have experienced a slump in sales and are unsure if the economy, your business model — or a combination of both — is to blame. Certainly, you could discuss these issues with your banker, investors or even your sales force, but some of those concerns could cause them to worry about the stability of your dealership — and, perhaps, your management skills. And while you may be inclined to “talk shop” with an area competitor over a beer following a local trade show event, you do not want to tip him (or her) off to your plans to expand into a new regional territory or, worse, intimate that you are experiencing sagging sales. Here is where the peer group network comes into play. Best described as a confidential “safe haven” where you can expand your sphere of knowledge, peer groups bring non-competing dealers from varying parts of the country together to
discuss and dissect the issues — both large and small — that may keep you awake at night. A peer group is where you can learn about and share best practices with dealers nationwide who are just as engaged in providing advice and perspective as they are in receiving it. Case in point is the Select Dealer Group (SDG), comprised of industry peers, with a membership that draws from leading office equipment/service dealerships across the country whose collective goal is to benchmark their industry and share best practices. SDG began with 10 founding members and today boasts nearly 40 of the most successful and innovative dealerships in the United States. This dramatic increase in membership speaks to the desire and need for structured gatherings — places where those in the industry can come together, share problems and enlist the expertise and experiences of peers who are not competitors. SDG brings together non-competing dealers from different geographic territories, allowing them to speak openly and honestly about marketplace and internal issues without feeling threatened. SDG operates under the umbrella of the Business Technology Association (BTA). The group meets at various dealership locations throughout the United States three times a year, and has held meetings in Boston, California’s Napa Valley, Chicago, Cincinnati, Dallas, Denver, Las Vegas, Miami, Minnesota, San Francisco, Savannah, Ga., Utah and Washington, D.C. Discussions range from employment issues to dealership branding, from methods of vendor negotiation to expansion plans — all under the safety net of confidentiality and mutual trust. And, with the office equipment/digital document solutions industry going through so many changes, now, more than ever, a strong need exists for a forum where leaders can meet, brainstorm and exchange ideas with the goal of providing even better service to their customers. The peer group concept allows for better decisions and, therefore, achievement of better results. The opportunity to step back and think, to work on your business and not in it, and to bounce ideas off of and receive wise counsel from www.officetechnologymag.c o m | J a n u a r y 2 0 1 3 | 29
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tools. While keeping abreast of technology experienced leadership peers is at the very and marketing your products and services core of this winning paradigm. ... SDG members work to your best advantage are key components Another one of the many merits of the toward building best of a lucrative business model, the peer SDG format is the relationships that are practices and establishing group experience is similarly essential. forged among members. Communication is industry benchmarks By sharing with and learning from others not limited to the handful of annual face-toand, in the process, hold within our industry, everyone (including, face meetings. Members often phone, email most importantly, our clients) comes away or otherwise communicate when an issue each other accountable a winner. n presents itself and they find themselves in for progress. Chip Miceli is president of the Select Dealer need of advice from a fellow member. Group (SDG). He is also president of And while friendships are made and Des Plaines Office Equipment (DPOE), wide-ranging information shared, peer a Chicago-area provider of document solutions groups are much more than an opportunity for social gatherand an industry leader in managed print services. ings or general give-and-take question-and-answer sessions Miceli can be reached at (879) 847-6400 or — although both of these aspects are beneficial in their own email@example.com. Visit www.dpoe.com. rights. Ultimately, SDG members work toward building best For more information on SDG, visit practices and establishing industry benchmarks and, in the www.selectdealergroup.org. (Editor’s Note: process, hold each other accountable for progress. A second group, the PRO Dealer Group, Peer groups have the capability to cultivate better leaders, also operates under the BTA umbrella. enhance decision-making processes and, in the long run, facilFor more information, visit itate the ability of their members to achieve improved results. Building a successful business requires a wide variety of www.bta.org/PRODealerGroup.)
Advertiser Index 14 • BTA District Event Sweepstakes
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15 • BTA Field Service Foundations
23 • ENX Magazine
11 • MSE
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31 • The Imaging Channel
27 • ProFinance 2.0
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5 • DocuWare
16-17 • ITEX 2013
9 • Samsung
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(866) 726-4249 / www.samsung.com/mpa
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Your link to the business and people of managed print. in-depth features channel profiles industry Q&A expert analysis vertical profiles industry experts hardware profiles channel pulse and much more
The Rules of MPS
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INSIDE: Defining the Indefinable: The Rules of MPS pg. 20 We can see the results, feel the power and know they are real, but the rules of MPS are not easy to define.
The Laws Your Clients Contend With pg. 12 There’s a lot to consider when “assuming responsibility” for clients’ devices, especially in light of today’s privacy laws.
Five Things to Consider When Developing Your Mobile Field Service Strategy pg. 33
April 2012 Volume 3, No. 2
Mobile technology has become a necessity in the service business
The Evolution of MPS INSIDE:
The Evolution of MPS: A Matter Of Perspective pg. 24 From papyrus to paper, the evolutionary path of MPS, like most technologies, is a long one. Its direction, however, depends largely on your perspective.
M&A Activity Connects Print With Other Services pg. 15 A new strategy of reshaping business serves to combine and conquer the ever-changing marketplace.
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Avi Resort & Casino Hits the Jackpot With MPS pg. 30
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