March 2009 Office Technology

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CONTENTS Volume 15 No. 9 G

FEATURE ARTICLES 10

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Page-Volume Roundup In pursuit of the print management opportunity

A Reduction in Force Fortify yourself against employee-initiated lawsuits

34

by Brent Hoskins Office Technology Magazine

by Robert C. Goldberg BTA General Counsel

Pages marked with toner. As simple as it sounds, they have been the primary target of the office technology dealership all along. And since there is revenue associated with each of those pages, the more, the better. Capture the clicks, capture the revenue. Do you have a strategy in place for a page-volume “roundup” within your customer base?

One of the many unpleasant consequences of a recession is the need to reduce your number of employees.

SELLING SOLUTIONS More Meetings, More Money How to implement effective prospecting

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by Kate Kingston Kingston Training Group

Optimizing Your CRM Utilize these programs to improve your sales force

by David Ramos Strategy Development

With every new client engagement, one of the first questions I field is: “Which CRM does Strategy Development recommend?”

Typically the client is asking this question because their current CRM is not being utilized by their sales force.

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COURTS & CAPITOLS

Security Leads the Sale It is imperative to protect networks & MFPs

by Scott Davidson Kyocera Mita America

Here are some strategies to use to successfully increase your number of new qualified meetings.

PRINCIPAL ISSUES A Multi-Dimensional Puzzle Is the manufacturer a friend or a foe?

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by Reed Melnick Nevill Imaging Solutions

If there was ever a time for manufacturers and dealers to work together, it is now.

Don’t Overlook Supplies They are an important part of selling dealership value

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Rather than selling the traditional box, savvy sales professionals are getting an upper hand by leading their sales pitches with the topic of security and its role as a business necessity and substantial line item in every IT budget.

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Your Dealership’s Worth Follow these guidelines to create a valuable business

by Jim Kahrs PPMC Inc.

2009 promises to bring many changes.

With all of this change and uncertainty, it is no wonder dealers are concerned about what the future will bring. Many dealers are left asking the question: “What is my dealership really worth?”

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by Bob Sostilio Sostilio & Associates International

There are many steps you should take in selling your dealership’s value — they include selling supplies.

DEPARTMENTS Business Technology Association

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Education Calendar BTA Highlights

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Executive Director’s Page

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BTA President’s Message

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Advertiser Index

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EXECUTIVE DIRECTOR’S PAGE

Drop by BTA’s Booth at the ITEX ‘09 Show ach year, for a couple of days in the spring, the Las Vegas Convention Center becomes the focal point of the office technology industry. Through a variety of educational opportunities, a vibrant exhibit hall featuring a wide variety of products and services, and unparalleled networking opportunities, the annual ITEX Show is among the industry’s premier events.

Have you registered to attend this year’s ITEX Show, scheduled for March 18-19? If not, I encourage you to do so at www.itex show.com. As a Business Technology Association (BTA) member, you can attend at a discounted rate. When registering (online

by March 16), enter the BTA member discount code: BTA9B. Your registration fee will then be $79 instead of $149.

BTA will be among the many exhibitors.

You will find us in the middle of the trade show floor in booth number 445. If you are a current member, drop by and learn more about the association’s latest benefit offerings. If you are non-member, allow us to share with you how BTA can help boost your bottom line through our education, information, etc. BTA staff members and our volunteer leadership will be on hand in our booth to visit with you.

Whether you are a member or not, if you have ever found yourself wondering about the full value of membership, you should know that BTA has made great strides in recent years. For example, several classroom workshops have been added to our educational lineup, such as the BTA Print Management Workshop and the BTA Sales Management

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Workshop. In addition, each month BTA now hosts a free webinar for its members, led by one of the industry’s many experts. To date, more than 800 attendees have participated in the BTA “Building My Business” Webinar Series. You may also have an interest in our newest educational offering, the BTA Professional Services Workshop. You can find details (including workshop locations and dates and webinar dates) for these and other educational opportunities on the BTA Web site, www.bta.org.

On the first day of the ITEX Show, while you are at the BTA booth, be sure to pick up an invitation to “A Winning Combination,” BTA’s evening reception to be held from the close of the show until 7 p.m. on Wednesday, March 18, in Sales Villa Suite No. 2935 at the Las Vegas Hilton. At the reception BTA will be presenting the association’s 2009 Channel’s Choice Awards, recognizing several manufacturers for their exemplary support of the dealer channel, based on ballots cast by dealers. In addition, ImageSource magazine will be presenting its 2009 Perfect Image Awards at the event. Of course, there will be plenty of food and drink. Plus, there will be the chance to win several great prizes.

The BTA reception will also include the opportunity to visit with our sponsors, who are helping to make the event possible. Be sure to show your appreciation to all of our sp ons ors: Bul l etHire, D o cuWare, GE, ImageStar, InkCycle, MSE, Muratec America Inc., Niche Equipment, OKI, Sagem-Interstar Communications, Strategy Development, StructuredWeb, Supplies Network and West Point Products.

I look forward to seeing you in Las Vegas. I — Brent Hoskins

Executive Director/BTA Editor/Office Technology Brent Hoskins brent@bta.org (816) 303-4040 Associate Editor Elizabeth Marvel elizabeth@bta.org (816) 303-4060 Contributing Writers Scott Davidson, Kyocera Mita America www.kyoceramita.com Robert C. Goldberg, General Counsel Business Technology Association Jim Kahrs, Prosperity Plus Management Consulting Inc. www.prosperityplus.com Kate Kingston, Kingston Training Group www.kingstontraining.com Reed Melnick, Nevill Imaging Solutions www.nevillsolutions.com David Ramos, Strategy Development www.strategydevelopment.org Bob Sostilio, Sostilio & Associates International

®

Business Technology Association 12411 Wornall Road Kansas City, MO 64145 (816) 941-3100 www.bta.org Member Services: (800) 505-2821 BTA Legal Hotline: (800) 869-6688 Valerie Briseno Membership & Marketing Manager valerie@bta.org Mary Hopkins Database Administrator mary@bta.org Teresa Leerar Bookkeeper teresa@bta.org Brian Smith Membership Sales Representative brian@bta.org ©2009 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 ®

Use BTA’s Offerings, Receive a Huge ROI eturn on investment (ROI). I hear and read these words all the time. In our tight economy, it seems more important than ever.

W hen I think of my personal ROI, I am usually thinking about the time and energy I personally need to invest in my own quest for attaining appropriate industry knowledge.

My ability to make more money is ongoing.

Money can be saved, invested and continually made. The available time for keeping up with industry news and events is finite.

One of the things I like best about being an active BTA member is that it enables me to maximize the value of my learning time. As an organization, one of BTA’s greatest strengths is its ability to do all the fact finding and storage of the information I need.

BTA is able to spoon feed me the most important, relevant facts on a regular basis.

Our monthly magazine, Office Technology, provides me with insights to expand my knowledge base. Better yet, BTA continually makes me aware of products, services and issues I am unaware of until I read or hear about them through the association’s publications and educational offerings.

Not only do the BTA fact finders save me time, but I am also exposed to the key issues going on in our industry. I recently attended a two-day conference put on by another organization. In the past I had gained an enormous amount of new information when attending this conference. This year I was impressed with the speakers and programs, but I did not feel I actually acquired any new breakthrough information.

During my two-hour drive home from the

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conference, I was reviewing the many speakers and topics. One by one, I tried to figure out where I had originally learned about the information they were providing.

In several cases, my answer was the monthly BTA “Building My Business” webinars. A couple more came from the BTA West conference in Cypress, Calif., and the BTA Southeast conferences. I had read about many of the issues in Office Technology magazine.

If your goal is to stay ahead of the competition, the leader of the pack must know which direction to go. The power of knowledge enables leaders to know where to position themselves. My goal as a consultant to our clients is to know what types of questions they are likely to ask. Then I can make sure I am ready with the correct answers.

BTA’s ability to continually provide me with the knowledge I need before I need it helps make me appear to be an expert to our customers. It is much easier to sell a solution when you are prepared to answer the questions the client will ask.

As BTA members, we have the opportunity to take advantage of a wide variety of educational tools. In these times of economical uncertainty, there is no additional cost to enrich yourself and other members of your company through the educational vehicles that are included in your BTA membership.

The next time you try to sell one of your clients a new or upgraded product using a return on investment scenario, think about what new products and services knowledge you and your fellow employees need to acquire. In most cases, BTA or a BTA vendor member has already done all the research work. You can receive a huge ROI by using BTA’s offerings. I — Ronelle Ingram

2008-2009 Board of Directors President Ronelle Ingram Steven Enterprises Inc. 17952 Sky Park Circle Ste. E Irvine, CA 92614 ronellei@msn.com President-Elect Bill James WJS Enterprises Inc. 3315 Ridgelake Drive Metairie, LA 70002 bjames@wjsenterprises.com Vice President Rock Janecek Burtronics Business Systems Inc. 216 S. Arrowhead Ave. P.O. Box 1170 San Bernardino, CA 92408 rjanecek@burtronics.com BTA East Tom Ouellette Budget Document Technology 251 Goddard Road P.O. Box 2322 Lewiston, ME 04240 touellette@bdtme.com BTA Mid-America Mike Blake Corporate Business Systems LLC 6300 Monona Drive Madison, WI 53716 mblake@corpbussystems.com BTA Southeast Bob Smith Copiers Plus Inc. 408 Chicago Drive Fayetteville, NC 28306 bobsmith@copiers-plus.com BTA West Greg Valen Hawaii Business Equipment Inc. Toshiba Business Solutions - Hawaii 590-A Paiea St. Honolulu, HI 96819 gregory.valen@tabs.toshiba.com Ex-Officio/General Counsel Robert C. Goldberg Schoenberg Finkel Newman & Rosenberg LLC 222 S. Riverside Plaza Ste. 2100 Chicago, IL 60606 robert.goldberg@sfnr.com

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Page-Volume Roundup In pursuit of the print management opportunity by: Brent Hoskins, Office Technology Magazine

ages marked with toner. As simple as it sounds, they have been the primary target of the office technology dealership all along. And, since there is revenue associated with e a c h of th o s e p a ge s , th e m o re , th e better. Capture the clicks, capture the re venu e. D o y ou have a strat eg y in place for a page-volume “roundup” within your customer base?

Capturing just the copied pages used to suffice. Then the rise of digital documents changed things. Increasingly, documents began to be created and distributed in digital form. Print volume began to increase while copy volume began to decline. Dealers had reached a fork in the road. One route was to continue to focus on the output of copiers, now MFPs. The other route was to seek ways to capture all of the page volume in the workplace.

Today, increasingly, dealers are pursuing the second route. They saw that printed pages did not migrate en masse from desktop printers to the “digital copier” — the MFP — as hoped or expected. They saw that the cost of toner for desktop printers, generally not under maintenance contracts, is often expensive and in need of expert management.

They also saw printer-centric companies like HewlettPackard and Lexmark launch MFPs to lay claim to even more printed pages. For these dealers, deciding which route to take was easy.

Every dealer at least knows about the opportunity. At manufacturer dealer meetings and elsewhere, the print management strategy has become a leading topic of discussion in the industry. The strategy is fairly straightforward. The dealership offers a combination of services — management (maintenance and toner) of all of the customer’s printing devices regardless of brand, assessments of print volumes

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and document workflow, and implementation of software-based solutions, where necessary, to improve that workflow. The appeal to the customer is improved productively, cost savings and the convenience of receiving only one invoice each month covering all output devices. The customer wins. The dealer wins.

Definitions, Realities & Drivers Many have likely noticed that there are two phrases in play here — “managed print services (MPS)” and “print management.” What is the difference? Tom Callinan, a principal at Strategy Development (www.strategy development.org), a consultancy that created and leads the BTA Print Management Workshop, describes MPS as an equipment-led sale. MPS begins with a print assessment intended to optimize workflow and consolidate printing assets, he says, noting that the placement of new hardware is generally part of the initial stage. The dealership then contracts to manage all of the customer’s printing devices (maintenance and toner) and, over time, strives to further improve workflow through, perhaps, the introduction of new software.

In contrast, says Callinan, print management is a services-led sale. “You start out managing the printing assets and, over the long term, you optimize and improve,” he says.

“So, you come in and start out simply handling the service and supplies. Then, once you have a contract in place, you help the customer get the correct assets in there and you help them with their workflow. Print management offers a shorter selling cycle, less disruption to the customer and, therefore, a higher close rate.”

At the Photizo Group (www.photizogroup.com), an MPS consulting and research firm led by Ed Crowley, the preferred

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term is MPS. However, acgrow th rat e of about 22 “The margins on knowledges Crowley, MPS percent, compounded annuaftermarket agreements may not be the best term. “It ally. In 2007, about 15 pertoday in MPS are in the is really ‘managed output cent of the products in the devices,’” he says. “It is manoffice technology market mid-to-high 50 aging all output devices, were under MPS contracts. percentile. I think the whether it is printers, copBy 2012, we project that to reason is that there iers, fax machines or even be more than 37 percent.” aren’t that many players scanners, in some cases. It is Along with the prospects in the space yet.” managing all of the devices for growth come attractive — Tom Callinan that produce or capture revenue opportunities. “The Strategy Development hardcopy.” He also describes margins on aft ermarket MPS as a “shift from a hardagreements today in MPS ware-centric sale to a services model.” are in the mid-to-high 50 percentile,” says Callinan. “I think Any debate on the semantics aside (hereafter referred to the reason is that there aren’t that many players in the space in this article as MPS, but inclusive of print management as yet. So, when you convince somebody to go on a program, defined by Callinan as well), it is a big opportunity. “In 2008, they aren’t usually comparing you to other players.” it was a $6.6 billion market in North America,” says Crowley.

While many have not entered the MPS arena or are only “By 2012, we see that growing to a $15 billion market. That’s a now ramping up, Callinan notes that “now is the time” for

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dealers to pursue an MPS later it was the number-one “In order to get dealers to strategy. He cites two realiselling Segment 4 box in the sign on, HP opened a ties that compel dealers to industry. So, now, not only floodgate of information do so. One, he says, is the are there fewer copies being previously noted decline of sold in the industr y, but that said to us, ‘You guys copies and rise of prints. there are new competitors don’t understand how “ There are fewer copiers coming after the copier many pages you are s o l d e ver y year at lower space — companies like HP, missing.’ I was at ... that average unit selling prices,” Lexmark, Samsung and OKI.” product launch. We sold 350 of them.” he says. “And the aftermarkBill Siderys, founder of — Bill Siderys et revenue for service and WMMW Mana ged P rint WMMW Managed Print Services LLC supplies is declining every Ser vices LLC (www.man year. So, it is difficult for a agedprintsvc.com), an MPS copier company to grow purely in the copier space.” consultancy, also cites the HP 4345, in particular, as a reason The second compelling reality for dealers to consider is the for dealers to pursue MPS. At the time of its launch, he was success of the printer manufacturers’ pursuit of the copier working at a dealership that sold the product. “In order to manufacturers’ domain. “Four years ago, HP introduced the get dealers to sign on, HP opened a floodgate of information LaserJet 4345 MFP and some in the industry laughed at it and that said to us, ‘You guys don’t understand how many pages thought it wouldn’t sell,” says Callinan. “Eighteen months you are missing,’” he says. “I was at ground zero of that

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the smaller carbon footprint product launch. We sold 350 “Customers have a much that comes with the optiof them. People were eating greater interest in saving mization of printing and them up.” money now than they w orkf low (and w ith th e Five years ago, even beinclusion of compatible carfore the launch of the HP have before. They are tri d ge s in an MP S strat4345, it was clear to Ron looking ... for anywhere egy). “It can also just help Carr, pre si d ent of O kl athat they can save money. dealers differentiate themhoma Office Systems Inc. That is the essential selves from the competi(www.oosinet.com), based promise of managed print services.” tion,” says Ann Priede, vice in Oklahoma City, that the — Steve Reynolds president of Lyra’s Publicapages coming off of printers Lyra Research tion Group. “So, instead of had to be pursued. “There just trying to sell a cost-perwere three to four times the number of clicks on printers than there were on copiers,” copy contract, the sales rep can come into the customer he says. “I thought, ‘If I’m getting 100,000 clicks out of a location and say, ‘We have this great way of working with customer’s organization right now, why shouldn’t I be you, analyzing your environment, shifting your output and getting 300,000 or 400,000 clicks?’” (The question led to the saving you money.’” launch of the dealership’s OneSOURCE division, focused on securing new customers through MPS, primarily with HP Implementing an MPS Strategy For any dealer now considering the pursuit of an MPS p r o d u c t . S u b s e q u e n t ly, t h e d e a l e r s h i p f o r m e d i t s PrintSOURCE group, focused, in part, on providing MPS to strategy, several questions likely emerge. Perhaps primary among them: Does it require dedicated sales reps? Carr says the dealership’s current customer base.)

Beyond any consideration of the realities cited, the yes. “We have been successful with the dedicated force,” he current state of the economy makes the timing right for says, explaining that one of the reasons is the need for the dealers to pursue an MPS strategy, says Crowley. “The MPS sales rep to call on the C-level rather than the generaleconomy is actually helping to accelerate this,” he says. line rep’s traditional targets, such as the office manager.

“Companies indicate that printing costs are equal to about 3 “Our success has been at the CEO/CFO level. So, when you percent of a company’s revenues. What we are seeing is head down the path of doing assessments, etc., you have the companies are saying, ‘If I can cut that by 30 percent, that’s right person driving it down to the right people from whom nearly 1 percent that drops right to my bottom line.’ In times you will be requesting information.”

Callinan recommends dedicated sales reps as well. “If a like these, that’s a big number. So there is a big cost-saving general-line rep is given the option of going out and selling a impetus behind this.”

Steve Reynold s, senior analyst for Lyra Research Segment 3 box or an assessment on 70 printers that in(www.lyra.com), a market research firm, concurs. “Because volves a longer sales cycle,” he contends, “it is a lot easier for the economy has gone south and credit has dried up, the him to choose the box sell.”

Siderys holds the alternative view. “I think that every rep demand for output devices has decreased,” he says. “Customers have a much greater interest in saving money now in the dealership needs to be presenting MPS as a way into than they have before. They are looking in their organiza- the door,” he says, noting that it is necessary to thwart comtions for anywhere that they can save money. That is the petitors that offer MPS. “If you don’t have all of your reps selling MPS, you are going to get beat. It is part of the essential promise of managed print services.”

In addition to the promise of saving customers money, package that reps take out the door — hardware, software there are other factors cited as drivers for MPS. Among and managed print.”

Whether pursued by dedicated or general-line reps, it is them: technological advancements that allow for remote meter reads and the monitoring of printing devices; the agreed that the decision to pursue an MPS strategy cannot opportunity for dealers to further embrace the industry’s be taken lightly or be made in haste. Otherwise, says Crowley, mantra that they should not just be selling boxes; and the the dealership may not be prepared to service multiple appeal of the positive environmental impact resulting from printer brands or will find itself without the infrastructure 16 | w w w . o f f i c e t e c h n o l o g y m a g . c o m | M a r c h 2 0 0 9

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necessary to support and reads to ERP systems, he “...

There are additional manage the growing fleets. says, “they’re not going to be backend costs to your “The worst thing that can able to read the meter on happen,” he says, “is selling every device.” So, the right organization that you may an MPS engagement that staff and processes must be not be aware of ... We have you cannot support.” in place to address the added dedicated employees in our Carr agrees. “We learned costs of handling more metwarehouse who go out to the hard way that there are er reads, he says. “If you don’t accounts and replenish additional backend costs to think about those additional their stock.

So, we had to add personnel.” your organization that you costs, you’re going to get — Ron Carr may not be aware of,” he yourself in trouble.”

Oklahoma Office Systems Inc. says. “For instance, we have While being judicious in dedicated employees in our preparing all departments warehouse who go out to accounts and replenish their of the dealership to aptly support the MPS initiative is stock. So, we had to add personnel.” important, Callinan advises dealers not to over-complicate There is also the issue of having enough employees and the it. “I see people trying to turn print management into this right processes in place to collect and bill for a growing big monster,” he says. “It’s a new approach. That’s all it is. It number of meter reads, says Carr. Even with the use of solu- is not like you’re selling them anything different. It’s just tions available today for the automated reporting of meter packaged differently. You’re servicing products, supplying

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InkCycle ad Feb 09:Layout 1

2/2/09

11:54 AM

Page 1

Cover Story Mar 09:Cover Story Mar 09

2/20/09

9:08 AM

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product and selling harddon’t care what brands they “You need to be able to ware. That’s it.” are; I’m going to provide the say to the customer, ‘I’m Reynolds emphasizes the complete set of services you p oint as wel l: “MP S i s a need based upon your regoing to support your shiny new wrapper around a quirements.’ If not, then you entire fleet and I don’t care bunch of things that have are going to be challenged, what brands they are; I’m existed for a long time.” because somebody is going going to provide the Is it time for you to careto walk into your customer’s complete set of services fully consider implementing office and you are going to you need based upon your requirements.’” that “shiny new wrapper” — lose the piece of the f leet — Ed Crowley an MPS strategy — in your that you used to own.”

Photizo Group dealership?

Brent Those dealers who do not Hoskins, will face an uphill battle, says Crowley. The day when a deal- executive director of the Business Technology ership could be content with only winning part of a cusAssociation, is editor of Office Technology tomer’s fleet are passing, he says. “You need to be able to say magazine. He can be reached at brent@bta.org. to the customer, ‘I’m going to support your entire fleet and I

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Sharp ad Feb 09:Layout 1

1/27/09

4:19 PM

Page 1

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Ramos Mar 09:Ramos Mar 09

2/23/09

10:47 AM

Page 10

Optimizing Your CRM Utilize these programs to improve your sales force by: David Ramos, Strategy Development

ith ever y new client engagement, one of the first questions I field is: “Which CRM does Strategy Development recommend?” Typically the client is askin g thi s qu estion b e cause th eir current CRM is not being utilized by th eir sal e s forc e. My re sp onse i s always a question: “What do you plan on using the CRM for?” The response is usually along the lines of: “So that we can track our rep’s call levels (activity) and opportunities (pipelines) and see if our people are working (again, activity).” Activity, pipeline and back to activity — sales metrics.

Ah yes, sales metrics. Those sales and activity numbers that are loathed by salespeople — often for good reason.

In some companies, managers have only a few sales metrics that they appear to use only for the purpose of browbeating and threatening the salespeople; at least that is how the sales force interprets it. Activity reports turn into demands on the salesperson to make more calls. Pipeline reports are used to demonstrate a lack of activity and to demand more calls. Commission reports are used to highlight weak sales and demand more calls. Do we really believe the only answer to increased sales is to make more calls?

It is not long before the salesperson figures out how to handle this issue — pad the activity reports. Salespeople have learned that if you are just going to use the reports as a baseball bat to beat them, they are not going to cut the tree down for you to make the bat.

Using traditional call level, pipeline, customer status and commission reports, it is difficult to isolate a salesperson’s root issues. It can be done, but it takes study, practice, welldeveloped analytical skills and a real knowledge of the salesperson involved.

W

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Unfortunately, that is a lot of work.

So, most managers take the easy way out — take a quick look, determine the root cause is not enough calls and demand more calls. It makes no difference if call quantity is an issue or not.

It makes little difference if the salesperson has been properly trained in prospecting or understands your marketing strategies. It makes no difference if the real issue is his (or her) interpersonal skills, communication skills, presentation skills or selling skills and the ability to probe, identify and solve prospect issues. The answers are usually the same — make more calls.

Since the salesperson sees no benefit from developing accurate reports — but certainly sees a very real deterrent — is it any wonder the reports are fanciful?

Now what happens when the company institutes a new CRM and demands compliance to faithfully use the system?

Typically it is resistance, maybe even revolution, from the salespeople. From the salesperson’s point of view, all the automated system is going to do is give the manager and the company a bigger bat to beat him with.

Yet salespeople can be taught to see sales metrics as a developmental tool. Certainly not by using the data the way many have used it in the past, but by using it to proactively help the salesperson earn more money.

The information gathered by a CRM — in fact, even that puff of information generated by traditional reports — can literally change a salesperson’s career when used properly.

Even a reasonable handful of accurate data can pinpoint issues that hinder a salesperson’s performance. In the hands of someone who has been properly trained to analyze the data, the information can be used to create an individualized training and development program for each team

ECi ads Mar 09:Layout 1

2/17/09

3:53 PM

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Ramos Mar 09:Ramos Mar 09

2/20/09

11:15 AM

Page 11

member. In the Strategy Development with your salespeople to improve their Sales Management Process, we call this skills? We recommend when doing pinThe objective of this RAP an individual development plan (IDP). point training and coaching, you focus process is to provide your The Strategy Development Sales on six areas for skill-set improvement: team with feedback on Management Process recommends that business acumen, communications, the areas where they this analysis of the metrics, with a tie to business planning, selling skills, prodare doing well, as well the IDP, occurs in a monthly review and ucts and services, and the sales process. as the areas where they planning session (RAP). The objective of Most salespeople want to sell more. need improvement. this RAP process is to provide your They want to earn more. They want to team with feedback on the areas where excel. But those same salespeople have they are doing well, as well as the areas where they need no desire to be consistently beaten over the head. improvement.

If you want to implement a new CRM or maximize your By using the information in the CRM for focused training current situation to produce accurate reports from your and coaching, ultimately improving the individual’s sales skills, salespeople, please seriously consider why you want them you gain acceptance of the CRM. When salespeople under- and exactly what you are going to do with them. If you stand that the information in the CRM has the potential of cannot or will not use them to help your salespeople making them money, it is no longer an issue. So, CRM utiliza- become better salespeople, do not even bother to ask for tion is as much a management issue as it is a sales rep issue. them because what you get will be designed to keep you off What skill sets do you typically analyze when working their backs as long as possible.

On the other hand, if your true goal is to help your team become the best salespeople they can be and to grow your team’s sales, communicate to your team in no uncertain terms what the purpose of the reports are and then stick to it. Use them as training and development tools in a monthly RAP and use an IDP to provide pinpoint training with specific developmental activities, not bats. It will take some time to implement and get the results you desire because salespeople have been taught — either through experience at your company or by a previous manager — that the reports and the metrics in the reports are not to be trusted.

If you or your sales managers need help in learning which CRM to select or how to thoroughly analyze and use CRM reports as training and coaching tools, hire one of the industry’s consulting firms. But whether you need outside help or not, you can have salespeople who welcome sales metrics — and the side benefit is the reports you have in your hands will actually have some relationship to reality.

David Ramos is a sales consultant with Strategy Development, a management consulting firm specializing in business planning, sales effectiveness, advanced sales training and operational and service improvement. He spent years developing employees and managers for Xerox and IKON Office Solutions, where he co-developed sales training programs. He can be reached at ramos@strategydevelopment.org.

Visit www.strategydevelopment.org.

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ECi ads Mar 09:Layout 1

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Davidson Mar 09:Davidson Mar 09

2/20/09

12:03 PM

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Security Leads the Sale It is imperative to protect networks & MFPs by: Scott Davidson, Kyocera Mita America

n the sport of boxing, fighters are taught to lead with one hand and defend with the other. Legendary boxers like Joe Louis and Muhammad Ali followed this training philosophy and won many titles.

But then along came southpaws, like Marvin Hagler and Oscar de la Hoya, who changed the game of boxing by leading with their left hands.

This boxing analogy also carries weight with today’s sales techniques for connected MFPs and printers. Rather than selling the traditional box, savvy sales professionals are getting an upper hand by leading their sales pitches with the topic of security and its role as an undeniable business necessity and substantial line item in every IT budget. In today’s connected environment, the time for security to be the primary sales driver has arrived — and, in order for dealerships to be successful, they must embrace it.

The philosophy of sales has clearly evolved during the past few years. We all remember selling copiers as standalone units; speeds and feeds ruled. Then, the next generation of MFPs arrived, labeled as “network ready.” We sold them as such, but technical specifications were still paramount and not all companies actually connected them to their networks.

Now, we are in an era where printers and MFPs are as common an addition to a corporate network as the desktop workstation or a telephone. No longer are we selling solutions simply packed with efficiency, reliability and workplaceenhancing productivity — we are selling hardware with risk.

Security and compliance are top concerns for corporate (healthcare, education and legal) and government customers alike. Threats and risks associated with an enterprise network, whether individual documents or confidential company assets — including intellectual property — exist as electronic or hard-copy vulnerabilities.

I

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The ideal solution for your customer is one that offers flexibility in the workplace and the ability to be implemented on an “as needed” basis. Moreover, a smart salesperson will know how to customize security features to match the particular security needs of the end user. Above all , it is extremely important to note that the IT department is likely holding your printer or MFP at the same level of scrutiny as a new PC — both will be plugged into its network.

They are asking themselves: “How easily can I add and maintain this hardware on my network and how do I secure it?”

Therefore, your solution must address the administrator’s need for simplification, deployment and management, while also allowing enough flexibility at the device level for end users to easily safeguard and share their information.

Using security to lead your sale can often be accomplished by first categorizing your customer’s primary need: Network Security — Is your customer’s primary security threat a risk of hacking and/or viruses through external or unauthorized access on the network? Network security also encompasses the ability to prevent unauthorized access and usage based on protocol. Features such as network authentication, a secure network interface card (NIC) and the ability to support IPv6 protocol are important network security measures.

Physical Security — Is your customer’s primary security threat protecting against loss, including privacy, manipulation or unauthorized distribution and theft of electronic data at the device level? Critical physical security tools are designed to control who prints what, with features like a virtual mailbox that requires a PIN at the device to complete a print job; a hard-disk overwrite that will eliminate all data from the last job(s) on the device; and a secure USB host interface so that end users can have portable printing flexibility without

Strategy Development ad Mar 09:Layout 1

2/20/09

8:19 AM

Page 1

You face a challenging environment But while some dealers struggle to survive, others will emerge even stronger. How can you give your company an edge?

Making the correct decisions based on your unique strengths is more critical than ever.

Why high performers shine even when the sun doesnâ&#x20AC;&#x2122;t Strategy Development is the complete consulting firm for the imaging dealer. Our team of consultants has more than 130 years of combined experience, leading companies through good times and bad â&#x20AC;&#x201D; with industry leading competence in building sales organizations, launching print management initiatives, improving service margins and deliverables, and improving operations.

To contact a Strategy Development consultant: callinan@strategydevelopment.org 610-527-3317

Davidson Mar 09:Davidson Mar 09

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Dealers can also use security to lead the threat of a lost memory stick or the sale by getting their teams to start storage memory device falling into the It is imperative to “thinking like an IT manager.” It may surwrong hands. understand the prise you, but in some cases it can be the This added security for USB printing sales process, as dealership that is actually educating the is increasingly relevant as the usage and understanding security customer on security needs. Your team popularity of portable memory devices issues alone will only may identify security risks within an continues to grow — especially for busiopen the door. It will enterprise that a prospect did not even ness professionals. For example, when not finalize the deal. realize he had. scanning or saving a file to a USB, a In addition to education on an indiKyocera TASKalfa end user has the vidual basis, another best practice is to option to encrypt the document, limiting who can open and/or print the file. At the desktop or hire or appoint a dedicated person on your team to become a the MFP, the end user is prompted to enter his (or her) pass- “security czar.” This expert should be an integrated part of the word to either open or print the file, thus ensuring that the sales process from the beginning, as well as a resource for owner of the USB is the only one with access to its contents. post-sales support. You may find a security czar to be an excelImagine leaving your USB behind at an airport or trade show lent sales resource; having someone of this caliber on your without this added layer of security. The costs and collateral team will also differentiate you from your competitors. Manufacturers should also have resources to tap, such as a profesdamages to your company could be substantial.

For better or worse, information — whether in the form of sional services division, to help dealers knowledgeably engage bits and bytes or a glossy print — is the currency corpora- end users in their security-led sale.

Sure, the market is a little slow in this economy, but no tions use to survive. Information in the wrong hands can ruin a project, a business or even a career. Moreover, regula- matter what, the general consensus is that security, and tions and compliance policies have placed a significant related business continuity expenditures, are still solid line impact on the way a company conducts its business. So, too, items in corporate budgets. Perhaps you do not agree, but I has the rise of globalization influenced the need to share challenge you to name one company that would benefit by confidential information and data across borders and time having its competitors know its secrets.

Information and knowledge inherently fuels the need to zones. No matter what the situation, accountability is key share it. Corporate networks and the MFPs that live on them and sensitive information must be protected at all costs.

In many ways, all roads lead back to the connected provide the means for doing so. Methods for protecting both are more imperative than ever for the BTA dealer to underprinter or MFP — the piece of hardware with risk.

However, you can safely bet on building future profits by stand and those who do not possess such knowledge will be proactively and knowledgeably addressing the particular at a serious disadvantage.

As a champion fighter will tell you, no matter what hand security issues facing your current and potential customers.

There are many advantages of introducing, or expanding, you have been trained to lead with, the ability to surprise security knowledge sources into your business and using your competition changes the game. At Kyocera, we believe it is time to try your sales hand at security. After all, winning such trends to lead your sales.

One thing that must be kept top of mind: There are more will mean that the only thing left standing in your cusdecision makers involved in the IT approval process than tomer’s office is your printer or MFP. ever before. The office manager is no longer the sole deciScott Davidson is director of technical services for Kyocera sion maker. Your sale is now being reviewed by an IT Mita America. He is a Microsoft-certified technician with a manager or department, a capital expenditure procurement deep knowledge of computing and networking technologies team and, depending on the scope of the organization, some based on his nearly 30 years of industry C-level of authorization may be mandatory before you can experience. Davidson contributes to Kyocera expect to see a final contract.

Mita America’s training curriculum and It is imperative to understand the sales process, as underoversees field technical support in North standing security issues alone will only open the door. It will America. He can be reached at not finalize the deal. scott_davidson@kyoceramita.com.

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Supplies Network ad Mar 09:Layout 1

2/13/09

4:03 PM

Page 1

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Kahrs Mar 09:Kahrs Mar 09

2/19/09

8:30 AM

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Your Dealershipâ&#x20AC;&#x2122;s Worth Follow these guidelines to create a valuable business by: Jim Kahrs, Prosperity Plus Management Consulting Inc.

009 promises to bring many changes. We elected a new president. We face economic challenges like never before and to top things off, our industry business models are changing. With all of this change and uncertainty, it is no wonder dealers are concerned about what the future will bring.

The recent purchases of Global Imaging Systems, DANKA Office Imaging and IKON Office Solutions by Xerox, Konica Minolta and Ricoh, respectively, have only added further confusion. Many dealers are left asking questions: â&#x20AC;&#x153;What do they know that I do not? Can I really make money in this environment? Is it possible to grow a dealership? Is it time to sell my dealership? What is my dealership really worth?â&#x20AC;?

So where do you start? First and foremost, before starting down the path of selling your dealership, you need to look at the big picture. This includes looking at what you will do after a sale. Life is basically a game. Your role as a business owner is your position in this game. Too often dealers do not really look at what it means to sell the business and walk away from this game. As the owner of a business, you are much like a professional athlete; if you walk away from the game there must be a game to replace it. For most people, simply saying that you will retire, play golf or fish just does not cut it. Many who embark on this path find themselves miserable within a few short months.

Just look at how many dealers sold their businesses to IKON or DANKA and then opened a new dealership once their noncompete agreements expired. They missed the game.

That said, I implore you to thoroughly consider what leaving the business means and I challenge you to map out a real future game that will present the challenge needed to keep you engaged and happy.

2

Getting to the Basics So what is a dealership really worth? What creates value?

Profitability is the single most important factor in almost every sale. Whether they present it as part of their model or not, buyers look at what their return on investment will be.

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Many buyers rely almost entirely on profitability to determine a purchase price. It is vital to understand the difference between profits as viewed from a management standpoint versus a tax standpoint. Many dealers choose to run personal expenses, or expenses that would not transfer over to a buyer, through the business. This is done to reduce the tax burden on the business. If you employ this method of tax reduction, it is critical that you document it completely. These expenses are actually profit that you have chosen to distribute as expense payments and must be presented as such. When valuing a business, we recast the income statement to add these expenses back into the net profit. However, I have represented dealers whose poor record keeping made this almost impossible and thus cost them tens of thousands of dollars. If you choose to run any personal expenses through your business, keep a very clean paper trail.

Recurring revenue streams are the next items that impact dealership value. Very often dealers focus much of their attention on selling equipment. Though this is important, you need to focus as much attention on the recurring revenues that come from service and supplies. A strong portfolio of recurring revenue builds value for buyers, as they can be relatively sure that this revenue stream will continue. A strong equipment sales history is valuable, but cannot be guaranteed to continue, particularly when sales reps choose not to join the new

Nexent ad Mar 09:Layout 1

2/9/09

8:28 AM

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Kahrs Mar 09:Kahrs Mar 09

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Having a strong sales team not only adds company and their revenue contribution financial value to the transaction, but in evaporates almost immediately. One of The key thing to many cases it brings buyers to the table in the best things you can do for the future keep in mind is that the first place. sale of your business is to concentrate on what you do today, Now let us look at your internal sysrecurring revenues and be sure to hold and over the years tems and structure â&#x20AC;&#x201D; the basics of your the profit margins on them. Do not fall to come, will determine business that are often overlooked. Havinto the trap of allowing reductions in the value of your ing an organized dealership with strong service prices to get equipment sales. You dealership. systems in place is a major plus in any will be in a much better position if you sale. When a buyer comes into the dealreduce the price of the machine and hold ership, does he (or she) see an orderly, the service pricing firm.

Related to recurring revenue streams: multi-year prepay- productive business or a messy, scattered environment? ments of service contracts in a lease can be one of the most Savvy buyers know that taking over an unorganized busidamaging practices in a dealership. When you collect three, ness is a real chore. Time and resources invested in getting a four or five years worth of maintenance money up front, you business organized will take away from time that could be dramatically reduce the value of your dealership. Buyers will used to grow sales and profitability.

How you respond to requests from a buyer can also have a calculate this unearned service liability and deduct it from their offer. I have seen situations where the dealership had tremendous impact on the overall transaction. If you can literally no value due to hundreds of thousands of dollars of respond quickly with clean, accurate data, the buyer gets a prepaid service. If you are currently collecting multiple years comfortable, confident feeling. If, on the other hand, you of service revenue up front, I suggest you start to wean your- need days and days to present messy or flawed data, you are self off of this practice. You will be glad you did when the raising a major red flag. Buyers get a very uneasy feeling from this and it impacts their willingness to make a strong offer. time to sell comes along.

Other factors that figure into the decision can be the manThe next item that impacts the value of a dealership is the installed equipment base or what manufacturers refer to as ufacturers and product lines you represent, territories you the MIF (machines in the field). The mix of equipment you cover, customers you control and much more. Of course, have in the field will impact the value of the dealership. If you your effectiveness with each of these is important. If you rephave a lot of very small machines, your dealership will not be resent a manufacturer, but are at 20 percent of your quota, worth as much. Focus your attention on building a strong base you are not adding value. If you are authorized for a territory, at all levels. The strongest and most profitable dealerships but have no presence there, you are not adding value. You have a good mix of equipment sizes and types. Along with this, need to show strength in all areas. Strength adds value.

Determining if it is the right time to sell and getting the most you must be able to document your MIF. This can be challenging depending on what software you use to run your deal- for a dealership is a matter of balancing all of these factors. The ership. Invest some time now to understand how you enter key thing to keep in mind is that what you do today, and over equipment in the system and check to be sure you can track it the years to come, will determine the value of your dealership.

Trying to build value six months prior to a sale is all but imposcleanly, as this will pay off when you prepare to sell. sible. If you are thinking that you might want to sell your dealership in five to 10 years, then start your preparation now.

Do Not Underestimate the Value of Your People People are the key to success in any dealership. Sur- Follow the guidelines above and you will have a valuable dealrounding yourself with the best people will not only help you ership. Ignore them and you will be taking your chances. build profits now, it will also add tremendous value to your Jim Kahrs is the founder and president of Prosperity Plus dealership should you decide to sell it. I have seen many Management Consulting Inc. PPMC works with transactions happen almost entirely because of the people office technology companies in building involved. In these cases, the dealership making the acquisirevenue and profitability. Kahrs can be tion did so to get one or more employees on their team. Along reached at jkahrs@prosperityplus.com with this, you need to have a strong sales team. As most or (631) 382-7762. dealers know, building a sales team is not an easy task.

Visit www.prosperityplus.com.

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Image Star ad Mar 09:Layout 1

2/17/09

11:40 AM

Page 1

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Goldberg Mar 09:Goldberg Mar 09

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COURTS & CAPITOLS

A Reduction in Force Fortify yourself against employee-initiated lawsuits by: Robert C. Goldberg, General Counsel for the Business Technology Association

would be remiss in my responsibilities if I did not address a persistent issue relating to these difficult economic times. One of the many unpleasant consequences of a recession is the need to reduce your number of employees. Several calls each week to the BTA Legal Hotline inquire about the legal procedures necessary when reducing the number of employees or changing compensation plans that are in place. At times, especially in small businesses, this is almost as burdensome to the owner as it is to the employee; but only “almost” because the owner still has his (or her) job. Whether the action is a dismissal, a layoff or a lengthy furlough, the employer must treat the employee with respect and professionalism for several reasons beyond simple human compassion. You want your employee to leave with a positive impression of the business and its management. First, because you hope for better times ahead and the possibility of rehiring the former employee, and second, because you fear the dreaded lawsuit.

The added costs and potential exposure in a wrongful termination lawsuit provide adequate rationale for being careful in your termination procedures. Keep in mind that though you may be sorry to lose a particular employee, your bottom line necessitates the action. So, your employee, who also may feel kindly toward you, has bills to pay and may use the law as a means to acquire some badly needed cash. In fact, over the last 20 years, state legislatures and Congress have enacted quite a few new “whistle-blower” statutes. (These are laws that reward an individual for notifying the government of wrongdoings.) These infractions could include bribery, over-billing, deliberate mislabeling of products, tax issues and the like.

Even if one were completely innocent, the costs and hours needed to defend oneself against the government would be significant. Needless to say, if the allegations were true, the consequences would be considerably worse. Whether the “whistle-blowing” is the work of a disgruntled employee or a

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seriously concerned one, the ramifications to your business are the same.

How then does one fortify oneself against employee-initiated lawsuits? As I previously stated, be respectful and honest.

Establish a written criteria for the designation of those to be terminated. Although it is not necessary to open the company books, it can be helpful to an employee’s selfconfidence to know that the business cannot support him despite your highest regard for his work. If this is someone you hope to rehire, share that information.

You are not obligated, but that notion may ease the pain, as well as lessen the likelihood of a lawsuit based on retribution. Even if you are secretly delighted to rid yourself of a particularly difficult employee, this is not the time to point out all of his weaknesses. Although in most circumstances you do not need a reason to terminate an employee, demonstrating that you are terminating the last two individuals hired will help the individual accept it was nothing he did that warranted termination.

Have a particular formula in place for staff reductions. No matter how unpleasant, if each employee knows he was let go in the same manner and with the same criteria as another, there will be less cause for rage at management.

Similarly, make sure to take a detailed exit interview. Aside from providing a forum for anger, this makes the employer aware of any potential problem areas. If the interview seems particularly hostile, notify your counsel of the potential problem. Do not engage in an argument with the employee, but listen intently knowing the action you have taken is final. Have two people present at the exit interview — one to lead it and one to take notes so there will be two potential witnesses to the proceedings.

Things are difficult enough without landing in court when trying to keep your business viable. Let us hope that the economic climate improves and that the issue of termination does not have to be faced so frequently.

Robert C. Goldberg is general counsel for the Business Technology Association.

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

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Kingston Mar 09:Kingston Mar 09

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SELLING SOLUTIONS

More Meetings, More Money How to implement effective prospecting by: Kate Kingston, Kingston Training Group

n today’s economy, and for that matter, in any economy, office technology companies need to be diligent in creating new opportunities to sell their products and services. They cannot rely solely on their current customer base because they may not be around forever. Your customers are facing the same crises that you are facing.

Businesses are cutting back, cutting costs and sometimes failing altogether. Because of this, you will lose current customers and sales through no fault of your own. But there is an answer. Your sales reps need to not only farm their current accounts, but they also need to focus on and hunt down new business. A constant flow of new customers is the lifeblood of any business.

Implementing effective prospecting for your sales force can take several forms. It is not only in what you say, but in how often you say it and to whom. Below, I have listed some of the strategies, tools and tasks that we use with our clients to successfully increase the number of new qualified meetings they make each week with their ideal customers.

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Make the Time to Prospect Finding the time to make calls, send e-mails, foot canvass and go to networking meetings does not happen unless you plan for it. So the first step is to get your sales reps to use their calendars more effectively.

Easier said than done, you say? Well, start like this: Every Friday, have each sales rep find four 90-minute slots in the upcoming week that he (or she) can dedicate strictly to phone prospecting. Each rep needs to schedule this time and write it down just like a client meeting. If something comes up that prevents that calling time from happening, the salesperson needs to reschedule the meeting with himself.

Next, tell him to use the car to prospect. It is easy to add 70-100 more dials each week by making three dials to new prospects every time the rep sits down in the car, but before he moves it.

This new habit is the key to maximizing the work week.

A salesperson should be dialing between 125-200 dials per week to new prospects (50 calls a week is a hobby, not a sales job). This is accomplished with four 90-minute sessions per 36 | w w w . o f f i c e t e c h n o l o g y m a g . c o m | M a r c h 2 0 0 9

week, plus the calling from the car.

Here is another hint: The most effective times to call are between 7:45 a.m. and 9:45 a.m. and then again after 4:30 p.m. These times yield the best chance of getting in touch with the decision maker.

Get your team’s calling volume up and meetings will go up. Managers should ask their sales reps to communicate on Fridays when they have scheduled the times in their calendars for calling new prospects. This can be accomplished simply by having salespeople e-mail their calling schedules to their managers every Friday. Managers should then call their salespeople once a week during those times to “check in.” This accountability will create the structure needed to make time to prospect.

Using Voice Mail to Make More Meetings Many salespeople do not get call backs from voice-mail messages, so they do not bother to leave them when calling new prospects to ask for meetings. Their preference is to talk to the potential customers live, so they hang up if voice mail picks up. And some like to call and just leave their name and number and ask the prospect to call them back. Doing this is not clear and is very tricky. The prospect may very likely think that you are a potential customer, so when they return the call and find out you are not, they are annoyed. You do not want to start a business relationship with an annoyed prospect.

Effective prospecting has to utilize the salesperson’s time and nothing is a bigger waste of time than making a call just to hang up the phone. When calling, you will get voice mail about 60 percent of the time, so you need to have a plan in place to get calls back. A voice-mail message can be a tool to communicate to the decision maker that you are interested in his business, you know how he makes money, how business technology plugs into his success and when you would like to get together.

The strategy to leaving a great voice-mail message is to think of it as a sandwich: The top piece of bread is your introduction and the request for a meeting. Example: “Hi John, I am calling to schedule a meeting with you. My name is Kate Kingston from The Kingston Training Group and we … etc.”

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Clearly defining what the call is about in your message lets your prospect quickly know what he should be listening for. In your case, he is listening for reasons why he would want to meet with you.

The meat of your message is not about you. No one cares about you. Prospects only care about how you plug into them.

Remember, no one wants you to call up to introduce yourself or to meet with them so you can tell them about you. No one has time. What they do have time for is hearing how your company uses office technology with clients that fall into the same industry as they are in and what the success has been.

The meat of your voice-mail message needs to include how you help companies similar to your prospect’s and what the outcome as been. Facts sell a meeting.

The bottom piece of bread is you asking for a meeting at a specific time. Example: “So John, that is why I wanted to meet with you. I was wondering if Tuesday the 15th at 9:45 a.m. would fit into your calendar? Here is my number ... (Tip: Write your phone number down as you say it so it is at the correct speed for your prospect to write down.) I will hold that time on my end. If you happen to catch my voice mail and that time works on Tuesday, please let me know and I will be there. I look forward to helping you.”

And another tip: Asking for the meeting at 45 minutes past

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the hour rather than at the top of the hour will land you more meetings. If you ask for a meeting at 10 a.m., the prospect usually thinks that the meeting will be at least half an hour or longer. But if you ask for the meeting at 9:45, he feels that he can end the meeting at 10 if he is not interested. The purpose of prospecting is to get qualified meetings. When you get to the meeting, your next job is to engage the client at the meeting. But getting the meeting is the task at hand and if you ask for the meeting on the “45,” you will be more successful.

Customizing voice-mail messages and using the 40 seconds it takes to make the message about the prospect will get your sales team callbacks for real meetings. Putting these few tasks, tools and strategies into play will increase your sales team’s meetings and more meetings mean more money.

Kate Kingston is the founder of Kingston Training Group (KTG). KTG provides motivational sales training specializing in making more meetings. They train office technology sales forces to make more qualified meetings and average a 70 percent increase in meetings across the entire sales force in every company they work with.

She can be reached at kkingston@kingstontraining.com.

Visit www.kingstontraining.com.

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PRINCIPAL ISSUES

A Multi-Dimensional Puzzle Is the manufacturer a friend or a foe? by: Reed Melnick, Nevill Imaging Solutions

ately, it seems that the question of the day is: “Is the manufacturer a friend or a foe?” I wish there was an easy answer. As they say, keep your friends close and your enemies closer.

We are in a predicament today, considering the manufacturer is our lender, supplier, partner and sales/support source of information. Not only is the manufacturer all of these things, but it is now also our competitor. Smart dealers are being very careful during this difficult transition from the manufacturer as a partner to a competitor. Even so, if there was ever a time for manufacturers and dealers to work together, it is now.

We, as dealers, need to communicate with the manufacturers to receive the appropriate discounts and extended payment terms necessary to overcome the challenges facing us from the manufacturers’ direct branches. As we all know, the manufacturers’ direct branches have been selling equipment dirt cheap and they have now increased the discounting of service and supplies. The two-prong approach (using dealers and direct operations) now in use by the manufacturers will make continued communication very difficult. It will take considerable effort by both parties to still win together.

In the past, manufacturers would bend over backwards to prove they were on our side. During this time, there was a feeling of friendship and teamwork. A fair amount of trust was developed, which does not exemplify the relationship as it is today. Lately, the level of sales support has plummeted with most manufacturers. They have tried to build a wall between their direct operations and their dealer support personnel.

The information that dealers share with their manufacturers also seems less private today. These are but a few of the issues we both have to deal with in this relationship.

But, despite all of these challenges, I firmly believe that we should continue to build and work in good faith with our partner(s), the manufacturer. So, I recommend we work harder to make sure we have the best possible relationship with them.

From my perspective, the manufacturers’ number one goal is to hit their target quotas. It has always been that way, and it always will be. It is also apparent that with the current state of the economy, manufacturers will have to discount to maintain volume. You will see “special pricing and terms” that will, hope-

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fully, keep you at your current sales level and keep you competitive with their direct branches.

All manufacturers should be willing to work on a recession-based quota as long as the numbers you propose are reasonable and new targets are met. Maintaining rebates and DFI’s at lower purchasing levels will be required of the manufacturer during this tough economy.

With that said, here are my recommendations to bring the relationship with your manufacturer closer: Prepare a short business plan for this year’s performance. Include last year’s sales numbers and manpower. Provide sound economic data on your marketplace and examples of what your competition is proposing from a pricing standpoint.

(A copy of the competitors’ pricing would validate your claim.)

Forecast what you are prepared to commit to from a wholesale approach; that can be a guideline for your quota this year. In addition, forecast how many “feet on the street” will be required to accomplish your goals. Indicate what type of support will be required for both of you to succeed over the next year.

Travel to the manufacturer’s headquarters to deliver your plan and show your commitment. Schedule the meeting to include the executives of the manufacturer. Your personal presentation will demonstrate your dealership’s dedication more than a short review delivered by your manufacturer’s sales representative.

Negotiate until you have a win-win deal and do everything in your power to accomplish this for both parties. We both have to make a profit to stay in business.

Although they are increasing the size of their direct operations, the manufacturers need you as much as you need them.

The slow economy has become your friend and you need to capitalize on the power this allows. It is better for all parties to go through these transitions together as partners. Keep both eyes open and drive your business.

Reed Melnick is CEO of Nevill Imaging Solutions of Carrollton, Texas. With more than 27 years experience, he has witnessed many changes in the industry. He can be reached at rmelnick@nevillsolutions.com.

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PRINCIPAL ISSUES

Don’t Overlook Supplies They are an important part of selling dealership value by: Bob Sostilio, Sostilio & Associates International

had th e go o d for tun e to b e working for a copier manufacturer in August 1971 when the U.S. government instituted its wage and price controls on manufactured goods, including U.S.-made copiers and supplies. At the time, the inflation rate was 4 percent. The 90-day freeze lasted 1,000 days and the inflation rate shot up to 12 percent.

By 1973, we were coming off the price controls, but many of us found ourselves sitting for hours in gas lines just to get 10 gallons of gas. Yet, despite those long days and soaring prices, I also remember walking into the branch each morning and seeing the service call board full with all the technicians being dispatched from their homes, keeping customers happy, while out back, our supply department personnel were shipping orders of toner and paper. Yes, our opportunity to survive and stay employed was predicated on our attention to the postsales market, including supplies. We survived; we did not have to lay off a single person in the branch during those hard times as unemployment shot up more than 8 percent and interest rates were more than 12 percent.

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The Economics I want to address those dealership principals who have not been in a downturn economy. Yes, the manufacturers have announced layoffs and large losses on their balance sheets due to poor sales, but also because of the appreciation of the yen to a weakening dollar. I have already seen dealerships acquiring other dealerships and manufacturers acquiring dealerships.

Why? Because the economics in the document channel that provide the pre- and post-sales support generate revenue directly related to the number of printed documents which, surprisingly, do not decline during slow economic periods. Document output is tied to GDP — forecasted to be flat through the second quarter of 2009 and then to exhibit growth toward the end of the year. At the same time, the importation of cut-sheet paper will decline due to the weakening dollar, thereby driving up the cost of free-sheet copy/printer paper in the United States.

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How should you be challenging yourself to take advantage of these events? The best solution is initiating a document management initiative within your installed equipment base. Along with managing service contracts and being reactive to client demands, there are many steps you should take in selling your dealership’s value — these steps include selling supplies.

Customer Feedback Are you aware of how your customers manage their document flow? Are they seeking cost reductions? Are they making do with fewer people? How are they capturing and distributing pages? Are they looking to replace or upgrade their current devices? Are they looking to reduce turnaround time of documents to improve their efficiencies with their own clients? Are you tracking your users’ page output across your MIF (machines in the field)? Are you utilizing any device, embedded or add-on, to record the number of pages being produced within your MIF? If not, how do you know when your clients are buying their toner and paper supplies? If you cannot monitor what you have installed, you will not be able to manage it. Our studies indicate only 51 percent of U.S. dealers have such devices installed within their base. This means that almost half the units are generating pages, but are not monitored.

Some Facts Did you know that the United States consumes 88.2 million monochrome cartridges per year, 37.35 million color cartridges per year and 729 million inkjet cartridges per year to produce 860 billion copies and prints, just within the office space? Are you capturing your fair share of those numbers? In our research, we have identified that within our dealer sample, supplies contribute 16.6 percent of revenue for the last three years.

The Next Step Here are some steps you can take during this downturn to improve your revenue from supplies:

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First, get yourself “wired” into your Above all, stay visible to customers.

MIF with a device that captures “click” Offer a managed print information along with the capability to Look for Opportunities service to your customers monitor supplies. Each manufacturer The office equipment industry has and stress lowering their either has its own or has partnered with enjoyed 20-plus years of continued revenue cost per print by setting companies with embedded solutions such growth while the product mix has underall printers and MFPs as MWA Intelligence, PrintAudit, Equitrac gone numerous changes. It may be time to to duplex as the and PrintFleet. become a full-service provider by selling default mode.

Offer a managed print service to your scanners, fax servers, wireless hubs, shredcustomers and stress lowering their cost ders, wide-format printers or services that per print by setting all printers and MFPs to duplex as the include wiring, training, etc. But first, make sure that you have default mode. This will not decrease your toner sales. Show positioned your dealership as supportive in post-sales activities your customers just how much they can save and that you are with your clients. Post-hardware support does not have to be willing to help them during these times. limited to just your toner and paper — it can include toner for Consider taking on a compatible cartridge supplier to sell competitive models that you are serving under a managed print competitive supplies into your MIF. Many users buy third-party services contract. Now is the time to give your business plan a supplies for printers not under maintenance agreements. hard look and see where you can expand or add value to your Offer coupons or rebate points to existing customers on existing offerings. “other” cartridges when they convert to your OEM supplies.

Bob Sostilio is president and CEO of Sostilio & Associates Sell recycled paper, promoting eco-friendliness and enviInternational (SAI), an Ocala, Fla.-based consulting ronmental benefits. Position your dealership as climate-friendly. firm serving the office technology industry.

Issue press releases that feature case studies about costHe has 34 years of experience per-copy savings within your market to local newspapers and in the industry, including service in senior SMB business journals to assure your dealership comes up on management positions with leading search engines when local users are seeking suppliers in the manufacturers and research organizations. local market.

Sostilio can be reached at sostilio@flash.net.

BTA Can Help.

Scholarships for use at colleges or accredited vocational trade schools are available to the sons and daughters of BTA retail dealership members and the sons and daughters of their full-time employees.

Scholarship recipients are chosen by an impartial and independent evaluator.

Having trouble finding money for your child’s education?

Completed applications must be received at BTA

by May 1. To obtain a scholarship application form, contact Mary Hopkins at mary@bta.org, call (816) 303-4031 or write to: BTA Scholarship Foundation, 12411 Wornall Road Kansas City, MO 64145. ®

w w w . o f f i c e t e c h n o l o g y m a g . c o m | M a r c h 2 0 0 9 | 41

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EDUCATION CALENDAR April 2-3

BTA ProSolutions Chicago, IL Software vendors teach you about their technology. However, your clients don’t care about technology — they want their business problems solved. You need to understand your client’s business problems before you can provide solutions. Darrell Amy of Dealer Marketing Systems will teach attendees how to: get the attention of top-level decision makers, analyze business processes, secure buy-in with proof-of-concept demonstrations, overcome common objections and much more.

7-8

BTA Sales Management Workshop Atlanta, GA Taught by Ed Carroll and David Ramos of Strategy Development, this intense, two-full-day workshop will provide dealership principals and sales managers at all levels a framework and tools so they can develop their sales employees and drive new business and more share of wallet in current accounts. This interactive workshop will help attendees form a business plan that they can implement upon returning to their dealerships.

14-15 BTA Professional Services Workshop

Dallas, TX With the focus on software solutions to drive growth and differentiate their dealerships from the competition, the formation of a professional services team is an ideal strategy for dealers.

Taught by Mitch Morgan of CEO Focus, the BTA Professional Services Workshop focuses on the critical success factors necessary to build a successful professional services team. Each participant will leave the workshop with a clear professional services road map for success with goals, targets and milestones based on the unique characteristics of his or her dealership.

17-18 FIX: Cost Management for Service Workshop

Las Vegas, NV Successful BTA dealers use their service departments to maintain profit margins as new sales margins decline. FIX, BTA’s most popular service workshop, shows you how to compute your service cost basis and overhead rates. Workshop instructor and BTA President Ronelle Ingram, vice president of technical service for Steven Enterprises Inc., Irvine, Calif., covers proven management and customer service programs to use in your company.

22

“Exploring the Needs of Multiple Generations” Free to BTA members, the April “Building My Business” webinar, “Exploring the Needs of Multiple Generations,” will be presented by Lisbeth Anne Marin of Lisbeth Anne Designs and Consulting. In this webinar, Marin will outline methods for relating to and satisfying members of multiple generations using sensitivity to their social experiences.

For additional information or to register for courses or events, visit www.bta.org or call (800) 843-5059.

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BTA HIGHLIGHTS The following new members joined BTA during the month of January:

Dealer Members Appalachia Business Communications Corp., Johnson City, TN Copy Corp. Inc., Melbourne, FL Duplicating Products Inc., Gainesville, FL East Texas Copy Systems Inc., Tyler, TX Guttz Corporation of America, Irvington, NY Mabry Office Equipment, Shelby, NC McNair Business Machines Inc., Springfield, MA MDM Business Technologies Group Inc., New York, NY Printer World Inc., Edmonton, Alberta, Canada Smart Technologies, Daytona Beach, FL Total Laser Care of NC Inc., Durham, NC Service Associate Members A-Tech Direct, Newport Beach, CA Kingston Training Group, New York, NY OutSource Management Inc., Johns Creek, GA For full contact information of these new members, visit www.bta.org.

BTA Credit Card Processing Provider A leader in credit card processing and the only endorsed provider for BTA, Chase Paymentech offers payment options specifically designed for the office technology industry. As an experienced payment provider, Chase Paymentech can equip you with services that can help streamline your payment administrative tasks and improve your bottom line.

Call (800) 579-8235 to take advantage of this exclusive offer for BTA members.

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

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For the benefit of its dealer members, each month, BTA profiles two of its Vendor or Service Associate members in this space.

BTA Service Associate member A-Tech Direct develops telemarketing programs designed to maximize lead generation.

Established by Mike Adams, a 27-year industry veteran and a former partner in a $20 million BTA member dealership, Adams has leveraged his relationships in the office equipment and document management industry to develop programs that are co-op-approved by most manufacturers. A-Tech’s programs include: “Turnkey Business Development,” where A-Tech Direct takes over the prospecting for BTA Channel members and “Top Gun Telemarketing Workshops,” which increase prospecting success and create an average pipeline increase of $2 million. Contact Mike Adams at (949) 2921339. Visit A-Tech Direct at ITEX, booth #640. www.a-techdirect.com BTA Vendor Associate member DocuWare is an integrated document management software solution that can automate business processes by managing any type of document, regardless of format or source, in one central document pool that can be accessed from anywhere in the world. Founded in 1988, DocuWare ranks among the leading worldwide integrated document management software companies with more than 6,000 installations and tens of thousands of users in more than 50 countries. www.docuware.com A full list of BTA Vendor and Service Associate members can be found online at www.bta.org.

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Upcoming Education Workshops

Ad Index Mar 09:Ad Index Mar 09

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ichard C. “Dick” Norton, a veteran of the office technology industry, most recently serving as president of DocuTrends, a market research firm, passed away on June 15, 2008, after a long illness.

He was 61.

Norton was a familiar face at industry events for many years, often serving as a seminar presenter and attending vendor dealer meetings as an industry analyst. He was also a contributor to various industry publications, including BTA’s Office Technology magazine.

R

Before founding DocuTrends in 1996, he had a successful career at market research firms Dataquest and Giga Information Group.

As a memorial to Norton, the Dick Norton Memorial Endowment Fund was established by industry associates Lou Slawetsky and Frank Cannata. The endowed scholarship fund will help to support high-achieving students at St. Mary’s College of California. One of Norton’s sons attended St. Mary’s, where Norton became active, serving for a time on the college’s Parent’s Advisory Board.

Gifts to the fund in Norton’s memory can be made by completing the form that is accessible on the Web site of Industry Analysts Inc. Visit www.industryanalysts.com. On the home page, click on “Dick Norton Memorial Endowment Fund” in the right column under the heading “Current Industry News.” All gifts are eligible for a tax deduction as a donation to a 501(c)(3) non-profit charity.

ADVERTISER INDEX 45 • BTA Professional Services Workshop (800) 843-5059 / www.bta.org

38 • FIX: Cost Management for Service (800) 843-5059 / www.bta.org

13 • Muratec America Inc. (469) 429-3481 / www.muratec.com

45 • BTA Sales Management Workshop (800) 843-5059 / www.bta.org

15 • FMAudit

31 • Nexent Innovations (866) 639-3681 / www.MiracleService.com 11• OKI Printing Solutions

41 • BTA Scholarships (816) 303-4031 / www.bta.org 43 • BTA Southeast/BTA Mid-America (800) 234-8996 / www.btasoutheast.org 18, 47 • BulletHire (925) 460-9233 / www.bullethire.com 2-3 • Digital Gateway (866) 342-8392 / www.digitalgateway.com/mps 46 • Dick Norton Memorial Fund www.industryanalysts.com 5 • DocuWare (888) 565-5907 / www.docuware.com 23, 25 • ECi (866) 374-3221 / eci2.com/onesolution 37 • Equipment Data Associates (800) 288-8262 / www.edadata.com/bta 46 | w w w . o f f i c e t e c h n o l o g y m a g . c o m | M a r c h 2 0 0 9

www.fmaudit.com 17 • GE Capital Solutions http://ge.leasingsource.com/CPC 48 • GreatAmerica Leasing Corp.

(800) 234-8787 / www.greatamerica.com

www.okiprintingsolutions.com/MFPDealer 14 • Sagem Interstar (888) 766-1668 / www.sagem-interstar.com

12 • IBPI

21 • Sharp Imaging and Information

(480) 393-1694 / www.ibpi.net 33 • Image Star (888) 632-5515 / www.imagestar.com 19 • InkCycle (800) 736-8877 / www.inkcycle.com 20 • International Laser Group

Company of America www.sharpusa.com/frontier 27 • Strategy Development (610) 527-3317 / www.strategydevelopment.org 29 • Supplies Network (800) 729-9300 / www.suppliesnetwork.com/welcome

(800) 937-2880 / www.ilglaser.com 7 • Kyocera Mita America Inc. www.kyoceramita.com 9 • MSE

24 • Vendapin LLC (866) 374-9314 / www.vendapin.com/5596.htm

(800) 673-4968 / www.mse.com

35 • West Point Products (800) 624-6991 / www.westpointproducts.com

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Experience the t Ne Next ex xt Gener Generation ration Job Jo ob Board Boarrd Focused on the Copier/MFP Cop pier/MFP P Industry - Hire Sa Sales les R Reps eps Today!

To oday!

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We W e incr increase ease y your our b bottom ottom line by

D post jobs on Monsterr or Careerbuilder? mine their

D UHGXFLQJ UHGXFLQJ \RXU WLPH WR ¿OO E\ ZHHNV \RXU WLPH WR ¿OO E\ ZHHNV D increasing your likel likelihood ihood of hire and overall bette better er

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Your Y o our Investment

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T ime spent Recruiting g Time

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T ime-to-Hire Time-to-Hire

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Great America ad Mar 09:32OT0408

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

PRSRT STD U.S. Postage Paid Easton, PA 18042 Permit #31