September 2019 Office Technology by Business Technology Association

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CONTENTS Volume 26 • No. 3

FEATURE ARTICLES 10

Mobile Printing Are you leveraging your vendor’s app?

DEALERSHIP SPOTLIGHT SumnerOne Midwest dealership targeting IT & production

by Brent Hoskins Office Technology Magazine

With the decline in print volumes, the rise in the number of mobile workers and the prevalence of mobile devices, are you making sure your customers are taking advantage of the mobile printing options available via free apps from the MFP manufacturers?

Concerning Cartridges Cancer, crimes & chips make sales challenging

by Elizabeth Marvel Office Technology Magazine

BTA member SumnerOne is looking to a successful future with managed IT services and production print.

DEALERS HELPING DEALERS Company Valuations Where to turn for dealership assessments

Compiled by Brent Hoskins Office Technology Magazine

by Tricia Judge International ITC

Scams, inferior — even toxic — cartridges, shifting Asian supply sources, patent-infringing products and blatant anticompetitive behavior make this a difficult time to sell printer cartridges. One bad move can herald the end of one’s business — or even one’s freedom.

What industry resources can you recommend to determine an accurate & independent company valuation?

SELLING SOLUTIONS A 21st-Century Transition The hidden causes of sales problems

Public Relations Is it part of your marketing program?

by Gil Cargill Cargill Consulting Group

For many dealers, the cause of sales productivity and profitability problems can be seen by looking in the mirror.

by Jim Farrell PRfirst

For most dealerships, the best marketing program uses a mixture of the “tried-and-true” methods of earlier times, as well as web-based marketing opportunities. That being said, one very powerful marketing strategy often overlooked in campaigns is public relations (PR).

The Silent Sales Killer How turnover drains your profits & opportunities

by Troy Harrison Troy Harrison & Associates

Turnover in sales is a sales and relationship killer. Eventually, your customers get tired of hearing, “I’m your new salesperson.”

COURTS & CAPITOLS 28

Some Things Never Change A look at the importance of core values by Robert C. Goldberg BTA General Counsel

I recently had the opportunity to visit PERRY proTECH in Lima, Ohio, a company that has grown to be one of the most respected businesses in the industry. So, how does a company in Lima, Ohio, become so successful, obtain enviable growth and revenue, and stand as an industry pillar?

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

• BTA Education Calendar

Executive Director’s Page

BTA President’s Message

Advertiser Index

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EXECUTIVE DIRECTOR’S PAGE

Tenth Edition BTA BEQI Now Available

o you want to set sales quotas for your sales reps or measure their performance? The 2019 Business Equipment Quota Index (BEQI), now available for purchase, can not only help with this, but it also allows you to measure market potential, evaluate and assign territories, and more. Every three years, BTA releases a new edition of the BEQI, which provides dealers market potential (product demand) indices for monochrome and color MFPs, monochrome and color single-function laser printers and large-format printers. Based on the results of a survey of decision-makers conducted on behalf of BTA by Crain Associates Research LLC, the tenth edition of the BEQI provides market potential indices for all U.S. sales territories including states, metropolitan statistical areas (MSAs), counties and ZIP codes. The BEQI includes index numbers, by geography, corresponding to 17 categories of MFPs, single-function printers and largeformat printers, based on speed ranges and color versus monochrome. In the monochrome MFP category: 1-20 pages per minute (ppm); 21-30 ppm; 31-69 ppm; 70-plus ppm; all monochrome MFPs combined; single-function monochrome laser printers in each of the four speed categories; and all single-function monochrome laser printers combined. In the color MFP category: 1-20 ppm; 21-30 ppm; 31-69 ppm; 70-plus ppm; all color MFPs combined; single-function color laser printers in each of the four speed categories; and all color laser printers combined. In addition, the BEQI provides indices for all monochrome and color MFPs combined and large-format (inkjet and laser) printers. The BEQI index numbers are based on two

data sources: Census Bureau data and the responses to a web-based survey of 1,000 decision-makers across 13 industries regarding the amount of equipment purchased in 2018 (actual purchases), and purchases planned for 2019 and 2020. To derive the BEQI indices, ratios of equipment purchases per employee were computed at the industry level and then applied to the distribution of employment by industry at each geographic level. A BEQI user can compute a particular geography’s market potential for any of the product categories listed in the BEQI using the forecasted unit placements from market research firm IDC, which are included in the User’s Guide. IDC has provided actual unit placements for 2018 and forecasted unit placements for 2019 through 2021. Here is an example of how to use the BEQI. ABC Office Systems in Houston, Texas, has a quota of 3,500 MFPs from XYZ Technology. ABC covers Fort Bend, Harris and Liberty counties. To determine its total MFP potential as a percentage of the nation’s potential, ABC adds the MFP BEQIs from each of the counties it covers, for a total of 0.02988728. To arrive at each county’s potential as a percentage of ABC’s total MFP potential, each county’s BEQI is divided by the dealership’s total MFP potential. So, 0.00134361 (Fort Bend’s BEQI)/0.02988728 (ABC’s total BEQI) = 0.0449559 (or 4.5% of the local potential). Similar calculations yield the proportions for the remaining counties. Finally, to allot the 3,500 units in proportion to their potential, multiply the quota by each county’s potential: Fort Bend: 0.0449559 x 3,500 = 158 units Harris: 0.9522546 x 3,500 = 3,333 units Liberty: 0.00278948 x 3,500 = 10 units BTA members can use their $150 or $250 discount received with their membership toward the purchase of the BEQI. To order, visit www.bta.org/BEQI. n — 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 Gil Cargill, Cargill Consulting Group Inc. www.gilcargill.com Jim Farrell, PRfirst www.prfirst.com Bob Goldberg, General Counsel Business Technology Association Troy Harrison, Troy Harrison & Associates www.troyharrison.com Tricia Judge, International Imaging Technology Council www.i-itc.org

Business Technology Association 12411 Wornall Road Kansas City, MO 64145 (816) 941-3100 www.bta.org Member Services: (800) 505-2821 BTA Legal Hotline: (800) 869-6688 Valerie Briseno Marketing Director valerie@bta.org Brian Smith Membership Sales Representative brian@bta.org Photo Credits: Bigstockphoto. Cover created by Bruce Quade, Brand X Studio. ©2019 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

Join Us in California at Capture the Magic

he Business Technology Association’s (BTA’s) final event of 2019, Capture the Magic, will be held Nov. 4-5 at a unique location on the coast of Southern California. The Loews Coronado Bay Resort, located in Coronado, California, is right across the San Diego Bay from downtown San Diego, with great views of the skyline. Capture the Magic will start at 2:30 p.m. on Monday, Nov. 4, with exhibit time, welcoming comments and the keynote address, “Resilience in Action: How to Break Through Obstacles, Stay the Course & Finish Strong,” presented by speaker, media personality and author Joel Boggess. A break will follow the keynote, giving attendees time to visit with peers and exhibiting sponsors. Breaks like these will occur between sessions during both days of the event. After the break, our featured speaker, retired U.S. Air Force Col. Mickey Addison, will present his session, “Leading Leaders: Inspiring, Empowering & Motivating Teams.” A welcoming reception will follow Addison’s session from 6:15 to 7:30 p.m., wrapping up the first day. The second day will begin at 7 a.m. on Tuesday, Nov. 5, with breakfast, followed by opening comments and three educational sessions: “Proactive Prospecting: Converting Interruptions to More Conversations, Opportunities & Revenue,” led by Tibor Shanto, Renbor Sales Solutions; “Design & Document Your Compensation Plan to Get the Biggest Bang for Your Buck,” led by Luis Gonzalez, SalesScoreKeeper; and “The A4 Revolution,” led by Ray Stasieczko, TEASRA, The Innovation Channel. Lunch will follow the morning sessions from 11:30 a.m. until 12:30 p.m. After lunch,

the final educational sessions will be held: “The Performance Process — Five Keys to Turning Around Your Sales Team,” led by Troy Harrison of Troy Harrison & Associates; and “Running Your Business in the New Economy — Growing Revenues & Profits,” led by Richard Elixman, NEXERA. Closing comments and prize drawings will be held from 3 to 3:15 p.m. From 4:45 to 8 p.m., attendees will enjoy a dinner cruise on the Adventure Hornblower, which offers magnificent views of the San Diego skyline from the ship’s sun deck and panoramic windows in four climatecontrolled salons. The evening, sponsored by Panasonic, will include a champagne boarding toast, dinner, drinks and music. The exhibiting sponsors: ACDI, Brother (breaks sponsor), Cartridge Warehouse International, Continuum, DLL, ECi, Epson, FP, GreatAmerica, Imaging Solutions Direct, Keypoint Intelligence, Kyocera, Laserfiche, LEAF, Lexmark, LMI, Muratec, NEXERA, Ninestar, OKI, Panasonic (dinner cruise sponsor), PCS VoIP, RingByName, SalesChain, Sentry File, Static Control, Supplies Network, Technology Assurance Group (breakfast sponsor), TIAA Bank, Toshiba, Unitone, Wells Fargo and Xerox. Two-for-one BTA member dealer registration is $199, but members can use their $150 discount promo code received with membership to get two-for-one registration for only $49. Registration includes the Monday and Tuesday educational sessions, Monday welcoming reception, and Tuesday breakfast, lunch and dinner cruise. Join us in California for a great event full of top-notch educational sessions, plenty of networking opportunities and a fun evening on the water. To learn more or register, see the ad on pages two and three, or visit www.bta.org/BTACoronado. n — Bob Evans

2019-2020 Board of Directors President Bob Evans Function4 Sugar Land, Texas bobevans@function-4.com President-Elect Tim Renegar Kelly Office Solutions Winston-Salem, North Carolina trenegar@kellyofficesolutions.com Vice President David Polimeni RITE Technology Sarasota, Florida dpolimeni@ritefl.com Immediate Past President John Eckstrom Carolina Business Equipment Inc. Columbia, South Carolina johne@cbesc.com BTA East Don Risser Advanced Laser Printer Service & Supplies Inc. Emigsville, Pennsylvania drisser@alpslaser.com Aaron Rubin Docutrend Imaging Solutions New York City, New York arubin@docutrend.com BTA Mid-America DJ Hastings Hogland Office Equipment Lubbock, Texas dj@hoglandofficeworks.com Mike Nerland Elite Business Systems Sioux Falls, South Dakota miken@elitebusinesssystems.com BTA Southeast Michael Hicks Electronic Business Machines Inc. Lexington, Kentucky mhicks@ebmky.com Adam Gregory Advanced Business Solutions LLC St. Augustine, Florida adam@goabsinc.com BTA West Joe Escamilla Document Systems Oxnard, California jescamilla@documentsystems.com Mike McCurdy Integrated Technologies Inc. Twin Falls, Idaho mikem@itechinc.com Ex-Officio/General Counsel Robert C. Goldberg Schoenberg Finkel Newman & Rosenberg LLC Chicago, Illinois robert.goldberg@sfnr.com

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Mobile Printing Are you leveraging your vendor’s app? by: Brent Hoskins, Office Technology Magazine

t’s not new. The ability to print from a mobile device, such as a smartphone or tablet, has been around for quite some time. However, with the decline in print volumes, the rise in the number of mobile workers and the prevalence of mobile devices, are you making sure your customers are taking advantage of this printing option? After all, it is readily available to them via free apps from the MFP manufacturers. “If you don’t offer a mobile printing app, you’re behind today,” says Dino Pagliarello, vice president of product management and planning at Konica Minolta Business Solutions U.S.A. Inc. “Five years ago, that wasn’t the case, but today you have to not only have it, but you need the app to be compatible with every operating system that’s out there or you’re behind the eight ball for sure.” While many may assume that it is younger workers who most often print from their mobile devices, Pagliarello says that may not be the case. “The more I look at the different age groups and technology, the more I realize that it may not necessarily be an age group, but more so people who are early adopters versus people who are not interested in learning about new technology,” he says. “From our analysis, all industries, vertical markets and business sizes are benefiting from the app, and since access to the mobile device is so prevalent — meaning everyone has a phone — the expectation to be able to perform a mobile function is so high that all types of customers are finding the app to be helpful.” Michelle Redmond, a product manager at Sharp Electronics Corp., offers a similar perspective, noting that the rise of the mobile device understandably led to the introduction of mobile apps among MFP manufacturers, including the introduction of Sharpdesk Mobile in 2012. “At that time, we knew that organizations were inundated with employees who felt very comfortable with their mobile devices, and they were becoming leading devices in the office,

not just at home,” she says. “So, we wanted to be able to leverage that wave, in terms of people wanting to extend the capabilities and the workflows that they were used to with laptops to their mobile devices as well.” As it turns out, the mobile device is often supplanting the laptop, Redmond says. “Some people, depending on their role or their responsibility and organization, have looked at the laptop as, ‘I carry it as a backup. It’s in my bag, but my phone or my tablet is really what I go to every day for emails or to catch up on the things that I need to make sure are done,’” she says. “For the most part, I feel that 80% of the things that you would normally do with a laptop you can get done on a mobile device. Again, that is why Sharpdesk Mobile emerged.” Today, about 90% of Sharp’s imaging devices have the ability to be supported by Sharpdesk Mobile, Redmond says, noting that the only outliers are production-level devices, where mobile printing is not generally an expectation. “Most of the Sharp devices you see throughout the office that everybody has access to are all supported by Sharpdesk Mobile,” she says. “Obviously, we want to make sure that we encompass as many of the devices in the office as possible.” Pagliarello likewise estimates that about 90% of Konica Minolta’s imaging devices can be supported by the Konica Minolta Mobile Print App, launched in 2017 as a replacement for PageScope Mobile, which was introduced in 2011. He emphasizes that the new app offers more capabilities than some may realize. “I think one of the major advantages is that we have all the print features supported in the app,” he says. “We can support whether you select color or black and white, what tray to pull from, whether you want to do duplex or simplex. You can also specify whether you want to staple or create a booklet.” Joe Contreras, commercial marketing executive at Epson

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America Inc., similarly touts topic of ‘mobile print and “So, it’s one thing for you the capabilities of his comscan,’ but it’s blended into the pany’s iPrint App; the initial conversation about ‘What to be able to have access to version was launched in 2010. are your pain points? What a document or content that “It allows you to do more — do you want to achieve? you want to print, but it’s a above and beyond just file What’s your ideal solution separate matter if you can printing,” he says. “For exfor the employees at work digitize a document and ample, you can print, access and how do they work?’” make it available on a information in the cloud, iniIn whatever manner or mobile platform, such as your phone.” tiate a scan from a mobile dedegree that a mobile app is vice and get information on discussed as part of the sell — Michelle Redmond ink levels, to name a few. So, ing process, the sales rep Sharp Electronics Corp. it is more granular in terms should ensure customers of the interaction with the are aware that it is available printer or the MFP than some might expect.” to them, given the “competitiveness of the industry,” ConYes, mobile printing apps also support scanning func- treras says. “If I’m not talking about it, somebody else is. tionality. Epson’s iPrint App allows users to scan documents The competitor calling on that same client could be trying or images with a mobile device and print them via an MFP or to differentiate. You don’t want to leave yourself open and printer, or share them via Dropbox, Google Drive, etc. This vulnerable to having somebody else get a foot in the door.” also works the other direction, Contreras explains. “When Dealers only now taking a closer look at mobile apps may on the go, for example, I can just walk up to an MFP, initiate be concerned about security issues and, perhaps, ease of a scan and push it to my mobile device, which is great,” he implementation and use. “Security is an area we are heavily says. “This is another advantage — an additional value.” focused on, ensuring that data is not going to be comproRedmond says that while users most often use Sharpdesk mised,” Contreras says. “We have introduced a number of Mobile for printing, “the beauty of this solution” is that it security features on our devices and we advise clients that supports mobile scanning, too. “So, it’s one thing for you to IT administration should be involved in the process. Ultibe able to have access to a document or content that you mately, the company has the ability to allow mobile printing want to print, but it’s a separate matter if you can digitize a or not, based on its own internal policies.” document and make it available on a mobile platform, such Redmond similarly emphasizes Sharp’s focus on security. as your phone,” she says. “Once that document or file has “We definitely looked at the security aspect of Sharpdesk been digitized and sent to your phone via email, you now Mobile as to how this application is going to be utilized from can collaborate with all the other apps that would then uti- the user perspective,” she says. “If it makes sense in terms lize that information.” of the workflow, we have user authentication, where the Given the prevalence of mobile devices, as well as the rise user must plug in a password; it also supports PIN code and in the number of mobile workers, are sales reps regularly SNMPv3 [providing internet security and privacy].” mentioning mobile apps as part of the selling process? “I beAnd what about ease of use? Some may remember cumlieve our sales reps definitely use it as a talking point,” Pagli- bersome experiences in the past. “Yes, I would say that was arello says of the Konica Minolta Mobile Print App. “It adds the case,” Contreras says, speaking of early apps in general. effectiveness and value to a customer purchasing an MFP “It took time for the technology to evolve and for users to and compliments the native mobile print support capabili- understand how to interact and connect. Today, speaking ties of the engine. So, yes, I think reps talk about it because from Epson’s standpoint, to download the iPrint App and to of the rich feature capabilities of the app itself.” connect devices is very easy. That was one of the things that For other sales reps, dialog with the customer regarding a we focused heavily on — ease of use.” mobile app may simply be a component of a broader converPagliarello also emphasizes the importance of ease of sation. “We are here to help our dealers have a broad-based, use. “We tried to make it as easy as possible,” he says, recollaborative brainstorming discussion with the customer in garding use of the Konica Minolta Mobile Print App. “In terms of not just where they want to be now, but where they the past, you would have to know a little more about your want to be in the near future, too,” Redmond says. “So, even if network, a little more about how the MFP is configured. mobile printing and scanning is not part of the conversation Nowadays, all it asks for is your Wi-Fi password in order today in terms of what they want to achieve immediately, it to make sure you’re on Wi-Fi. Then, when you install the is definitely part of the talk track. Maybe it’s not a separate app, it asks for the IP address. It also highlights all the 12 | w w w. o f f ic et ec hno lo g y m a g.c om | S e p t e m b e r 2 0 1 9

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in terms of how they interaccessories and gives you all “We see mobile printing as act with printing in the ofthe options of what you can fice are different,” Contreras do automatically instead of another opportunity within says, noting that he expects having to plug it in yourself. the dealer’s portfolio to add pages captured via mobile It definitely has gotten easiadditional value and capture printing will continue to er, and I think more effective additional pages that are increase. “As we see the genfor the client; it’s not complicoming from various sources. erational shift and members cated anymore.” So, our advice to dealers: of a younger workforce beAny discussion within the Capture as many pages as possible ... ” coming the leaders, driving industry about mobile apps best practices as the decishould include a reminder — Joe Contreras sion-makers within organiof the goal of capturing Epson America Inc. zations, I think we’ll see momore printed pages. “We see bile printing increase. I don’t mobile printing as another opportunity within the dealer’s portfolio to add additional know that it will ever overtake traditional value and capture additional pages that are coming from printing, but I think the way users work will various sources,” Contreras says. “So, our advice to dealers: continue to evolve over time.” n Brent Hoskins, executive director of the Capture as many pages as possible and know the sources Business Technology Association, is editor that are generating prints.” of Office Technology magazine. He can be As new generations of workers join the workforce over reached at brent@bta.org or (816) 303-4040. time, it should be recognized that the “habits and behaviors

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Concerning Cartridges Cancer, crimes & chips make sales challenging by: Tricia Judge, International Imaging Technology Council

California man decided to take advantage of the large discrepancy between the prices of OEM printer cartridges and some of the lesser-priced cartridges available on the internet. He delivered the cheaper products to his customers and pocketed the difference. In June, he was sentenced to 33 months in prison for scamming one of his customers, the federal government, out of $3.5 million by switching out products he sold it for cheaper ones. According to a Department of Justice press release, Jim A. Meron, 54, owned WOW Imaging Products LLC and Time Enterprises LLC, and sold office supplies to federal agencies through two web-based government sales portals. Meron is not — and never has been — a member of the International Imaging Technology Council (Int’l ITC) or the Business Technology Association (BTA). Scams, inferior — even toxic — cartridges, shifting Asian supply sources, patent-infringing products and blatant anticompetitive behavior make this a difficult time to sell printer cartridges. One bad move can herald the end of one’s business — or even one’s freedom. But do not despair. There are safe options out there that can provide lucrative profits. Cancer-Causing Cartridges: Health & Safety Issues From Foreign New-Build Cartridges Toner cartridges are comprised of an OPC or drum and toner housed inside a heavy styrene plastic shell or core. European industry members, including the European Toner and Inkjet Remanufacturers Association (ETIRA), started testing cores from several large Chinese manufacturers of new-build cartridges. The ETIRA’s report found large quantities of the flame retardant decabromodiphenyl ether (DecaBDE) in the newbuild cartridge bodies. DecaBDE is a known carcinogen that is so powerful it is banned in most European countries.

The largest commercial producers and suppliers of DecaBDE in the United States agreed to phase out the use of the chemical by the end of 2013, yet the EPA is still proposing a ban of the substance. Here is language from the proposed rule: “Decabromodiphenyl ether. DecaBDE (Chemical Abstracts Registry Service Number [CASRN] 1163-195) is a flame retardant that has been widely used in textiles, plastics, adhesives and polyurethane foam. For DecaBDE, this proposal would prohibit the manufacture (including import), processing and distribution in commerce of DecaBDE, and articles and products to which DecaBDE has been added ... ” The proposed rule has four exceptions that have nothing to do with imaging supplies. In the electrophotographic process, internal elements of the cartridge get up to 266 to 356 degrees Fahrenheit, heating the DecaBDE-laden cartridge and potentially releasing this chemical into the office environment with every print. Xerox and the other OEMs are wasting no time spreading the word. Xerox’s results found volatile organic compounds (VOCs) of DecaBDE up to 16,510% higher in new builds. Subsequent reports undertaken by the Int’l ITC have found large quantities in some Asian new-build cartridges, while others have undertaken steps to alleviate the problem. But what about the toner itself? It, too, is made of plastic. Toner consists of pigment, plastic polymer, wax, charge control agents, bulk additives and surface additives. Low-cost cartridges, like the Asian new-builds, are likely to employ low-cost raw materials that are more likely to contain “impurities” that could have dramatic health and safety issues. In addition, the smaller the size of the toner powder, the more fine the print is on the page. The OEMs have therefore driven down the particle size of toner to increase graphic quality and yield. Mean particle size can range from five to 10 microns, but it can contain particles in sizes that are considerably smaller than five microns and more than 10 microns.

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The smaller the particle, the more color cartridges. Canon sued LD Products hazardous it is. Once you get that small on March 20 in a U.S. District Court in OEM patent in size, respiration into the lungs is posCalifornia for patent infringement based infringement is another sible. Moreover, the additives used in on LD’s sales of new-build-compatible serious concern for toner, particularly the surface ones, are versions of HP CF210/211/212/213 color those selling imaging even smaller. cartridges. The patent in these cases covsupplies. Now ... OEMs In toner cartridges, toner is heated to ers “a movable member having a spacing a melting point during fusing, when the force receiving portion capable of receivwant their supplies print is laid down on the page. Again, the ing a spacing force to space the developing business back. cartridge and its contents are heated up to roller from the photosensitive drum ... ” 356 degrees Fahrenheit and many of these Will Canon continue its roll over the impurities can become airborne and released from the printer. new-build invasion? Probably. However, it certainly has The problem does not end with the cores and toners. been picky about which patents it intends to enforce, given There are many internal components that may also contain the tens of thousands of patents it has in its arsenal. Still, it toxins, and plenty of Asian suppliers are looking to shave a is easy to be an “innocent infringer” in today’s marketplace. few pennies off by using tainted materials. It has never been more important to know your suppliers There are legitimate Chinese manufacturers that have intimately. taken steps to address the issues regarding contamination. However, in today’s volatile Chinese imaging supplies mar- The Falling of the Chips: Firmware That is Causing ketplace, companies are changing hands and being traded at Printer Interruptions a rapid rate. Yesterday’s environmental superstar could beAnother OEM, HP, is using chip technology to control come tomorrow’s polluter when the company has to cut costs. printing. Modern chip technology is a miracle that allows That is how DecaBDE ended up in the plastic in the first place. consumers to enjoy a host of features from their machines. Manufacturers use it to monitor their products’ perforPatent Infringement: Still a Problem mance and make improvements in subsequent generations. OEM patent infringement is another serious concern for However, chip technology can also be used for other those selling imaging supplies. Now, more than ever, OEMs purposes. When chips are used to monitor supply usage want their supplies business back. in printers, for example, they can become an impediment In August, Brother, which has been reasonably quiet to product performance. In 1999, the first “killer” chip was when it comes to defending its intellectual property rights, introduced. These chips, used in Lexmark printers, would filed a complaint with the United States International Trade shut off the machines when they detected that remanufacCommission (USITC) against 32 companies and individuals tured printer cartridges were in use. that have allegedly infringed its patents. Brother joins CanThe bundling of beneficial security technology in chips on and Epson in 2019 to fiercely fight with the aftermarket. with printing functions initially appears to be a plus for In the early 2000s, new-build cartridges started showing consumers, but it sometimes ends up having a convoluted up and taking market share. Remanufacturers waited impa- impact. These chips have long been the target of aftermartiently for Canon to protect its huge portfolio of intellectual ket ire, and the dark side of similar technology bundling was property. It took years, but Canon finally did sue over an in- at the core of legal battles between Microsoft and U.S. antiternal gear. The company secured a general exclusion order trust officials decades ago. from the USITC in that case, but the party was not yet over. HP employed chips also, but its earlier models did not lock The Asian companies and their U.S. subsidiaries, if any, out competition. They provided a variety of information to responded by developing workarounds to the gear. Canon the consumer that was appreciated: gauges for toner levels, sued, claiming that the workarounds were also illegal. A pre- information on page count, etc. Aftermarket replacement liminary finding sided with the new-build manufacturers. chips did not provide this information and the cartridges On May 31, 2019, Canon announced that it had appealed they were affixed to were seen as less valuable because of the USITC decision to the U.S. Federal Circuit Court of Ap- the diminution in function. This gave HP a competitive edge, peals, which is one step below the U.S. Supreme Court. The but did not keep other brands’ cartridges from functioning. Chinese are game for the fight, but Canon has money and These early chips were overcome when smart aftermarplenty of procedural avenues available. ket companies, like Static Control, developed replacement Another interesting suit that is still pending is Canon v. LD chips that disabled the “kill” feature and allowed for reuse. Products and V4Ink for infringement involving its new-build The market for aftermarket chips became robust. www.offi cetechnol ogymag.com | Se p te mb e r 2019 | 17

Judge Sept 19.indd 2

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The OEMs added a new tool to their right-to-repair doctrine has long procompetitive arsenals: firmware. By downtected remanufactured cartridges from Remanufactured loading what is supposed to be an “upclaims of patent infringement. The concartridges are based grade” from the OEM, consumers became sumer has a right to repair his (or her) on the reuse of the complicit in creating “killer” chips. car, computer and cartridge. The issue OEM cores, so the However, consumers and the afterwas settled in the mid-1990s and 2000s health and safety market are now confronting a very blain a variety of U.S. lawsuits. tant attack from HP with a new round of OEMs have hundreds of patents at their issues discussed firmware that is inscrutable. It is either disposal, covering nearly every cartridge herein do not apply. a “time bomb,” so to speak, waiting until they offer. Canon, in particular, has a huge the printer is in service for a time, or it patent portfolio that it has recently started automatically changes the firmware so it disables all after- to aggressively protect through litigation. It is all but impossimarket chips. Either way, the competitive cartridge works ble for a new-build manufacturer to successfully work around for a while, but is then disabled. This firmware affects a host all those patents. of popular printers. Remanufactured cartridges are based on the reuse of the HP’s own internal documents (and packaging) alert the OEM cores, so the health and safety issues discussed herein consumer that this scenario could happen: “Dynamic se- do not apply. In contrast, as noted, some new-build molds curity-enabled printer. Only intended to be used with car- are potentially toxic, and use inferior-grade plastics that do tridges using an HP original chip. Cartridges using a non- not have the durability or integrity of OEM plastics. Beyond HP chip may not work, and those that work today may not the cartridge shell, there are important technologies that work in the future.” the domestic market took decades to command — and then These statements could serve as notice to the consumer, there are the chips and other highly technical components. as in “buyer beware.” HP could argue this information gives A $3 cartridge cannot address these issues with the requithe consumer the heads-up that aftermarket cartridges site quality, nor can it have all the vetting necessary to be might not work and, therefore, any subsequent failures are free of all intellectual property concerns. to be expected — or perhaps not even actionable if the conFinally, customers are becoming more environmentally sumer becomes inconvenienced. conscious. Remanufacturers reuse 27 million pounds of inThe notice is tiny and the vast majority of consumers will dustrial-grade plastic and conserve 73 million quarts of oil. buy without knowing about the potential for printer inter- Clover Imaging Group alone reclaims more than 21 million ruption. Once the firmware update is done, it cannot be un- ink and toner cartridges each year. done. There is no way to uninstall this firmware. Reman Day has taken off under the tutelage of the ReThe future is reasonably certain. There will be more liti- manufacturing Industries Commission, representing all regation and more movement by OEMs into the use of firm- manufacturers — from John Deere and Caterpillar to 73,000 ware as a competitive weapon. HP, once heralded by the small auto and cartridge remanufacturers. This year’s aftermarket for its non-interference with remanufacturing, events encompassed nearly 200 locations spanning 21 counwants its supplies business back. Consumers will certainly tries on all six inhabited continents. All 12 of the recognized lose if HP runs all competition out of business and then re- sectors of remanufacturing were involved, and a resolution claims its marketplace and margins. from the U.S. House of Representatives and proclamations One solution is to keep consumers away from firmware from state and local government officials were signed, recupdates altogether. Educate them as to the nature of the ognizing remanufactured products as preferable. firmware’s purpose and leave them a reminder on their Finally, there is President Donald Trump’s trade war with printers. You can download these stickers from the Int’l China. He has continued to implement tariffs on more and ITC’s website at www.i-itc.org. As another solution, Int’l ITC more Chinese products, and cartridges could be among them. is working with aftermarket litigators to monitor and, perSelling imaging supplies should not be this complicated, haps, act on this. but it is. Look to the Int’l ITC to keep you apDo you have a firmware story? I want to hear it. Email me prised of ways to stay safe in your sales. n at tricia@i-itc.org. Tricia Judge has served as the executive director of the International Imaging What About Remanufactured Cartridges? Technology Council (Int’ l ITC) for 17 years. Remanufactured versions of these cartridges remain She can be reached at tricia@i-itc.org. the safe, legal alternative, thanks to the right to repair. The Visit www.i-itc.org. 18 | w w w. o f f ic et ec hno lo g y m a g.c om | S e p t e m b e r 2 0 1 9

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Public Relations Is it part of your marketing program? By Jim Farrell, PRfirst

generation ago, office technology dealers marketed their products and services much differently than they do today. The “tried-and-true” methods of earlier times (direct mail, trade shows, paid print advertisements and commercials on radio or television), while still components of many marketing efforts among the MSP and IT industries, have been joined by web-based marketing opportunities including Facebook, LinkedIn, Twitter, online advertising, e-newsletters and email blasts, as well as targeting potential customers through sophisticated “geofencing” tactics that market directly to smartphones. For most dealerships, the best marketing program uses a mixture of several of these methods. Rarely does one particular form of marketing accomplish every goal. That being said, one very powerful marketing strategy often overlooked in campaigns is public relations (PR). In simple terms, PR works with news media outlets to have them publish/post a company’s news with two objectives in mind for the business: (1) increased brand awareness and visibility for the company; and (2) showcasing the company’s expertise. The goal of the news media outlets that participate is to provide additional relevant knowledge and information for their readers/viewers. If done properly, everyone wins. For the business owner, a PR campaign that is properly executed can let thousands of readers and viewers know who you are, what you do and, hopefully, why they should utilize your services. There are several important differences between PR and other forms of marketing. First, for the most part, the news coverage comes at no cost to the business. The second difference is that PR carries with it a third-person validation; that is to say, an editor, magazine writer or webmaster deems that the story about a particular business is important enough to be included in their content. That is a big credibility booster for any business. After all, in that case, it is not the business owner saying positive things about his (or her) business; it is someone else doing the reporting. The major elements of a PR campaign include: (1) Press releases — Press releases are announcements

about a company’s ongoing events. Topics can include: new hires; promotions; conferences or trade shows attended; awards (from trade associations or local chambers of commerce, for example); company anniversaries; new products offered; and charitable good works that the business does in the community. (2) Source letter — This is an introduction via email, often followed up by a telephone conversation, that introduces a business owner as a resource to writers, bloggers, webmasters, magazine editors and radio/TV producers. The objective of this tactic is to acquaint media people with good local sources so if they are working on a story and need informed comment, they will have someone to call. As an example, with all of the recent talk about hacking and cyberthreats, writers would appreciate having a list of one or more qualified managed IT services professionals who can comment on current news. And, when a business owner is quoted in an article, he is seen as an authority or leader in the field. Some quick advice to anyone who finds himself on the receiving end of a reporter’s inquiry: return the call quickly. Media representatives like sources who are available to meet their deadlines and who provide good industry insight.

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Farrell Sept 19.indd 1

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(3) Features/profiles — These are material business owners might send articles about a company or interviews them. The chances of getting publicity For the business with a company owner or decision-makare greatly enhanced if the material is seeking to expand er. These can be in industry journals, a genuinely newsworthy and is deemed its profile, PR can local business journal, a regional daily beneficial to the publication’s readers/ be a powerful and newspaper, or an interview on a radio or viewers. And, it is also important to persuasive way TV station. There are also a number of consider the geographical relevance of business websites that may also be open the information. to communicate to such opportunities. For example, if a dealership is located a company’s message. (4) Thought leadership or guest arin Denver, Colorado, then it is far more ticles — These are articles in industry or likely that The Denver Post would find it business journals that showcase a company’s knowledge or relevant than, say, The Boston Globe or The New York Times. position on an issue. For example, the president of a com- Dealers who seek PR opportunities should read or view the pany that sells office technology — everything from MFPs news outlets carefully to get a sense of the kind of content to document management software — might write an ob- they seek and plan accordingly. jective article on the effect of email or mobile devices on the It is also worth remembering that, in the overwhelming changing demand for imaging equipment. Or, the president majority of cases with media, there is a firewall between of an IT firm might write a piece on threats to a company’s paid advertising and “earned media” (PR) content. Just infrastructure and what to do about them. These articles because a dealership advertises with a particular magacan be placed in business journals or on websites. Or, if zine, for example, does not guarantee that the magazine that IT firm is interested in breaking into the construction will use its PR-generated content. Similarly, most outlets industry, an article in a construction journal might be the will evaluate PR content on its merits and not through the perfect way to have thousands of readers learn what that lens of “does this company advertise with us?” There is an business owner knows. Having that visibility on display can increasing trend among some media outlets toward paid make the sales process a lot easier when a prospect says, “I content, but there are still many opportunities for a busiread your article.” ness to take advantage of the opportunities for press cov(5) Events — If a business opens a new office, celebrates erage that so many of them do not. an anniversary or has some other major occurrence going Securing publicity is a great first step toward a higher on, having a ribbon-cutting with local and community of- profile. What a dealership does with the publicity, however, ficials is a nice way to introduce the business to a new audi- is equally important. A media placement, such as an interence — and it makes a great post-event press release. view in an industry journal or a thought-leadership piece (6) Utilizing publicity on social media — Every time a that makes it into a regional business magazine, is a great business secures publicity, whether it is through a thought- opportunity to post a link to the article on the company’s leadership article, an interview or a press release, it is a website, to a LinkedIn profile, and on Twitter and Facebook. great opportunity to post a link to LinkedIn, Twitter and The more posts, the better. That way, when someone searchFacebook. These articles, interviews, etc., can also make es for a company online, the viewer will see numerous links great content for company e-newsletters or email blasts. to articles and it will serve to elevate the company on search With all of this being said, a question many business engines. Plus, it provides a sense that the business is a leader owners ask is: “Why would one or many news outlets be in- in the industry. terested in my business?” For the business seeking to expand its profile, PR can be a The reason is this: media outlets (to varying degrees) rely powerful and persuasive way to communicate a company’s on small businesses to keep them abreast of news and in- message. PR is, all too often, an underutilized form of mardustry trends. Most of the big business stories are written keting that is among the most effective tools at the business by staff members. If two global companies merge, for ex- owner’s disposal. Whether a dealership uses an outside PR ample, that is likely going to be covered by in-house writ- firm or goes it alone, there are opportunities ers. However, very few media outlets have the resources to awaiting. Good luck and good publicity. n cover stories of smaller businesses, and they often look to Jim Farrell is the president of PRfirst, contributed material from dealerships or their PR firms to a public relations/marketing company supplement their in-house news coverage. in the Boston, Massachusetts, area. Because the coverage generally comes at no cost to the He can be reached at (781) 681-6616 or business providing it, media outlets are not obliged to use jfarrell@prfirst.com. Visit www.prfirst.com. 24 | w w w. o f f ic et ec hno lo g y m a g.c om | S e p t e m b e r 2 0 1 9

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12-13 Grand Slam - Hosted by BTA East New York City, New York The Grand Slam event, hosted by BTA East, will feature: a keynote address by Chris Messina, inventor of the hashtag; a dealer panel discussion on how dealers are growing net-new business; five additional educational sessions led by industry leaders; time to network with peers and exhibiting sponsors, including during a reception and breaks; and an evening at ONE Mix/Dine, a bar and restaurant on the 101st floor of One World Trade Center that has floor-to-ceiling views of Manhattan. BTA member dealers receive 2-for-1 registration and can use their $150 or $250 discount promo code received with membership. Visit www.bta.org/BTANewYork to register.

October 16-17 ProFinance 3.0 Irvine, California Over the last 17 years, the principles of ProFinance have dramatically improved the performance of hundreds of dealerships. Now, with color, connectivity, software, managed print services (MPS) and managed network services (MNS), the business has changed â&#x20AC;&#x201D; and ProFinance has changed with it. ProFinance 3.0 incorporates these changes into the industry model, including benchmarks for MPS. With more than 30 key benchmarks, this management tool will help you and your team achieve double-digit operating income. Visit www.bta.org/ProFinance to register. 17

2019 AIMED Forum Asheville, North Carolina The 2019 AIMED Forum, open to office technology dealers from across the country, will consist of a four-hour discussion forum with dealers, including gold-sponsor presentations. Breaks during the forum will give attendees time to visit with peers and exhibiting sponsors. AIMED member dealers receive 2-for-1 registration and can use their $150 or $250 discount promo code received with membership. 2019 AIMED Forum attendees can also attend the Fall Colors Retreat at no charge. Visit www.bta.org/AIMED19 to register.

17-18 Fall Colors Retreat - Hosted by BTA Southeast Asheville, North Carolina The Fall Colors Retreat, hosted by BTA Southeast, will feature: two keynote addresses by Meridith Elliott Powell of MotionFirst Inc.; two educational sessions led by industry leaders; round-table discussions with exhibitors; time to network with peers and exhibitors, including during breaks between sessions; and cocktails and dinner at the Grove Park Innâ&#x20AC;&#x2122;s (named the best resort in the South by Southern Living) Seely Pavilion, which offers panoramic views of the surrounding mountains. BTA member dealers receive 2-for-1 registration and can use their $150 or $250 discount promo code received with membership. Visit www.bta.org/BTAAsheville to register. For more information, visit www.bta.org/Education or call (800) 843-5059.

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Some Things Never Change A look at the importance of core values by: Robert C. Goldberg, general counsel for the Business Technology Association

ast month I shared my thoughts on how our industry is changing. Technology is shaping the landscape and dealers must plan for future growth, expand their offerings, and even consider selling their businesses if significant investment is not realistic or possible. I appreciate the positive response to those remarks, but it also caused me to do some additional reflection on the industry. I recently had the opportunity to visit PERRY proTECH in Lima, Ohio. Established by Rex Perry in 1965, the company has grown to be one of the most respected businesses in the industry. PERRY has grown its offerings beyond imaging to include networks, services, security and managed IT. Its revenue has grown significantly year over year and the company often enters agreements for its services in excess of its total revenue years ago. So, how does a company in Lima, Ohio, become so successful, obtain enviable growth and revenue, and stand as an industry pillar? I learned the answer during my visit. Posted throughout the PERRY facility are framed statements of its “PRO Core Values.” I have seen similar postings of mission statements, values and objectives, but often these postings fail to reflect the company’s culture. PERRY’s core values are truly the foundation of its culture and provide guidance for the entire industry. These core values were not created by an outside consultant or a management team, but by PERRY’s team members. The first step was to request value suggestions from all its employees, which number in the hundreds. It was found that, of the more than 200 suggestions made, many represented the same concepts. The company organized a committee of employees that took the 200 suggestions and codified them into 10 core values. These values have been formally guiding PERRY for the past eight years. The 10 core values begin with “Accountability.” Each employee accepts responsibility for what he (or she) must accomplish and performs his duties faithfully. The company goal, and the second value, is to “Exceed Expectations.” Success is built on under promising and over delivering. PERRY performs everything it does with “Integrity and Honesty,” its third core value. I have personally observed situations where

legal positions would allow the company to take courses of action that PERRY simply rejected, as it did not think they were the proper solutions. Employees work as a team with “Mutual Respect and Humility,” its fourth core value. All employees understand the company’s objectives and strive toward them together, as a real team. There is no boasting and there are no prima donnas, just company success. This is reinforced by the fifth core value, “Teamwork.” Like many dealerships, PERRY is actively involved in its “Community,” the sixth core value. Participation is not limited to financial contributions, but active physical contributions to both help organizations with their projects and provide leadership skills. The seventh core value, “Embrace Change,” allows the company to grow and prosper. Expansion into new areas has been successful due to the company’s short- and long-range plans to grow the business. “Growth and Learning,” the eighth core value, provides the fuel for that change. Education and training are encouraged. An “Enjoyable Workplace,” the ninth core value, was evident by all I saw and from those I interacted with. Finally, PERRY asks all employees to “Think Like an Owner,” the final core value. This is not difficult, as every employee is an owner and participates in the company’s financial success. Rex Perry could easily have sold his business to a third party, but, instead, he sold the business to his employees through an employee stock ownership plan (ESOP). The ESOP has been successful and has allowed all employees an opportunity to share in the company’s increased value. I am relatively certain that when you are an owner, you have a different perspective than an employee would about the business decisions you make on a daily basis. PERRY proTECH’s core values are standards everyone should consider. Many dealerships already do. When you consider the future, remember the business practices and culture that brought you to where you are today. The times are changing, but certain things never do. n Robert C. Goldberg is general counsel for the Business Technology Association. He can be reached at robert.goldberg@sfnr.com.

28 | w w w. o f f ic et ec hno lo g y m a g.c om | S e p t e m b e r 2 0 1 9

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DEALERSHIP SPOTLIGHT

SumnerOne Midwest dealership targeting IT & production by: Elizabeth Marvel, Office Technology Magazine

TA member SumnerOne is looking to a successful future with managed IT services and production print. Recently, Office Technology had the opportunity to speak with Chris Gaunce, region president for the Kansas City metro/ Wichita, Kansas/St. Joseph, Missouri area, about his time at SumnerOne, what the company looks like today, and the challenges and opportunities of today’s office technology industry. Like many BTA member dealerships, SumnerOne is family owned. Company founder Bud Sumner started in the printing industry in 1937 at a branch of the A.B. Dick Company in Oklahoma City, Oklahoma. In 1955, he purchased A.B. Dick Products of STL Inc., growing it into what is today SumnerOne. The company is now managed from its headquarters in St. Louis, Missouri, by Bud’s son, Ed, and his grandchildren, Liz and Edmund. The company’s offerings have evolved dramatically since it was part of A.B. Dick (whose founder, Albert Blake Dick, invented the mimeograph machine in the 1880s). After mimeograph machines, the company moved into offset presses, then copier/ MFPs (which are still a large part of its business) and, finally, to the digital presses and networking/IT services it offers today. SumnerOne, which has revenues of approximately $90 million, has 12 offices with about 500 employees across the Midwest. The company offers a range of products from Canon, Cisco, Datto, Dell, HP, Konica Minolta, Kyocera, Microsoft and more. The company has concentrated its recent initiatives on managed IT services and production print, where it sees the greatest industry opportunities. Gaunce started his career in the industry in 1982 at Metroplex Information Systems, a Kansas City, Missouri, copier company. In 1988, he started Unisource Document Products (UDP) with a business partner and the pair grew the company to a $12-million business before selling to SumnerOne in 2011. Gaunce ran the sales division at SumnerOne until he was named a region president in November 2012. He says managed IT services is one of SumnerOne’s most important offerings today, especially considering the exponential evolution of technology and the decrease in machine pricing. “[All the machines] do more now and the pricing has gone down, so that’s a challenge,” he says. “If you’re not getting involved in these different things [like managed IT services], then you’re making a mistake,” Gaunce continues. “But just getting involved in them doesn’t mean you’re good at them. We’re really, really good at our traditional business, so we’d better provide the exact same level of service with managed services.

SumnerOne’s headquarters in St. Louis, Missouri. That’s the biggest challenge I think, especially for smaller dealerships, because the people you need are not your traditional entry-level copier tech people; these people are specialized and paid well. You need to be able to hire quality people.” SumnerOne has been providing some semblance of managed IT services for 20 years, and while only about 5% of the company’s business is in this segment right now, it has become a bigger focus in the last four years as more businesses see the need for managed IT services. “There are tons of businesses out there [that need managed IT],” Gaunce says. “It’s a gigantic market.” SumnerOne’s managed IT services stack includes smart IT, smart backup and smart mail, as well as Office 365 installation/support and security solutions. Security is relatively new to the company, which hired a certified ethical hacker to help it build out this part of its offering. “You’ve got to have really smart people who understand security,” Gaunce says. “I understand it from a business standpoint, but I sat between two of these [security] guys at a dinner one night and they were talking about all this stuff that zoomed right by me. It’s just a really specialized area and they’ve really got to know what they’re talking about.” In addition to hiring the best people, Gaunce has other suggestions for dealers who are looking to get into managed IT services. “I would say the most important thing is understanding what market you are intending to serve and gear your stack of products and deliverables to that market,” he says. “Second, you have to build a great backend. Just like with our traditional MFP products, service is key here. When a company’s network is down, not secure or just needs a serious overhaul, you need to have the support group that can deliver

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Dealership Spotlight Sept 19v2.indd 1

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and how those could fit into our offering.” an experience that provides the customer To “do it right,” Gaunce recommends the peace of mind and confidence they ex“We have to make sure hiring people with production experience pect. Our goals [in this space] are the same our customers know and properly investing in the segment. as with our traditional business: Find the about all the ways we can “We currently have six production speright customers that value our services and help them operate more cialists across SumnerOne, and we have then do a great job for them.” efficiently and educate two production workflow and business While managed IT services may be an architects as well,” he says. “All have great important offering for SumnerOne, it is also them on all the offerings knowledge of the business from the intaking advantage of two other opportuniwe can provide.” side. Also, invest in the resources needed ties: production and wide-format printing. from the beginning. The return on investThe dealership currently sells Canon, Konica Minolta and Xerox sheet-fed production products, as well ment happens much more quickly with the right resources.” As the total number of printed pages continues to shrink, as Canon, HP and Océ wide-format products. The company sees a trend toward a need for more high- Gaunce shares some advice for dealers to overcome this conspeed digital production equipment and Gaunce says 15% to stant challenge. “All dealers are trying to expand their offer20% of the business is now in production. “Production print ings,” he says. “We have to make sure our cusalso seems to be growing [in the marketplace], but it’s anoth- tomers know about all the ways we can help er tough market,” Gaunce says. “You’ve got to have the right them operate more efficiently and educate people to make sure you’re doing it right, and it’s not cheap. them on all the offerings we can provide.” n Elizabeth Marvel is associate editor of Office Our product lineup and varied options from a manufacturer Technology magazine. She can be reached at standpoint give us a distinct advantage over most of our competitors. We are also evaluating high-speed inkjet products elizabeth@bta.org or (816) 303-4060.

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Dealership Spotlight Sept 19v2.indd 2

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Hytec ad Apr 19.indd 1

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DEALERS HELPING DEALERS

Company Valuations Where to turn for dealership assessments Compiled by: Brent Hoskins, Office Technology Magazine

ollowing is another of the questions submitted by a dealer member as part of BTA’s Dealers Helping Dealers resource, and several of the answers received. These answers and many others can be found in the members-only section of the BTA website. Visit www.bta.org/Dealers HelpingDealers. You will need your username and password to access this member resource. What industry resources can you recommend to determine an accurate & independent company valuation without a commitment to sell the company? “The single best valuation tool we use is ‘The Model’ which is currently administered by John Hey and Todd Johnson. It is something every dealer can input information into to give a true picture of where you stand against national averages. It also would be a great tool for acquisitions. It takes a lot of work to set up initially, but once you have the information plugged in, it becomes easier to update each year.” Brantly Fowler, sales manager Zeno Office Solutions, Midland, Texas “I have heard everything from two years sales is your value, to two years gross profits, to two years net profits. I don’t think there is an exact science, as each dealership is different. I think it boils down to the strength of your contracts and your brand in your market.” Paul Thomas, president National Office Shore, Lillington, North Carolina “Five times earnings is a method we use to determine company value, which we calculate annually for our own understanding of our company growth.” Susan Woodhull, owner Woodhull LLC, Springboro, Ohio “Prosperity Plus is a very good resource.” Neville Chaney, president WJ Office, Boone, North Carolina “We have successfully used reputable CPA firms that have successful track records of doing independent business valuations.

They can be expensive, but you will also get a true picture and opinion without having to wonder if the valuation could be influenced by alternative motives.” Mike Kelly, CEO Pearson-Kelly Technology Spring field, Missouri “I would say get in deep with John Hey and Todd Johnson of the ProFinance team. Understand if you have strong systems and processes, are not reliant on the OEMs for infrastructure and support, and would consider your business a platform dealership or an ancillary add-on that could be bolted onto an existing dealership. Look at your year-overyear growth, operating income and potential in your market. Do you have a handful of anchor clients that, should you lose their business, would dramatically impact your business? Are you in a strategic market that someone wants to break into? Is there anything about your business that is not scalable? There are always more questions than answers: ‘What is it worth? What is someone willing to pay? What do you want? What is next? Do you want to continue to work? Do you want to retire? What does that payout look like? Is it over time? Is there a bonus earnout for growth?’ The actual value of what a dealership is worth is only a small piece of the decision. I would talk to other dealers who have been acquired and understand what they did well and what they would have done differently.” Brett Butler, CEO Excel Office Services, Los Angeles, California “There are several independent consultants available to evaluate our businesses. Mike Dudek with Zygoquest is probably the best known.” Tim Renegar, president Kelly Office Solutions, Winston-Salem, North Carolina Do you have a question for your fellow dealers? If so, email it to brent@bta.org with the subject line: “Dealers Helping Dealers.” BTA will then share your question with the full dealer membership with a request for guidance from your fellow dealers. n Brent Hoskins, executive director of the Business Technology Association, is editor of Office Technology magazine. He can be reached at brent@bta.org or (816) 303-4040.

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SELLING SOLUTIONS

A 21st-Century Transition The hidden causes of sales problems by: Gil Cargill, Cargill Consulting Group Inc.

or many office technology dealers/ owners, the cause of sales productivity and profitability problems can be seen by looking in the mirror. That is right — in my 42 years of coaching and consulting in this industry, I have noticed a growing trend. Specifically, dealership owners are approaching me to help them solve sales productivity and profitability problems but, unbeknownst to them, they are the source of the problems. Now, I am not trying to offend anyone, but I am going to tell it like I see it in the next few paragraphs of this article. If you are an owner and/or a senior management person within your dealership, you may be inadvertently creating the problems that you want me or other consultants to solve. Following are some of the ways in which I have observed this phenomenon manifesting itself. “Do It Like I Used To” Well, I hate to break it to you, but this is the 21st century and the sales and prospecting techniques that worked for you in the 20th century will not work for your sales team in the 21st century. As a matter of fact, the more adamant you are about forcing or coercing your people to work the way you used to, the less credibility you have with your team members and the more inclined they are to resign and seek employment elsewhere. We all know what that does for your profit picture. One of the biggest offenders of the “do-it-the-way-I-used-todo-it” method is the approach to prospecting that is a result of what worked in the 20th century. Even though all of the data shows that phone cold calling is unproductive and demoralizing to salespeople, we still insist that they make cold calls. At one level, they are doing it because they need the salary or guarantees associated with their comp plans. The dealership owner who insists on 20th-century sales and marketing tactics in the 21st century is frustrating his (or her) sales team members and reducing their profits — not to mention accelerating attrition and pushing quality prospects away. After all, the buying process has changed and I am sure you would agree that it is time to change the selling process. Many people give this idea lip service, but they never translate their good intentions into changing the processes within their dealerships. As my tagline states: “It’s not your people, it’s your process.”

Compensation The advent of managed print services has created a bit of a compensation conundrum for many dealerships. You cannot utilize old-school compensation philosophies in this environment. The old-school philosophy is what I refer to as an “absolute compensation structure.” In an absolute compensation structure, the salesperson gets a fixed amount of money per transaction. That fixed or absolute compensation structure works well in a transactional environment. However, managed print has brought recurring billing and recurring revenue relationships into vogue. While they do wonders for the dealership, they can create comp plans where the company is overpaying for underperformance. You see, the recurring revenue under a fixed comp plan produces a bit of an annuity for the salesperson. Consequently, at some point the salesperson is incented to work less while making all the money he wants to make. Please notice the emphasis on “all the money he wants to make,” due to the fact that you cannot make an adult want to make more money than he wants to make. As a result, your comp plan should be designed utilizing a relative compensation philosophy. In other words, you should pay relative to the increase in revenue produced by a salesperson from his territory and/or assigned accounts. Hiring & Onboarding Many of the recruiting/hiring strategies that I have seen, combined with the comp structure offered to a new employee, are guaranteed (especially in today’s economic environment) to attract the least-qualified, least-motivated candidates. Although they are few and far between, there are still a good number of sales “hunters” available in the marketplace, but you have to recruit them differently. You can no longer offer your salespeople a base or draw that is barely above minimum wage with the promise that they will become extraordinarily successful, financially, as a result of selling for your company. That is viewed by many applicants in today’s world as a come-on and a promise of hard work with little or no return. Once you bring a salesperson into your company, make sure that he goes through www.offi cetechnol ogymag.com | Se p te mb e r 2019 | 35

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When he does, he will notice a surge in his a proper onboarding process and receives top and bottom lines, as well as a dramatic proper training. All manner of research reduction in the stress that running his busiThe behavior that I have observed is one shows that the ness produces for him currently. Letâ&#x20AC;&#x2122;s make wherein the salesperson is hired and then company that invests sure that you are one of the successful dealpushed into the deep end and ordered to in the training of its ership owners in the 21st century. As always, stay afloat. Obviously, that strategy backnew, young salespeople I wish you good luck and good selling. n fires more often than not. Consider bringAfter concluding a sales and ing people on board as sales development is the company that ... management career at IBM, Gil Cargill representatives. A sales development rep is wins the day. launched his own consulting practice in a young person who would be paid less than 1978. He has spent the past 42 years as a the starting wage of a senior person, but consultant, speaker and trainer, helping thousands of whose job would be helping senior salespeople manage the CRM businesses achieve dramatic and permanent improvements in system, coordinate database activity, profile prospects, etc. sales productivity. Cargill has taught salespeople across diverse In other words, the sales development rep offloads the lowindustries the importance of developing sales er-value tasks from the high-value senior salesperson while processes, the advantages of implementing he learns the ropes of your business. All manner of research new technology and the benefits of shows that the company that invests in the training of its new, tracking sales performance. young salespeople is the company that, more often than not, He can be reached at (310) 447-4102 wins the day. Make sure your company is that organization. or gil@gilcargill.com. In summary, todayâ&#x20AC;&#x2122;s dealership owner needs to bring his Visit www.gilcargill.com. management strategies, attitudes and style into the 21st century.

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SELLING SOLUTIONS

The Silent Sales Killer How turnover drains your profits & opportunities by: Troy Harrison, Troy Harrison & Associates

recently answered the phone and an earnest voice said, “Hello, Mr. Harrison. This is Chris (last name omitted) and I’m your new representative with Company X. I’m calling to introduce myself, and to see if we could set up a time to chat so I can learn about your business and see if Company X can do more for you.” Company X is a vendor I have done business with for six years. I am loyal to the company because it provides a service that helps me a lot. I spend quite a bit of money with the company and I am sure that when Chris looked at my account, he figured he had a pretty solid customer and a good sales call. That is why I am sure that my response was a huge surprise to him (and it might be to you as well). “I’m sorry, Chris, but that wouldn’t be a good use of my time or yours,” I told him. He was clearly shocked, so I decided to explain more fully. “You see, I get a call just like this every six months from your company. About every six months, more or less, I have a new rep who wants to spend time being a ‘resource’ to me. I’ve had several of these conversations and I just don’t have the time for another. I’m already buying what I need from your company, so there’s no upsell potential for you. I wish you the best, I have your contact information and if I need you, I’ll call.” “Well, I do appreciate your candor,” he said. “I’m not trying to be rude,” I told him. “I’ll tell you what — call me on your one-year anniversary and I’ll give you all the time you want.” Chris was disappointed, but I meant what I said. And I doubt, based on past performance, that I will get that call on his one-year anniversary. Turnover in sales is a sales killer and a relationship killer. Sooner or later your customers get tired of hearing, “I’m your new salesperson.” Or, for those salespeople who jump jobs and are saying, “I’m now with a new company,” your customers get tired of that as well. In both cases, credibility and relationships are the victims. The reason I would not speak with Chris was exactly what I told him — that it would not be a good use of my time. History shows that by the time he is getting it figured out, he will be gone and I will be getting a call from yet another new

salesperson. I like to train salespeople — but only when I am paid to do so. Here are the raw facts: There is a learning curve for salespeople in any job. Stats say that salespeople reach basic competence in six months, become profitable for the hiring company between 12 and 18 months, and do not reach full productivity until year three or four. When salespeople change jobs inside that three-year window (or worse, a one-year window), that tells me that they do not know what it is like to reach full productivity. Ultimately, excess turnover is a problem for our profession, but there are a few things that salespeople, sales managers and company owners can do to curb it. For Salespeople n Stand and fight — There are many stated reasons for salespeople short-timing on a job; however, the main reason is that things get a bit tough and salespeople bail. Sales is not always an easy career, but the best, most successful salespeople fight through the problems and emerge victorious on the other side. n Stop chasing shiny objects — One of the biggest reasons for turnover is that salespeople chase. What do they chase? Shiny objects. Or, to put it another way, the new opportunity that seems oh-so-much-better than the current job because they get more money, better technology, a different territory, etc. I recently interviewed a guy who said that he was a “chaser of the best technology in my space at any given time.” This reasoning was to explain six job changes in the last 10 years, none of which produced significantly better results or income. Do not get me wrong, I know that there are times when the only way to advance your career is to make a change — but those changes should be infrequent and well-thought-out. For Sales Managers n Hire smart — Too many hires are simply future turnovers in the making. Sales managers, lacking a good basis or tools for hiring, simply make “gut hires” that do not produce results. Lower turnover is the result of good hiring practices. n Coach before firing — Once you have hired someone, you owe it to yourself, as well as to your hire, to give him (or her) every reasonable opportunity to succeed. That means www.offi cetechnol ogymag.com | Se p te mb e r 2019 | 37

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termination should be a last resort, not a first; the first resort is to troubleshoot and coach your salesperson’s performance. Only when you can honestly look at yourself in the mirror and say that you gave him an honest shot should you terminate. I would be remiss if I did not mention that both hiring and coaching are well covered in my “Unconventional Guide to Sales Management” audio course.

have the skills to coach and improve sales performance. They are drivers of the sales effort rather than passengers. If that is not your sales manager, it is time to rethink (and maybe invest in coaching or training for that person). Turnover has many costs, but it does not have to be a sales killer. The right approach to building a sales force can greatly reduce turnover — which puts profit on your bottom line. n Troy Harrison is the author of “Sell Like You Mean It!” and “The Pocket Sales Manager,” and is a speaker, consultant and sales navigator. He helps companies build more profitable and productive sales forces. To schedule a free 45-minute Sales Strategy Review, call (913) 645-3603 or email troy@troyharrison.com. Visit www.troyharrison.com.

Quality sales managers have the skills to coach and improve sales performance. They are drivers of the sales effort rather than passengers.

For Company Owners n Take a long-term approach — Building a quality sales force is not something that happens week by week or necessarily quarter by quarter. It is something that happens over the long haul. In the case of the sales rep who contacted me, I am sure that ownership or upper management has set up a set of standards that basically wash out new sales reps after about six months, hence my frequent calls from new reps. n Hire a quality sales manager — Quality sales managers

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