rvice Exc Se
MARCH 2016
MPS
ence Plat ell Office Technology Service Excellence Award
PLATINUM LEVEL
m Awar inu
Would You Work for You?
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VOLUME 23 NO. 3
Connecting People, Ideas and Products in the Document Imaging Industry since 1994 Connecting People, Ideas and Products in the Document Imaging Industry since 1994
History Lessons It’s All in the Family
The Internet of Things Is Heating Up in Digital Imaging. But Who Will Benefit?
Business Profile
at Barlop Business Systems
Developing the Plan to Improve Mean Copies between Calls Is Now The Time To Sell? ENX Magazine ENX Magazine PO Box 2240 Suite 729 PO Box 2240 Suite 729 Toluca Lake, CA 91610-0240 USA Toluca Lake, CA 91610-0240 USA tel: 818-505-0022 tel: 818-505-0022 / fax: 818-505-9972 fax: 818-505-9972 email: enx@pacbell.net email: enx@pacbell.net www.enxmag.com www.enxmag.com
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YOUR MPS BUSINESS
In This
Issue e n x
NOTE 12 EDITOR’S Between the Lines: MPS is Here to Stay OF THE INDUSTRY 20 STATE MPS History Lessons
By Scott Cullen PROFILE 30 BUSINESS Schock 16 Treatment: Schock Logistics Makes Copier Shipping and
In This
Issue
EDITOR’S NOTE
Between The Lines De-installation Simple and Secure for the Office Dealer Community
24
STATE OF THE INDUSTRY
of 2015 34 The Internet By Scottof Cullen Things Is Heating Up in Digital Imaging.
Staff
MARKET INTELLIGENCE Trends and Trendsetters
But Who Will Benefit? NEWS BRIEFING 32 HP Sheds More Resellers As It Implements New Qualified By Michael Nadeau Supplies Program
SPOTLIGHT By Charles Brewer 40 DEALER It’s All in the Family at Barlop Business Systems
40
BUSINESS PROFILE
44
DEALER SPOTLIGHT:
Static Control
SERVICES 44 MANAGED Would You Work for You?
Staff
A Conversation with Keith Justus, President of Business By Charles CopierLamb Solutions
EXCELLENCE PLATINUM AWARD WINNER 48 SERVICE 48 BEIDigital Services and ENX Magazine Acknowledge Da-Com Office Solutions is thetoBomb When it Service Comes to Service SERVICE EXCELLENCE
Susan Neimes
Publisher & Managing Editor
Excellence in 2015 Excellence
SALES & MARKETING 54 The Year Ahead 52 Developing Plan to Improve Mean Copies between Calls By Bradthe Roderick
SERVICE MANAGEMENT
Susan Neimes
Publisher & Managing Editor
By KenMANAGED EdmondsIT 58 How to Win Over a New Prospect
STRATEGY 56 EXIT By Dave Sobel Is Now The Time To Sell?
60JimThe By Zipursky 10 Biggest Mistakes Business Sellers Make – Part 1 of 3 EXIT STRATEGY
Todd Turner Editorial Director
Scott Cullen
Editorial Director
By Jim Zipursky TECH TIP 64 PRINTER By LaserPros Display Advertisers Index
62 Industry Events 65 65 Xerox Printer Tech TipStyle Toner Cartridges Phaser® 3635 66 By Laser Pros Calendar TECHNICAL TIPof
By Britt Horvat Tech Help 68 FreeADVERTISERS DISPLAY
INDEX By Smarka! 60 OF 4110INDUSTRY Style Fuser EVENTS Repairs 70 Xerox 64 CALENDAR By Britt Horvat ®
Ronelle Ingram
ContributingRonelle Editor Ingram Contributing Editor
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engage ‘n exchange
engage ‘n exchange
Christina Kim
Christina Associate Kim Editor Associate Editor
14
10
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México & Latin America La Revista del Distribuidor Dealer Source
Corporate Office Susan Neimes - susan@enxmag.com Corporate10153 Office1/2 Riverside Drive., Suite 729, Toluca Lake, CA 91602 Editorial Office: Susan Neimes - susan@enxmag.com Todd Turner - todd@enxmag.com tel. 818-505-0022 • fax. 818-505-9972 10153 1/2 Riverside Drive, Suite 729 tel. 818-212-8903 Editorial Office: Toluca Lake, CA 91602 Scott Cullen - scott@enxmag.com 21818-505-9972 Llanfair Lane, Ewing, NJ 08618 • tel. 609-406-1424 tel. 818-505-0022 • fax. ENX Magazine is published monthly by Affinity Business Communications, Inc. Any inquiries should be sent to: enx@pacbell.net or mailed to the corporate office.
ENX Magazine is published monthly by Affinity Business Communications, Inc. Any inquiries should be sent to: enx@pacbell.net or mailed to the corporate office. Copyright ©2014 by ENX Magazine printed in the U.S.A. All reproduction in whole or part is prohibited without written permission. Cover photo from shutterstock.com Copyright ©2016 by ENX Magazine printed in the U.S.A. All reproduction in whole or part is prohibited without written permission. Cover photo from fotolia.com •
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Contributors
Scott Cullen | Scott Cullen is former editorial director of ENX /The Week in Imaging. He has been covering the document imaging/office technology industry since 1986 and recently celebrated his 30th year in the industry in February. During this time, he has interviewed hundreds of professionals from all corners of the document imaging/office technology industry on a wide variety of topics. He was also the founder, publisher and editor of The Week in Imaging, which he launched in 2009 and subsequently merged with ENX in 2014. Ken Edmonds | Ken Edmonds is currently employed as a District Service Manager for a major copier manufacturer. He has an extensive background in the imaging business, having owned a successful dealership, serving as service manager for multiple dealerships, and as a Document Solutions Specialist for Sharp Electronics. Additionally, he has more than 40 years of experience in the electronics and computer fields. He has attended the BTA Fix service manager training, the Pros Elite service manager training, and the Service Mangers Achieve Results training conducted by John Hay and John Hansen for Sharp Electronics. He completed the University of Wisconsin training program for technical trainers. Charles Lamb | Charles Lamb is the President and CEO of Mps&it Sales Consulting. His firm delivers proven methodologies and processes that assist dealer principals seeking a successful transformation into the managed services space. He’s created complementary solutions including Funnelmaker, Gatekeeper, and Shield IT services. For more info, call 888.823.0006, e-mail him at clamb@mpsandit. com, or visit www.mpsandit.com. Michael Nadeau | Michael Nadeau is the Senior Market Analyst for Actionable Intelligence, covering the 3D printing reseller channel and supply chain. He has made a career of explaining emerging technology to business and IT professionals. He cuts through the complexity to provide the context and clarity that his audience needs to understand the challenges and opportunities that those technologies present. Follow him on Twitter @menadeau.or email to mnadeau@action-intell.com Jim Zipursky | Jim Zipursky is the Managing Director of CFA-MidWest, an investment bank serving the middle market. Jim is a registered representative of Silver Oak Securities, Inc., member FINRA/SIPC. For more information visit www.cfaw.com/omaha. Follow Jim on Twitter (@ jazcfane) for articles and information about M&A. For more information about Exit Strategies or Selling Your Business, feel free to contact Jim at (402) 330-2160 or jaz@cfaomaha.com.
Technical Article Contributor Britt Horvat | Britt Horvat works for The Parts Drop, a company whose primary business is providing parts, supplies and information for Xerox brand copiers, printers and fax machines. You can find more information, including many of Britt’s past ENX articles on their website, www. partsdrop.com.
12
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www.enxmag.com | March 2016
B E T W E E N
T H E
L I N E S
MPS is Here to Stay Remember when the industry was MPS crazy? That’s all everybody seemed to talk about whether or not the channel was ready to go to market with it or not. Of course that’s the way it is with any new technology or service. Hype, hype, and more hype, and then it becomes what one might call a traditional service offering. Even though everyone in the document imaging industry seems to know what MPS is today, or at least should know, it’s still a talking point at conferences, in conversations with OEMs, aftermarket suppliers, and leasing companies. The reason being, so many resellers have tried and failed at it while there’s also a significant reseller population who have yet to add MPS to their menu of service offerings. Also contributing to the ongoing discussion of MPS is a growing number of resellers who have achieved success in this segment, including plenty who are more than willing to share their knowledge with their peers in the industry. It’s safe to say that MPS with its 10+ year history is well established in the document imaging/office technology channel. Maybe it wasn’t known as MPS in the early days, and in some cases the definition of MPS has been misconstrued by many in the industry, leading in some cases to unrealized riches, but all the same, those who have been offering it for several years have learned some valuable lessons along the way. That’s why we continue to write about MPS here in ENX. This month’s feature, “MPS History Lessons” examines how the industry perception and the market perception of MPS has changed over the past several years as well as how the MPS offering itself has changed. We also examine some of the lessons learned from the pioneers in the industry—resellers, OEMS, services and supplies companies, and industry consultants who have been instrumental in raising the profile of MPS to where it is today. Our MPS coverage this month can also be found on our website (www. enxmag.com) and in our newsletter, ENX The Week in Imaging, with articles that outline common pitfalls encountered by those entering the MPS space along with observations from MPS advocates as to whether or not it’s too late to get into the MPS game if you aren’t in it already. Not to give anything away, but one thing is obvious after listening to the MPS advocates, and that is MPS is here to stay, which means this is one topic that we’ll all be talking and reading about for the foreseeable future.
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NBS / ENX | March 2016
State of the Industry
MPS History Lessons
MPS advocates and early adopters discuss lessons learned about marketing MPS over the years.
M Scott Cullen
PS has now been around long enough for it to possess an established a track record within the document imaging industry. Indeed, there’s a wealth of dealers offering MPS to their customers, some doing well, others stumbling and fumbling, but trying to get a handle on it just the same. We thought it would be interesting to connect with a few dealers who are doing it well along with some of the leading advocates of the MPS movement to get their perspectives on how the market, MPS offerings, and the perception of MPS has changed over the past several years as well as lessons learned marketing MPS. Even though the industry has been marketing, promoting, and dishing about MPS for a number of years now, Kevin Morris Kevin Morris, OneDOC Managed president, OnePrint Services, LLC DOC Managed Print Services, LLC in Oklahoma City, OK, contends that most [customers] still don’t know what MPS is. That’s a good lesson for anyone marketing MPS. “That’s the reality from a client perspective,” he says. “From a provider perspective, just about everybody in the industry is involved in it. MPS has definitely changed from the perspective of increased competition, especially in the enterprise market. Everybody is in that market and there’s a lot of companies that don’t really provide MPS calling it MPS. It’s just re-labeled service and supplies agreements.”
Morris has been knee deep in the MPS world since 2002, and whether it’s been OneDOC, the company he founded in 2009; OneSource Document Management, the company he founded in 2003, or Print, Inc., where he served as a MPS consultant from 2002-2003, the organizations he’s been involved with have been on a mission to do things differently than everybody else. “As far as our company, we’re not a whole lot different than we were back then as far as how we attack our market,” says Morris. “It’s just a different perspective.” When it comes to dealers who offer MPS programs, Morris doesn’t think that’s changed all that much. “It’s just another way of marketing a whole bunch of equipment.” Nathan Maust, a major account executive with ASI Business Solutions in Dallas, TX, knows MPS and he’s seen some changes in regards to market perception since 2004. “There are a lot of companies from an end user perspective that were burned by MPS engagements, so when Nathan Maust you approach ASI Business them from a Solutions break-fix, toner, auto fulfillment [perspective] it’s a message they’ve heard millions of times and they’ve become resistant to it.” That’s one of the reasons that ASI’s approach to MPS is not a device centric, page-focused managed print offering, but focused more on intelligent print
management, print governance, and addressing end user printing behaviors. “That’s a message the market is much more responsive to,” states Maust. Pat Russell, President and CEO of ImageNet Consulting, sees the improvement in the software offerings as being the most positive change. “Ultimately our goals are the same, and that’s managing the print environment for our customers. The change Pat Russell has been more ImageNet with the software Consulting piece that goes with it, such as uniFlow, PaperCut, etc. PaperCut seems to be getting a lot of traction [recently] because it’s very reasonably priced and easy to install. I would say that’s been the biggest change in the 10 years we’ve been offering [MPS] — more efficiencies around the software solutions.” “The biggest change the market has seen is the massive commoditization of MPS,” opines Christian Christian Pepper Pepper, director LMI Solutions of marketing and business intelligence at LMI Solutions. When Pepper first started making presentations on managed print he’d ask resellers how much they charged for a monochrome print. He discovered the average price was about 2.5 cents per page. Fast forward a few years continued on page 22
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MPS History Lessons later and the average price had dropped to about a penny per page or 8 mils. “There are many MPS providers taking on monochrome fleets and charging a half a cent per page for supplies and service,” observes Pepper. “That’s the most dramatic change.” “When I started almost 13 years ago there was great promise about all that MPS could do, but it only delivered on two [things],” states West McDonald, vice president West McDonald of business development, Print Audit Print Audit. “One was billing per page and the second was auto toner fulfillment.” Where MPS and MPS providers have faltered are automated service management and providing customers with quarterly reviews. That may be why there’s less than a 30 percent customer retention rate for dealers offering MPS, according to estimates from Photizo Group analyst Ken Stewart. “In other words, 70 percent or higher are going to do it and then leave,” says McDonald. What’s the problem? “We haven’t done enough work on delivering on the promise we made in the first place,” responds McDonald. “Second, the world has changed. Fifteen, sixteen years is a long time, especially when technology is involved.” He explains that the original concept for MPS was built around limited technology and focused around the devices. “Now we live in a world of micro-manufacturing and cars that park themselves and every device under the sun is monitored and managed in this Internet of things,” observes McDonald. “But MPS hasn’t evolved to catch up to that. The market for managing people’s print is still there, but based on the [original] model we built for MPS, its days are limited.” “The more things change, the more things remain the same,” states Photizo’s Ken Stewart. “MPS hasn’t changed much in terms of its original value proposition, but regardless of how the industry is messaging and morphing the offering, I don’t
think customers are receiving it. The technology providers have matured and the offerings have become more streamlined, but it’s a race to the bottom.” Even for customers who understand MPS, Stewart says what Photizo is seeing from the many providers, whether they be the OEMs or the dealer channel, is that each simply wraps their own bow around the same package. “There’s so many variations of how people define MPS it can be hard to compare all the programs in the market,” concurs Sarah Custer, director of service and Sarah Custer solutions sales for SupSupplies Network plies Network. “When you look under the hood there are a lot of differences on how operational elements are executed. If anything the bar is raising and there’s less room for someone just manually billing for clicks at the end of the month [and marketing that as MPS].” Custer has found buyers to be more educated about MPS than in the past. Another change, at least for those with a working knowledge of MPS, is that customers are looking for what Custer describes as a more operational sophistication in their engagement such as an online portal that provides a snapshot of the environment including device level detail and critical information such as when supplies are being shipped and needed service and maintenance information. “We have seen a lot of change with MPS over the last several years,” says Lindsay Bohon, vice president sales, GreatAmerica Financial Services Corp. “When MPS came into the market it was Lindsay Bohon GreatAmerica exciting, it was innovaFinancial Services tive, and the initial hype Corp. led to a flurry of sales and marketing tactics.” It wasn’t long before resellers became disillusioned and frustrated for a number of reasons, the least of which were a lack of sales incentives, compensation discrepancies, and revenues that were less than initially expected.
“Now we’ve seen it plateau and those who have honed in, added solutions and different strategic [options] to their MPS offerings have become successful,” says Bohon. “The MPSA has recognized the change in the MPS model by redefining their definition of MPS and the change includes adding business processes and information as a more integral part of the definition.” (See sidebar for the MPSA’s definition of MPS.) Devon Thompson, manager, customer experience with PrintFleet, has been with the company for seven years and has followed the evolution of PrintFleet’s product line from a program that took a basic snapshot of a print environment to where the product is today, providing resellers with true automation and a focus on data analytics. “That’s one of the biggest changes,” states Thompson. “Another major change I saw was the transition of resellers moving from ‘simply’ box selling to providing Devon Thompson a solution, and truly PrintFleet understanding how they are bringing efficiencies with these tools/ solutions for their customers.” She’s also witnessed PrintFleet shift from providing simple integrations with partners to being truly connected to those partners. “The partnerships are so much more robust, not only with our partners in the industry but encouraging our customers to have any number of partners to create their ideal solution.” Mitchell Filby, managing director of First Rock Consulting and author of Rest in Print: from office printing to the rise in managed services, finds that everything regarding MPS has changed during the past several years. “End customers, especially in the medium to large enterprise markets are now searching and looking for Managed Print Service providers and most believe that a Mitchell Filby MPS solution is what First Rock they need to assist them Consulting gain added value and continued on page 24
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We Saw It In ENX Magazine
MPS History Lessons cost savings and operational efficiency. That was not the case 5 to 10 years ago. The market perception of MPS has now become a reality and the level of maturity of MPS has increased significantly over the last three to four years. This maturity is at both ends of the scale—the customer and the provider—both have refined and matured their view of what MPS should be and what it is.” Driving this change in perception within the target markets are C-level executives. “The majority of CIO’s and CFO’s and Chief Procurement Officers (CPO) understand the value proposition to some point about the MPS offering,” says Filby. “MPS in many ways looks like, smells like, tastes like, and on the surface is represented like other Managed Services offerings the client has purchased or invested in before. In some way customers adopted MPS faster than most providers understood it. They were clearer (mainly CIO’s) what they wanted to achieve from MPS. The customer wanted a way to move from a transaction play that was led by a manufacturer or was dominated by a certain technology footprint. They wanted a provider that managed their environment regardless of the logo on the box. They just wanted to pay or be charged for the outcome that they desired or expected.” “When we first started our offering around 2004 it was an immature market, the term MPS wasn’t coined or popularized yet, and most importantly for several years we were Bill Melo educating customers Toshiba America about what this even was, Business Solutions/Toshiba why it made sense, and Global Commerce what value they got out Solutions of it, and how it would work from a Toshiba perspective,” recalls Bill Melo, chief marketing executive, Toshiba America Business Solutions/ Toshiba Global Commerce Solutions. “Amazingly, even though [dealers] went out and repaired MFPs every day doing the same thing for printers seemed bizarre to them as comical as that might seem these days.”
He acknowledges that MPS was initially a vendor driven market for several years. “The good part was you got to educate your customer and be a consultant to them and there were a lot fewer competitors in those days, and the pricing was more the functionality of the value you could create rather than 10 people bidding on a deal,” says Melo. The other change he’s witnessed regarding the perception of MPS is that many customers are familiar with MPS and have already had some experience with it whether that experience was good, bad or indifferent. “It is unfortunately becoming more of a commodity than it used to be although there are still a lot of moving parts, still a lot to execute, and still to some degree it can be consultative, and that’s a big difference over the past couple of years,” observes Melo. “When we first started, we were making stuff as we went along. We got to take some of the early arrows and make some mistakes but along the way we got a lot of good experience and now it’s kind of a ‘machine’ for us.”
Lessons Learned
Perhaps the biggest lesson OneDOC’s Morris has learned, even if it’s something he had a strong inkling about back in the early days, was showing the customer what made his organization’s offering different from everyone else’s. “There’s a reason it’s called ‘Managed,’” he says. “A lot of our competitors don’t really manage anything. We do. We go in and look at workflow, how they move information from Point A to Point B, how they create, distribute, and store documents. We try to show people ways to reduce their document output. The typical dealer wants to put as many pages under contract as humanly possible. We don’t look at it from that perspective. We try to do what’s truly best for the client. When we go into companies we tell them up front, we don’t warehouse equipment because we don’t know what your needs are. A lot of my competitors, regardless of your need, are going to try to sell you what’s in their warehouse.” Another lesson Morris has learned over the years is the credibility that comes
from industry accreditations, such as the CompTIA Managed Print Trustmark. “There are probably only 100 dealers nationwide who have that CompTIA Trustmark,” reports Morris. “The biggest thing we learned is that it’s not the same as servicing copiers,” adds ASI’s Maust. “There are a lot more processes, a lot more moving parts, inventory management both at ASI and the end client level, and more importantly much more process driven engagement.” He explains that there’s a lot more analysis and reporting required in order to make MPS a profitable and valuable engagement. “When we first got into MPS, it was more like here’s a cost per page for all these given printers and let’s roll with it and see how it goes,” says Maust. “Now it’s our MDOM (Measure, Design, Optimize, Manage) process that’s become critical for treating every client engagement as a managed process and as a managed service.” For ASI it’s all about better defining the process and bringing more detail in terms of reporting to its clients. “[That’s something] a lot of dealers talk about, but here at ASI that’s actually a measured process and something sales people are held accountable on and something where we continue to get measured feedback from our clients in terms of ‘I never had this kind of visibility or accountability with any other company I’ve worked with in this space.’ Our technology review process is really our secret sauce in client engagements.” One of the biggest lessons that Print Audit’s McDonald has learned from dealers who have been successful at marketing MPS is that they do a good job with assessments. “[They’re] not just walking around the floor and looking at printers,” he says. Another lesson is that successful MPS dealers make sure they’re providing their customers with quarterly business reviews. “Those two things alone, understanding what the solution should be in the first place and then following up once a quarter to make sure they’re on track are the biggest lessons I’ve learned watching some of the most successful companies continued on page 26
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We Saw It In ENX Magazine
OFILE
l
MPS History Lessons
LIGHT:
on with Keith Justus, President of Business offering managed print,” says McDonald. you for it every month.” “One of the biggest lessons when it ions He cites a third element and that’s a
comes to marketing MPS is to not assume that you know everything,” opines LMI’s Pepper. He cites an LMI specific lesson as an example. Early on LMI Founder Gary Willert couldn’t understand why people would outsource managed print to a third party, giving up that opportunity to be sticky with a customer and managing their print for an extended period of time. By listening to its customers LMI learned the reasons why they should do that. “Because we are the consumable manufacturer and infrastructure provider, we are better equipped to manage the risk associated with MPS,” says Pepper. “This provided [dealers with] a predictable margin and enabled them to take on customers outside of their geographical area of service coverage.” “When I work with successful providers, coming from a provider myself who was successful, it starts with the messaging and the story we tell—an Ken Stewart articulate story where we Photizo explain to them what they can expect to experience,” states Photizo’s Stewart. It’s important in Stewart’s opinion to understand what you are and what you aren’t when it comes to marketing MPS. It’s also essential to be operationally effit cient depending on what type of customer you’re targeting. “As we see that demarcation of the market—high-value providers that serve fewer customers but provide higher-value solutions and are more consultative versus those that just offer higher-volMéxico & Latin America ume solutions,” explains Stewart. “I still see a lot of providers in the middle and Corporate Office The Largest Circulation the waters are not quite hot enough to Susan Neimes - susan@enxmag.com in the Document Imaging Industry cook them just yet, but give them a few 1/2 Riverside Drive., Suite 729, Toluca Lake, CA 91602 tel. 818-505-0022 • fax. 818-505-9972 years and it will be.” In the early days of Supplies NetEditorial Each Office: Distributed Month! work’s MPS program West McDonald Scott Cullen - scott@enxmag.com (funny how that name keeps popping up ENX Magazine anfair Lane, Subscribe Ewing, NJfor 08618 • tel. 609-406-1424 whenever MPS is mentioned), then with and/or siness Communications, Inc. Any inquiries should be sent to: enx@pacbell.net mailed to that the corporate office. another or company Supplies Network ENX The Week in Imaging at e U.S.A. All reproduction in whole or part is prohibited without written permission. Cover photo from shutterstock.com was partnering with, used to say, ‘When www.enxmag.com you see one network…you’ve seen ONE We Saw It In ENX Magazine
vendor neutral proposition where the ELLENCE dealer supports multiple brands of MFPs and printers within their MPS offering. “If those three things are done correctly they’ll be able to increase their win rates from 30 percent to 70 percent,” RKETING opines McDonald. “A lot of it is filtering out those opportunities on the front end which aren’t opportunities. They’re also rick getting better at closing accounts they might have lost because they understand what they’re looking for, and they’re following up with [customers] and measuring against what they promised.” l “Every situation can be different,” cautions ImageNet’s Russell. “What GY may be a great solution for one business may not be the same solution for another. There’s not really a one-size-fits-all for y any organization. Sure there are some commonalities, but we need to make sure we’re not just interrupting somebody’s business. We’re making sure the business is more efficient.” Russell continues, “For some customers, decentralization of print is a better fit. For other customers, consolidation is a better fit. There’s a big difference between managing services and billing for a click, and providing technology solutions to improve our clients’ bottom line. We’re not just there to collect a meter and bill
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network’. Experience has demonstrated every environment is truly unique. That lesson has been instrumental in Supplies Network’s approach to the market. “We’ve learned that we are dealing with so many different sets of expectations at the reseller and the end user level we had to build a flexible and adaptable program that allows many variations while still keeping that operational structure to allow them to scale while accommodating all environments,” states Custer. “It turns out all end users have some unique need specific to their environment.” Another lesson Supplies Network has learned in terms of supplies replenishment is that, surprise, surprise, printers lie. “You think everything is going great in terms of monitoring the device and when they need a supply, but there are tons of anomalies that can occur at the model level even down to the level of firmware that’s installed on a printer where you can get erroneous readings and faults for replenishment,” reveals Custer. “You have to understand each and every model that you’re managing.” “I look back at the market share lead we could have had in this space had we really gone all in [at the beginning] because a lot of our competitors didn’t start doing this until five or six years later,” says Toshiba’s Melo. “We’d have had a pretty significant share of the market if we had gone at it as much as we are now.” The top three lessons GreatAmerica has learned about MPS surround compensation, the importance of properly analyzing the customer’s environment, and the importance of quarterly business reviews. “Compensation plans always becomes top of mind whenever you think about any new program that a dealer is bringing to market—ensuring that it’s driving the long-term service revenue for MPS and most important, tying in the short-term hardware goals,” contends Bohon. “That depends on [the dealer’s] go-to-market strategy—whether it’s that land grab approach or rip and replace. The various ways MPS are offered to the market demands different compensation models.” Honing in on the analysis, Bohon says that’s critical before finalizing a service agreement, particularly getting a handle
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continued on page 28
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MPS History Lessons
on all the devices in that environment and nuary being 2015 We Saw aware of whether they’re overused or underutilized as well as the toner costs. Like some of her peers, Bohon emphasizes the importance of quarterly business reviews. “Going in and being in front of that customer, reporting and communicating on not only the service value you’re bringing to that environment, but also the device replacements needs that are going on to ensure efficiency metrics are met.” “The biggest lesson is understanding how truly important and invaluable the data we collect is,” says PrintFleet’s Thompson. “It’s become the core focus for PrintFleet and what our software program is built around.” This has enabled new partnerships with the likes of IBM and Photizo in regards to Predictive Analytics as well as PrintFleet’s new relationship with MWAI. “For us it’s focusing on the data and on the partnerships that’s going to drive more value for our customers with the product,” adds Thompson. The other lesson that PrintFleet has learned from working with resellers is that they want the program to be a fix all, press the button, and it’s done. “There’s a lot of heavy lifting and a lot of work that has to be done, truly under28
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standing how you’re going to differentiate Ityourself In ENX in Magazine the marketplace,” observes Thompson. “What value are you going to drive? Are you going to use a basic MPS program or are there other initiatives you’re going to try besides the software program it enables? That’s what we see dealers struggle with and where we can help them based on what we’ve learned over the past 10 years.” Not to go all negative, but one of the many lessons that Filby has learned over the years is that some MPS providers still don’t get it. “Maybe it’s about managing the reward and recognition, but this will ultimately impact your business and you will lose market share, which in this industry is still one of the key ingredients to future sustainability,” acknowledges Filby. “We still see MPS providers focused on the solution (products) not the client’s problem or what the client is trying to achieve. This becomes evident in the client’s eye very fast.” He’s also learned that MPS clients have become adept at sitting back and watching the different MPS providers slug it out in a race to the bottom. “This ultimately results in the customer winning and other providers knocking
themselves out of contention,” says Filby. “Ultimately, the provider winning the opportunity does this at a much lower rate than they would have it there was limited competition. On this point we may be seeing less experienced sales people come in and ratchet the service cost down to either win the business or hurt the opposition. Maybe this points to a more assertive sales style from a hardened and competitive industry. Either way, the customer likes the end outcome. Why wouldn’t they?” Perhaps the biggest and most optimistic lesson Filby has learned is that MPS still has a long way to go, which is exciting for the industry and the customer. “There is still an enormous opportunity for both the customer and provider,” concludes Filby. ♦
MPSA Definition of MPS “The active management and optimization of business processes related to documents and information, including input and output devices.” This is an update from the past definition: “The active management and optimization of document output devices and related business processes.”
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Business Profile
Schock Treatment: Schock Logistics Makes Copier Shipping and De-installation Simple and Secure for the Office Dealer Community
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Spencer Schock founder.
chock Logistics likes to describe itself as being on the cutting edge of change in America. When you think about it that makes a lot of sense because customers tend to call on Schock when they are immersed in change themselves. Founded in 1992, Schock Logistics assists office technology dealers and corporations with onsite de-installation of high-value equipment and oversees airride shipping of that equipment throughout the U.S. It also provides onsite data security, including wiping sensitive hard drives, network cards, and fax boards. In addition, Schock provides follow-up services such as satellite tracking, freight reports, inventory storage, and revenue sharing. Spencer Schock, Schock’s founder, started the business 24 years ago in his garage. Since then, he’s watched his business grow 15-fold to where it now serves hundreds of copier dealers nationwide along with national banks and leasing organizations, Fortune 500 companies, and thousands of small businesses. Prior to starting Schock Logistics, Spencer was a copier wholesaler struggling to remain competitive primarily because he was operating out of a remote location in Oregon. Everything changed, however, when a copier dealer in Sioux Falls, SD, asked him to ship a copier. “Twice I refused, and finally on the third request I agreed,” recalls
Spencer. “The rest is history. I switched from copier wholesaling to copier shipping.” What began with a single copier shipment in the late ‘90s has grown to thousands of shipments and more than 1,500 clients last year. Fully 70 percent of those are wholesale shipments to copier dealers while the remaining 30 percent are retail shipments for end users such as hospitals and law firms. Spencer compares his operation to an Expedia or Priceline in the travel industry. “We shop copier dealers’ shipments against up to 20 different freight carriers,” explains Spencer. “Dealers find they can standardize their freight quoting, accounting, tracking, and problem resolution through one vendor—Schock Logistics—while at the same time shop the freight market on every shipment. The dealer achieves the simplicity of [working with] a single vendor, but with the long-term, price competitiveness of bidding multiple freight carriers.” Although price is important, Spencer is quick to point out that it’s not the only variable in shipping. “Copier dealers must consider other variables such as transit time, special conditions such as stair moves or after-hours pickups, and the fragility of the equipment being shipped.” Fortunately, Schock Logistics can help dealers sort through those variables. Each of the company’s estimates lists the top three bids. The dealer can choose the least expensive bid, or the fastest transit time, or for example, if they have a particularly fragile machine
they might choose the carrier with the fewest cross docks. (Fewer cross docks reduces the chance of freight damage.) “With us, copier dealers can shop their freight variables and come up with the correct solution for each particular shipment,” says Spencer. Another critical factor when it comes to shipping is that some carriers excel at cross country shipments while others are strong in particular regions or metro area. “Again, copier dealers can manage their freight business through one portal, Schock Logistics, but choose the best carrier for each particular shipment,” notes Spencer. “If they are not sure, we identify what we believe is the best option.” Schock Logistics hasn’t changed all that much since it entered the shipping business. “At the core, we are doing today what we did on day one,” he says. The biggest challenge is managing data from so many carriers and points of contact, a challenge that Schock Logistics has met head on. “We have invested heavily in IT so that we can instantly find equipment by serial number, lease number, asset number, or even the contact’s nickname,” reports Spencer. “The history of every shipment—estimate, invoice, PO, BOL, faxes, e-mails, and phone calls—are instantly available to anyone in the office in one digital location. For example, even our accountant could tell you what is going on with a given shipment, instantly.” Another benefit of doing business with Schock Logistics is real-time tracking. Here too Schock has made the appropriate continued on page 32
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Schock Logistics Makes Copier Shipping and De-installation Simple and Secure for the Office Dealer Community investments to provide this capability to its clients. Today, 80 percent of Schock’s shipments are tracked via satellite with that data available to clients online. The company has five estimators constantly quoting jobs to copier dealers and end users. Spencer is pretty much a jack of all trades and often spends a big chunk of his day problem solving. In the morning you’ll find him working on escalated shipments—shipments that have specific pickup or delivery dates. They might be extra fragile or need to be watched closely. “We have a report on all our escalated shipments and I review those every morning,” states Spencer.
represents the hallmark of a successful company and Schock Logistics fits squarely within that pantheon. The Schock team is adept at interfacing with sales managers, leasing managers, warehouse managers, and a surprising number of sales representatives who need to include freight pricing in their copier quotes. “Copier dealers consistently comment on the quality of our service,” reveals Spencer. “We have very little turnover. Our long-term staff is experienced in all aspects of shipping. Their wealth of information comes into play every minute of the day.” The relationships Spencer forged working as a copier wholesaler has helped immensely in moving the business forward. Coast to Coast Coverage and then Some “People already knew me and it was the Schock Logistics services the entire U.S., same contact—the warehouse manager Alaska, Hawaii, and Canada. Shipments that’s rolling out used equipment is also the from Hawaii and Alaska typically travel via person managing the end of lease copier ocean, which as one would expect results shipments,” states Spencer who still finds in longer transit times. Sometimes happentime to go on sales calls and meet face to stance steps in and the customer benefits in face with Schock’s long-term clients or a big way. touch base with them on the phone. “One time we were shipping from He’s still crazy about what he does after Honolulu to New Jersey and we accidently all these years. “I enjoy the people in the checked the ‘by air’ box,” recalls Spencer. industry and solving puzzles—the latter is “The law firm we were shipping for was something that goes with the shipping and expecting a transit time of several weeks, logistics territory.” but was stunned to receive their 700-lb No wonder dealers use Schock Logiscopier the next day in perfect condition. We tics again and again. lost a lot of money on that shipment, but Even though Schock’s staff is desecured our reputation for under promising termined to meet and exceed customer and over delivering!” expectations, Spencer reveals that every The ability to forge lasting relationships staff member receives a monthly bonus and provide exceptional customer service depending on how well the company did that month. “This bonus makes up a significant portion of their pay,” reports Spencer. “Our staff operates like owners. They constantly seek ways to improve our service and streamMaria Cassidy Spencer Schock Perla Ruiz line our processes. They strive every minute to solve problems and keep clients satisfied.” Asked if there’s anything that Our Team Schock’s customers or prospects would be surprised to hear about the company, Spencer pauses, Becky Weber Kevin Schook then says, “At the end of the day, Schock Logistics is a reflection of the people we serve. I have been in the office equipment business since 1987 when I worked for the Eastman KoTom Albaugh Amable O’Neal Erin Craig dak Company as a copier sales 32
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representative in Silicon Valley. Every day I am astonished at the work ethic, integrity, and drive of people in this industry. The sales managers and sales representatives, in particular, are often masterful in their character, humor, and ability to read the needs of others. They best me and I am fine with that because it is inspiring. I am blessed to be able to work alongside and try to keep up with such outstanding Americans.”
Looking Forward
Despite the consistency in Schock’s services and the way it conducts business, change is inevitable. The company is now expanding into medical shipping as well as office equipment disposal—recycling the equipment in an ecological manner and protecting people’s data security. Another initiative is providing even more customers with access to its IT system, allowing them to view their shipments, tracking information, bills of lading, etc. Asked what the future looks like for Schock Logistics, Spencer simply, optimistically, and succinctly replies, “Bright!” ♦
Schock’s De-installation Service
Schock’s de-installation service is used primarily by its retail clients. The company maintains a network of service technicians nationwide who complete condition reports on machines prior to shipment, prepare and de-install machines for shipping, and provide data security services. “For example, a national hospital chain may need to data secure its copiers prior to shipment,” says Spencer. “Our techs will arrive, replace the hard drives in those copiers with new blank drives, reload factory authorized firmware so the copiers are fully operational, and then provide the hospital with a lockbox for the old hard drives. The lockbox is then sent overnight by hospital staff to a destruction facility for certified destruction. Clients enjoy solving both data security and freight concerns with one call to Schock Logistics.”
Contact Info
Dealers looking to ship with Schock Logistics can start by visiting www. goschock.com or simply send an e-mail to info@goschock.com. Owner Spencer Schock recommends including a copy of the lease-return return authorization and Schock will take it from there.
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News Market Intelligence
The Internet of Things Is Heating Up in Digital Imaging. But Who Will Benefit?
T Michael Nadeau
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he Internet of Things (IoT) has begun to make an impact on digital imaging. Many printers now sold are Internet-enabled to perform basic tasks such as replenishing ink supplies or auto-printing items like coupons or crossword puzzles. Recently, companies such as Canon and Hewlett-Packard have announced a tighter embrace of IoT with commitments to build products and infrastructure to better support it, potentially opening up IoT-enabled opportunities in the business markets. This might actually be good news for companies that provide managed print services (MPS) remotely, as a better IoT infrastructure for printing could remove complexity and allow for greater automation. Like any other new technology, however, IoT promises to be disruptive to the digital imaging industry as both new and familiar competitors find innovative ways to leverage the technology and deliver more value to customers. Briefly, IoT is just what it sounds like: a network or mesh of smart devices connected to the Web for the purpose of remote monitoring and management. Each device has the software, hardware, and sensors needed to acquire, store, and send data
www.enxmag.com | March 2016
about its physical location, how it is being used and who is using it, operating conditions and status, or in some cases local environmental conditions. With IoT, connected devices can also communicate machine to machine (M2M). Data coming from the network of IoT devices is sometimes overlayed with data from other sources. For example, weather data might tell a CocaCola distributor that a heat wave is coming, likey spiking demand for cold drinks. This data might then override information about current consumption rates coming from Web-connected vending machines, prompting more frequent refills. Again, IoT is being used in the hardcopy industry mainly to automate supplies replenishment, anticipate required service, or acquire and print documents that a user pre-selects and schedules. Almost all of this is happening at the consumer level. Examples of IoT in hardcopy are HP’s Instant Ink and Brother International’s support of the Amazon Dash Replenishment Service (DRS). These programs provide only a portion of what many corporate customers get with MPS. So, what might MPS providers get out of IoT? To get to the answer, it’s important to understand the limitations of MPS. David Morrow, author of PrintFleet’s The Internet of Printers blog, has done a pretty good job of summarizing those limitations: “Traditional MPS is an incremental cost of doing business. Traditional MPS means a lot of reports and virtually no automation. Traditional MPS is a rear-view mirror, not a predictive analytics engine.
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Traditional MPS is table-stakes, not a differentiator. Traditional MPS promises “actionable information” from your device data. The degree to which that information is truly actionable (useful) depends on your own capacity to process, analyze and operationalize it.” “MPS is more about integration,” said Elise McFarlane, marketing manager at PrintFleet, which provides process automation software to the imaging industry. “IoT is about connectedness and true automation.” The difference between integration and connectivity is really a blurry matter of degree to which different systems are woven together to share data and processes. With IoT, much of the work that goes into getting one system sharing information with another to enable MPS is eliminated. For example, PrintFleet’s Data Collector Agent (DCA) is Internet-enabled and can be installed on some devices, eliminating the need for a server. This reduces the number of onsite visits needed to set up and maintain the system. Connecting rather than integrating translates into less on-site time for the MPS provider and greater automation of services. It also means that you can more easily perform analysis to, for example, define usage patterns that help predict supplies consumption rates. And that data and analysis is more easily shared with the client.
Risks of IoT
The risk to companies that now provide MPS is that IoT lowers the barrier to entry for providing similar services while at the same time opening up the possibility for new or enhanced services. continued on page 38
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Royal Imaging International Appoints Mark Camber-Thomas as Vice-President of International Sales February 1, 2016, California, Royal Imaging International, the Imaging Industry’s first choice for Aftermarket and OEM Imaging Supplies for 37 years, has announced the appointment of 24-year Industry veteran Mark Camber-Thomas to the position of Vice-President of International Sales. Mark entered the Remanufacturing Industry with a background in banking and insurance sales. In 1992, he began work for I.C.M.I. / Future Graphics, based in the United Kingdom. Since moving to the United States in 2001, he has held Executive Management positions at two of the Industry’s leading companies, Summit Technologies and more recently, Future Graphics / Mitsubishi Kagaku. Mark had a key role in helping to establish and maintain their global distribution networks. Mark brings with him a wealth of hands-on knowledge and experience working with Industry Dealers, Distributors and Manufacturers in the United States and Internationally. “I am thrilled to become part of one of the longest established wholesale distributors to the Imaging Industry. Royal Imaging has been enjoying exponential growth recently and I am looking forward to our future and further growth in our ever evolving Industry.” said Camber-Thomas. “I have had the pleasure of knowing Mark for over 20 years. His professionalism and knowledge can only result in increased sales to markets we are currently not capturing. He becomes an integral piece of a growing global market we intend to penetrate.” stated Gene Fontana, Executive Vice-President, Royal Imaging International.
About Royal Imaging International
Royal Imaging International has been a leading supplier to the Imaging Industry for 37 years. Over 7,000 SKU’s of OEM and compatible products warehoused on the East Coast in New York and the West Coast in California; shipping to 90% of the US in 2 days via ground service. Corporate Office & West Coast Sales & Distribution Center 8936 Comanche Ave Chatsworth, CA 91311 CA: (800) 805-3526 Sales@Royal-Imaging.com Mark Camber-Thomas Direct: (775) 376-8530 MThomas@Royal-Imaging.com East Coast Sales & Distribution Center 6030 N Bailey Ave Amherst, NY NY: (877) 227-1250 NYSales@Royal-Imaging.com Gene Fontana Direct: (800) 805-3526 Gene@Royal-Imaging.com
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The Internet of Things Is Heating Up in Digital Imaging. Take Amazon’s new Dash Replenishment Service, for example. Right now, it simply automates the ordering of supplies when a device detects they are at a certain level. DRS works with a variety of devices other than printers, but Brother International is an early participant in the program. I have seen no indication that Amazon has broader plans for DRS, but given Amazon’s infrastructure, OEM relationships, and technical capabilities, it’s not hard to imagine that service expanding to provide MPS-like benefits. At its Canon Expo last September, Canon Chairman and CEO Fujio Mitarai talked about his vision of IoT, and how IoT depends on the “imaging of things.” He did not provide many specifics, except to say that it involved building an infrastructure to connect all devices that capture, store, edit or print images or data. To meet the challenge that the imaging of things concept presents, Mitarai said that Canon is building “a network of Canon companies” that will form an ecosystem to realize new possibilities. 38
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The type of infrastructure that Mitarai describes makes sense, and it also suggests that the MPS concept may need to expand to keep pace. With so many devices now capable of sending images and documents to be printed-cameras, smartphones, tablets, scanners-it may be an opportunity for companies to provide services that help companies better manage those connections. It also begs the question whether OEMs like Canon that produce many of those devices will offer some kind of data services themselves. Expanding the market for MPS-like services is both an opportunity and risk for current providers. MPS makes the most sense for clients with a relatively large installed base of devices. IoT should allow providers to scale or modify those services to make them more appealing to clients with dozens rather than hundreds of devices. Or, IoT could allow smaller companies to better replenish and service themselves. “[With IoT] a machine can connect with any number of partners, order
based on price, and seamlessly deliver to the end user,” said PrintFleet’s McFarlane. “You won’t have to spend human hours figuring out the best deal deal or when to place the order.” She noted that this automation takes place on both ends of the transaction--buyer and seller.
Summary
It’s too early to predict exactly how IoT plays out in the imaging industry. What’s known is that IoT will simplify the implementation and delivery of MPSlike services, consequently lowering the cost to provide them. It will also open up new services as more devices become Internet-enabled and IoT platforms like Amazon Dash or infrastructures like Canon envisions are built. The owners of those platforms and infrastructure might become competitors of MPS providers, or they might be new partners. At the very least, IoT gives MPS providers the opportunity to expand and enhance their current offerings as long as they stay informed about the technology and are willing to rethink the services they deliver and how they do so. ♦
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Dealer Spotlight
It’s All in the Family at Barlop Business Systems
Jose Lopez, President of Barlop Business Systems, discusses how his small family owned dealership stands out in the competitive Miami market.
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f you’re going to do something you might as well do it well and that’s what Jose Lopez, president of Barlop Business Systems, has been doing ever since he began his career in the office equipment industry 44 years ago. Lopez started with Saxon Industries in 1972 and worked his way up to national parts manager. After Saxon went Chapter 11 in the early 1980’s and sold its various divisions, including service and parts to a Fairfield, New Jersey based company, Lopez moved to the new organization, traveling between New Jersey and Miami. Encouraged by his wife, who would later play a significant role in his future dealership, the Lopez family settled in Miami where Jose founded Barlop Business Systems in 1983. Today, Barlop Business Systems has 35 employees and even though it’s still considered a small dealership, it’s never stopped making a big impact in the market, and was recognized last year as a 2015 Elite Dealer by this publication. Lopez isn’t afraid to take chances whether it’s creating his own leasing business or altering Barlop’s go-to-market approach. Barlop has enjoyed 249 percent, that’s right, 249 percent growth in its home-grown leasing business. Since 2013, the dealership has been leading with its solutions offerings. This approach has seen Barlop’s solutions revenues triple during this period. For the record, Barlop’s solutions providers include
www.enxmag.com | March 2016
Nuance (Equitrac, NSi), Ademero, Print Audit, EFI, RSA, MarcomCentral, and Objectif Lune. Barlop has also made the transition into offering Managed Print Services, Managed Network Services, Document Management and Workflow solutions, and Business Process Optimization as well as production print. To ensure its success in these areas and build a new market brand, Barlop is leveraging social networking and e-mail marketing. The intent is to position the dealership as a client-focused, solutions-driven company. It has also revamped its sales processes and hired a dedicated solutions specialist to help sales reps evaluate document processes. In addition, Barlop has been hiring sales professionals with an IT and technology background. Late last year I connected with Jose Lopez to get a better idea of how a small family business can remain relevant in the highly competitive Miami market for more than 30 years. How was business last year? LOPEZ: We did about $2 million more in sales in 2015 than 2014. What do you attribute that to? LOPEZ: Managed Print Services and solutions. We lead with solutions. We do a lot of government bids and we’ve doubled that business as well. I also increased my sales force, not in volume, but in the quality of personnel. What segments of the business are doing well for you? LOPEZ: Solutions. We try not to just sell a copy machine anymore,
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but offer solutions to solve [the customer’s] pain. What solutions are you doing well with? LOPEZ: Ademero’s Document Management and Nuance NSi. Ricoh has quite a bit of solutions. What segments of the business would you like to see improve? LOPEZ: Managed Network Services. We need to do it, but I know we can to do better. What’s that going to take? LOPEZ: I’m trying to hire more technical people for my sales force that can sell network solutions. We need to get people who know more [about IT solutions] into the door with the customers. Are you using a third-party Managed Network Solutions provider or doing it yourself? LOPEZ: We just started working with N-Able. How would you describe your customers? LOPEZ: Small and medium size businesses. We have a handful of national and international companies as well. Who do you consider your primary competition? LOPEZ: Miami is a very competitive area. Canon and Ricoh are the two lines we compete against the most. You sell Ricoh, Samsung, and OKI Data, how are each of those OEMs a good fit for Barlop? LOPEZ: Ricoh is our flagship line. We used to be a Gestetner dealer before Ricoh bought them. Ricoh has a full line. We sell more Ricoh than anything else. I continued on page 42
It’s All in the Family at Barlop Business Systems use OKI mostly for their A4 products. I like their products. We were offered Samsung and they’re taking off with their new line. They’re going to be a big player very soon. I like their printers as well and that’s what we need for MPS. Tell me about Barlop Leasing, which has been growing at an amazing rate. What was the inspiration for getting into the leasing business? LOPEZ: We started Barlop Leasing in 2008 when the economy got bad and the banks were tight with the approvals. I had a lot of customers who had been with me for many years and I knew what kind of customers they were. I started working with the customers I knew and [our leasing business] just developed and grew from there. Was it a difficult thing to do? LOPEZ: Getting money, yes. But it’s worked out. I did a lot of used equipment and ran the papers myself, and for good customers I’d put in new equipment as well. I’m cautious; I don’t go crazy and have to be sure it’s not going to backfire. I’ve been lucky so far. You’ve been focusing on becoming a solutions and services-led company, how challenging was that and what steps did you take to do that? LOPEZ: Our goal is to be a consultant. We want our sales reps to listen to the customer and understand their business. To do that we need to offer a solution that can help that customer [solve their problems]. Sales reps must be trained to find opportunities. And it requires a comp plan that’s based on selling a complete package—equipment, service and solutions. Our sales reps’
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The Lopez Family
comp plan is better when they sell a solution than if they just sell equipment and service. That’s motivated them to go out and sell a solution. One of the biggest things that’s helped us during the last three years is becoming a Pro Dealer Group member and interacting with other dealers and coming up with ideas. You also offer production print, how’s that going? LOPEZ: We’re doing it. We’re trying to focus on churches and copy centers of large businesses rather than commercial printers. We’ve been most successful with the Ricoh 5100. Production isn’t our biggest business. Again, our biggest is Managed Print Services. That’s where we see the most growth. What do you do for fun when you’re not working? LOPEZ: Boating and fishing. We have a house in the Keys and I go there with my wife, my daughters, and the grandkids. What’s the one thing you’re best at that might impress your employees, customers, or dealer friends? LOPEZ: I don’t know if I’m good at anything, but I’m consistent. I’m not going to do one thing one way one day and another way the next day. I love selling. I’m not supposed to go out and sell anymore, but I create good relationships with my customers. Many have become friends. And I still do a lot of business with a handshake. Any plans to take it easy after all the time you’ve put into the business? LOPEZ: No. You’ve really turned this into a family business, haven’t you? LOPEZ: My three daughters have been working with me ever since they graduated from university. Each has their own position. One is a good networker and handles outside retail. People know her and she’s good at developing sound relationships. My middle one is involved with in-house operations for supplies and Managed Print, and my youngest is the comptroller. My wife used to work with me. She retired a long time ago. She was the backbone of the business. Now, in the house she has the last word and in the business I’m the one with the last word. After being in the business for all these years, what’s the one thing you know now that you wish you knew when you first started? LOPEZ: I should have interacted more with other dealers and helped with the benchmarking. I started doing that three years ago when I joined Pro Dealer Group. It has helped change my business. What can we expect to see from Barlop in 2016? LOPEZ: Our Managed Network Services business will increase and we’ll continue to raise our profile as a solutions-driven company. ♦
We Saw It In ENX Magazine
A Letter to Dealers To All : I sold in the Office Equipment Industry from 1981-2001 at three Cleveland, Ohio dealers, finishing as a partner at Blue Technologies, a $50 Million dealer, and moved on to Konica Minolta as a Midwest DSM covering four states. Upon leaving KMBS in September 2009 as a multi-year President’s Club performer, I started Pinnacle Sales, Inc., a wholesale distributor and leading source of imaging supplies. I understand distribution on both sides of the equation. Since Pinnacle’s inception October 1, 2009, our business model has been and still remains 100% drop-shipping of all products, whether to you the dealer or your end-user customers, and we truly are experts and an industry leader at this process. With direct relationships to multiple top manufacturers and importers, we can supply every product that every dealer needs whether it’s OEM, remanufactured or compatible. This enables Pinnacle to afford Dealers the leading edge on price, quality, fulfillment, and delivery which we back up with the best service and customer support in the industry. Quite simply, we’ve collapsed the supply distribution chain to its most basic and fundamental principle getting products to where they need to be, on time, every time, at the lowest cost possible. To make the process simple and efficient, Pinnacle constructed a software pipeline that integrates our ERP System with e-Automate, completely automating the entire order processing cycle. We capture the PO from e-Automate, push tracking back in, post receivers and vouchers, and close out the invoices. The processes are unattended, unrestricted, and at NO COST to the Dealer. With all this being said, don’t you think it’s time to contact Pinnacle Sales and let us “Manage your fulfillment transparently and make you look good to your customers?!” Please email me at jim.loparich@psi-ohio.com or call 440-734-9195. Thanks and have a Great Day. Regards, Jim Loparich, President
C A L L : 4 4 0 - 7 3 4 - 9 1 9 5 O R V I S I T W W W. P S I - O H I O . C O M
Charles Lamb
Managed Services News Briefing
Would You Work for You?
S
o you’re an experienced sales rep in the office equipment industry and you’ve been talking with a new potential employer and their sales leader. They tell you that you have the right experience and skill set and you’re exactly what they’re looking for. The position they’re trying to fill is a managed services sales specialist and you’ve investigated their company and reputation—as much as anyone could—and so far it looks like it could be a great fit for the next stage of your career. You continue doing your due diligence, checking everything you can, and from your tour of their facility you noticed an amazing demo room and a very modern facility. You’ve worked in your current position for four years and have exceeded quota every year. You’re in your prime, but your employer is making it harder and harder to win business. It seems every deal is a price war, even on our renewals, and when you ask your boss for help, they are unwilling to budge. You feel alone and you’re just losing customers to the competition every month. Your income is shrinking. You told your spouse that you’re seriously looking at a
new opportunity and they simply said, “Be careful.” You’ve made a nice income in this industry so far, but it’s time to move on. Besides, you really want to work in a progressive sales organization that will let you sell managed services. The big bucks! Tomorrow is your final interview. They’ve bragged continually about their managed services and, according to their website, it seems they have a strong program. After the interview tomorrow, it’s decision time and it’s really what you want. Their sales manager seems like a nice person and mentioned that their company has an amazing sales support team and their CRM has a proposal builder “which really helps close deals.” Although you haven’t run into them much, they’ve been in the market place for over 30 years, so they must have a strong market presence. The final interview is over. The job is yours if you want it. A nice salary, health insurance, a cell and gas allowance and the entire marketplace is yours if you just say yes. So you say, “Yes!” Your two weeks’ notice with your current employer is met with the immediate collection of all of your company belongings as they escort you out of the building. You tell your new employer the news and you’ll be starting in just a few days. Everyone’s excited! It’s day one at the new job. You’re the new kid on the block and the sales manager introduces you to everyone and tells the sales team that you’re the new managed services specialist.
All of a sudden the room gets super quiet, most of the smiles disappear and it seems that no one had any idea that they were going to hire a managed services specialist. One of the hardware reps speaks up and says, “I don’t want anyone working in my accounts without my permission.” The sales manager immediately cuts off the conversation and says, “Don’t worry, we’ll work it out as we go along!” All of a sudden you realize that regardless of the picture the owner painted during your interview, there is no real strategy in place for your new job. Later the owner and the sales manager pull you aside and assure you that there is nothing to worry about: “What happened earlier is just the guys trying to protect their account relationships. They’ll all settle down as soon as you start building your pipeline.” Then they pull out your commission plan and share a modification they’ve added today that allows you to sell hardware in an open territory, just while you’re building your MPS pipeline. You’re new to selling managed services but one thing is for sure, managed service deals aren’t built the same way and are seldom built around new inbound hardware. None of this matters because you got the salary you wanted and the owner and sales manager see managed services as a strong part of the future. You have solid job security! No telling why this position hasn’t worked in the past, but you will get it done! Next they want to train you to use their CRM and make sure you get all of your continued on page 46
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We Saw It In ENX Magazine
Would You Work for You? prospecting logged in the system so that you can start building your contact history. The first two weeks you’ve been pounding the phones and you’ve completely documented every call. The next day, two of the sales reps approach you again and tell you not to make calls into their accounts until you ask them first! They seem to be confused as you have been given 100 percent green light to call on the entire marketplace and are tasked with building the managed services pipeline within the first 90 days. You happen to catch the sales manager and pull them aside and tell them what just happened. They reply, “I don’t really blame them, but just throw them a heads up before you call on any of their accounts. Let’s just keep the peace.” So then you say, “You want me to hop in and out of each contact record to see who owns that contact and call to the rep first? Before I make a phone call? That will slow me down drastically!” The sales manager says, “Just do what you can to get along!” On your way out that evening you slip into the owner’s office and ask if you can speak with them for a second. They invite you in and as you close the door you explain the recent situation and share what you were told by the sales manager. The owner says, “I know. The sales manager told me. That’s one of the reasons we gave you the open territory so you could sell some hardware and survive.” You respond, “But I’m not wanting to just survive. I want to grow my managed services pipeline. You know my comp plan has a performance adjustment which will lower my salary if I don’t hit my numbers.” The owner says, “Yes, I know it does, and it may slow you down a tiny bit, but I don’t really think it will hurt you in the long run. Besides, we did give you the open territory for hardware sales, so if your salary were to go down, you’d still have hardware commissions to offset the salary reduction!” You reply, “Wait a minute, I didn’t come here to sell hardware. I came here to lead your managed services program, but it seems you don’t really have the priority on
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managed services that you told me in my interviews.” You add, “If I don’t hit the numbers in my managed services quota, my base salary goes down!” He answers, “You’re right, so don’t let anything stop you!” It’s like you’ve landed in the twilight zone. You turn around, walk out and go home. Over the next 30 days you start to hear things about the last two managed services specialists. You thought you were the first. In only a month’s time the pressure from the other sales reps is so enormous it seems that they’ve built a 100-foot wall around accounts that should be most approachable. This leaves you in the cold calling mode. Another 30 days pass and you can see that there’s just no way you’re going to hit your managed services quota. So you call a meeting with both the owner and the sales manager. In the meeting you express your concerns about the lack of leadership from them and cooperation from the sales team and make the request that your comp plan be adjusted appropriately. At this rate you’ll never hit the required milestones and your salary is in jeopardy. Silence fills the room and they look at each other. “Guys, I’m not going to make it and I can’t afford a lower income! I’m supposed to be a managed services specialist and managed services are supposed to be a priority here. In my interviews you told me that MPS and managed IT were your future, but I can’t find one single fact that proves that they are!” They agree to extend your plan, but only for an additional 30 days. They did nothing to address the cooperation issue with the reps and said, “We all have to work together.” What are you going to do? When you get home, you eat a gigantic plate of crow and call the owner where you used to work to see if you could get your old job back. He wouldn’t take your call! What now? I can’t tell you how many times a situation like this is the cause for a failed launch or transition to managed services. Is it the fault of the managed
services specialist because he wouldn’t get along with the reps? Could it be the sales manager’s fault for not properly managing his team and having the sales organization prepared for the new strategy? Or is the owner at fault for not properly leading his sales organization in a successful manner, assuring that the future is as important as today? I believe it’s the owner’s responsibility to define their objectives and to drive those objectives through the entire organization, working out all of the kinks before you act. It’s not just a website that makes you good at managed services. It’s your ability to tell your story (prospecting), share the values (first appointments), and actually deliver those values (implementation). But none of that happens if you build like the story above. Time after time, overlaying a specialist of any kind just creates a power struggle that destroys momentum, and there is a better way. If your team isn’t prepared to execute, it will never happen. I would be willing to bet that 8 out of 10 dealerships are dealing with similar problems like the one I’ve described in this article. Oh and by the way, it’s a true story! In my bootcamps a dealer often asks me how they can create a differentiation that will set their company apart for the competition. If you simply plan your transition to managed services, you will absolutely be ahead of the game and very, very unique! ♦
We Saw It In ENX Magazine
Service Excellence Platinum Award Winner
Office Technology Service Excellence Award
PLATINUM LEVEL
Da-Com Digital Office Solutions is the Bomb When it Comes to Service Excellence
M
eet Da-Com Digital Office Solutions, an office technology dealership with a 65-year history of providing technology and outstanding support to businesses in and around St. Louis, MO and Southwestern, IL. Da-Com began in 1948 selling typewriters and cash registers—leading edge technology at the time. The dealership would eventually grow to become one of the nation’s largest 3M dealers, selling Thermofax machines, copiers, and overhead projectors. Throughout the years Da-Com continued to roll with the technology flow, bringing leading-edge products from worldclass providers to its markets. In 2002, Da-Com moved into its new state-of-the-art corporate headquarters in Shrewsbury, MO. That was a start in its efforts to bring more value to the markets it serves along with its customers. The construction and expansion of its Service Center in 2005 and the enhancement of its state-of-the-art Customer Sup-
Da-Com Team Members Second from the left Scott Shanafelt V.P & General Manager Third From Left Bob Thompson Service Manager St. Louis, Mo. Fifth from Left Eugene Twenter Service Manager Columbia, Mo.
port Center in 2012 further underscore Da-Com’s commitment to strengthening its resources to better serve customers. This commitment to exceptional customer service and customer satisfaction is what drives the entire organization and nowhere do customers experience that more every day than through interactions with Da-Com’s service department. Proof of how well Da-Com cares for its customers is illustrated by its recent acknowledgement as a BEI Services/ENX Magazine Service Excellence award winner in the Platinum category. The dealership ranks 13th overall of the 176 dealers in the BEI program. Its service-related numbers are impressive. For example, Da-Com’s current First Call Effectiveness (FCE) rate is 57 percent and its Hold for Part rate is 11 percent. The dealership’s 20 service techs (Da-Com has four additional techs who handle its IT customers) are responsible for 6,000 devices, which produce approximately 38,000,000 pages per month. Among the brands Da-Com’s techs service are Lanier/Ricoh, Toshiba, and in certain markets, Kyocera. Techs also service a sizable Risograph population. While techs service all brands, Da-Com specialists tend to focus on the Lanier/Ricoh production devices. “We have the largest Ricoh national account MIF of any dealer in the country,” says Scott Shanafelt, senior VP and general manager. “Some days
that’s a curse and some days a little bit of a blessing. That makes us unique because we provide service and support to Fortune 1000s in St. Louis. Because we were a Lanier dealer forever and had a huge national account base we had an exclusive in this market. That’s kind of where our high-end, high-volume [business] comes from.” Most of Da-Com’s customers can be found throughout 77 counties in Illinois and Missouri. They are primarily SMBs, particularly in the rural markets. The dealership’s bread and butter is still the $8,000-$10,000 machine sales in towns of 2,000 people where one will find 100150 businesses. “Where they have a need for a copier we may have a 50 percent market share,” states Shanafelt. “That’s not uncommon in our rural markets.” Covering such a wide swath of territory in two states is a challenge, but Da-Com has been meeting the challenge for as long as they’ve been taking care of business in these territories. The challenges from a service perspective revolve around parts distribution, response time, and mileage. “When a territory is two hours away from the office there’s a lot of guys a long way from home,” acknowledges Shanafelt. “BEI Services has made a difference in allowing us to manage it better.” That’s something that impresses BEI’s Performance Analyst Steve Sharkey. “When you look at their data and numbers and when you consider the many different product lines they’re servicing and that the vast majority of their technicians work on those product lines continued on page 50
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We Saw It In ENX Magazine
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A Conversation with Keith Justus, Presiden Copier Solutions
EXCELLENCE Da-Com is the Bomb When it Comes to Service Excellence 48 SERVICE
BEI Services and ENX Magazine to Acknow Excellence in 2015
Would Thompson recommend this ly, whether or not it’s perfect, it at and they’re able to maintain that hold for program to other dealers? least gives him a launching point for a part rate, that speaks phenomenally as to “I honestly wouldn’t know what to says Shanafelt. “It gives how well these guys are staying on top of conversation,” SALES & MARKETING do without it now that I understand it,” us a great baseline to know if we’re managing parts inventory and their car he says. “I like it and it helps me better making money or not on certain gear, or stock. That’s a tough monster to collar issues with the techs. It’s a do we needBy to doBrad something different, when youSusan have thatNeimes many product lines Roderick identify great tool.” ♦ or change out the tech. Originally tech and everybody them.” Publisher servicing & Managing Editor comp was aMANAGED big factor and thereIT was too Da-Com has been a BEI Services client going on 10 years. When the program much that wasn’t tracked or known. We had very few statistics.” was first implemented, Bob Thompson, “As my understanding grown it’s service manager at the St. Louis operaBy Davehas Sobel tion was a service tech and Shanafelt was been trying to get the techs to understand as well,” adds Thompson. “They VP of sales. EXIT STRATEGY Da-Com Digital Office Solutions get more reports out of it than I ever did. “Our ownership bought into the They can see what machines they get tech compensation idea, ‘How do we St. Louis & Columbia, MO called back on and what parts they’ve pay these techs to do better and how By Jim Zipursky President & CEO: John Tipton been put on hold for.” do we challenge them to do better?’” Da-Com is also using one of the new- Sr. VP & General Manager: Scott Shanafelt recalls Shanafelt. er components of the system, a territory Of course the data was helpful to the Service Manager: Bob Thompson Scott Cullen mapping tool. VP of service and that information conEditorial Director Number of Techs: 20 (+4 IT techs) “It’s been helping our call load,” tinues to make Thompson’s job of manNumber of Devices Serviced: 6,000 aging his techs so much easier, especially notes Thompson. “It’s just another piece we weren’t utilizing, but now that we when it comes to industry wide service Why they’re a Platinum Award Winner are, I just can’t using it. data for specific machines and how DaBy imagine LasernotPros • First Call Effectiveness = 57% Com stacks up against its industry peers. There’s so much information and it’s • Hold for Part Rate = 11% easy to use, but overall what I get out “The things I’ve seen and utilized • Ranks 13th overall of the 176 dealers of it and what I can give to the techs to with BEI is not only we need to pick up By Smarka! using BEI’s program this machine and put it under service, but have better conversations about what I can look at the numbers to see what the they’re doing and for coaching them; ® now that I understand it more, I can series is doing for us in given paramecoach them in how to get better.” ters,” adds Thompson. “It shows how By Britt Horvat The tech compensation element of the good we Ronelle are vs. everybody else.” Ingram program has been a key motivational tool Thompson also likesEditor the personal Contributing knowledge he derives from the program, as it is in most dealerships. Thompson says that techs have a keen interest in which validates whether or not he’s how they’re doing each month and it’s on the right track based on what the not unusual for them to come in the first numbers are saying. And when it comes Mé or second day of the month to find out to all the data that is now available at Lat how they did the previous month. Thompson’s fingertips, there’s a lot to “They appreciate the transparency,” comprehend. Corporate Office The Largest Circulation says Shanafelt. “And they appreciate the Susan Neimes - susan@enxmag.com There’s a lot of information to digest in the Document Imaging Industry 1/2 Riverside Drive., Suite 729, Toluca Lake, CA 91 feedback. If that wasn’t there10153 they’d feel and that’s something else that can be a more like robots, but now that there’s a tel. 818-505-0022 • fax. 818-505-9972 blessing and a curse with Shanafelt explaining that the program can make a big talking point and here’s your numbers, Editorial Each Office: Distributed Month! you’re doing a good job or you have difference when one takes the time to go Scott Cullen scott@enxmag.com Christina Kim ENX Magazine to work on this. It’s just a quick through it and use it toEditor one’s advantage. 21way Llanfair Lane, Subscribe Ewing, NJfor 08618 • tel. 609-406-14 Associate and/or without [our service managers] having to “There’s so much information I can’t ENX Magazine is published monthly by Affinity Business Communications, Inc. Any inquiries should be sent to: enx@pacbell. ENX The Week in Imaging at go through of calculations and utilize all of it, but I can’t imagine not Copyright ©2014abybunch ENX Magazine printed in the U.S.A. All reproduction in whole or part is prohibited without written perm www.enxmag.com getting documents ready to review and having that data to talk with a tech and discuss with them. Plus it’s an indepensee what their mindset is and why they • www.enxmag.com l January 2015 We Saw It In ENX Magazine 14 dent source vs. your manager putting did what they did,” emphasizes Thomp[something] together and saying here’s son. “It makes it so much easier to break it down and have the tough sessions with what you’re doing; they tend to argue with that more. Now it is what it is; the the techs to make them better.” numbers don’t lie.” “Bob uses tech grading effective-
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Ken Edmonds
Service Management
Developing the Plan To Improve Mean Copies between Calls
I
n our previous articles, we discussed the reasons why Mean Copies between Calls (MCBC) is the most important metric, and we looked at some of the issues that impact that value. In this article, we want to start trying to find ways to address the issues in the service department.
My Experience
Here is a quick story to illustrate how staying the course will make things better in the end. I took over the service department of a company years ago. They had been on a bonus program that rewarded high calls per day and low parts usage. When I first arrived, the company had 10 techs that Start at the Top were sharing a carryover load of The commitment to address the 100 calls per day. issue and change your philosophy After evaluating the situhas to start at the most senior levation, I told the owners that els in the company. In most cases things were going to get worse the goals, metrics and practices before they got better and that will be significantly different than their parts cost was going up. your current ones. If the owner/ I changed the techs’ process to president is not behind these make them completely fix every changes, it may be impossible to machine before moving to the get the changes made. next. In the beginning, our calls The senior management team went from 100 to about 160 carneeds to understand that there ryover calls, and the dispatcher may be bumps in the road as you and I spent our days on the move forward, but if you stay phone explaining to customers the course, the end result will be that things would get better. more profit, happier customers, At the end of 6 months we and easier sales. were down to carrying over about 30 Hold for Parts (HP) calls each Articulate the New day. The customers were happy Philosophy to the Team again and the dispatcher and I Once this decision is made, it is could breathe easy. I had techniimportant that everyone involved cians perform courtesy calls to understand the plan and why it keep them busy. will help them. You must understand that change is difficult for Develop and Enforce most people, and they will only Procedures that Achieve participate if they see an advanYour Goal tage to themselves. Since you have analyzed your de In most dealerships, these partment, you should know what changes will impact the parts department, dispatch department, areas need attention. Here are and the service departments. You suggestions for your procedures that you may find useful. One will want to identify how the changes will affect these groups. thing to keep in mind is that procedures are dynamic documents Initially, things may get worse that will change as you continue for a period of time before they through this process. start to get better. Expect this to During this process, it is a happen and plan for it.
necessity to involve the technicians as much as possible. The more input the technicians feel they have, the more likely you are to get their buy-in and they will accept the changes that are made. You will additionally find that their input will often improve the procedures that you are developing. One of the more important documents to create and enforce is a minimum call procedure. After looking at what has caused your recalls in the past, ask yourself if you could change your minimum call procedure to prevent that type of recall in the future. For example, at the company I mentioned earlier, some of the equipment had waste toner bottles that could only be changed by the technician. When the waste toner bottle was full, the machine would stop working. I often received calls from key operators complaining that the waste toner was full after the technician had just left. Changing the waste toner bottle was added to my minimum call procedure. One item that must be mandatory on every service call is to examine the management list and the consumable parts and jam counters on every machine. Techs will need to learn to look at these items for two reasons. First, to identify what needs to be replaced on the current visit. It is critical that the technician identify components that are approaching the end of their life and replace them while they are on site. Second, to plan for their next call on that machine so that they have the items in their car stock continued on page 54
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We Saw It In ENX Magazine
Developing the Plan To Improve Mean Copies between Calls that they will need and prevent a future HP call.
Inspect What You Expect
To achieve positive results when you change procedures, you have to inspect what you expect. Especially in the beginning of the program, someone will need to make random inspections to verify that the technician did what was required. Once everyone understands that you are serious about your procedures the inspections can become less frequent. If a certain technician is consistently not achieving his goals then the inspections should become more frequent for that technician. The inspections are also a good opportunity to build a stronger relationship with your customers. The inspections let the customers know that you are interested in improving their satisfaction and the performance of their equipment. This is a good time to make sure that the customers are happy with the technician. I would also ask them what you can do as a company to better serve them.
Fix the Technicians
With the proper guidelines in place, the next step is to begin improving the skills of your technicians. Technician needs typically fall into one of three major categories: knowledge, aptitude and attitude. I would recommend evaluating all of your technicians on these three attributes to make a personalized improvement plan.
Knowledge
Of the three categories, knowledge is the easiest to fix. After working with over 40 different dealers during the past 13 years, I know for a fact that training is the key to success. The dealers that have had the best results financially and have excelled growth-wise have a strong focus on technician training. A trained technician is more likely to correctly resolve the problem on the initial call and also is less likely to use unnecessary parts in the troubleshooting process. I have some dealers that have the philosophy that they will send one technician to class and train the other
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technicians at their company. I have never seen this process succeed. One of the main excuses dealers use for not sending technicians to factory training is that it costs too much money or that they can’t afford to take a technician out of the field. Neither reason is valid. The investment in the technician will usually pay for itself within the first year. The improved ability to resolve issues will reduce the workload in the long term. While manufacturers’ training is vital, it is not the end of the process. As you see opportunities for improvement in the service department, you need to try and develop internal training to improve the department. Monthly service meetings are a great venue for short training sessions. Perhaps you can have the technicians review a management list to see what they would need in their car stock for the next visit. You might have someone prepare a presentation on how a specific component works. During your monthly service meeting, sharing model specific common problems and solutions that your technicians have experienced in the field or reviewing important technical bulletins can also be used as a training tool. One potential resource for training is the regional service representative of the manufacturer you work with. In my time in this role, I have routinely put together and presented seminars on troubleshooting.
Aptitude
This is a much more difficult area to address and needs to be tailored to the individual. Ask yourself what does the technician have issues with? Is he not good at troubleshooting? Does he have challenges with his logic process? Does he not have the necessary mechanical skills for the position? After identifying the issue, you will need to determine if it is something that can be resolved. You may find that the technician may never have the aptitude to be successful in the field. If so, there may be another position within your organization that he is more suited to perform. I have had several service managers tell me that when they have reassigned
technicians out of the field, their workload has actually gone down. I was once with a service manager who had a technician that called him for assistance after going to a service call for copy quality, but after trying to repair the copy quality issue the machine would no longer function. The technician made arrangements for a service loaner. The customer thought that the technician was great, but in reality, he was not mechanically adept even though he had excellent customer service skills. He was reassigned to the sales department and excelled at his new position. A direct result of the technician being reassigned to the sales department was a decrease in the service call load.
Attitude
If you have a technician that has a bad attitude, the first question you need to answer is why. You will have to talk to the technician and try to discover what the root cause of the problem is. It may be that there are issues at home that may be affecting his work. The technician may also be unhappy about something in the work environment. The last possibility is that he has a chronic bad attitude. For some issues you may be able to assist the technician, for some you won’t. You will need to determine if the problem is affecting the department or the customers. If the problem can’t be resolved and is affecting the department or the customers, you will need to take action. In the next article, we’ll discuss areas outside the service department that may need to be addressed to improve your numbers. I want to acknowledge the contribution of Jeff Whitlock of Hendrix Business Solutions for his editorial and content assistance with this article. ♦
We Saw It In ENX Magazine
Jim Zipursky
Exit Strategy
Is Now The Time To Sell?
I
t is an age-old question for business owners: “Is now the right time to sell my business?” Because the economy has been fairly strong the past four to five years…and just seven years ago we went through the worst financial crisis in 80 years, many business owners are naturally concerned about trying to “time the market” for the sale of their business. This question, “Is now the time to sell my business,” is one I get asked almost daily by our clients and prospects. In this issue, we look at the factors around the timing decision. Let’s face an incontrovertible fact: along with death and taxes, one thing is certain, every business, at some point, will change ownership. Said ownership change may occur after your demise (as the business owner) and it may not be an outright “sale.” But no matter what you do, you cannot change nature. We are all mortal which means our businesses will change hands, like it or not. Since a change of ownership of your business is inevitable, one
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aspect of the process you can control is when the transfer of ownership occurs. If you plan to sell your business, how do you know the right time to sell? Unfortunately, there is no written formula, no handbook, no magic hourglass whose exhaustion of sand lets you know it is time to sell. Thankfully, there are several factors which help influence your decision. Unfortunately, most business owners tend to base their decision to sell on a hot (or cold) economy. We have seen too many owners wait to sell until after the market has peaked, only to have a very unsuccessful or unsatisfactory process. Back in 2007 and 2008, we had several clients who wanted to wait to “time the market” and sell at the highest point. They missed the peak and were forced to continue running their business through the recession and beyond. Trying to capture the “last dollar” cost them millions. What are the factors influencing your decision to sell? There are internal and external factors, and some beyond your control.
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INTERNAL FACTORS
We consider internal factors as “controllable factors.” These are issues over which the business owner has control and input. The most importance internal factor is the desire or motivation to sell. An old mentor of mine used to say “the most critical component for a successful business sale is a motivated seller.” The decision to sell a business is never easy for the business owner. This decision is purely internal; it is one which only the owner(s) can make. If the owner(s) want to sell, the Company will be sold; conversely, if the owner(s) do not want to sell, regardless of price, the business will not be sold. continued on page 58
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Is Now The Time To Sell? The second internal factor is the health of the owner and or his/her family. Too often, we get a call from owners who are interested in selling because either they or a loved one has been diagnosed with a debilitating or terminal illness. “I want to sell so I have time to do the things I’ve always wanted to do,” or, “I don’t want to spend my last years working,” are common themes we hear from our clients. A third internal factor is the health of the company/business. Many business owners believe, incorrectly, they can sell their way out of trouble. That is, if the company is not doing well financially or operationally, magically, a buyer will swoop in and solve all of their problems. Unfortunately, life is not a fairy tale. Regarding the “health” of your business, ask yourself the following questions: Is your company financially sound? Are you at a point where you need to invest significant capital for new equipment to maintain the business? Do you need to make significant investments in marketing programs or to expand your territory simply to maintain the business? Do you need to have a number of key employees getting ready to retire, all of whom you will need to replace? Has your company been growing in terms of sales/revenues and profits each year, or have you been stagnant, or…worse…seeing a decline in revenues and profits? The answers to these questions may help you determine if now is the best time to sell your business. A fourth internal factor is the growth of the company. Sellers want to sell when they have wrung every last dollar out of their growth curve. However, buyers want to buy when there is still some “squeeze left in the juice.” One saying we have in our business, which is an absolute, is: “One year of growth is an accident, two years are a trend.” Imagine this scenario: you have five years in a row of flat/even revenues and earnings. Then, last year, your sales increased 20 percent from the prior year. Sellers want buyers to believe their increased sales are the “new norm.” Buyers want sellers to “prove” the new norm by doing it more than once. Thus, the best time to sell is not necessarily after your one great year, but
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after two good or great years. The final controllable factor is product/service viability. If you want to sell your business, you do not necessarily want to be the last man standing. Several years ago, we were working with two clients who were in the data/disc duplication business. Unfortunately, they waited too long to consider a sale; by the time they wanted to sell, the market had moved and people were downloading files directly from the internet and no longer needed floppy discs or CDs. The idea here is to get out while you still have something to sell.
EXTERNAL FACTORS
External factors are generally out of your control as a business owner. What are these external factors? The first external, uncontrollable factor is the state of your industry. Even during recessions and depressions, some businesses do quite well. During 2010, while the overall economy was bad around the world, certain parts of the agricultural economy in the USA were as strong as they have ever been. In that year, we closed several transactions in the agricultural sector for prices/values which were above market. Even in bad economies, good businesses in healthy industries get sold for good prices. The second external factor is, not surprisingly, the health of your local and national economy. It is true “rising tides float all boats.” In economic boom-times, M&A deals tend to get done more easily and for more money. In lean times, deals get more difficult. Another external factor is the health of the financial market. If banks/lenders have money and are willing to lend for reasonable rates with reasonable collateral requirements, deals get done. But if interest rates are high and/or collateral requirements increase, not only do deal valuations decrease, but it is hard to get deals done with buyers who use leverage (borrowed money) to complete their transactions. In 2009, even though interest rates were at historic lows, banks were not lending because of their high collateral requirements for loans.
A fourth external factor is governmental regulations. You have no control over changes to tax codes or operational regulations required by your local, state or federal government. We saw a huge demand to sell businesses in 2012 before long-term capital gains rates were set to increase. Similarly, we saw a significant increase in business owners looking to sell gas/service stations in 1999 before new underground storage tank rules were set to go into effect. The final external factor is technology. Technological changes or advances make yesterday’s equipment and services seemingly less valuable virtually overnight. You cannot control your OEM’s product developments; if they don’t move as quickly as the “other guys” or don’t advance their technology lock-step with the industry, you and your company may face significant challenges to revenue and earnings growth.
HOW TO CONTROL THE FACTORS
With so many controllable and uncontrollable factors, how can you know when it is the right time to sell? The most important thing you can do as a business owner is prepare for the inevitable. You know at some point you will have to transfer ownership of the business. If you can accept this as inevitable, you can start planning for it. At the end of the day, the absolute best time to sell a business is whenever you are ready to commit yourself 100 percent to the process of selling and when you and your company are healthy enough to sell. I am happy to answer any of your questions regarding this subject or any previous articles. In my next article, I’ll discuss the subject: The Top 10 Signs It Is Time to Sell? ♦
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Printer Tech Tip
Printer Tech Tip
TECH TIP
HP CP3525, CM3530,
HP LaserJet M525 series “Lost Communication” M551,Message M575on control panel Description:
ISSUE: 59.F0 Error DESCRIPTION: Printer boots up to 59.F0 Error and is unable to print. This behavior may be caused by one of the following three conditions: 1. Transfer belt is locked up and cannot rotate. 2. Sensor SR17 (primary transfer-roller-disengagement) is bad. 3. Damaged or broken fuser drive gear. Typically, a grinding or clicking noise will be heard during boot up. RECOMMENDED ACTION: 1. The first step is to reseat the ITB and power-cycle the printer. NOTE: If the problem persists, an HP Certified Technician should be dispatched for further troubleshooting. 2. Inspect the ITB by taking the ITB completely out of the printer. Check to see if the flag rotates (callout 1) when the white knob is turned (callout 2). See the Figure following. 6664
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|l March January2016 2015
There is a known problem with the communication between the printer’s formatter and control panel. The error message appears in five different languages as seen at right
Recommended action:
Remove control panel along with formatter cover and re-seat both connections (on each control panel and formatter) If this does not fix the issue, replace formatter LaserJet M525: CF104-69003 If the ITBLaserJet flag is broken, damaged, or does not rotate replace FLOW M252C: CF105-69001 the ITB (CC468-67907). Otherwise, continue with step 3. Printer TechPerform Tip is contributed Laser Pros 3. TestThis Sensor SR17. the ManualbySensor Test. In order (www.laserproscom). Email anysure questions to ITB, Cyan to run this test successfully, make the Fuser, marketing@laserpros.com
We Saw ENX Magazine We Saw It It In In ENX Magazine
Britt Horvat
Technical Tip
Xerox Phaser® 3635 Style Toner Cartridges Refilling and rebuilding the Toner/Drum units for the Xerox® Phaser® 3635 MFP & WorkCentre® 3550
T
he Phaser® 3635 and WorkCentre® 3550 toner cartridges are rather easy to refill and rebuild. Quality aftermarket toner and parts (drums and charge rolls) are all available and there’s a nice delta between the cost of a (proper) rebuild and the cost of a new OEM cartridge. The two models (Phaser 3635MFP and WC-3550) use very similar cartridges. The only difference is the CRUM chip which tells the machine which cartridge type it is. There are also two yield types of cartridges for each of the two models: Standard Capacity and Hi Capacity. Here the differences will be the CRUM chip and the amount of toner which is loaded into the cartridge (135g for the Standard Capacity, and 290g for the Hi Capacity). One advantage is that the cartridges are physically identical, so regardless of which yield type you want to rebuild, you may use either empty and simply fill it with the appropriate amount of toner and corresponding CRUM chip. At a minimum, you will need a bottle of toner and a replacement CRUM chip. If you want to do a more complete rebuild, you’ll also need a replacement
Model Phaser 3635 Phaser 3635 WC-3550 WC-3550
Part # 108R00793 108R00795 106R01528 106R01530
Capacity Standard Cap. Hi Cap. Standard Cap. Hi Cap.
Stated Yield 5,000 pgs. 10,000 pgs. 5,000 pgs. 11,000 pgs.
drum, cleaning blade and charge roller. The only tools you’ll need are a Phillips head screwdriver, a small flat-head screwdriver and a funnel. Precaution: on this type of cartridge, the drum is totally exposed below. Pay attention to where you place the cartridge so that the drum doesn’t get damaged or exposed to too much light. If you have to pack the drum afterward for shipping, place something soft against it and wrap it firmly so that the material against the drum doesn’t move around or cause abrasions to the drum’s surface. Time to open one up and fill ‘er up! Get oriented in Photo #1 which shows what we’ll call top vs. bottom; front vs. rear; and left end vs. right end.
PROCEDURE:
1. Start by gently removing the left drum lever off the end of the drum’s shaft with a flat-head screwdriver. Remove the left end cover which is held into place by three PhilipsRetail Price head screws and $140.one clip which is $190.accessed through $140.a small square $200.opening in the
top front corner (see Photo #2). CAUTION: there are seven gears hiding behind this left-end cover which are not captive (see Photo #3) and they will fall off easily if you don’t take care to prevent that from happening. It’s a good idea to reinstall the left-end cover after you separate the two halves of the cartridge (step 3) to help keep all of the gears in place. continued on page 66
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Xerox Phaser® 3635 Style Toner Cartridges 2. Take off the similar-looking right drum lever and then remove the right-end cover (3 screws and a clip again [see Photo #4]). Notice that the two drum levers are different from one another, so pay attention to which is which.
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3. Lift the top cover off (see Photo #5). The charge cleaning roll is mounted to it. 4. Now you can separate the two halves of the cartridge by releasing the flanges on the toner/mag roll half (the front half) from the studs on the drum/ cleaning half (see Photo # 6). At this point you may want to reinstall the left-end cover temporarily — just to hold the gears in place while you work. One screw and the clip should be sufficient. 5. Extract the plug out of the toner fill hole (refer back to Photo #5) and dump out any remaining old toner. Use a toner vacuum to clean out the unit. Removing the mag roll and metering blade (doctor blade) is not necessary unless the existing toner is contaminated or the mag roll shows starvation lines (areas where some foreign substance is trapped behind the metering blade, preventing toner from evenly coating the mag roll’s surface). If it does, you’d need to remove the metering blade (2 screws)
to get in there more completely. 6. Use a funnel to pour the new toner into the toner fill hole and then reinstall the plug. Clean up the outside and check for leaks.
We Saw It In ENX Magazine
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Xerox Phaser® 3635 Style Toner Cartridges 7. Move on to the drum/cleaning half of the cartridge to remove the drum. Remove one E-clip from the right end of the drum shaft (see Photo # 7) and slide the drum shaft all the way out of the opposite end of the drum. Now you can lift the drum out of its cradle. 8. To remove the charge roller, shift it to your right (see Photo # 8) until it comes loose on the end which has the little white gear. When you reinstall the charge roller and drum later, it is advisable to clean off the old conductive grease and reapply a fresh coat to help keep the drum ground and charge bias connections happy. 9. Remove the drum blade (2 screws). You’ll find it to be a snug fit, so be pa
tient, gentle and persistent. Vacuum out all of the waste toner and clean up the unit. 10. Apply starting powder (Kynar works good here) on the drum and the drum blade. Start the drum by rotating it by hand for a few full rotations. You want to make sure the blade will not stick to the drum. 11. Now you can reassemble the cartridge. 12. Finally… you’ll need to replace the toner reset CRUM chip which is needed to reset the toner count for the machine and get it working again. Pop off the small cover which holds the toner reset CRUM chip (see Photo # 9). If you get under the cover with the blade of a small flat-head screwdriver and pry up, it will pop the two plastic rivets which hold the cover in place. Install the new CRUM chip and either glue the cover back into place or drill two small holes and install screws to hold it on. We Saw It In ENX Magazine
That’ll do it! You’re on to your next conquest. These will quickly become very familiar once you’ve learned how to rebuild them. I hope this article helps get you started. It’s a great way to save your customer money, go green and make some green at the same time. Happy Refilling everyone! ♦
March 2016 | www.enxmag.com
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CBTN350J CBTN360J CBTN450J CBTN580J CBTN650J PTCE255XJND PTCE278AJ PTCE285AJ PTCE390AJ PTCE505AJND PTCE505XJND PTCB435AJ PTCB436AJ PTCC364XJ PTC3903AJ PTC4096AJ PTC4182XJ PTC7115XJ PTC8543XJ PTQ2612AJ PTQ5949AJ PTQ5949XJ PTQ2610AJ PTQ5942AJ PTQ383942XJ PTQ7553AJ CLE260JC
2,500 2,600 2,600 7,000 8,000 12,500 2,100 1,600 10,000 2,300 6,500 1,500 2,000 24,000 4,000 5,000 20,000 3,500 30,000 2,000 2,500 6,000 6,000 12,000 20,000 3,000 3,500
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$19.00 $19.00 $14.25 $22.80 $22.80 $41.80 $16.15 $16.15 $51.30 $21.85 $24.70 $16.15 $16.15 $54.15 $23.75 $26.60 $56.05 $21.38 $109.25 $18.05 $23.75 $25.18 $31.35 $46.55 $54.15 $23.75 $113.05
$0.0038 $0.0037 $0.0029 $0.0019 $0.0019 $0.0028 $0.0054 $0.0054 $0.0029 $0.0062 $0.0031 $0.0054 $0.0054 $0.0015 $0.0040 $0.0035 $0.0018 $0.0043 $0.0029 $0.0045 $0.0059 $0.0031 $0.0030 $0.0031 $0.0019 $0.0059 $0.0126
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