January 2010 Office Technology

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Making the Leap

Expand offerings by moving

into network technologyby Susan MuthStrategic Business Solutions Inc.As the impact of industry changes affect office tech-nology dealerships, dealers may want to look tobroaden their suite of current product and serviceofferings and expand their customer bases in orderto stay profitable.

Sales Force Effectiveness

Is your dealership ready

for success in 2010?by Wayne OutlawOutlaw GroupMany have been through some verychallenging economic times in recent months, but nowwe all have the opportunity to reflect back on 2009 andlearn. Does your dealership have the ability to capturethe opportunities available next year and beyond?

4 | w w w . o f f i c e t e c h n o l o g y m a g . c o m | J a n u a r y 2 0 1 0

CONTENTS

Security Solutions

Helping to safeguard

information confidentialityby Brent HoskinsOffice Technology MagazineWhile many end users still re-main unconcerned or unaware ofthe information security risksassociated with MFPs, today there are a growing num-ber of product features that help to safeguard the con-fidentiality of electronic documents and data in theworkplace.

Volume 16 � No. 7

20

10

F E A T U R E A R T I C L E S

26 A Model for Success

Tips to help you create

a long-term strategyby Robert C. GoldbergBTA General CounselIn last month’s column, I began a discussion of waysin which a dealership owner can strengthen his (orher) business for the long term. One strategy toaccomplish this lies in customer selection anddetailed pre-qualification.

C O U R T S & C A P I T O L S

The Wake-Up Call

Transition your dealership

to a service-led modelby Tom CallinanStrategy DevelopmentIn the past two years, copier/MFP unit placementsin the United States have decreased by almost 30percent. Is it time to bail out of the industry?Possibly, if you do not think you can execute a planto transition your company to a service model.

29

D E P A R T M E N T S

6

8

30

Executive Director’s Page

BTA President’s Message

Advertiser Index

24

23 JBMIA New Year’s Message

Association president reports

on main areas of focusby Katsuhiko MachidaJBMIAExpressing his best wishes to mem-bers of BTA in the new year, Katsuhiko Machida, pres-ident of the Japan Business Machine and InformationSystem Industries Association (JBMIA), discusses theassociation’s current areas of focus.

P R I N C I P A L I S S U E S

Business Technology Association� BTA Highlights25

M P S S T R A T E G I E S

2010’s Opportunities

Dealers share expectations

& advice for the new yearCompiled by Brent HoskinsOffice Technology MagazineIn 2010, what do you believe will bethe greatest areas of opportunity for dealers in theoffice technology industry? Office Technology askedthis question of its readers via an e-mail survey. Hereare many of the responses.

16

04OT0110:04OT0110 12/22/09 9:39 AM Page 4

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Executive Director/BTAEditor/Office Technology

Brent [email protected]

(816) 303-4040

Associate EditorElizabeth Marvel

[email protected](816) 303-4060

Contributing WritersTom Callinan, Strategy Development

www.strategydevelopment.org

Robert C. Goldberg, General Counsel Business Technology Association

Katsuhiko Machida, JBMIAwww.jbmia.or.jp

Susan Muth, Strategic Business Solutions Inc.www.susanmuth.com

Wayne Outlaw, Outlaw Groupwww.outlawgroup.com

Business Technology Association12411 Wornall Road

Kansas City, MO 64145(816) 941-3100

www.bta.org

Member Services: (800) 505-2821BTA Legal Hotline: (800) 869-6688

Valerie BrisenoMembership & Marketing Manager

[email protected]

Mary HopkinsDatabase Administrator

[email protected]

Teresa LeerarBookkeeper

[email protected]

Brian SmithMembership Sales Representative

[email protected]

©2010 by the Business Technology Association. All RightsReserved. No part of this publication may be reproduced by anymeans without the written permission of the publisher. Everyeffort is made to ensure the accuracy of published material.However, the publisher assumes no liability for errors in articlesnor are opinions expressed necessarily those of the publisher.

EXECUTIVE DIRECTOR’S PAGE

The arrival of the

new year always

brings with it a re-

newed sense of hope and

expectation. After all, it

provides a new beginning

— a clean slate and a

fresh outlook. In busi-

ness, the new year’s arrival often provides

the perfect timing to implement new busi-

ness strategies. At the very least, it provides

a good opportunity to evaluate current

strategies, with a focus on their impact on

sales and profitability.

Of course, to make the new year a better

year takes effort. That includes a focus on

reaping the rewards of the opportunities the

market presents. In 2010, what do you

believe will be the greatest areas of opportu-

nity for the office technology industry? What

do you believe will be the best strategies for

success in pursuing those opportunities?

I recently asked these two questions of

Office Technology dealer readers via an e-

mail survey. Below are some of the re-

sponses. Others appear on pages 16 and 18 in

this issue. All of the responses appear on the

“BTA Idea Exchange,” which can be accessed

via the home page of the BTA Web site,

www.bta.org. (You will need your member

login and password.) It is my hope that the

responses provide you with some new

insight or ideas — or at least confirm that

you are on the right track. (For instance, are

you pursuing MPS?)

� “Obviously, the most popular answer is

managed print services or document storage

and retrieval. The office equipment dealer

cannot read anything without seeing the

value of these strategies. However, we must

get back to Selling 101. We must evaluate our

customers’ problems and help them find the

correct solutions. The right answer might be

MPS or document storage, but we don’t

know that until we ask. So, the dealer must

be ready and able to provide these solutions.

Our game plan for 2010 is to stay focused on

our customers’ problems and address them

with the best solutions the industry can

provide.” — Mike Upchurch, President, Busi-

ness Machines Inc., Raleigh, N.C.

� “HP printer service. Also, developing a

sales strategy that combines MFP sales reps

with a specialist who goes in to do TCO

audits. Until this gets off the ground, the

specialist will have to be a person on staff

who is good at nurturing an account.” —

Troy Paterson, Vice President of Sales, Copy

Systems Inc., Des Moines, Iowa

� “MPS is the greatest new opportunity

although I use ‘new’ lightly, as this opportu-

nity is moving fast! Lots of folks say they do

MPS, but all it is is Office Depot with service.

Be different and be comprehensive and you

will win the business.” — Susan Woodhull,

Owner, Woodhull LLC, Springboro, Ohio

� “If dealers haven’t already succeeded in

implementing an MPS of fering, they ’d

better. If they have, the next area of prof-

itability is ‘managed services’ — proactive

monitoring of the customer’s IT infrastruc-

ture.” — Russ Bennett, President, Bennett

Office Technologies Inc., Willmar, Minn.

� “Managed print services, A4 and docu-

ment management. The best strategy is to

have a committed team of reps contacting

businesses in their territories to uncover

opportunities and offer solutions in combi-

nation with direct mail.” — Todd Fitzsimons,

President, Network Imaging LLC, South-

ington, Conn. �

— Brent Hoskins

The Best Strategiesfor Success in 2010


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BTA PRESIDENT’S MESSAGE

If you have not already

done so, I encourage

you to register today

for ITEX 2010, scheduled

for March 3-4 at the Las

Vegas Convention Center

in Las Vegas. Each year,

this show proves to be a

key industry networking and educational

event for office technology dealers. Of course,

it also provides a great opportunity to see the

products and services of many of our in-

dustry’s vendors. ITEX 2010 should be a stop

on your road map to success in the new year.

The show is being promoted as “the

hybrid dealer event.” In their promotions,

our friends at Imaging Network, the hosts of

ITEX 2010, state: “Dealers once grounded in

delivering reliable hardware offerings and

services have found that traditional capabil-

ities barely open the door to winning a cus-

tomer’s business. The environment has

shifted and the dealer channel demands a

transformation to being comprised of con-

sultative solution providers who integrate

offerings of hardware, software and services

to become single-source providers for their

customers — the ultimate hybrid dealers.”

Certainly, the focus of ITEX 2010 is right on

track with what many in the industry know to

be true. This isn’t your father’s copier busi-

ness, but is an industry that has been trans-

formed, first by the transition to digital and

connectivity, then by the arrival of software-

based solutions from hardware manufac-

turers and independent software vendors, and

more recently by the rise of managed print

services with the goal of being that single-

source provider. When you add to that the

pressures of the poor economy and the

growing need to further distinguish your

dealership from the competition, it becomes

clear that receiving insight and guidance

through industry education is very important.

The ITEX 2010 schedule includes an

impressive education session line-up specif-

ically focused, in part, on the hybrid dealer.

These include such sessions as: “Network

Services: Building a World Class Help Desk,”

“Why You Need to Be in MPS Today” and

“How Professional Services Tie Your Solu-

tions Business Together.” I am pleased to

note that two of BTA’s own will be among

the presenters. BTA President-Elect Rock

Janecek will be one of the three presenters

of “Creating the Ideal Service and IT Teams.”

Likewise, BTA General Counsel Bob Gold-

berg will be co-presenting “Succession Plan-

ning and Exit Strategies for Your Business.”

He will also present “Establish Content and

E-mail Management for Legal Compliance.”

BTA will have a strong presence at ITEX as

in recent years. Please drop by our booth

(#249) in the exhibit hall. While you are

there, pick up an invitation to attend BTA’s

Meet & Greet Reception, scheduled for 4:30

p.m. to 7 p.m. on Wednesday, March 3, at the

Las Vegas Hilton. At our reception, we will be

presenting the 2010 BTA Channel’s Choice

awards. The event will also provide a nice

venue to network with your fellow dealers,

visit with vendor sponsors, learn more about

BTA and enjoy free food and drinks.

Registration for ITEX 2010 is easy. Just

visit www.itexshow.com. The registration

form can be accessed from the home page.

Th e pre-regi stration amount i s $149.

However, BTA members may register at the

discount rate of $79. Simply use the code

BTA9B when registering.

I look forward to seeing you in Las Vegas. �

— Bill James

Register for ITEX2010 Show Today

®

2009-2010 Board of Directors

PresidentBill James

WJS Enterprises Inc.3315 Ridgelake DriveMetairie, LA 70002

[email protected]

President-ElectRock Janecek

Burtronics Business Systems Inc.216 S. Arrowhead Ave.

San Bernardino, CA [email protected]

Vice PresidentTom Ouellette

Budget Document Technology251 Goddard Road

Lewiston, ME [email protected]

BTA EastTodd J. Fitzsimons

Network Imaging LLC122 Spring St.

Southington, CT [email protected]

BTA Mid-AmericaRon Hulett

U.S. Business Systems Inc.3221 Southview Drive

Elkhart, IN [email protected]

BTA SoutheastTerry Chapman

Business Electronics Corp.219 Oxmoor Circle

Birmingham, AL [email protected]

BTA WestLokke PatrickDocutxt Corp.

11110 E. Artesia Blvd., Ste. BCerritos, CA [email protected]

Ex-Officio/ImmediatePast President

Ronelle IngramSteven Enterprises Inc.

17952 Sky Park Circle, Ste. EIrvine, CA 92614

[email protected]

Ex-Officio/General CounselRobert C. Goldberg

Schoenberg Finkel Newman & Rosenberg LLC222 S. Riverside Plaza, Ste. 2100

Chicago, IL [email protected]


08OT0110:08OT0110 12/22/09 9:44 AM Page 8

Lexmark business products have received greatreviews in the past year, including a reputable 2009 Better Buys for Business Editor’s Choice for theXS658dfe! What’s more, our innovative E-task solutions,featuring Eco Copy, MyMFP and Remote Copy, won a2009 Buyer’s Lab Outstanding Achievement Award! In addition to great products, you can also enjoy thebenefits of great Lexmark programs, like the LexmarkfiBusiness Solutions Dealer (BSD) Program with exclusive pricing and incentives that allow you to aggressivelycompete and win!

Learn more at our ITEX booth # 331 or contact us at877.999.4360.

“We continue to believe there is a very important role that A4 can play for the independent copier dealers…Lexmark has got it right…Lexmark has the right approach to our dealer audience.”

Frank Cannata, Publisher and Editor, The Cannata Report and Live Wire

Lexmark and Lexmark with diamond design are trademarks of Lexmark International, Inc. registered in the United States and/or other countries. All other trademarks are the property of their respective owners.

©2009 Lexmark International, Inc. 740 New Circle Rd., Lexington, KY 40550.

When it comes to award-winning products, Lexmark delivers.

Lexmark ad Jan 10:Layout 1 12/3/09 3:57 PM Page 1


by: Brent Hoskins, Office Technology Magazine

Security SolutionsHelping to safeguard information confidentiality

While many end users still re-

main unconcerned or un-

aware of th e information

security risks associated with MFPs,

today there are a growing number of

product features that help to safeguard

the confidentiality of electronic docu-

ments and data in the workplace. The

features also ser ve to maintain the

integrity of information and control its

accessibility. Increasingly, anyone with

malicious intent will often find the office

MFP well protected.

Init ial ly i t was employees in th e

federal government who saw the risks inherent to MFPs and

sought solutions. With data streaming in and out, and with

the use of an internal hard drive, the MFP was viewed as

akin to the personal computer, long known as hardware

whose data required security. Given the confidential and

even classified information government employees gather

and generate, they made their concerns known to MFP

manufacturers.

“When we first came out with our data security kit, it was

definitely customer driven; it was in response to a govern-

ment request,” acknowledges Vince Jannelli, associate

director of applications and partners for Sharp Imaging and

Information Company of America. “They wanted the risk

mitigation of the encryption and overwrite on the hard

drive. That was the genesis of it.”

Government officials received what they requested — an

MFP solution that encrypts data prior to being written to

RAM or flash memory or the hard drive and overwrites

deleted data to help ensure all information is virtually irre-

trievable by unauthorized users. However, says Jannelli, the

government sought an assurance that the data security kit

would deliver as promised. Specifically, he says, “they wanted

Common Criteria Certification to prove

that we actually did what we said we did.”

The rigorous, government sponsored

certification process, also known as ISO

15408 and implemented in 2002, requires

certain security features of networked

devices used in conjunction with the

entering, processing and transmitting,

etc., of national security information to

be validated. While Sharp was the first

MFP manufacturer to have a product val-

idated through the process, today

Common Criteria C erti f ication of

product security features is common-

place among MFP manufacturers.

Likewise, manufacturers are also now embracing the

IEEE 2600™-2008 family of standards for hardcopy device

and systems security, resulting from efforts that began in

2004. The standards project is sponsored by the IEEE Infor-

mation Assurance Standards Committee of the IEEE Com-

puter Society. The standards define copier/MFP and printer

security requirements in such areas as authentication,

authorization, privacy, integrity, device management, and

physical and information security. Among the sponsors of

the standards initiative are such companies as Canon,

Hewlett-Packard, Konica Minolta, Kyocera Mita, Lexmark,

Oki, Ricoh, Samsung, Sharp and Toshiba.

“Essentially, a number of manufacturers sat down

together to address the question: ‘What security features

need to be on these products?’” says Jannelli, noting that the

catalyst for the development of the standards was end-user

demand and inquiries regarding such features. “The interest

in security has risen to such a point that customers are

saying, ‘I need someone to guide me as to what the true

risks are and the best way to mitigate those risks.’”

Government agencies have remained the dominant

Cover Story Jan 10:Cover Story Jan 10 12/22/09 9:47 AM Page 10

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customer group requiring security features. In recent years,

the rise in use of common access cards (CACs) has been

among the focal points for manufacturers selling to the gov-

ernment. “Basically, the use of a common access card is a

Department of Defense (DoD) requirement,” says Ron Nevo,

senior product planning and marketing manager of security

and applications at Sharp. “If you need to do anything with

a machine, you have to authenticate with your CAC, which

is a smart card. Its use is still ramping up. When you walk

into any DoD facility today, not every copier/MFP in use is

covered by CAC implementation, but certainly most of the

new copier/MFPs being rolled in are covered.”

While the government remains dominant in terms of

security requirements, the commercial market is increas-

ingly adapting such requirements as well. Akisa Matsuda,

director of software solutions for Kyocera Mita America Inc.,

says security features used to be primarily a “nice-to-have”

but today are becoming a “must-have.” The bid requests

received by the manufacturer confirm the change. “The cus-

tomer has decided that you have to have security features in

order to enter the bid process,” she says. “If you don’t have it,

you cannot submit a bid. This is not something where you

can offer an alternative solution.”

In recent months, Matsuda says she has noticed an increase

in the inclusion of security features as a requirement in bid

requests, not only from government agencies, but also in the

education, financial and healthcare industries. She has

noticed, too, a shift from simply viewing security as an arbi-

trary bid criterion to viewing it as a real solution to specific,

practical needs. “They do have confidential information that

they want to protect,” she says. “For example, I recently heard a

comment from a customer representing a school that they are

concerned about students hacking into their system, so they

really want to address the need for security.”


“Its use is still ramping up.When you walk into anyDoD facility today, notevery copier/MFP in use is covered by CACimplementation, but certainly most of the new copier/MFPs being rolled in are covered.”

— Ron Nevo, Sharp Imagingand Information Company of America

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Dennis Amorosano, sen-

ior director of solutions mar-

keting and business support

for Canon U.S.A. Inc., says

there are two primary areas

of concern among cus-

tomers seeking to address

the need for security. “I think

the most common concern

has been and continues to

be related to securing the

device, given that it is at-

tached to the customer’s

network,” he says. “So, for example, some customers want to

understand the level of flexibility they have in configuring

the different types of ports on the device. In many cases, they

want to close down many of the ports on the device, particu-

larly, of course, those ports they are not going to be utilizing.”

The second area of primary concern, “are the latent

images that have been processed by the device,” says

Amorosano. “The customers want to know how they can

effectively protect images that may reside on the hard drive

of the device following the completion of the job. Of course,

Canon offers a number of different methods to ensure that

any images that may have been written on the hard drive of

the device can ultimately be protected, whether it be by

encrypting the entire hard drive or by implementing an

overwrite of jobs following their completion.”

Like other manufacturers, Amorosano says Canon offers

a broad range of security features, not just those that

address the two primary concerns. Other features he cites,

for example, include: user authentication, verifying that the

user is who he (or she) claims to be through passwords or

smart cards or both; access control, associated with the

user’s role and privileges, determining what the user can

access and the actions he can take on the device; and

logging and auditing, which provide audit trails of who

accessed and printed specific documents, etc.

“We have tried to take a holistic approach to looking at the

topic of security, because there are so many different types of

security-related issues that can come up when you are con-

necting these devices inside of a customer’s environment,”

says Amorosano. “So, depending on the kinds of concerns

that a customer has, the dealer can then talk in terms of the

particular capabilities they can offer with Canon devices in

one of the security areas.”

Bill Cassidy, associate director of product and solutions

marketing at Kyocera, em-

phasi zes that although

many customers do have

specific reasons in mind for

product security features,

security implementation

simply for peace of mind is

also becoming more com-

mon. “A lot of times, the IT

directive is ‘let’s just secure

everything and that way we

never have to worry about

anything,’” he says. “Even

though the residual data on a hard drive is incomplete data

for the most part, from the IT standpoint it’s ‘I don’t even

want that much data unsecured.’ So, they prefer to basically

lock it all down.”

Are you helping your customers “lock it all down” or

address specific needs through the implementation and use

of MFP security features? It is not simply an opportunity for

manufacturers seeking to better serve customers and secure

new product placements in major accounts or the federal

government. Dealers should remember, for example, notes

Jannelli, that the DoD extends well beyond large military

bases. “Don’t forget about the National Guard bases,” he

says. “They are mostly dealer opportunities because they are

at the state level.”

There are, as noted, many commercial businesses increas-

ingly seeking to better protect information and documents.

“The dealership’s general line sales reps need to have at least a

base level of understanding as to the security capabilities that

are inherent in the product platform in order to effectively

address security concerns that may be raised by the customer

in the normal sales cycle,” says Amorosano. “Today, almost

every customer is asking questions about security.

“It is an opportunity,” he says. “More customers are now

looking beyond the basic capabilities of just connecting the

device to a network in a secure manner. Increasingly, they

want to do things that are tied to securing the document, pro-

viding audit controls, etc. Dealerships have the capabilities

and technical skills that make them well positioned to

support these requirements as they continue

to emerge in the marketplace.” �Brent Hoskins, executive director of

the Business Technology Association,

is editor of Office Technology magazine.

He can be reached at [email protected].


“More customers are now looking beyond thebasic capabilities of justconnecting the device toa network in a secure manner. Increasingly, theywant to do things that aretied to securing the document ... “

— Dennis AmorosanoCanon U.S.A. Inc.

Cover Story Jan 10:Cover Story Jan 10 12/22/09 9:47 AM Page 12

FMAudit ad May 09:Layout 1 4/16/09 2:29 PM Page 1

Compiled by: Brent Hoskins, Office Technology Magazine

2010’s OpportunitiesDealers share expectations & advice for the new year

In 2010, what do you believe will be

the greatest areas of opportunity

for dealers in the office technology

industry? What do you believe will be

the best strategies for success in pur-

suing those opportunities?

Recently, Office Technology asked

these questions of its readers via an e-

mail sur vey. Among the many re-

sponses received, the opportunities

cited as the greatest for the new year

are varied, although some common areas of focus emerged.

Perhaps the comments shared by your fellow dealers will

mirror your plans for 2010 — or provide new ideas.

Following are many of the responses. Additional re-

sponses can be found on page 6 and on the BTA Web site,

www.bta.org. Click on “BTA Idea Exchange” in the left

column of the home page. (You will need your member login

and password.)

“The best opportunity is in offering comprehensive solu-

tions instead of selling a particular brand or box. This includes

managed print services, document management solutions,

scanning solutions, financing options and anything that can

help your customer concentrate on what they do best.”

Steven Cobb, President

Dean’s Office Machines Inc., Greensboro, N.C.

“It is imperative that dealers work diligently to add click

volume to their monthly/quarterly billings and keep a very

close tab on the number of clicks they are billing so they can

address customer click volume decreases. It is also impera-

tive that dealers increase their per-click rate to customers on

an annual basis and that those click rates be nothing less

than 10 percent (there will certainly be hold-outs from this

procedure, especially where the account has a guaranteed

rate). This is necessary because as we

sell new systems, they are going under

a new contract at a reduction in rate. In

this economy, it is extremely difficult to

place new systems and increase the

customer’s total payout. With that said,

it explains why it is so important to

have a successful managed print serv-

ices (MPS) program and that you have

it working properly. As we know, there

is no silver bullet, and a successful and

profitable MPS program is a lot of work and requires dedi-

cated people to perform the tasks required. Additionally,

having a focus on “solutions” selling with specific software

and making sure you have proper charges for installation,

implementation and training to eliminate ‘scope creep’ is

vital. Another revenue opportunity (and truly a customer

service program) is the dealership’s help desk and charging

for the services rendered. We are so used to providing this

type of service for free that it sometimes requires a company

culture change to implement. But the most important thing

is for the dealer to have quality associates to make all of this

happen at a profit and be perceived by customers as the truly

‘value-add’ programs that they are.”

John Heiser, Executive Vice President

MT Business Technologies Inc., Mansfield, Ohio

“Due to the economic recession we all are facing, we are

seeing a need for network support at higher levels than

ever. We have seen companies reduce their IT staffs, which,

in turn, has opened up network service opportunities. This

will open up our opportunity to sell the many network

devices we offer. Back when copiers became digital and

could connect, we all felt that gaining control of a com-

pany’s network would ensure our ability to sell our con-

nected devices. After many years of trying to gain network


New Year Survey Jan 10:New Year Survey Jan 10 12/22/09 11:01 AM Page 10

ECO-nomical. ECO-logical.

ECOSYS Printers from Kyocera.

Customers afraid to look at whattheir printers really cost?

Help them make the wise choice.

Typical Printer Kyocera Printer

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How much did your customers spend on printing last month? How about last year? If they are like most companies,it’s probably too much. Switching to ECOSYS Printers from Kyocera could save your customers hundreds, eventhousands of dollars per year. That’s because Kyocera’s durable long-life consumables mean less waste, reducingcosts and lowering impact on the environment. Brilliant color, crisp black and white, and low Total Cost of Ownership.Now that’s a wise choice.

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Kyocera Mita ad Jan 10:Layout 1 12/14/09 9:42 AM Page 1

control, the recession has given us the

opportunity to become more embedded

in our customer’s office.”

Mark Watson, President

CDS Office Technologies, Springfield, Ill.

“Managed print services and profes-

sional services are the keys for us in

2010. Changing the mindset of our reps

(and total company) from box-selling to

solution-selling will be a major emphasis. This is the direc-

tion we must travel to remain competitive and successful.”

Rollie Schultz, Vice President

Gordon Flesch Co. Inc., Madison, Wis.

“Technology-driven products. I believe salespeople must

double down. Knowledge and service will be key in 2010.”

Frank Sluss, President

Business World, St. Croix, Virgin Islands

“Becoming a more diverse vendor for our clients; strength-

ening our internal and external communications so eve-

ryone we touch understands who we are and what we’re

capable of doing.”

Michael Steinhoff, President

Rhyme Business Products, Portage, Wis.

“Managed print services and document management are

two areas with great current opportunity in spite of the neg-

ative business environment. The ability to change the value

proposition for our clients with innovative approaches that

legitimately help them reduce current costs and better

manage their businesses should be particularly attractive at

this time. If implemented properly, this focus presents an

excellent opportunity for sustainable success for dealers in

the medium to long term. Dealers not already engaged in

these areas should seriously consider adding these products

and services to their portfolios.”

Richard Mark, Managing Director

RL Mark & Co. Ltd., St. Michael, Barbados

“The greatest opportunity appears to be in the document

management solutions arena. BTA has sponsored training in

this area and several document management enterprises

have developed programs for dealers to offer to their cus-

tomers. These solutions seem particularly suited for small

to medium-sized businesses and that is the bulk of the

dealership’s customer base.”

Nancy Taylor, President

Taylor Bu siness Equipment LLC,

Chicago, Ill.

“Our bankers in central California do

not see any real improvement in our local

economy until at least the end of 2010.

Should that be true, we feel it is more

important than ever to provide our cus-

tomers the best service, and to help them hopefully reduce

their costs in producing and managing their documents by

placing the right equipment, MPS or existing service. More

customers are choosing to purchase color MFPs when

replacing their old equipment — often replacing faxes and

printers that are more expensive to operate. We also are

selling and renting more used equipment to customers who

cannot get lease financing, or who are not wanting to commit

to any long-term agreements when they are not sure what is

around the corner.”

Teri Brymer, General Manager

California Business Machine Co., Fresno, Calif.

“Dealers who can show customers how to save money

will succeed in 2010. Your hardware, software and service

marketing will all have to focus on the customer’s bottom

line — not image, cool features, new ‘bells and whistles’ and

so forth.”

Jay Nolan, President & Owner

Mountain Advocate Media Inc., Barbourville, Ky.

“We’re continuing to pursue MPS opportunities in health-

care and customer-facing professional services firms.”

Tom Senecal, President

Laser’s Resource, Grand Rapids, Mich.

“Color MFPs, archiving and document management soft-

ware (paperless) and MPS.”

Harry Fields, President

Chattanooga Business Machines, Chattanooga, Tenn.

“I think the greatest opportunities will be writing CPP

maintenance contracts on in-place printers and document-

ing customers’ current estimated costs and offering to fix

these costs for them so that they are budgetable numbers.”

Barry Wallingford, President

Atlantic Business Systems, Melbourne, Fla. �


Your hardware, softwareand service marketingwill all have to focus onthe customer’s bottomline — not image, coolfeatures, new ‘bells andwhistles’ and so forth.

New Year Survey Jan 10:New Year Survey Jan 10 12/22/09 4:39 PM Page 11

ECi ad Jan 10:Layout 1 12/16/09 8:13 AM Page 1


by: Wayne Outlaw, Outlaw Group

Sales Force EffectivenessIs your dealership ready for success in 2010?

Many have been through some very

challenging economic times in

recent months, but now we all

have the opportunity to reflect back on

2009 and learn. In 2009, you may have had

to make some difficult decisions (such as

reducing overhead and cutting expenses)

to have the opportunity to be ready in

January — ready to tackle 2010 and be-

yond . However, even as the economy

appears to be improving, unless we have a

catastrophic event, what you did for 2009

will not be enough to be effective for 2010.

As the economy continues to improve,

the question is: “Does your dealership have the ability to

capture the opportunities available next year and beyond?”

Just as the banks had to rid themselves of “toxic” assets to

pass a stress test, your dealership may have to rid itself of

some “toxic” elements, such as unproductive activities, low

performing salespeople and even limiting beliefs to be suc-

cessful in 2010 and beyond.

Every several years you hear the mantra, “selling in this

business has changed.” It is fair to say that those who do not

believe that mantra and adapt better strategies have suffered

significantly in the past months and it will only be worse in

the future. While the actions that created a successful dealer-

ship are, for the most part, still good business, there are some

significant differences that must be addressed if you want to

achieve your full potential in the future.

No longer can bad habits, ineffective management, empty

sales territories and managers or employees who are not

performing be allowed if you want to pass your own stress

test — and, most importantly, pass the test with your cus-

tomers. Today’s customer is looking for innovative solutions

to his (or her) problems, not just changing out one machine

for another.

While this may have been a difficult

time to get decision makers to make deci-

sions, many of our clients have posted

record months and are ahead of previous

years, especially in profit. In short, those

not bound by the past and those willing to

innovate and root out ineffective practices

are succeeding in 2009 and will continue to

succeed in years ahead.

How does your dealership stack up?

There are some consistent characteristics

of successful companies. Now is a great

time to take a clear, objective look at your

dealership and ask if it is displaying the

characteristics of today’s most successful companies. Look

at your dealership and ask if there are areas where you need

improvement to ensure success in the future.

Individual & Team Sales ProductivityWhat is the average monthly sales revenue for each indi-

vidual and for the entire sales team? Do your salespeople

consistently meet the quotas or expectations for their type

of territory and assignment? Have there been discussions

with salespeople about their habitual underperformance or

specific negative performance issues, and have those issues

been resolved? If anyone is more than 20 percent below

budget, or has a negative trend longer than 60 days, you are

paying a price.

Sales StaffingIs every territory staffed with a capable performer to

produce critical sales revenue? Remember, a sale today will

likely lead to two or three times that in future revenue of up-

grades, service and supplies. If you have five territories and

one is open or ineffective, you are losing 20 percent; and if

you have two open, you are losing up to 40 percent. Even if

Outlaw Jan 10:Outlaw Jan 10 12/22/09 12:58 PM Page 10

you have someone working an open ter-

ritory (and even if the owner works it

but does not receive commission) that is

still a significant drain in future revenue

and profit.

Not only is unemployment high with

the recent changes in the industry, but

many people are open to new opportuni-

ties. While it is always a good strategy to

continuously recruit for a top performer,

now more than ever, recruiting support is available. Imagine

the impact on your organization if you could replace the

bottom 25 percent of your lowest performers with individ-

uals who are capable of producing in the top 25 percent. A

simple exercise in math will give you enough motivation to

take the time and effort to find more top performers.

While employee referrals and recruiting by management

has always been the best solution, new and innovative job

boards focused specifically on the industry can be a consis-

tent source of top performers. There are industry bench-

marked measurements that can help assess candidates to

assist you in making more accurate hiring decisions.

Territory IntegrityAre your territories balanced and equitable? It is easy to

have some territories with greater potential than others.

Have you allowed a significant imbalance to develop over

the years as turnover has occurred? You can spot this if your

existing salespeople are able to easily work their existing

customer population to make a good living, while new sales-

people find it difficult to get started, because their sales

must be primarily from new business. Because new business

is more difficult to generate and new people are less skilled,

this increases turnover, which perpetuates the problem.

Expectations & BudgetsIt is critical to have high expectations not only of sales-

people, but also of the sales management team. The expec-

tations must be balanced, reasonable and based on the

ability of the individual to meet those expectations. It is

best to begin at a reasonable level and increase expecta-

tions until the individual has an opportunity to meet the

full level of expectations for the company. Creating specific

budgets and finite activity levels for a new employee that

increase over time (or ramp up), increases retention and

makes it easier for a sales manager to quickly address a per-

formance problem.

Competent, Effective Sales CallsToday, we cannot rely on the cus-

tomer simply needing a new machine

and buying from us because we have

been effective in taking care of them in

the past. Each sales call must be con-

ducted by a competent sales profes-

sional who can uncover the customer’s

specific needs and create motivation for

the customer to buy. With products and

systems becoming more capable and advanced, it is even

more important that sales calls be highly effective.

In times where customers need to reduce expenditures,

the competition to a buying decision may not be another

dealer or manufacturer, but may be an internal expense,

such as employee payroll. In these instances, the quality of

the sales call and the skill of the sales rep will determine if

the customer sees the real value of the product, your dealer-

ship and, ultimately, makes a positive decision.

Skill, Not Just Product TrainingMany manufacturers provide great product training,

technical training or even application training. What is not

easily available is training that will enable the salesperson to

understand why customers make buying decisions and how

to move a customer through the sales cycle. They must learn

how to uncover the customer’s real needs and what will

motivate him to make a positive buying decision. Most

importantly, the customer must know how to justify the

expenditure with real, substantial benefits.

If a salesperson does not have these skills, he will struggle

to meet quota and succeed in a challenging economic envi-

ronment. One way to test how well salespeople are doing is

to consistently go on sales calls and observe them selling. A

quick check can be done by reviewing the last proposal pre-

sented to a prospect to see how much is clearly boilerplate

verbiage and what is specific to that customer’s needs. Is it

persuasive enough to ensure a positive decision? Most pro-

posals are simply price quotes with product specifications.

If that is what is contained in a proposal, is it any wonder

the lowest price wins, or even that the prospect finds it easy

to delay or not make a decision?

New Business is EssentialWhile it is important for a salesperson to uncover new

business prospects and close them, that importance is not

just for the individual. It is easy for a company to become

Each sales call must be conducted by a competent sales professional who canuncover the customer’sspecific needs and createmotivation ... to buy.

w w w . o f f i c e t e c h n o l o g y m a g . c o m | J a n u a r y 2 0 1 0 | 21


too complacent living off of its installed

population. Look at the transactions

that are occurring with existing cus-

tomers to see if they are being upgraded

or traded too frequently at the expense

of healthy margins. Some may justify

this as keeping competition from getting

the business, but it is still killing mar-

gins. If there is not enough new business

activity, individuals will come to rely too

heavily on the existing population at the expense of margins.

Address Low PerformanceNow, more than ever, it is essential that sales managers

address low performance by sales representatives. Low per-

formance is not just the inability to meet a revenue quota,

but it is also not having sufficient sales activities, generating

ample prospects to keep the sales funnel full and having a

sufficient “success ratio” of moving the prospect through the

steps of the sale to a close. Performance is not just getting a

couple of big deals — it is also having a sufficient number of

orders of the right type, at the right margins, consistently.

Today, it is important for the sales manager to know the

“real” performance of the individual and take action if it is

not sufficient for the future.

Constantly TrackDealerships have CRM systems that keep track of

prospects, activities and sales. Unfortunately, many do not

use these systems to their full potential or adapt them to

help manage the sales organization. It goes without saying

that all information on customers and potential new

accounts should be accurate and up to date. If you do not

know the activity of each salesperson and his prospects’

accounts, and if that knowledge is not used to manage, you

are losing sales performance and valuable revenue dollars.

Salespeople and sales managers do not like having an up-to-

date, accurate sales information system because it may point

out shortcomings or lack of activity that has to be changed.

Addressing Low ProductivityUnless territories are well balanced and budgets are set to

reflect potential, it is possible that a salesperson meeting

quota may actually be a low performer. To know if an indi-

vidual is a low performer and to be able to address the issue,

it is essential to look at selling skills and sales activities, as

well as the number, type and margin of each transaction —

not just total sales revenue. If an indi-

vidual , even if he has been meeting

minimum expectations, is not getting

the full potential from his sales, he is a

low performer.

Ensure Sales Managers ManageMany salespeople receive a promotion

to management, but never effectively

transition from selling to managing.

Sales managers tend to go on sales calls with sales reps as an

“expert salesperson” (or closer), rather than as a manager and

coach. Instead of improving the ability of the salesperson to

perform well on all calls, they focus on getting a specific

order. While this may provide short-term relief by getting

orders, it does not solve the problem of developing a high-

performing sales organization that consistently produces

results. Not only do many managers fail to coach, they also

fail to manage a salesperson’s productivity.

Recently, a manager told me that he had never had an

effective review or forecast session and, as a result, did not

know how to do one with his salespeople. The best way to do

this is to spend time each month using a structured agenda

to uncover and evaluate performance and to determine not

just a forecast, but a commitment for the coming month.

How are your salespeople being managed?

How well you and your managers do in these 11 key

areas will determine the effectiveness of your sales organi-

zation for 2010. Can you afford to not have a highly effec-

tive sales organization? If you would like to evaluate and

increase your sales organization’s effectiveness, e-mail

[email protected] and ask for a copy of the “Orga-

nizational Performance Evaluation Roadmap to Greater

Sales Force Effectiveness.” �Wayne Outlaw is the founder of Outlaw Group, a firm that

assists companies in integrating problem identification,

solution development and implementation to increase

performance. The firm conducts organizational surveys,

develops staffing solutions, designs performance management

systems, creates customized training and provides learning

tools. Prior to establishing the Outlaw Group, Outlaw spent 13

years at Xerox, where, as a sales manager, he

took a last-place (78th) sales team to first

place in just one month, with the same staff.

He developed the benchmark sales strategy

used worldwide by Xerox to beat

lower-priced competition.


Performance is not justgetting a couple of bigdeals — it is also having a sufficient number of orders, of theright type, at the rightmargins, consistently.


Editor’s Note: Expressing his best wishes

to members of the Business Technology

Association in the new year, the following

was submitted by Katsuhiko Machida,

president of the Japan Business Machine

and Information System Industries Associ-

ation (JBMIA). Machida is also chairman

and CEO of Sharp Corp.

With the worldwide recession

that followed the Lehman

sho ck, th e past year has

been one of great upheaval that has not

spared the business machine industry.

As we head into the new year of 2010, I

hope for a great year ahead for the

members of both BTA and JBMIA.

As we look to turn difficulties into

hopes, we must make 2010 a year of meeting new challenges

with strength and a view toward growth. The current reces-

sion is more than just cyclical in nature — it is much more

structural. There are no guarantees that, after a certain

period of time passes, demand will return to the level that it

was at before. As such, in order to survive the recession,

instead of taking the passive view of waiting until demand

gets back to a certain level, we feel that we have to take a

more active position and attitude, to become the engine that

produces its own changes.

As we face these new challenges, it is essential that we firmly

understand the changes that are happening in the global busi-

ness environment. And, with changing technologies, I feel that

there are three main areas we should focus on.

First is the challenge of global warming. The response to

global warming within offices is already far behind in many

countries and the move toward zero-emission buildings and

structures has accelerated all over the world.

Offices are the “playing field” of our industry. We have been

active in the development of “office innovations.” But we

believe that in the future there will be a focus on “eco solu-

tions” for the “greening” of offices that will be key for our

industry. In addition to comfort and efficiency, which have

long been our goals, we feel that we also need to show our

commitment to reducing environ-

mental impacts.

The second challenge is to deter-

mine how business machines will deal

with the changing trend of cloud com-

puting. For example, with the use of

servers on a distributed network to run

applications and store data, we feel that

the spread of cloud computing repre-

sents a major paradigm shift for the

business machine industry.

The third challenge is the move

toward electronic books and paperless

offices. New mediums such as elec-

tronic paper, etc., are continuing to be

developed and these products have all

of the convenience of regular paper.

This represents a challenge to develop new business models.

JBMIA is promoting research into how best to deal with these

changing business environments and technologies.

Against the backdrop of this new era, I wish all of the

member companies of BTA and JBMIA the best for the new

year as we continue to promote and seek to play a major role in

business innovation. �The Japan Business Machine and Information System Indus-

tries Association (JBMIA, www.jbmia.or.jp) was formerly the

Japan Business Machine Makers Association (JBMA), which

was established in 1960. The name was changed in 2002. The

association’s member companies, which previously attached

greater importance to hardware, are now offering total busi-

ness solutions. In keeping up with these changes, JBMIA has

broadened the scope of its membership qualifications with the

intent of broadening the association’s scope with sales and soft-

ware-related companies, as well as manufacturers. JBMIA is

committed to contributing to the creation and utilization of

knowledge in the workplace by means of information tech-

nology while proposing “UC” (Ubiquitous workware and Collab-

oration) as the symbol words of next-generation of fices,

replacing “OA” (Office Automation). Activities of JBMIA include

those related to environmental preservation, standardization,

product safety and international cooperation.

JBMIA New Year’s MessageAssociation president reports on main areas of focus

by: Katsuhiko Machida, JBMIA

PRINCIPAL ISSUES


JBMIA Jan 10:JBMIA Jan 10 12/22/09 1:34 PM Page 26

As the impact of industry changes affect

office technology dealerships, dealers

may want to look to broaden their suite

of current product and service offerings and

expand their customer bases in order to stay

profitable. One approach that is largely being

considered in the industry is to broaden from

just office technology to network technology as

well. In order to gravitate upstream into the

route/switch and server world of technology

delivery, it will take more than just a leap of

faith. Of primary importance is a deliberate,

strategic plan that will determine how quickly and effectively a

move can be made into this new arena.

As you create this plan, here are a few key issues to consider:

� Buy or Build? — Should you acquire an existing network

technology reseller or build your own delivery model? The

pros and cons of each are great. Buying an existing reseller can

provide customers and technical capabilities that compliment

your current business. Building your own delivery model can

require time and investment. Having a strategic direction

about what you are buying or building will help to streamline

this process.

� Selection of Technology — Do you want to deliver broad-

based, high-end services with current name recognition and

respect in the IT industry? Are you interested in delivering net-

working managed services that are much like managed print

services? Or do you want to deliver low-end, turnkey solutions?

What suite of add-on services can you sell that compliment

the high or low end? Will you provide far-reaching Cisco solu-

tions that comprise more than 90 percent of networks world-

wide, or boutique solutions such as 3Com, Shortell or Microsoft

Small Business?

What level partner will you become — Premier, Silver or

Gold? What are the qualifications and costs of these levels and

why should you consider them? What pricing discounts and

margin opportunities do each bring?

What will comprise your total package of partners? What

associated services will you offer and how will you select

them? For example: Will you sell APC power or Emerson? Will

you sell Fortinet or Checkpoint security? What factors do you

need to consider to determine the right mix of

partners? The technology partner you select is

a major determination of the direction you will

take your company.

� Customer Base — What is the total ad-

dressable market of customers who require

technology in the given geography that you

will want to service? How does this compli-

ment your current customer base and how can

this expand it? Are you selling to the small,

medium or large business customer?

� Competition — What does the competi-

tive landscape look like in the area you have targeted? Are they

IT value-added resellers (VARs) that are boutique firms that

have been delivering these services for some time? Or are they

simply branch offices of a larger reseller? What does the scale of

each of these mean for the competition and product pricing?

� Define Your Sweet Spot — It is important to consider

where your sweet spot in the IT industry will be. Will it be in

delivering voice, security, unified communications or wireless?

Will you only concentrate on one or two? Will you concentrate

on a vertical market (healthcare, banking, education, etc.)?

� Value Proposition — In making this transition you will

have to be able to sell your credibility. Why should a customer

believe that you are now a technology expert? How can you

provide services that are from a different capability set and

what is your experience delivering them? How can your sales-

people tell a story about your business to their IT decision

makers that will differentiate you from the rest?

Once you have given these issues proper consideration, the

strategy can take direction. A transition will take time and

resources. The move upstream to networking can be lucrative

and can give you a solid foundation for the future. The

network technology industry remains an incredible opportu-

nity as the depth increases. Now is the time to take advantage

of the marketplace and position yourself for

the future. �Susan Muth is president of Strategic Business

Solutions Inc., based in Cincinnati, Ohio.

She can be reached at [email protected].

Visit www.susanmuth.com.

Making the LeapExpand offerings by moving into network technology

by: Susan Muth, Strategic Business Solutions Inc.

PRINCIPAL ISSUES


Muth Jan 10:Muth Jan 10 12/22/09 1:38 PM Page 26

BTA HIGHLIGHTS

The following new members joined BTA during themonth of November:Dealer MembersCTWP, Waco, TXDuffie’s Copier Consultants LLC, Forest City, NCGreat Lakes Office Technology, Plymouth, MIIdeal Office Machines, Searcy, AR

Service Associate MembersCatalyst Performance Learning, Merrimack, NH

Vendor Associate MemberFalcon Technology Solutions, Savage, MNOki Data Americas Inc., Mt. Laurel, NJSmart Power Systems, Houston, TX

For full contact information of thesenew members, visit www.bta.org.

BTA’s MPS WorkshopsThe BTA MPS Sales Workshop, taught by

consultants with Strategy Development, willprovide dealerships the information they needto establish a managed print services strategythat will allow them to significantly increase thequantity of captured prints, lock in customers,distinguish themselves from competitors and, ultimately, sell more hardware. Visitwww.bta.org/MPSSales for more information.

Frequently, operations and service areleft to “figure it out on their own” after thecontract is written. The BTA MPS Operations& Service Workshop is designed to jump-start the understanding of how to set up and manage all operational and serviceaspects of an MPS agreement. For information,visit www.bta.org/MPSOperationsService.

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

For the benefit of its dealer members, eachmonth, BTA features two of its Vendor or ServiceAssociate members in this space.

BTA Service Associatemember ManagedPrintMarketing.com helpsdealerships market their

MPS programs using exclusive video com-munication technology. You can easily add acompelling MPS commercial to your currentWeb site, use video with your e-mails or buildyour own MPS sales offense system. Thecompany understands the MPS business andwill get you the results you need with the C-level prospects you want. Customize your ownMPS marketing package with: MPS leadgeneration tools — online, video and print;MPS presentation collaterals; and automatedMPS campaigns.

www.managedprintmarketing.com

BTA VendorAssociate memberemFAST Inc. is an

industry pioneer in network fax communi-cation. emFAST has enhanced fax messagingfrom a simple document transport mechanisminto an indispensable business tool that fullyintegrates into critical areas requiringcommunication capabilities including unifiedcommunications, business process workflows,multifunction peripheral devices and majorenterprise content management and resourceplanning systems.

www.emFAST.com

A full list of BTA Vendor and Service Associate members can be found online at www.bta.org.


Highlights Jan 10:Highlights Jan 10 12/22/09 2:13 PM Page 25

In last month’s Courts & Capitols column, I began a discus-

sion of ways in which a dealership owner can strengthen

his (or her) business for the long term. Two strategies to

accomplish this lie in customer selection and detailed pre-

qualification, and mandating all-inclusive contracts. This

month, I will discuss these two strategies in-depth.

Strategy 1: Customer Selection and Pre-qualification“Our customers are our greatest asset” is not an over-state-

ment of truth. In fact, when valuing a dealership, acquiring

companies will look very closely at the executed program

agreements between dealers and leasing companies to ensure

that the dealer actually “owns” the customer (versus the

leasing company). Well, what happens when 50 percent of

your current customers are mortgage companies, commercial

real estate firms, small businesses, new businesses and others

that continue to fill the “no” bucket? The industry statistics in

the graphic to the right tell the true tale.

Keeping Customers — Successful dealerships and sales-

people have a clear understanding of these statistics and have

adjusted their customer approach. For example, you are

scheduled to meet with a mortgage company that has been a

good-paying customer of yours for 10 years. You know that

your “normal” credit application will typically be declined

since most leasing companies have completely blacklisted

mortgage companies. So, you have trained your sales team to

take a revised approach:

“Thank you for being a great customer for the past 10 years.

We truly appreciate your business. We are also pleased that

you have decided to take a look at some new equipment from

us. As always, we would like to do a detailed assessment of

your needs and make a recommendation that fits your budget.

As we all know, our credit markets have been through some

turbulent times lately. Unfortunately, leasing companies have

been hit very hard and it has become extremely difficult to get

lease approvals lately. Before we get started with our assess-

ment, I would like to spend some time together to secure a

lease approval so I do not waste any of your time. Would you

work with me on that? Great, here is what I will need. Nor-

mally, on a $20,000 transaction I would not need to ask you for

a financial statement. However, in today’s world, it is the best

reflection of your company’s financial condition and will help

us to get a ‘yes’ from the leasing company. Along with that, I

would like to complete a full credit application and submit

them together. Would you make that information available?”

What would your salespeople do if the answer to that ques-

tion was “no”? By postponing the discussion to the end of the

assessment process or proceeding when they do not agree to

give you the requested information, you are setting yourself up

for a lot of frustration and wasted time. Of the hundreds of

conversations that I have had with dealers and manufacturers

throughout the country this past year, the primary area that

they are focused on is a better use of their limited time and

resources. This business is difficult without wasting time on

transactions that are likely to get declined. If an outright pur-

chase is not an option (a good qualifying question up-front)

then it is essential to train your salespeople on how to ask,

what to ask for and when to walk away. Take a lesson from the

real estate industry — buyers with pre-approved mortgages

are much more attractive.

Other helpful tips include:

� Check with their current leasing company. Is the cus-

tomer paying them as agreed?

� Check with your accounting department. Are they paying

you as agreed?

� Do some research — the Internet, local newspapers and

industry magazines are all good sources to learn about your

by: Robert C. Goldberg, General Counsel for the Business Technology Association

COURTS & CAPITOLS

A Model for SuccessTips to help you create a long-term strategy


Goldberg Jan 10:Goldberg Jan 10 12/22/09 4:35 PM Page 26

customers and prospects.

� Ask your customer. If they are doing

well, they will want to talk about it.

Seeking Customers — Acquiring new

customer relationships is an essential piece

to any sustainable growth strategy. Nothing

is more disheartening than getting the first

appointment, gaining commitment, getting

the sale and losing the deal because you

cannot find someone to approve their

credit. Unlike current customers, you have very little visibility

into their pay histories and financial condition. To maximize

your chances of approval, a successful customer selection

strategy will focus on:

� Vertical marketing — Past successes, references and case

studies are a great way to extend deep into certain vertical

markets. Which vertical markets does your company specialize

in? Blitzing good vertical markets (as opposed to avoiding

restricted verticals) is a great way to consistently close busi-

ness. Check with your primary leasing company — it can

provide you a comprehensive list of good vertical markets.

� Networking with other service providers that specialize in

the verticals you wish to approach. They

will have visibility into their credit quality.

� Selling at the CFO/CEO level to

increase your chances of getting a clear

understanding of a company’s financial

condition. I have never heard of a “recom-

mender” giving out a financial statement.

� Research is the key. Just like with your

current customers, potential new cus-

tomers will want to tell their stories. Local

papers and publications, the Internet, trade associations and

chambers of commerce will all help a lot.

Strategy 2: Mandate all-inclusive contractsIndependent dealerships and manufacturers both bear a

similar fiscal model — a majority of their revenue and profit

comes from aftermarket. As our economy turned violently down-

ward, the consistent cry was that “page volume is way down” and

it was mostly due to the customer’s own business decline (layoffs,

mandates to only use monochrome copies, etc.). So, if a 20

percent decline in aftermarket revenue/profit is “out of our

control” then the only natural response was to:

Past successes, referencesand case studies are a great way to extenddeep into certain verticalmarkets. Which verticalmarkets does your company specialize in?


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� Sell more — Well, that is pretty tough

these days.

� Cut expenses — Which typically has

meant layoffs and other cuts that have

reduced your service levels. Tom Peters

said it best: “You can’t shrink your way to

greatness.” However, it was the only pru-

dent thing to do at the time.

On the surface, these two actions seem

to be the only options. But when we take a

close look at our “Eagles” (Dealerships that have maintained

80 percent-plus lease approval percentages and have experi-

enced aftermarket revenue growth, despite the economy), they

seem to be doing things quite differently. Sure, they made

some cuts (everyone has some “fat”) but the focus is not as

much inward as outward — toward the customer.

The Long-Term Benefits of Bundling — “Bundling” in

these terms is simply marketing the lease payment together

with the monthly service contract to result in a bundled con-

tract. As elementary as this might seem, let us take a closer

look at the benefits of partnering with a leasing company that

has expertise in bundled contract administration. Your dealer-

ship will see the following benefits:

� Increased customer retention rates — Most dealers sell

either monthly or annual service/supply contracts. A bundled

lease locks in your aftermarket revenue for the full term and

typically includes pre-programmed escalation and additional

fee income (interim rent, supply shipping fee reimbursement,

etc.). Moreover, a bundled contract provides a solid exit

barrier for your customers. When a lease buyout is quoted,

your aftermarket revenue is included in the quote to the cus-

tomer. Your “upgrade advantage” wil l win deals or, at

minimum, get the customer talking with your company to

understand their options. Either way, you win.

� Reduction in administrative costs — Most quality

providers will not charge you for the administration of a

bundled agreement. The cost reduction, typically estimated at

about $30 per contract per month, is a pure bottom-line

savings. This is a negotiable item with your leasing partner.

� Increased selling margin — It has remained a consistent

fact that dealers sell with higher equipment and aftermarket

profitability when the contract is bundled. When it is a bundled

managed print services (MPS) contract, you will unlock your

highest profit opportunity of all.

� Revenue stability — My obser vation is that most

dealers/manufacturers have experienced (on average) a 15 to

20 percent decrease in aftermarket revenue over the past year.

Meanwhile, our “Eagles” have experienced

a range from slight declines to modest

revenue growth. The reason for this is very

basic, but very powerful. You write a con-

tract with a monthly allowance of 10,000

pages. If the customer’s page volume drops

to 8,000, you still get paid for 10,000 —

guaranteed revenue at a higher profit

(because you only had to provide service/

supplies for 8,000). I can sense your eyes

rolling right about now. “Sure, I know all this and I get the same

thing when I sign them up under my service agreements.” This

may be true, but when you analyze the financial statements of

the “Eagles” you will find consistency — a vast majority of their

contracts with guaranteed, sustainable revenue. Here is the

simple math formula: sustained aftermarket revenue plus

annual 5 to 10 percent escalations minus some contracts you

need to adjust as a customer accommodation minus some con-

tracts you may lose to competition plus some cost reductions

equals a nice profit.

A Final ThoughtTimes are difficult. The good news is that the recession has

ended and that “yesterday” is way behind us. If there are 20

percent fewer MFPs and associated pages being sold then that

means 80 percent of customers are still doing what you had

hoped. So, as the overall opportunity narrows, many have

turned to a desperate price competition. They will certainly

win a few deals, but it is not a sustainable model and it is defi-

nitely self-defeating. Michael Porter, Harvard professor and cor-

porate competitiveness expert, recently provided this solid

advice (I paraphrase): “In tough economic times, it is imperative

that you focus on what you do well — become more of who you

already are — what you are the best at. When times are tough,

do not try to become something you are not, or you will fail.”

As always, I strongly recommend that you seek the advice of

one of our industry’s many expert consultants, join BTA and

exchange ideas with your peers, or go meet with an “Eagle.”

Spend the time re-educating your sales team in better cus-

tomer selection, pre-qualification and mandate the use of all-

inclusive contracts. This model will weather any storm.

Finally, choose your leasing partner for the

future, not that day’s best rate. The operative

words are “partner” and “relationship.” �Robert C. Goldberg is general counsel

for the Business Technology Association.

He can be reached at [email protected].

A bundled lease locksin your aftermarket revenue for the full term... Moreover, a bundledcontract provides a solid exit barrier foryour customers.



In the past two years, copier/MFP

unit placements in the United

States have decreased by almost

30 percent. What does that mean for

the office technology dealer? It is

simple. If you have the same market

share you had in 2007, then your

equipment revenue has decreased by

at least 30 percent. That equipment

revenue decrease may be even more,

due to lower average unit selling

prices, but 30 percent is a fair esti-

mate. If you believe the research

firms, in the next three years unit

placements are going to decrease by

almost 20 percent.

So, in a six- or seven-year period,

copier/MFP (A3) unit placements will

have decreased by more than 40 percent.

What does that mean? It will result in

significant structural change in the industry. By that I mean there

will be fewer manufacturers and fewer channel players (dealers).

If you have made it through the first two paragraphs of this

article, I clearly have your attention. Is it time to bail out of the

industry? Possibly, if you do not think you can execute a plan

to transition your company from a hardware-focused business

to a service model. If you do not have the desire, capital or

management talent to continue to evolve, then selling your

business is probably your best bet.

For those of you who are still having fun, there are great profits

waiting for you in the service-led business. Yes, I am referring to

managed print services (MPS). But, after four years of speaking,

writing, consulting and educating on MPS, I still find that most

dealers want to try to turn MPS into a hardware business. I am

constantly asked two questions: “What is the best line to carry for

MPS?” “What copier/MFP company has the best MPS program?”

Over the period spanning 2008 to 2013, page volumes on

monochrome A3 devices are forecasted to decrease from 140

billion to 59 billion. This is significant in that most of those A3

pages are under some type of contract with the copier/MFP

channel, either through dealers or direct. That means that

more than 50 percent of the after-

market revenue you currently enjoy

from monochrome copier/MFPs will

evaporate. Over that same period,

prints on monochrome A4 devices

are forecasted to decrease from 400

billion to 311 billion. That is significant

for two reasons. First, the current ratio

of A3 to A4 volume is less than 1-to-3,

and in 2013 it is forecasted to be

greater than 1-to-5. Prints will con-

tinue to move to printers. The second

major significance is that most of those

pages are not under any contract. So,

there are 311 billion pages up for grabs.

Unit placem ents and pages are

growing for both A3 and A4 color

units, but with the same shift of

prints to A4. From the current ratio

of 1-to-1.3, the gap on color prints

will expand to 1-to-1.5 in favor of A4 units.

If you are serious about staying in the imaging business, you

had better get focused on capturing those pages that are not

under contract. It is not about the product line that you carry, it

is all about the sales strategy and services you provide. This is

not to say that you should forgo equipment revenue; my belief,

and the belief of all of Strategy Development’s consultants, is

that you should get 100 percent of the revenue inside of your cus-

tomer’s business. What has changed is that 15 years ago, you

were defined by your product line. You were a “Canon dealer,”

“Ricoh dealer,” “Sharp dealer,” etc. However, moving forward, you

will be defined by how much you are growing your aftermarket

revenue. Once you control the output of your customers with a

contract, you will control the products the customer acquires.

I realize that for decades “equipment revenue growth” was a

strong barometer for a healthy copier/MFP company. Unfortu-

nately, the copier/MFP company as we know it is atrophying

away. That is not to say that the copier/MFP industry is not

attractive; for those who are in this business today, it provides

strong profits and operating income, although from a decreasing

revenue stream. But there will also be fewer dealerships, so the

The Wake-Up CallTransition your dealership to a service-led model

by: Tom Callinan, Strategy Development

MPS STRATEGIES


Callinan Jan 10:Callinan Jan 10 12/22/09 2:43 PM Page 26

opportunity will remain for those dealer-

ships that survive. What is important is that

office technology dealers begin to think of

their companies as imaging companies and

shift their focus from equipment revenue

growth to aftermarket revenue growth.

Dealers need to view their companies as

service providers rather than as equipment

companies. Network integration compa-

nies sell availability and performance, not

switches and cables. MPS providers sell outsourcing of the

management of the print environment and not printers or

copier/MFPs. Does that mean that MPS providers do not sell

copier/MFPs and printers? Of course not. Forty percent of their

revenue is derived from hardware. But MPS dealers think of

themselves as service providers, just like many technology com-

panies that sell network integration, security or virtualization.

I know there are many who believe things will be back to

normal as soon as the recession is over. Well, the recession is

over by most accounts. I am sure that over time, lease

approvals will begin to increase, although never back to the

level they were at two years ago. Clearly, a 90 percent approval

rate was not a sustainable model for those lending the money.

But how many of those transactions did you actually lose

versus going to a third or fifth leasing source or carrying the

paper yourself ? Leasing had a minor impact on our industry

but it, along with the recession, has masked the real issue:

decreasing unit placements.

Do not wait for the industry to bounce

back; your future is in MPS. Think back to

those 311 billion pages that are not under

contract — at $0.015 per page, repre-

senting more than $4.5 billion in revenue,

simply in monochrome and without

selling a dollar in equipment. Granted,

not all of those pages will end up on a

contract, but if 25 percent of them are put

on an MPS agreement, that will result in

more than $1.1 billion in revenue. Color A4 adds at least four

times the page revenue, so with 25 percent penetration, we

are talking about a $5.5 billion business without ever selling

a device.

Get a plan in place to transition your dealership to a service-

led model where you measure health by the growth in your

aftermarket revenue. If you started four years ago, you would

have had the time to experiment and perfect your offering. At

this point you need a quick start, so get some professional help

in launching your program. �Tom Callinan is the founding principal of Strategy Development,

a consulting and advanced sales training firm that developed and

delivers the BTA MPS Sales Workshop and BTA

MPS Service & Operations Workshop to help

dealers enter the lucrative MPS space. He can be

reached at [email protected]

or (610) 527-3317.

Visit www.strategydevelopment.org.

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Get a plan in place to transition your dealership to a service-led model where youmeasure health by the growth in your aftermarket revenue.

Callinan Jan 10:Callinan Jan 10 12/22/09 2:43 PM Page 27

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