there's gold in selling software solutions, but you have to dig for it

Connecting People, Ideas and Products in the Document Imaging Industry since 1994

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0Connecting People, Ideas and Products in the Document Imaging Industry since 1994


ENX MagazinePO Box 2240 Suite 729 Toluca Lake, CA 91610-0240 USA tel: 818-505-0022 fax: 818-505-9972email: [email protected] www.enxmag.com

THERE’S GOLD IN SELLING SOFTWARE SOLUTIONS but You Have to Dig for It

CHINA’S THIRD-PARTY SUPPLIES INDUSTRY CONSOLIDATES AS FIRMS GROW THROUGH ACQUISITION

Atlantic Tomorrow’s Office – What

Success Looks Like

The Question Is, “What Am I

Doing Wrong?”

What Is Your Definition of

Cold Calling?

Is Your MPS Business in

Decline? Why?

Optimizing Territory Management

Five Biggest Mistakes Made in

Hiring and Utilizing Your

AttorneyBusiness Profile

O�ce TechnologyService Excellence Award

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© 2015 OKI Data Americas, Inc. OKI, Reg. T.M. OKI Electric Industry Co., Ltd., Reg. T.M. OKI Data Corporation.

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• www.enxmag.com | October 2016 We Saw It In ENX Magazine6

24 DEALER SPOTLIGHTAtlantic Tomorrow’s Office – What Success Looks Likeby Christina Kim

30 MARKET INTELLIGENCEChina’s Third-Party Supplies Industry Consolidates as Firms Grow Through AcquisitionBy Charles Brewer

36 BUSINESS PROFILEBEI Services: Improving Service Department Performance & Profitability By Editorial Staff

40 BUSINESS MANAGEMENTThe Question Is, “What Am I Doing Wrong?”By Charles Lamb

42 SALES & MARKETINGWhat Is Your Definition of Cold Calling?By Tom Callinan

46 SERVICE EXCELLENCE PLATINUM AWARD WINNERService First for Allen Business Machines Since 1953By Michael Nadeau

50 MPSIs Your MPS Business in Decline? Why?By Ben Bounds

52 SERVICE MANAGEMENTOptimizing Territory ManagementBy Ken Edmonds

54 EXIT STRATEGYFive Biggest Mistakes Made in Hiring and Utilizing Your AttorneyBy Jim Zipursky

60 PRINTER TECH TIPBy LaserPros

61 TECHNICAL TIPSFuser Cleaning Cartridges- Rebuilding the Web Cartridges for the Xerox® 4110 StyleBy Britt Horvat

56 DISPLAY ADVERTISERS INDEX

60 CALENDAR OF INDUSTRY EVENTS

In This Issue

16STATE OF THE INDUSTRY

There’s Gold in Selling Software Solutions, but You Have to Dig for It By Michael Nadeau

24

42

46

© 2001 – 2016, Mitsubishi Kagaku Imaging Corporation dba Future Graphics. All rights reserved. Future Graphics is a distributor of compatible replacement parts for imaging equipment. None of Future Graphics’ products are genuine OEM replacement parts and no affiliation or sponsorship is to be implied between Future Graphics and any OEM. Trademarks and brand names are the properties of their respective owners and used for descriptive purposes only.

Is Your Color Replacement Cartridge Powered to Go the Distance?

FOR FURTHER INFORMATION CONTACT CUSTOMER SERVICE TODAYSales: 1 (818) 837-8100 | Tech Support: 1 (800) 466-0246 | Email: [email protected] | Website: www.fgimaging.com

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ENX_SEP2016.indd 1 8/9/16 4:32 PM


Michael NadeauEditorial Director

ContributorsBEN BOUNDS has been in the managed print services industry for over a decade. As Director of Sales for an industry leading MPS provider, Ben helped maintain and grow the MPS landscape in the Midwest. In Ben’s role as Director of Business Development for Compass Sales Solutions, he is focused on working with both the dealer channel as well as manufacturer and supplier partners in educating and de-mystifying the MPS landscape and its processes.

CHARLES BREWER is the founder and president of Actionable Intelligence, the digital imaging industry’s leading market research firm. He was an editor for Inc. magazine and ComputerWorld during the 1990s, and more recently, the managing editor of The Hard Copy Supplies Journal. Mr. Brewer’s analysis is currently featured at his firm’s website, www.Action-Intell.com.

TOM CALLINAN is the President of Strategy Development and an engaging speaker and facilitator. After quickly rising through the ranks from an award winning sales professional, front line manager, director of sales and ultimately vice president of sales, Tom founded a technology company with the support of an angel investor. A public Fortune 500 Company acquired Tom’s company in 1997. Since 2006, Tom has been consulting on sales strategy and training sales forces in large and mid-market companies. He can be reach at via email at [email protected].

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. He has more than 40 years of experience in the electronics and computer fields. For further information email him at [email protected]

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 [email protected], or visit www.mpsandit.com.

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., and a member of 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 him at (402) 330-2160 or [email protected].

TECHNICAL ARTICLE CONTRIBUTORBRITT 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.

Staff

Susan NeimesPublisher & Managing Editor

Todd TurnerContributing Editor

Ronelle IngramContributing Editor

Christina KimAssociate Editor

ENX Magazine is published monthly by Affinity Business Communications, Inc. Any inquiries should be sent to: [email protected] or mailed to the corporate office. 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 depositphotos.com

Corporate OfficeSusan Neimes - [email protected]

Todd Turner - [email protected] Michael Nadeau - [email protected] 10153 1/2 Riverside Drive, Suite 729

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M3540idn

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Nuworld is not responsible for typographical errors or inaccurate specifications. Registered trademarks are properties of their respective owners.All prices, rebates, and availability are subject to change without notice. Please call us to confirm.Nuworld is not responsible for typographical errors or inaccurate specifications. Registered trademarks are properties of their respective owners.

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Office equipment dealers, MPS providers, and VARs looking to diversi-

fy their businesses are warming to the idea of selling software solutions. They are a strategic fit with their current offerings. Selling software also provides a means to offer customers end-to-end solutions to their business problems, strengthening the cus-tomer relationship in the process.

That kind of opportunity does not come without a significant investment in time and money. It also requires careful research to find the right partners with the right products for your customer base. ENX spoke with a number of dealers and software compa-nies, who shared their experienc-es and advice.

Why Sell Software?For dealers who have already

made the move into IT and managed services, selling soft-ware solutions is a natural next step in a progression that starts with selling hardware, then net-worked hardware, then managed services, and finally end-to-end solutions built around software. Each step expands and diversifies a dealer’s business and further entrenches itself with its custom-ers, in turn generating more and recurring revenue from them.

“The market is in transfor-mation,” said George Seymour, VP of Sales Enterprise Software Solutions at Nuance, which sells print management and document capture and conversion software. “[Dealers are] moving from hardware to services.” He noted that services like MPS that had been profitable for dealers are becoming commoditized, driv-

ing down fees and margins. That trend is helping to drive interest in selling software solutions.

“Dealers are caught between a rock and a hard place,” said Joe Rubino, channel director Americas for print management software vendor Papercut. Those selling hardware and supplies are struggling in an extremely com-petitive market and need to make the move to solutions. He said that the end-user community is more educated than ever before,

and they understand that they need to take a solutions focus for their pain points, and that’s often driving the

hardware decision. For dealer and service pro-

vider NovaCopy, the signal to consider software solutions came from their customers. “Business-es had questions about security, how to work with scanning options,” said Jason Levkulich, CMO at NovaCopy. “We worked hand-in-hand with them, making customer support [for hardware and software] an essential part of our strategic plan. This helps continue our overall goal of en-riching the customer experience and providing a one-stop shop for each of them.”

“When you offer an end-to-end approach to managing [a customer’s] content, you will differentiate yourself from the competition,” said John Sutton, national solutions sales manager at NovaCopy.

Selling software solutions can benefit other parts of a dealer’s business. “The size of deals in-creases whenever we can insert solutions-related offerings,” said Sutton. “Profitability increases on anything related to solutions. We are winning deals we would have otherwise not won or had to walk away from.”

All the dealers we spoke with said that software solutions is the fastest or one of the fastest growing

portions of their business. That growth is due in part to the rela-tive newness of the offering, but all are also expecting continued growth in the future. Software sales at printer/copier dealer Ex-ecutive Technologies is between 30 percent and 40 percent of total revenue, according to Jon Osborne, director of sales, and its goal is to reach 60 percent to 70 percent.

NovaCopy is seven months into a 36-month plan to make software solutions 10 percent of its total business, said Sutton. It’s already halfway there at 5 percent.

“Software solutions is grow-ing at a higher percentage than other areas, although it’s larger

There’s Gold in Selling Software Solutions, but You Have to Dig for It

News BriefingState of the IndustryMichael Nadeau

George Seymour, Nuance

Joe Rubino, Papercut

Jon Osborne, Execu-tive Technologies

continued on page 18



percentage on a smaller number,” said Pat Haney, director of major accounts at business solutions provider Marco. “The majority of sales are major account trans-actions where software is a large part of the transaction.”

Software companies find office equip-ment and copier/printer dealers attractive partners. “Office equipment dealers have large sales teams and customer bases,” said Steve Behm, VP of sales Americas for document management software vendor Docuware. That infrastructure and customer relationships helps to open doors for the software provider.

Commitment and FocusAs with any new expansion, dealers

need to understand the demand for soft-ware solutions within their customer bases as well as the investment in staff, training, and possibly delivery and sup-port partners. A strong level of commit-ment goes hand-in-hand with carefully choosing which solutions to support. The more you take on, the less able you will be to adequately support. “It comes down to credibility,” said Osborne. You need to understand and be able to communicate exactly what a software package can do for a customer. Offering too many pack-ages means you might not know some of them well enough to gain the customer’s confidence. “We don’t want to bite off more than we can chew, but we haven’t had to take baby steps.”

“The average office equipment dealer has 60 to 70 solutions that they support. It can be a struggle to stay on top of all that,” said Stephen Young, president and CEO at ECM software vendor Square 9 Softworks. Some of those are specific to the hardware products they carry, but his comment underscores the need to focus as much as possible.

“First you have to understand the cli-ents’ needs,” said Haney. “Then you need to identify the viable products in the marketplace. There are many to go to market with, so look for those that are the most supportable internally.” He sug-gests picking a primary solution plus a secondary option and not going outside of them. “If a client has a need that we

don’t have a solution for, we will not en-gage,” he added. Even with this policy, Marco constantly evaluates new products to judge their fit for its clients’ needs.

ECM software vendor M-Files looks at three fac-tors when evaluat-ing how successful a channel partner might be, says Scott Erickson, se-nior VP of world-wide channel sales.

“First, do they have the organizational mindset in place to do consultative sell-ing? Then we look at the technical team. Do they have the bandwidth, compe-tency, and experience to implement our product for customers? Finally, do they understand how to effectively market themselves as a value-added partner?” The goal is confidence that M-Files can work with the partner to show them how to build value by integrating its product with the customer’s business processes.

Finding a niche and then proving yourself in it before expanding is the consensus advice for growing a software solutions offering. One source for this story was recently told by a client, “You guys do so much, I know you can’t do it all well.” While that firm has a wider offering than most dealers, what’s really behind that sentiment is doubt whether a copier company can consistently de-liver on other services. The best way to combat that image is to build in stages, mastering each one before moving to the next.

Dealers often start with solutions that align well with document imaging such as document or content management. Once a dealer establishes a strong offer-ing in those areas, it becomes easier to see opportunities for expanding the solu-tions offerings. “We are looking at other options like variable data, workflow, business intelligence, and forms process-ing,” said Sutton. “Those are areas we can achieve quite a bit of growth with.”

“The most important aspects to suc-cessfully adding complementary prod-ucts and services to the MFP/business

equipment world is to understand that the processes, pro-cedures, and people are not the same for each solution,” said Greg Bryan, CTO of office technology provider KDI Of-fice Technolo-

gy. “There is some cross-over, but the respective personnel needs to focus on their technology and master that for suc-cess.”

Another option for dealers is to start with a niche product that aligns well with document imaging and the verticals they serve. ITC Systems, for example, sells print and copy management solutions for the education and government markets. “The verticals we serve can have finan-cial challenges,” said Lisa Dzafic, VP of

sales USA at ITC Systems. “We’ve become experts at identifying all the needs and breaking out a project into phases [to meet the customers’ financial requirements].”

Growth is also possible by taking an industry-specific approach. Sutton said NovaCopy is seeing an uptick in demand in legal and medical verticals, and said that both software and hardware compa-nies are providing good support for tar-geting key industries. To support the push into verticals, NovaCopy has increased its marketing staff to generate digital con-tent that helps sell its vertical offerings.

Nuance has products and solutions geared for SMB and big vertical mar-kets such as healthcare, education, and government. “The messaging and tech-nology set we provide them is precise, which helps dealers develop a model that successfully meets the needs of their cus-tomers,” said Seymour.

Software companies will pay attention to how their partners staff. Docuware prefers to see a Docuware-trained team of a solutions advisor to attract pros-pects, a sales engineer who consults with

Scott Erickson, M-Files

Lisa Dzafic, ITC

Greg Bryan, KDI


C

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CM

MY

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CMY

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the customer and closes the sale, and a solutions consultant who can manage the implementation. “With sales people it’s difficult to ever have them purely dedi-cated [to Docuware],” said Behm. “But the more dedicated the sales consultant, the better the results.”

Having a good business plan will also help build con-fidence with soft-ware companies. They will want to see a plan that cov-ers target markets, the product mix sold to those mar-

kets, sales strategy, and what personnel is in place to support that strategy. Most software companies depend heavily on their partner channels, so seeing a plan is not just a vetting mechanism, it tells them where they might want to lend some assistance. “We sell indirect,” said Sean Morris, director of sales at ECM software provider Digitech. “If our part-ners don’t win, we don’t win.”

Dealers interested in selling software but are unable or unwilling to make the level of investment described above have other options. Some companies make their software available to the channel, but handle implementation and support themselves. Nuance offers two partner models: a low-touch option where deal-ers simply have the software available to sell, and an option where dealers make the investment to own the whole process. “The second model is more successful,” said George Seymour, VP of sales at Nuance.

A Different Type of SaleFor sales teams used to selling hard-

ware, the switch to software solutions can be difficult. “The MFP industry is ingrained in hardware sales, service, and compensation models. That makes it difficult for dealers to make the shift to become successful solutions providers,” said Sutton. “Hardware reps are used to a 30-day sales cycle. Solutions don’t always fall in that timeframe. Traditional reps are not always comfortable [with a

longer sales cycle], so they don’t always pursue a solutions-based deal.”

For NovaCopy, getting the sales and manager teams focused on solutions selling meant a change in structure and culture. “Sometimes dealers assign tradi-tional partner reps to the software solu-tions role, promote a connectivity tech or someone in service. Sometimes that doesn’t yield successful results.”

“[The sales team] needs the ability to sell on actual value-add in a market that’s been commoditized,” said Haney. He also noted that some sales reps have trouble adapting to the software sales cycle, and that it is a challenge finding the right sales talent.

The solutions sales team needs to take a more consultative approach focused on understanding and solving customer problems. “You have to understand the customer’s business model,” said Os-borne. “You can’t have a one size fits all approach. It’s really important to solve the customer’s problem and not just sell a product.”

The consultative approach might start with a sales rep, but the conversation about the customer’s problems and pos-sible solutions is typically done by some-one with an IT background. The sales team is trained to identify a solutions opportunity and then qualify it prior to the handoff. “It’s really about spotting opportunity and then bringing in the ex-perts,” said Osborne. The sales rep gets an appointment with the decision maker where the technology expert listens, asks questions, and starts the process of resolving the issue. “We have [experts] out in the field with our reps on a daily basis,” Osborne added.

Understanding the problem at the user level is key to solving the customer’s problem. “I always ask one question: Paint me a picture. Tell me what the user experience is and walk me through it so I can visualize it,” said Dzafic. “If you can’t regurgitate what you heard, you don’t understand the problem.”

It is important to have an expert drive the conversation about solving the cus-tomer’s problem, but that should not diminish the importance of the sales rep.

“Frequently the MFP reps who produce the most IT sales are also some of our least technical,” said Bryan. “They have no idea what the customer bought, but they built the customer relationship.”

While dealers report that most cus-tomers are open to buying software from their hardware dealer, others might push back. “We’re not in the largest city,” said Osborne. “In rural markets, you get that ‘if it ain’t broke, don’t fix it’ attitude.”

When Marco sees resistance, it urges customers to vet them. “The first thing we do is provide them with references,” said Haney. This lets prospective cus-tomers see the value they’ve provided

other businesses.One aspect of

the software sales cycle is indecision on the part of the customer. “Inaction to make a final de-cision is the biggest hurdle,” said Behm. “[Implementing the

software] changes the business process. We try to understand the whole sales pro-cess. What is the pain? How do we solve the pain? What are the true benefits?”

Because of the consultative approach and longer sales cycles, dealers have to adjust the way they pay their sales reps. “Our biggest problem was coming up with a compensation plan that the organi-zation was comfortable with,” said Bry-an. “We didn’t cross-compensate until recently, and that helped a lot.”

Solutions providers can look to the software companies for help with train-ing their sales and marketing teams. Dig-itech Systems provides marketing tools on its website. “They help identify the target market and show what’s important to the customer,” said Morris. “We work with resellers on how to use these tools.”

“[Nuance] has a massive sales force to support the reseller’s team on the ground,” said Seymour. Nuance also provides resources to help with sales and technical pre-sales that help with crafting responses to RFPs or creating proofs of concepts, for example. Those resources come in multiple forms, such as in-class

Sean Morris, Digitech

Steve Behm, Docuware




training, videos, and online certification prep.

Software com-panies offer other services that are designed to inte-grate with the chan-nel partners’ sales processes. Square 9, for example, regularly conducts product demos for

its channel partners. “The average channel rep might need to do a demo once a week or less,” said Young. “Our sales engineers do between three and five a day. Without repetition, the channel rep can’t be nearly as effective as we can so we encourage them to leverage our resources.”

That help is essential because of the nature of selling and implementing soft-ware solutions—customer requirements are typically diverse. “M-Files is not a commoditized product,” said Erickson. “We’ve got a great platform that is high-ly configurable, but our daily focus is to ensure that our partners can deliver value quickly and efficiently for customers.” M-Files is addressing that challenge by creating more packaged solutions that deliver out-of-the-box capabilities to solve specific business process challeng-es. Additionally, they have prioritized open communication and feedback with and among partners to ensure they are focused on the right priorities for their channel. They do so through channel ad-visors, channel surveys, a Partner Portal and partner community forum, and annu-al channel partner events.

You can expect help from the software companies with sales leads as well. Most collect leads from their websites and then distribute to the appropriate channel part-ners. That might raise a concern about channel conflict, but software companies tend to have mechanisms in place to avoid that. “We have multiple resellers in Chicago,” said Rubino. “We do detailed pre-qualification about the prospect’s fleet, network infrastructure, and document workflow.” Based on the information they gather, the lead goes to the reseller best equipped to serve the customer.

Technical Know-How a Must, but Hard to Find

Let’s say you’ve decided to sell soft-ware solutions. You keep it simple with a couple of document management appli-cations, a workflow solution, and maybe a forms package. Now all you have to worry about is making them work on the customers’ IT infrastructure. Some of them are built on Windows, others on Linux. All have other commercial or homegrown applications that your solutions need to tie into. And some use cloud applications that your solutions need to connect with.

That simple plan to offer a few man-ageable solutions doesn’t seem so simple anymore. This scenario underscores the need for skilled, experienced, and peo-ple-savvy IT professionals who know how to tie all the pieces together and communicate the benefits of what you are doing to the customer.

Finding people who fit that bill is a constant struggle for many dealers. The software companies know this and every one that we spoke with provides training support and other resources. All provide APIs that make integrating their products with other applications easier.

Software company also provide tech-nical resources for partners’ in-house technical teams. Digitech Systems, for example, offers help with implementa-tion, configuration, and integration with other platforms. “If a customer wants to integrate with an AR solution like Great Plains, a partner might not have the ex-pertise to do it,” said Morris.

“A customer might have 20 to 30 soft-ware applications in a private cloud or on premise,” said Rubino. “Integration takes a lot of time and is costly to support , but the customer wants a single inte-grated platform. Minimizing the number of applications would reduce cost and streamline support.”

Staying Current with Technology

Technology is never static. A solutions provider needs to be able to support the installed base, but be one step ahead of customers in terms of knowing the

technology. “Our biggest challenge is staying on top of changes in the mar-ket,” said Haney. Evaluating and vet-ting [new products] is really important for us. It takes quite

a bit of time and resources.” Marco does this to qualify that the software can de-liver value to its customers.

One area that all solutions providers and software companies are looking at is the cloud. All the software companies we spoke with offer cloud versions of their products, and most of the solutions providers also support cloud implemen-tations. Many businesses now consider cloud options because they are seen as less expensive and require less infrastructure.

“We see hybrid [cloud and on-prem-ise] more often,” said Haney. “More and more is moving to the cloud, but it’s still in transition.” He added that the way you support a cloud implementation is differ-ent because it’s hosted outside the cus-tomer site, and this creates different ben-efits and challenges. Ultimately whether it is an on-premise, hybrid or hosted, you still need to vet the solution and any oth-er software that connects to it.

Customer preferences are definitely trending toward the cloud. Docuware, for example, sells a fully featured cloud version of its product. In 2015, that prod-uct represented 5 percent of its sales, ac-cording to Behm. In the first half of this year, Docuware cloud sales are running between 30 and 33 percent. Behm added that while there are inherent advantages to the cloud, it has a slightly different licensing model. Partners might need to adjust how they sell the cloud and pay commissions.

Selling and implementing cloud solu-tions also requires knowledge of popular hosting platforms like Amazon Web Services and Microsoft Azure. “A big if not the biggest challenge [for partners] is to get their heads around the cloud infrastructure components,” said Morris. “Cloud products might be easy to use, but there is a learning curve to installing

Stephen Young, Square 9

Pat Haney, Marco


October 2016 | www.enxmag.com •We Saw It In ENX Magazine 23

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There’s Gold in Selling Software Solutions, but You Have to Dig for Itand configuring them in the cloud on these hosting platforms.”

“Most of the cloud options hit the SMB market first,” said Seymour. “They are looking for easy entry solutions, but not necessarily cloud-hosted solutions.”

The ability to collect, analyze, and take action on data is another rising custom-er demand that solutions providers will need to handle properly. “The ability to aggregate information is increasingly im-portant,” said Young. “People are looking to take data and transform it into useful information—to turn their scanned images into editable content or to scan and extract data from invoices, for example.”

Keeping Support In-HouseAll the solutions

providers we spoke with emphasized the importance of sup-porting the software they sell in-house as much as possible. “We do as much support in-house as we can,” said Sutton.

“It allows us to be much higher touch and have faster response times.” He added that they will escalate an issue to the software provider’s support service if it exceeds NovaCopy’s level of expertise or band-width. That’s spelled out in the customer’s project plan, so the customer knows all the points of contact and levels of escalation.

Setting customer expectations for sup-port whether it’s in a project plan or SOW is important. “All software is flawed,” said Osborne. “You need to have a process for resolving problems if there is an issue.”

“The systems to support the solutions need to be adjusted [from those for hard-ware],” said Bryan. For example, an MFP will always be in the same location, so the tech can arrive at any time with the tool bag and repair the product. With solutions such as document management, the user needs to be available to demonstrate the issue to the technician, so appointments are scheduled.

Marco’s “sizable” help desk is staffed with people who are used to dealing with software solutions, according to Haney.

He also cited the importance of having direct access to the engineers at the soft-ware company when there is a problem the in-house team can’t resolve. “When-ever we can, we like to have direct access to level 3 engineering support. They can look at the code, see the problem, and fix it. If you buy through a hardware OEM, request the ability to bypass their support and go direct to developers when needed to speed up resolution.”

Again, most OEMs are highly depen-dent on their channel partners, so they have channel support programs designed for fast resolution and when necessary, offloading the support load. Support needs to scale as you add more customers and your existing customers increase the use of what you’ve implemented. “As partners gain more and more customers, demand grows. If you don’t have people to meet the need, you won’t grow,” said Behm.

The Opportunity Is ThereAll the software companies saw the

office equipment and printer/copier dealers as a key part of their channel pro-grams. What they value the most is their commitment to customer service, strong sales teams, and large, loyal customer bas-es. “Three of our top five partners come from the document imaging field,” said Erickson. “We’ve really been effective at enabling office equipment dealers that are making the investment to become solu-tions-savvy. Many have large customer bases that represent rich hunting grounds.”

The key takeaways are that software solutions can bolster business with your current customer base, help land new busi-ness, and increase profitability. All that comes at a cost in terms of staffing, train-ing, and perhaps organizational restructur-ing. Those that have made the investment seem to be happy with the results. ♦

John Sutton, NovaCopy

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With roots dating back to the early 1960’s, Atlantic Tomorrow’s

Office has seen it all. As “Atlan-tic Photocopier” it was one of the first copier dealerships in the United States. While the com-pany has steadfastly maintained its commitment to a “customer first” business model, it has also undergone a virtual evolution, staying one step ahead of tech-nology and the ever-changing demands of the marketplace. That “evolution” has included several name changes over the past few decades.

President and CEO Larry Weiss bought the company when it was in bankruptcy in 1982. At that time, it consisted of seven employees and had $600,000 in revenue. In 1983, Weiss intro-duced a re-vamped and re-ener-gized “Atlantic Business Prod-ucts” to the industry, complete with the marketing and sales of mailing systems. The company has never looked back, experi-encing continual and exponential growth throughout the years.

As printers were increasingly becoming connected to busi-ness systems, it was once again time for the company to adapt,

improve and expand to support such progress. In 2003, with a forward-thinking mindset, Weiss innovated once again and Atlan-tic Tomorrow’s Office was born.

“The copier used to be the heart of the office,” said Weiss. “If the copier didn’t work, the of-fice stopped—similar to today’s environment when the network goes down. We were very good at servicing the heart.”

While Atlantic Tomorrow’s Office kept a singular focus on solving their customers’ prob-lems, the term “solutions” was a bit too over-used for Weiss. He wanted to create some “separa-tion” between Atlantic and the rest of the industry.

“I couldn’t just call it ‘Atlan-tic Solutions’,” he said. “Every copier company seemed to be changing its name to ‘something solutions,’ and it had no ca-chet. We think we made a good choice.”

Though the company’s present name clearly connotes its dedi-cation to adapting to change and supporting new technologies, it would ring hollow without the commitment of Atlantic’s employees and senior staff who recognized that it was imperative

to include network support along with office “hardware.” To that end, IT services became an add-ed priority, and continue to be a strong component in Atlantic’s business pursuits.

Today, Atlantic Tomorrow’s Office maintains an indus-try-wide reputation as a service oriented company. From its mod-est beginnings, it has developed into a major player in the field, with 370 employees and a 2016 revenue stream of $116 million, signifying a 12% overall growth from last year. Copier sales (including MPS) continue to comprise the lion’s share of that revenue at $106 million, while the recently completed fiscal year’s $10 million in IT services represents a 22-25% increase over last year (a rate of growth which Weiss anticipates in 2017 as well).

How does Atlantic Tomor-row’s Office maintain strong sales and growth in both hard-ware and IT services? Weiss attributes that growth to a laser focus approach servicing the client. ENX spoke at length with Larry Weiss to better understand how the company has stayed successful as the industry has changed over the years.ENX: How is business this year? WEISS: We had 22 percent growth from $8 million to $10 million on the managed services side, and the copier business grew 8 percent from $94 mil-lion to $106 million. That’s all organic, no acquisitions. So we feel very good about that and feel confident that next year will be as good, if not better, based on pipeline business we have culti-vated.

Atlantic Tomorrow’s Office— What Success Looks Like

News BriefingDealer Spotlight


Larry Weiss with his sons : Jason, Adam and Larry Weiss

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ENX: What was one of your biggest wins this year? WEISS: Combining hardware, services and supplies, one of the biggest wins, approximately $1.7 million, was in the educational field. We had more deals of that size this year than we’ve had in the past. We closed approximately 10 to 12 of the larger deals, respective vertical market from education, healthcare and Fortune 500 companies. ENX: Can you name one major mile-stone that helped your company get to where it is today?WEISS: We’ve had a lot of significant milestones that collectively amount-ed to something major. Most recently though, in September of 2013 we hired outside consultants to assist with form-ing an executive management team. The EMT focuses work on strategic plans. In other words, to strategically look at where we are and where we want to be in five years. Look for new markets, and what programs we need to design and implement so we can sell deeper and wider into the [existing] accounts. This executive management team consists of an accomplished group of industry professionals, including: VP of Service Joseph Coler; CFO Russ Klein; VP of Sales Robert Habeeb; VP of Business Development Joel Sherman; CTO Bill McLaughlin; In-House Counsel Jason Weiss and GM Adam Weiss. I meet with them quarterly. The EMT has made a big difference in our growth. ENX: What would you say was the big-gest contribution of your executive coun-sel team so far?WEISS: They have developed an ex-tensive total account penetration plan. The majority of our accounts are copier accounts, so they came up with a way to identify what copier accounts fit the stack. You can sell a copier to almost any business, but you can’t sell IT to everybody. So they’ve developed a pro-gram that looks at which clients fit the IT stack, and through the review process, they’ve developed a program that works with our CRM system. The subject mat-ter experts then call into these accounts with or without the copier sales rep to

make the introduction to sell wider and deeper. This has been very successful. ENX: Tell us about your managed ser-vices practices. WEISS: We have a team of “Jeopardy” champions who are able to identify our clients’ business risks and opportunities. We use no third-party support; every-thing we do is supported by our people. We have unique workflows that we pro-vide based on specific client needs, in-cluding desktops, advanced IT solutions, backup disaster recovery, security pro-tection, regulatory compliance support, and risk mitigation. ENX: How do you differentiate your company from your competitors? WEISS: We have a seal of satisfaction that really lays out what the clients get—guaranteed response time, a loaner or replacement program—and there’s a payback if we don’t hit some of those metrics. We’ve gone through our metrics to know exactly how many service calls we get on a monthly basis and we’ve shared with them that 94 percent of the calls are met within four hours. We also show them that we’re very committed, and investing a lot of money toward call avoidance. Twenty percent of all our copier service calls are now eliminated at our help desk. So response time can drop from four hours to 15 minutes.

We provide very specific competitive advantages that show, statistically, that we achieve these metrics (they aren’t just numbers). Clients don’t buy from the best, they buy from the less risky, so we try continually to show potential new clients that our seal of satisfaction makes us a less risky decision. ENX: What are some of the biggest chal-lenges these days?WEISS: We have a unique issue—we have lots of people in their late 50s, early 60s. We have to have a “bench” to eventually replace our first-teamers. We really don’t have any plan or program in place yet. They are some significant contributors to the business whether they’re in sales, technical support, or ad-ministration. We have lots of employees with over 20 years of tenure, and their

contributions have been integral to our success. ENX: There is a lot of talk about mil-lennials in the workplace. What do you look for in your employees? How do you recruit and retain good ones?WEISS: When it comes to recruiting on the sales side, we have a set hiring process including a DISC profile and a sales test. It doesn’t matter who you are, millennial or whomever, we know who we want to hire because we know what works. We can’t deviate from that. They say millennials need all this freedom. I say, if that’s what they want, they can go work for somebody else. ENX: What is your view on the changes in the industry?WEISS: I’m going to answer that differ-ently than most. There are always a lot of changes in the industry. It’s becoming more software and security centric, and there are different types of products, but even a company like mine, where we’re going to do $116 million at the end of our fiscal year and $10 million of that is on the IT side. That means the rest, the $106 million, is copiers. So, yes, there are changes, but I do not put quotas for my copier reps to sell other solutions. In-stead, we supply them with subject mat-ter experts who can assist them selling software, advanced scanning security, PaperCut, and document management. The old saying works—as much as ev-eryone thinks things are different, things always remain the same. You want to see the future, look at the past. We keep a very focused approach, understand the current market and sell whatever the cli-ent wants!ENX: What does Atlantic Tomorrow’s Office pride itself on? WEISS: We’re just obsessed with cus-tomer excellence. That’s it. Very simple. We do not like to say “no” to our cus-tomers. ENX: Does Atlantic have any exciting news to share?WEISS: We have a product expo every other year. Why every OTHER year? Be-cause if we did it every year, everybody here would quit. It’s a very hectic, non-

Atlantic Tomorrow’s Office—What Success Looks Like



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stop day and a lot of work. The day runs from 9 am to 7 pm, and we have about 1,000 attendees with approximately 500-550 com-panies and two keynote speakers. At our last event we had NY Giants QB Eli Manning and former Navy SEAL Leif Babin. It’s extremely well received by clients, manufacturers and partners. The next one is in May of 2017. It’s as big as any manufacturer’s dealer show. I will send you an invite to that, so please join us and see for yourself.ENX: What keeps you motivated and excited about the work that you do?WEISS: At this stage in my life, I love having a positive impact on the Atlantic employees. We do our best to keep a family atmo-sphere, where collaboration is paramount, but hard work is, too. Everyone pulls his/her own weight, but help is always a call or cubicle away. We’ve had substantial growth as a company, and because of this growth, many employees have been promoted. It is a very satisfying feeling to see someone work hard, advance within the company and provide their own family with special things and a sense of security for the future. We feel that, just as they have contributed to Atlantic’s success, we have contributed to theirs. It’s rewarding.ENX: What is your least favorite thing about your job?WEISS: I hate, hate, sitting down and listening to business fore-cast reviews from sales reps and sales managers. That’s why the VP of sales does it, and I don’t. Not the personal reviews, mind you, but their forecast reviews, because 90 percent of their sales forecast is bullshit. You can quote me. I hate it. I don’t have the time to go through it. [laughs]ENX: Outside of work, what do you do for fun?WEISS: I love sports. I’m a huge Yankees fan, and for 30 years, from the time I was 30 to 60, I was heavily involved in youth sports. I coached well beyond my sons’ playing days, and I pre-ferred coaching other people’s kids much better than my own because I never had to worry about my wife getting mad at me. I only had to worry about other parents getting mad at me because everyone thought their kid was the next Babe Ruth or Mickey Mantle. Even today I watch the Little League World Series on TV. The pros can learn something from the work ethic of those kids. In my mellow time, I definitely enjoy my Lifetime Movie Network. Don’t judge. ♦

Atlantic Tomorrow’s Office134 West 26 street, 3FL New York NY 10001

Tel: 212-741-6400tomorrowsoffice.com

Atlantic Tomorrow’s Office—What Success Looks Like


Consolidation is the hall-mark of any mature industry and it’s been

ongoing within the third-party supplies industry for years. At the opening of the 21st century, the North American industry began to experience extensive merger and acquisition activity and within 10 years only a few large players remained along with several dozen much smaller companies. The European indus-try has followed the same path. With more fragmented markets, however, M&A activity in the EMEA region has been slower and the results have been less profound than what we witnessed in the United States. The consol-idation of the European industry is ongoing as leading firms in the region search for new investment partners or look to be acquired outright.

Until recently, the Chinese third-party supplies industry had resisted the “urge to merge,” but all that’s changing. Today, the third-party supplies industry in China is rife with M&A activity. Chinese firms have gained access to the capital and other resourc-es they need to get deals done and with many small companies available across the People’s Re-public, consolidation is happen-ing at a frenetic pace. As a result, the balance of power is shifting within the Inner Kingdom and impact on global markets prom-ises to be huge. Moreover, these are early days for the consolida-tion of China’s industry and there is a way to go before the situa-tion will stabilize.

Times Are a-Changin’Compared to their counter-

parts in the West, the history of third-party supplies firms in Chi-na is unique. There was coopera-tion within the Chinese industry not seen in Europe and North America, which led to a prolifer-ation of inter-connected compa-nies. Small enterprises flourished by supplying finished cartridges to larger players, and the big firms leveraged their internal as-sets to supply the growing indus-try with raw materials like inks, toners, and empty shells. In cer-tain instances, large firms further fueled the growing number of manufacturers by setting up joint ventures, which were often run independently, or by spinning off companies that began as internal operations. Some large firms have even acted as incubators to start-ups by providing access to white-box product and other resources as the small businesses grew large enough to build their own factories.

Trading companies also helped small companies to multi-ply and grow. Unlike in the West, where product was largely pro-duced for domestic consumption (at least initially), most of the ink and toner cartridges produced in China were meant for exporta-tion. With extensive international distribution and established dealer networks, smaller Chinese firms found they could success-fully penetrate markets far from home by partnering with the right trading company. As trading companies grew, many estab-lished their own factories, but

most continued to rely on their smaller partners when they need-ed specialty SKUs or additional manufacturing capacity.

As the ranks of workers in small and large factories began to swell, so did the importance of the third-party supplies industry to certain regions within China. Trade organizations and other quasi-governmental groups that work closely with state-run agen-cies sought to foster symbiotic relationships between companies to help the industry succeed. Regardless of size, many firms within China’s third-party sup-plies industry gained access to infrastructure like improved ports and highways and scientific and technical training for its workers.

After years of growth, today’s third-party supplies industry in China simply has too much ca-pacity. My company, Actionable Intelligence, recently profiled the Top 25 third-party supplies manufacturers in China and found that unit shipment growth is already outpacing revenue growth as companies lower unit pricing to spark demand. At some firms, we found unit ship-ments were growing as revenue actually declined. Even with the support of wealthy stakeholders or the Chinese government, these conditions cannot continue for long. At some point, the industry will need to be streamlined and capacity limited. Conditions are perfect for the Chinese industry to consolidate.

Roll Up Another OneA growing number of Chinese

firms from the supplies industry

China’s Third-Party Supplies Industry Consolidates as Firms Grow Through Acquisition

News BriefingMarket IntelligenceCharles Brewer


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are going public and gaining access to capital to invest in assets. Hubei Din-glong Company, previously known as Hubei Dinglong Chemical, was one of the first public Chinese firms that I’m aware of to demonstrate a growth strate-gy through acquisition. Based in Wuhan in the central province of Hubei, the com-pany manufactures various components for inks and toners including colorants and pigments as well as charge control agents and chemicals for applications outside of the digital imaging industry.

Hubei Dinglong is one of the first public Chinese companies in the third-party supplies industry to demonstrate a growth strategy through acquisition

Hubei Dinglong was listed on the Shenzhen Stock Exchange (stock code 300054) in 2010 and its share value has grown from CNY4.7 (USD0.70) to an all-time-high of CNY37.17 (USD5.57), which it recorded in June 2015. As of this writing, Reuters reported the compa-ny’s market capitalization was just over CNY12 billion (USD1.8 billion) and it appears to be using the capital to roll up some of China’s better known, second-ti-er supplies companies and emerge as the region’s largest toner cartridge manufac-turer.

After establishing itself as a toner pro-ducer, Hubei Dinglong moved into the finished cartridge industry late in 2012 by taking a 20-percent stake in Mito Color Imaging Co. Investing a total of almost CNY145 million (approximately USD23 million), Hubei Dinglong com-pleted the acquisition of Mito Color in October 2013. Established in 2003 in Zhuhai, a small city in Guangdong prov-ince that is home to many third-party

supplies manufacturers, Mito Color has a good reputation for producing quality color cartridges. Through its subsidi-ary, Zhuhai Un-Tern Imaging Products, Mito Color is licensed to import empty cartridges into China so it doesn’t have to rely on newly-built infringing cores. Remanufacturing legitimate empty cores allows Mito Color to pursue Western markets where new-build cores could result in lawsuits. The company is said to have several large clients in the United States as well as in Europe and it is look-ing to further penetrate Western markets.

Mito Color operates as an independent subsidiary and in the opening months of 2014, it acquired 51 percent of Zhuhai Kolion Technology. Founded in 2004 to manufacture compatibles for use in Sam-sung machines, Kolion Tech is another established player in China. Today, the firm claims to manufacture consumables for over 1,000 printers and copiers. It has connections to the Hong Kong-based distributor Jet Rise and Sinobase Net-work Technology, a cartridge producer in Shenzhen. Like Mito Color, Kolion Tech is licensed to import empties. Executives for Mito have indicated that they plan to grow Kolion Tech’s production of black cartridges as Mito focuses on color SKUs. While the majority of its business is in monochrome remanufactured and compatibles cartridges, it seems likely its selection of color cartridges will grow thanks to its new partner.

More, More, MoreAs the Shenzhen stock market began

to grow, so did Hubei Dinglong’s dispos-able capital. Rumors began circulating that the firm was about to go on a shop-ping spree early in the summer of 2015 when stock prices on the Shenzhen Stock Exchange reached their high-water mark. Despite some decline in its share price, Hubei Dinglong announced it would make several key acquisitions in the au-tumn of 2015 and suspended trading of its stock while it restructured its assets. At the start of this year, reports came out of China that the company spent between $125 million to $155 million to acquire

Hangzhou Qijie Technology Co., Ltd., which markets chips for inkjet cartridges under the Chipjet brand along with the chemical color toner manufacturer Ning-bo Flexitone New Material Co. Hubei Dinglong also acquired Shenzhen Chao-jun Technology Co., Ltd., a manufacturer of plastic injection molded gears and other components.

In addition to strengthening its com-ponents business with its newly acquired chips, parts, and chemical toner assets, Hubei Dinglong also purchased the vet-eran toner compatibles manufacturer Re-tech Technology International for an un-disclosed amount. Established in Shen-zhen in 2001, Retech markets new-build monochrome and color toner cartridges for a range of office equipment, includ-ing printers and copiers. The company is said to have more than 1,000 domestic dealers as well as large export customers including Russia’s NV Print.

According to our research, by adding Retech, Hubei Dinglong jumps to the top of the list of China’s largest toner cartridge manufacturers in terms of reve-nue. Through its strategic M&A activity, Hubei Dinglong now has a broad product portfolio that allows it to pursue various markets both foreign and domestic with mono and color compatibles and reman-ufactured cartridges available at a range of price points. Vertically integrated with toner, chip, and component assets as well as with licenses to import empties, Hubei Dinglong can offer its finished cartridge companies access to low cost raw mate-rials along with technical expertise and distribution networks inside and outside of China.

It appears that investors in China like the strategy. Although shares continued to trade well below the high achieved in June 2015, share prices had improved by over 85 percent over the past 12-month period. As of this writing, shares were trading at near their 52-week high of CNY26.54 (USD3.98).

The Mouse That RoaredThe most well-known company in

the Chinese third-party supplies today




is undoubtedly Apex Technology. Once familiar only to industry insiders, the Zhuhai-based chip maker was launched out of obscurity in April 2016 when it grabbed headlines as part of a consor-tium of Chinese investors seeking to acquire Lexmark International. Founded as the exclusive chip supplier to one of China’s largest third-party supplies man-ufacturers, Apex Microelectronics was spun off its parent, Ninestar Technology (also known as Zhuhai Seine Technology Co., Ltd.), in 2004. After the spin-off, Apex quickly became a leading chip sup-plier to the domestic Chinese aftermarket industry and then to third-party supply companies worldwide. By 2007, the company was producing up to 10 million chips per month.

Apex’s sister company Ninestar occupies a new sprawling factory in Zhuhai, China

Like Hubei Dinglong, Apex is a public company with shares trading on the Shenzhen Stock Exchange (stock code 002180). It had a market cap of CNY31.7 billion (USD4.7 billion) as of this writing. Rather than participating in an initial public offering, Apex went public by leveraging its acquisition of Zhuhai Wanlida Electric Co., an electri-cal equipment manufacturer listed on the Shenzhen Stock Exchange in 2007. Prior to Apex’s ownership, the share price fell to a low of CNY2.73 (USD0.41) in 2008 and reached a high of CNY40.73 (USD6.10) when the Shenzhen peaked in June 2015, which was after Apex’s 2014 Wanlida acquisition.

Unlike Hubei Dinglong’s domestic “roll-up” program, Apex seems to be

looking to grow outside of the People’s Republic and to do it in a grand fash-ion. The firm’s first large purchase was the May 2015 acquisition of its main rival, Sanford, NC-based Static Con-trol Components. At the time, Reuters reported the U.S. firm was acquired through a “$63 million cash deal.” The acquisition was thought to have more than doubled Apex’s annual revenue. During the fiscal year ending December 31, 2014, Bloomberg Business reported Apex’s revenue totaled CNY478.1 mil-lion (USD71.74 million). Reports out of China including one on the Chinese-lan-guage site www.cnstock.com, indicated that Static Control’s total revenue in 2014 was approximately $194 million down about 18 percent from $237 mil-lion in 2013. In addition to eliminating

its largest competitor’s busi-ness, Apex gained a greater foot print in North and South America.

As audacious a move as it was for Apex to gobble up its larger rival, the Static Control acquisition is noth-ing compared to Apex’s bid to take over Lexmark. Less than a year after the Static

Control merger, a consortium of Chinese investors led by Apex, PAG Asia Capital, and Legend Capital announced plans on April 19, 2016 to acquire the printer OEM. The group proposed an all-cash transaction valued at $40.50 per share or $3.6 billion, a premium well over Lexmark’s market cap at the time of about $2.2 billion. Although the deal is still under regulatory review, Lexmark’s board unanimously approved the acqui-sition and the company said that the vast majority also gave a thumbs-up to the purchase. Apex investors also seem to like the deal and share prices had nearly doubled year-on-year as of this writing. The sale is expected to be approved by the end of 2016.

In addition to the high-profile M&A activity that Apex has initiated in the United States, Ninestar, which continues to hold 68.7 percent of Apex’s voting

shares, is rumored to have made its own major acquisition in China—perhaps more than one. Since the recession, many major third-party supplies vendors have moved away from ink cartridges as the consumer market has declined, but not Ninestar. After falling behind its largest Chinese competitor, Zhuhai National Resources & Jingjie Imaging Products, Ninestar’s ink cartridge business rallied last year and clawed back enough global market share to make Ninestar the num-ber one Chinese ink cartridge manufac-turer in 2015 in terms of revenue. Late in 2015, we began to hear persistent rumors that Ninestar acquired National Resourc-es’ ink cartridge business. Many that I’ve spoken with in China say the acquisition of National Resources is a done deal and rumors are now circulating that Ninestar has acquired other rival ink cartridge firms. Although the firm may now be the largest third-party ink cartridge manufac-turer in the world, Ninestar has remained tight-lipped.

Expect More M&A Action Other Chinese companies appear to be

looking to replicate the success enjoyed by Hubei Dinglong and Apex. In August, I learned that Suzhou Goldengreen Tech-nologies (SGT), China’s largest OPC drum manufacturer, was raising capital through its initial public offering (IPO) on the Shenzhen Stock Exchange. Last year, SGT took a majority stake in the retail refilling shop franchiser, Cartridge World. Presumably, SGT felt that it could supply the hundreds of Cartridge World stores around the globe with drums as the shop franchisees remanufacture toner cartridges. With a market cap of CNY6.57 billion (USD985.90 million), SGT is the poor relation compared to Hubei Dinglong and Apex. Regardless, I think the firm has the potential to make some key acquisitions within China, where it’s currently a buyer’s market for those looking to snap up a third-party supplies company or two. With its Car-tridge World stores, SGT has a ready-made channel for any finished cartridges it can bring to market.




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While publicly traded firms have deep pockets and can purchase larger assets, there are closely held companies that are also growing through acquisition. Print-Rite makes a great example. Years ago, Print-Rite acquired Nukote’s ICMI toner manufacturing assets in Zhuhai to vertically integrate its toner cartridge operations. More recently, the firm pur-chased the manufacturing assets of a Xerox toner plant in the U.S. and moved it to Zhuhai. That factory opened in 2011 and Print-Rite claims that it is now the largest toner facility in China. In addi-tion to the toner manufacturing assets, in 2010 Print-Rite bought the assets of what was once Germany’s premier OPC manufacturer, AEG, which allows the firm to market toners and drums that have been “tuned” to work in concert with each other. Over the past five years, Print-Rite’s toner and drum business has

become an important source of revenue for the firm.

Although it will be limited, there may also be opportunities for non-Chinese firms looking to purchase third-party supplies firms in China. That’s what hap-pened to Huatai Computer Consumable, a well-established ink cartridge refiller that opened in Shanghai in 2000. Also known as Menston Limited, the company markets supplies under the Vivi Color brand. In November 2014, Gradum Inter-national Limited, the Hong Kong subsid-iary of Digital Revolution BV, which is based in the Netherlands and hosts ecom-merce sites across Europe, acquired the Huatai Computer Consumable company. Presumably, other Western firms with assets in Hong Kong and other major Chinese cities may seek to follow Digital Revolution’s example.

Larger, more efficiently run third-par-

ty supplies vendors resulting from the consolidation of the Chinese aftermarket industry are destined to impact markets around the world. In the end, however, I don’t see one large giant firm emerging from the East, like we saw with Clover in the U.S. Rather I think several large vendors will ultimately dominate the Chinese industry. These firms will have the wherewithal to manage complex supplies chains and meet the demands of large, multi-national channel partners. As I noted above, however, these are still earlier days so it will be a while before we reach anything like stasis. Which firms will be the big winners is anyone’s guess. But firms such as Hubei Dinglong, Apex and Ninestar have already disrupt-ed the hierarchy in the Chinese industry and other firms will undoubtedly emerge over the next year or two that will further rearrange the pecking order. ♦



Introduces REACH Leadership Development Academy

Many dealerships are exploring managed net-work services and other

avenues to reach deeper into their customer base. Many of these projects require significant in-vestments as dealers ramp them up, putting a drain on net profits. Equipment sales can go up and down, which leaves supplies and service as the “biggest horse pulling the wagon,” as Jack Dun-can, Director of REACH at BEI Services, puts it. BEI sells equip-ment and service performance benchmarking software.

“This drain on profits makes it critical that we extract as much productivity and proficiency as possible from our service de-partments,” said Duncan. “It is imperative that we have a system to judge who our best techni-cians are as well as which can be coached into greatness. Team members who manage field tech-nicians must become mentors and coaches to help their teams improve both productivity as well as their proficiency. Things such as first-call effectiveness, gross and net calls per day, and hold-for-parts percentages be-come even more critical elements in building a successful service organization.”

Far too often the “best tech” gets promoted with little or no regard as to whether or not he or she can succeed in that role, let alone have any management training that may be needed. Just as the best salesman may not be the best sales manager, the same holds true for technicians. Managing mobile employees is a unique situation due to the fact that when they are doing what

you pay them to do, you cannot see what they are doing.

“Because of their technical skills, these newly promoted (and oftentimes not just newly promoted) individuals’ comfort zone when things get busy is their toolkit,” said Duncan. “Therefore, they begin simply shuffling calls among techs and taking the calls that no one else can fix. This is directly opposed to what we real-ly need them to do, which is grow and improve the performance of their team members.” The fact that these promoted technicians might now manage people who had been their peers as techni-cians could also create some un-comfortable situations, he added.

The toolkit of effective field supervisors or field service man-agers should be their teams of technicians. Their job should be to share the talents and training that made them successful with their team members. To be suc-cessful in that job, Duncan be-lieves that field supervisors and field service managers must have a system of measurement that can be supported and can accu-rately measure strengths and op-portunities for their team mem-bers. Trending should be used to identify areas of improvement and progress being made. Ex-pectations should be set and held accountable for, as well as goals for improvement. Goals should be attainable and negotiated with the tech to gain agreement. Ride days and field audits are critical, as are monthly coaching sessions where they need to both give and receive feedback. When perfor-mance is below expectations, an action plan should be developed

and consequences made known to the employee in writing to in-sure HR compliance.

Monitoring start and end times for each technician or ac-countable time is important in determining manpower required to meet response times and other expectations. “It is accepted that we need 85% of a technician’s time spent traveling to or at a customer’s office working on equipment,” said Duncan. “When that time decreases, it may be necessary to see why. It may simply be the geography of their territory causing longer-than-nor-mal return home trips or improp-er time recording, but it must be investigated.”

Building optimized territories is another factor that can lower travel time, but considerations should also be given for where the technician will start and end their day from. You must also take into consideration the technician’s ability to properly service and maintain the models assigned to them. “If your data shows they are struggling with a particular model machine, why should you assign them to that technician until you help them improve their performance on them?” said Duncan. “Using a technician’s current statistics for mean time and copies between calls is important in establishing the demand time needed to run that territory. The hours required can change drastically based on these factors either up or down. While one technician may be at 120% of demand time, another may only be at 80%. Specializ-ing technicians on fewer models or types of equipment can be helpful as they will have more experience on the machines they

BEI Services: Improving Service Department Performance & Profitability

News BriefingBusiness Profile

Jack Duncan



service. Additional benefits can be achieved by having more accurate car stocks.”

Your inventory and logistics department is also joined at the hip to the success of your service department. “While hold-for-parts percentages are generally accept-ed at 10% to 12%, as the number increases beyond that you are in a position to have to hire to your inefficiencies, leading to overstaff-ing,” said Duncan. “As you might expect, this leads to a degradation in profits. A regular pattern of re-stocking techs and reordering from vendors is necessary to insure in-ventory is turning and not stacking money on the shelves. You must also be aware of declining usage items and adjust your purchasing quickly to avoid obsolescence and ultimately throwing net profits away when you have to write the items off as dead stock.”

Using BEI’s Tech Assessment Program, Duncan said that Oklaho-ma-based managed services provid-er Standley Systems achieved the following results when measuring first quarter service statistics with the second quarter of 2016:•First-call effectiveness im-

proved by 7%•Callbacks decreased by 5%•Hold-for-parts calls decreased

by 2%•Emergency calls decreased

over 11%•Parts COGS decreased dramat-

icallyJust as important as the statistics

above is the fact that this perfor-mance increase was achieved with a significant reduction in the num-ber of technicians due to attrition and other factors.

“When BEI launched the Tech Assessment piece to their software, I was extremely skeptical and on many occasions I was the loudest critic,” said Josh Ravan, VP of Ser-vice at Standley Systems. “How-ever, after being forced to use Tech Assessment for a couple of quar-ters, I found myself now defend-ing BEI and the Tech Assessment piece. It made the once abstract and overwhelming information into an

easy to see visual using graphs, and I am now able to identify, address, and track the progress of every tech in the state in minutes. The techs no longer argue about what the num-bers mean, but now they find them-selves with clear goals that they are able to use to improve themselves into great techs!”

Duncan said that BEI has es-tablished the REACH (Respect, Expectations, Accountability, Coaching and Humility) Leadership Development Academy to address these issues while not being just another exercise in benchmarking. Courses offered include REACH Level One – Managing Mobile Em-ployees and Level Two for those with departmental responsibilities. Inventory & Logistics has been de-signed to teach the skills needed to increase inventory efficiency while minimizing losses due to obsoles-cence.

About REACH Leadership Development Academy

REACH is an acronym that stands for Respect, Expectations, Accountability, Coaching and Humility. These principals paired with BEI’s exclusive management solutions comprise the next level of leadership training. Three different REACH Academies geared to-wards different job responsibilities will help your leaders develop the people skill set necessary to imple-ment the specific tools they will be taught to use during these on site instructor led sessions. For more info email: [email protected] or visit www.beiservices.com/REACH.

About BEI ServicesBEI Services stands alone as

the imaging industry’s trusted provider of equipment and service performance standards. BEI offers a complete array of performance analytics and software solutions designed enhance every aspect of a dealerships performance and profitability. A no cost service per-formance analysis is available. For more info, visit www.beiservices.com or call 307.587.8446. ♦

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One of the things I truly love is repairing broken things. Often when my

wife needs to blow off steam, she’ll preface her comments with, “I don’t need you to fix it, I just need you to listen,” because she knows I will tackle anything for a solution!

Every week, dealers fire off questions that are absolutely the reverse of my wife’s request. They want me to fix it, and want brilliance and great answers. A few weeks ago, I had lunch with a friend who owns an of-fice technology business, as he walked up to the restaurant table I asked him, “How’s it going?” He replied, “Charles, where do you find real talent?” I asked him, “What do you mean?” He said, “I’ve been hiring college graduates because I can’t afford experienced sales people, where do you find real talent, Charles!” He used my first name twice in like ten seconds so I knew he was serious. I jumped right into my sales process and asked a probing question, “How are your college graduates working out for you?” He said, “Not good, I don’t think a single one of them has ever been told NO and when they’re rejected they crash and burn!” He said, “I need you to

tell me where do I find real talent and what I am doing wrong!”

I continued with my probing, “What percentage of your team is actually hitting quota?” He asked, “Consistently?” I said, “Yes!” He replied, “One maybe, others do hit quota, but only one consistently!” I asked him, “Why do you think most of your reps are failing?” He said, “That’s a question I’m counting on YOU to answer!”

The question, “What am I doing wrong?” has got to be the most popular question I’m asked. Even though I face that question constantly, it’s always asked regarding a thousand different issues from a thousand different points of view. When I hear that question, it’s like an alarm going off as it almost always means that “business as usual” is running the business. Do you get my drift? In today’s business climate, you can’t run your business the old-school way. As fast information is coming and how quickly tech-nology changes, there is no way you can run your business with a “business as usual” mentality!

His question isn’t really where do you find good sales people, because they’re out there. A bet-ter question might be, “What can I possibly do to attract, afford and execute a successful sales organization?” When I probed further, I found out that the most consistent sales rep had been around so long that he’d sucked up all of the lease renewals and had enough to make quota each month. Can we say, “Farmer?”

Honestly, it’s easier to tell someone what they’re doing wrong when you’re looking from

the outside in and you’re not emotionally attached to the sit-uation. Why didn’t he say, “I’ve had 20 come and gone sales reps in the last year and most of them were college graduates?” Why didn’t he come to the conclusion that spending 200k on reps who were gone or failing was expos-ing a flaw in his methodology? He’s too close to the business and is letting business as usual run unchecked!

CONSULT WITH SOME-ONE FROM OUTSIDE OF YOUR BUSINESS WHO KNOWS WHAT THEY’RE DOING, TO ASSESS YOUR FAILURE POINTS! Sometimes it’s the person that created the mess who simply doesn’t have the ability to fix the mess. If you have everything invested in your business, like your emotions, your pride and your habits, most likely the business is the way it is because you made it that way.

Usually when someone asks, “What am I doing wrong?” there are three significant contributors causing the overwhelming situa-tion: their comfort level, account-ability, and failure to change.

One of the most popular obsta-cles I face is the comfort level of a business owner. They have long passed the 12-hour days and the blood, sweat, and tears they once gave to build their business. Not many things disturb their quality of life objectives. The problem is that technology, competition, and the overall speed of business to-day don’t care about their quality of life. The “quality of life syn-drome” affects everyone in the business and can kill a business’ ability to implement necessary

The Question Is, “What Am I Doing Wrong?”

News BriefingBusiness ManagementCharles Lamb



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The Question Is, “What Am I Doing Wrong?”

and timely improvements due to the lack of responsiveness. That kills morale!

The second thing is accountability; this is where everyone brings up the sales reps being accountable to the busi-ness. But I consider the owner’s account-ability as paramount. The owner should be accountable to everyone they employ for the success of his or her business. That means, they’re the thought leader and should be on top of their game as to how their business finds success.

MORE THAN ANYTHING this is the most popular business illness I find and it’s deep down in the bones. Simple med-icine doesn’t cure it. My father used to say, “Your habits will bear you out,” and that is so true. If you’ve moved from the fast lane to the quality of life lane, every-one in your company will act according-ly. You are accountable to lead them and make appropriate timely decisions.

If you have a slow to act, non-respon-sive owner at the top, you most likely

will have significant turnover and the lack of accountability is probably already present throughout the organization. Like the U.S. Marines always say, “Improvise, adapt and overcome!” there is great busi-ness value in that phrase.

I would never tell you that achieving a great quality of life is wrong or even a bad idea. I would tell you that if you are the captain of your ship, you are respon-sible for all of your shipmates. They trust you to navigate correctly and to keep the ship off of the rocks. So be the captain and be accountable to your team.

What was my friend doing wrong? Was hiring college graduates in itself, wrong?

No, but hiring the wrong college graduate would be. The part that I didn’t mention was that he also has reached that quality of life stage and the business is almost an interruption. He’s tired, tired of being the competitive engine for his ship, and the college graduates he’s been

hiring were easy to find, eager to nail their first job and were ready to come to work the next day. But there are so many things out of alignment in his business that the college graduates are really the least of his worries. He is still running an old-school hardware shop with one manager over 12 reps, which isn’t really driving any accountability. They haven’t identified their path to the future and they have no idea who their best target is. They tout that they’re a “technology provider” and sell managed services on their website but have yet to share a val-ue proposition with the reps. The sales compensation is confusing and they’re pushing MPS but only really pay on hardware. There’s no marketing going on and the sales reps that are making quota are living in the renewal world. Eight of his sales slots are revolving doors and most stay on the payroll for 11 months. No wonder you’re tired! I meant, he’s tired! ♦


I work with a lot of great companies to help them im-prove their sales results. At

one point in time I think many of these companies hired me as their consultant because I ran a business unit with 1,100 sales professionals and they thought I might have learned a thing or two in that experience, and they were correct. Today they hire me because I have a demonstrable record of success helping com-panies grow in my capacity as a consultant. But that does not mean they agree with everything I suggest and one of the most controversial suggestions I give is, “Stop cold calling,” in the traditional definition of the term, which to me means randomly knocking on doors.

You cannot grow revenue without business development and my team has a lot of focus on ensuring our clients are doing enough in the business develop-ment area. So I certainly am not saying don’t focus on business development when I suggest they stop with the conventional cold calling. I also realize that there is pain in change and I am asking

for a great deal of change. One big change is the mental model that when a sales professional is in the office they aren’t engaged in selling time. After years of that concept being pounded into our heads that’s a tough one to change, but in my opinion and from my experience starting as a sales professional and working through many levels of manage-ment, I know that it simply isn’t true. I can remember, somewhat fondly, many times having break-fast at Denny’s (I guess it would be Starbucks’s today) with my fellow sales team members after being thrown out of the office.

So from my perspective, “cold calling” is a term that is a proxy for business development. Everybody wants new custom-ers so they tell the members of their sales team to go cold call. Back to my days as a front line copier rep—to snuff out any cyn-icism readers may have with my Denny’s reflection, so that they don’t dismiss my entire article on a poor hypothesis—I set the company record for sales in my fifth month, double the previous record, and I was sales rep of the

year my first full calendar year, and I was promoted to manager in July. So by July I had more revenue than any sales profes-sional had in 12 full months.

I wasn’t lucky, I didn’t stum-ble on some big deal and I wasn’t given one current customer. So how did I do it? I went to this training class offered by Mi-nolta at that point and taught by their corporate trainer, a guy named Tony Codianni. I don’t remember how long the course was, something like a week but it might have only been three days, but what I do remember is Tony emphasizing cold calling, phone calls, and closing skills. I took the toolkit Tony gave me and went back and executed ex-actly as he laid it out. The other reps in the office would laugh at how fearless I was at cold call-ing and phone calling, and how disciplined I was at spending my time productively. That was 1984 and to give some perspective we were selling IBM typewriters, Panasonic memory typewriters, and Windows wasn’t invented until 1985. The technology world has changed substantially since then!

So yes I cold called and be-came a highly successful sales professional in that time. And when I walked into that building in Philadelphia my goal was to identify every company in that building and to find the name of the decision maker in every one of those companies. My sec-ondary goals were to try to get a peek at their copier to see what they were using and to develop a relationship with the receptionist, because the phone systems of

What Is Your Definition of Cold Calling

News BriefingSales & MarketingTom Callinan



the day required that you go through the “switchboard” to get to the person you needed to talk to.

So the four goals of cold calling at that time were:

1. Identify the companies in the build-ing

2. Identify the decision maker in each company

3. Identify current copier4. Develop relationship with the re-

ceptionist so when I called back she would transfer me to decision maker

Let’s start with #4. Like the memory typewriter it’s an antiquated concept because all phone systems today have direct inbound dialing and every decision maker has their own number/extension. That doesn’t mean that if they are at the highest level of the organization that they don’t have an executive assistant that answers their phone line, but I don’t need to go through the receptionist any longer. Moreover, everybody has email today and they also have a cell phone, so I can email or text them directly. So we can eliminate #4 from our list of cold calling goals.

I’m now going to move to #3. In 1984 there were different technologies in the copier product. Savin, who was a standalone company then before being acquired by Ricoh, used liquid toner and had trouble with some high cotton content letterhead. Some Canon products used cold fusing and if you tried to write on a copied page with a ballpoint pen the pen would clog up. Moreover, most of the manufacturers only had three or four products and product extensions—fast-er devices—were being introduced so you truly could “upgrade” somebody in speed, to a speed that wasn’t available in the past. And, companies were intro-ducing technology advances, and I know this was a long time ago, so if they had a copier that didn’t have duplexing or an intelligent document feeder, normal features today, you wanted to know that so that when you called to speak to the decision maker you could say something like, “I know you have a Kodak copier; how do you copy your oversized docu-ments,” when their device only copied

8.5X11. Today, unless you’re into the production space, all the devices have similar functionality. Therefore, not knowing what devices they have until the initial appointment does not affect your ability to get that appointment. There-fore, #3 is no longer applicable.

We’ll now move to #1, identify the companies in the building. Back to the technology I sold in 1984, three copiers with the fastest speed being 30 CPM. The smallest copier I sold was a 12 CPM copier that literally had a moving platen. When I sold that copier I made a commission of about $400. When I sold a 30 CPM copier I made a commission of about $1,000, maybe if I hit a “home run” I earned a $1,500 commission. What this says is that everybody was a prospect, as I didn’t care what copier they bought from me since the commis-sion range wasn’t significant. That’s not the case today.

Through trial and error, I learned to walk right past the small dentist and doctors’ offices as they had one small copier and they always got four or five bids; I couldn’t make any money with these prospects. It made my day when I found a nice sized law firm in a building with four copiers. If you look at the most successful sales professionals in your organization today you’ll note that they have this same learned knowledge of the correct accounts to call on. Yet we don’t educate the new or struggling sales pro-fessional on the importance of calling on the correct accounts at the correct level. Rather we let them cold call and try to figure it out on their own.

Today I can go to the local library and use a list service to search out those law firms, and every other vertical market I want to attack. In an hour I will know every law firm in my geographic territo-ry with more than 15 employees; I will know every engineering firm with more than 20 employees; I will know every CPA with more than 15 employees. I could go on but you get the point. In one hour I’d have a list of the accounts in my geographic territory that have the highest revenue potential and that have the abili-ty to buy all of the products and services

in my portfolio, from multiple copiers to document management, MPS, MNS, te-lephony and IT services. I don’t need to reinvent this list, as it is readily available with a little time in the local library.

So now we come down to #2, identify the decision maker in the company. In our space, copiers, document manage-ment, MPS, MNS, IT services, and tele-phony, that decision maker is fairly clear and I will provide you who that is in four bullets:

1. If the company’s revenues are < $15 million it’s the owner

2. If < $40M it’s the owner or the CFO (in smaller companies they some-times call this person the controller or VP of finance)

3. If < $80M it’s the CFO or CIO (in smaller companies sometimes called the VP of IT)

4. If > $80M it’s the CIO, VP of IT, or director of IT, and the bigger the company the farther down the scale of responsibility resides i.e., at $90M the CIO, at $300M the VP of IT, at $800M the director of IT

Now that you know who to contact simply look them up on LinkedIn; you no longer need to go ask the receptionist, who more than likely doesn’t know the correct person and will provide you the name of who she calls when she has a technology issue, like a help desk man-ager. So physically cold calling not only doesn’t help you with #2 but may actual-ly send you on fruitless business devel-opment efforts trying to get in touch with the wrong person at the company.

As a sales professional you have to conduct business development every day. The most important thing you can do is to continue to add prospects to your pipeline. The revenue equation is simple: revenue = prospects X close ratio X average transaction size. What I am advocating is a refined approach to that prospecting that will increase your pipeline much faster than if you use the approach that made me successful in 1984, physically cold calling. It’s 2016, use a 21st century approach to business development and watch your revenue and earnings soar! ♦

What Is Your Definition of Cold Calling


Every business owner strives to do more with less, increasing sales while

paring back overhead. That’s difficult to do without stressing out employees or cutting quality of service. Office equipment dealer Allen Business Machines (ABM) has found a way to raise its service business productivity with the enthusiastic support of its technicians. Today, ABM is handling about 5 million more copies than it was 10 years ago while going from 10 to six tech-nicians and maintaining a two-hour response time.

President and owner Dan Maucher attributes this achieve-ment to a service-oriented com-pany culture that began when his father Elmer started the company in 1953. “Dad always made a special effort toward the service side of the business, making sure that customers were responded to and taken care of,” said Maucher. “He didn’t like getting calls from customers that something wasn’t right. Even though he was a very nice guy, that was one thing that could really, really tick him off. I was brought up to very much respect the service side of the business.” That dedication to customer service is what earned ABM the BEI and ENX Maga-zine Office Technology Service

Excellence Platinum Award.“My father actually bought

a small dealership. He was in the Navy during World War II and the Korean conflict,” said Maucher. “He served on a repair ship, and they taught him the trade of repairing office equip-ment.” Elmer Maucher didn’t get much for the $600 he borrowed from an uncle to buy the busi-ness: some furniture, parts, and tools.

“All of our service people, from our parts manager to our billing clerk, they actually care about our customers,” said Greg Wilbanks, service manager at ABM. “Our service techs know our customers by name.” He not-ed that a smaller family owned company can resolve problems quickly, and ABM has empow-ered its employees to escalate whatever they need to. “If they find any kind of an issue out there in the field, they can imme-diately come to me or go to Phil, Dan or whichever department head they need.”

Today, ABM is a $6 mil-lion-a-year company serving a 100-mile radius of the Fort Wayne, Indiana area. Its main lines are sales and servicing of Sharp copiers and Kyocera print-ers. Schools and churches repre-sent about 40 percent of ABM’s business. The company added office furniture and supplies about 10 years ago when sales for product lines like typewriters, calculators, and cash registers were declining. “Believe it or not, we’re still servicing type-writers for our customers,” said Maucher.

ABM recently launched a managed services division us-ing the Continuum platform. “Our copier revenue is growing marginally,” said Phil Koehl, controller at ABM. “Managed

network services is probably going to have the biggest growth potential, though it’s been a slow start. It’s an area we really want to grow, and at some point it will probably overtake the copier business.”

“The amount that’s going to get printed will continue to de-crease,” said Phil. “That was one of the driving factors for us to get involved with managed network services. It kind of offset the fall-ing page output. It’s going to get tougher in that arena.”

Whether in core or new busi-ness lines, growth for ABM will depend on the quality of the service it provides. “I started in the business back in 1980. The rule of thumb back then was you made money in your hardware and your supplies. If we could break even in service, we were doing well,” said Maucher. “Now it’s totally the opposite. With margins being compressed as everybody goes after each other, if you can make a little bit on the hardware and the supply, OK. Your money is made in service now.”

“Our service techs are our frontline,” said Wilbanks. “They see our customers more than any-one. Our customers will talk to them more. They can get inside information that a sales guy just

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Dan Maucher

Phil Koehl


can’t do, because the sales guy talks to them maybe once or twice a year. A ser-vice tech speaks with them all the time.”

ABM’s service team is also a source for business leads. When they can, they drop off brochures at neighboring busi-nesses. This is one way that ABM is get-ting the word out about its new managed network service program. “A lot of people don’t know we’re doing that,” said Wil-banks. “We’re using our service techs to educate our customers on what we do. It’s going to be a big help.” Service techs can earn lead fees of between $20 and $150.

Wilbanks said the biggest challenge for his techs is keeping up with the changes in technology. “What a service tech does today is not anywhere near what it was 10 years ago. The service techs have to know so much more about IT work than they had to know before,” he said. “That’s been a challenge to some older guys who would rather just fix copiers and not worry about how the print works.”

Turnover has not been a problem, said Wilbanks. The youngest technician has been with ABM for 10 years, and the longest 28. “We’re a small family business, and we treat them right. Dan pays our service guys and all of our em-ployees profit sharing,” he said. “So they have a stake in whether we’re successful or not.”

“We give them the ability to solve problems and act on their own,” Wil-banks added. “That’s huge. A lot of com-panies don’t do that. When they feel like they’re kind of like the boss, they like that.”

Wilbanks also gives credit to BEI’s tech comp feature for the low turnover rate. “Our service techs like to make money,” he said. “When people retired, we have not had to replace them because our current staff is more than willing to do a little extra to try to pick up where the guy left them. They’re very eager to take on more copies. If that means they have to work a little extra, they will.” Wilbanks estimates that the productivity of his technicians has gone up by 50 per-cent since implementing BEI.

“I saw the potential to get the techni-cians on board for reducing our parts us-age,” said Phil, who introduced ABM to the BEI program. “Our parts usage was climbing at a pretty high percentage on an annual basis year over year. We saw

a dramatic reduction in parts usage once we went on the program.”

The BEI program incentivized the technicians to use the parts to their full-est extent. Instead of leaving a part in a machine if it didn’t fix the problem, they took it out. Phil estimates that parts usage declined by 20 percent in the first year of using BEI, compared to a 15 percent increase previously. Parts usage continued to decline for another five years before it stabilized.

When ABM first implemented BEI, Wilbanks was one of the service techs. “I was fully on board with it, because our service manager at the time went back in the past and ran some numbers,” he said. “He showed how much money I would have made if I had done everything ex-actly the same. I was fully on board at that moment.”

“A good 50 percent of our techs were totally against it,” said Wilbanks. “They were saying we’re shorting the custom-ers on parts. We’re trying to do whatever we can to make more money. It’s not fair to the customer.”

The other half of the team saw the value of it right away and started doing the total call procedure, said Wilbanks. “The techs that were against it are no longer here. It’s funny how they were the ones that weeded themselves out. They weren’t making the money and they were getting way more call backs.”

Wilbanks said that ABM’s current service techs are taking full ownership of the machines for which they are responsi-ble, but they are willing to help each oth-er out. “If I need to put a part in your ma-chine, I will. But you have to put a part in my machine when I need it,” he said.

ABM is looking at implementing BEI’s new tech assessments feature. “I can look and see if my territories are aligned properly. I can easily compare one tech to another tech on cost-per-copy and his mean copies between visits,” said Wilbanks. “I can see which tech I think is the best, and I can have that tech share information during meetings if, say, he’s got a little tip that can make something last 25 percent longer.”

The purpose of tech assessments as ABM sees it is to identify best practices and match techs with jobs and clients that they are best able to handle. “If I see somebody that’s just way out of line, we sit down and talk about it,” said Wilbanks. “Sometimes it’s just a bad model.”

ABM got a little customer pushback on the BEI program initially. “Some of the techs were telling the customer how bad a plan this was,” said Wilbanks. “It wasn’t long before the customers realized that none of that bad stuff was actually happening. People were doing a total call.”

Under the previous plan, the goal was to fix the problem and get out. “It was putting out fires every day,” said Wil-banks. With a total call, the tech might put in a few more parts initially so the machines would run better, reducing the number of future visits. That drove down the cost per copy. “When our customers realized that, the tune changed,” he said.

ABM asks its customers to complete a satisfaction survey after each call. This gives them the opportunity to rate the experience and make suggestions for improvement. “I was really afraid to send these things out,” said Maucher.


Greg Wilbanks



“Usually it’s just a big chance to complain. Believe it or not, 92 percent of those surveys we get back from customers are all positive.” Maucher added that the company shares positive comments on the surveys with the service techs. “They feel proud about getting mentions,” he said.

To keep improving customer satisfaction, ABM uses “seven or eight benchmarks that we look at religiously,” said Maucher. “We hit most of them, but not all the time. If we can be more consistent with certain numbers, that’s just going to improve us even more.” Sometimes a miss on the benchmarks is due to factors out of the service tech’s control, but Maucher said that it’s easy to identify them so it doesn’t reflect on the tech.

The company’s service-oriented approach contributed to a 5 percent increase in sales for 2015. That came with a 2 percent drop in cost and a 2.5 percent increase in gross profit. Future growth might come from acquisitions, according to Maucher. “One of the things we’re probably going to look at is some type of IT company that has reached the point where they’re not going to see any growth.” He added that ABM is working on a couple of smaller acquisitions of other copier companies.

“When I started in 1980, we had 52 employees,” said Maucher. “As of today we have 30, and we’re doing three times as much business. The efficiency has improved greatly around here. Are we perfect? No way. We can strive for it, though.” ♦


OTSEA Platinum award winners rank in the top 25 of all dealers evaluated. The evaluations are based on Call Back percentage, Hold for Parts percentage, MCBV (Mean Cop-ies Between Visits) and Technician Grading. Tech Grading encompasses Time Accountability and Time Management along with individual HP, CB and MCBV rates as well as parts expense as it relates to parts CPC compared to world stats.

About the Dealership:1. Owner and President: Dan Maucher2. Controller: Phil Koehl3. Service Manager: Greg Wilbanks4. Number of Techs: 65. Number of Devices Serviced: 2,000+

Information provided by BEI1. First Call Effectiveness: 59%2. Hold for Parts Rate: 14%3. Ranking: 16th overall of the 170 dealers


I came across an article a few months ago that really caught my attention. It mentioned a

study that had been conducted by the Photizo Group regarding MPS client retention. The study showed that 1 in 3 customers are not renewing their MPS contract with their current vendor. Even more concerning is that they claim 1 in 5 are leaving MPS all together because they have seen no value in the service. NO VAL-UE IN THE SERVICE; that real-ly struck a chord with me. Before getting into the SaaS business, I spent 10 plus years in the man-aged print business where I lived and breathed MPS. It was still a somewhat new concept when I started and we definitely didn’t always do the right thing in the beginning, but we learned from each mistake to help us be even better for the next customer. At the core it was pretty simple; Do Right by the Customer. The own-ers of the company were passion-ate about building relationships and pretty much structured their business around it. As a result, during my time there, we had an over 90% client retention rate within our MPS client base. Now you may be saying, “I’m in the building relationship business too!!!” If that is true, then your business at the very least should be holding steady. If it’s not, like many other dealers in this mar-ket, you may be missing a crucial piece to the MPS puzzle and that is what I want to talk about today.

Since your company has de-cided to really get into the MPS game, you have done your best

to create the right business struc-ture to succeed. You’ve aligned yourself with the best supplies vendors out there, you have de-veloped a clean process for order fulfillment, you have a dedicated staff that continually monitors the profit and loss of each con-tract, you’ve hired and trained the right sales staff to grow your MPS business, you have a great service team that has years of experience, yet your business is in decline. Why? What are you missing? Have you figured it out yet? No?

OK, ask yourself, if I was the owner of a large law firm and ABC company came in and asked me if I knew what I was spending on print I, like most, wouldn’t be able to answer that question. So I listen to what ABC company has to say and they convince me to agree to have them conduct an assessment on my print environment. They bring in this big team and walk every inch of my building, they have interviews with my staff, they take inventory of all of my devices and supplies, they show me pictures and maps, they show me this impressive PowerPoint that addresses all of my challeng-es and make me feel like they really know what’s best for my company, and to top it off, they don’t ask me to buy anything…What!!! All they ask is that I let them manage my print environ-ment and help reduce my costs. Wow! Sign me up!!!

Does this sound familiar? If you have a substantial MPS business, I know it does. We’ve put all of this effort in showing

people how great we are at MPS, how we are experts in the field and why we are the best fits for our clients. This is all needed to have a successful MPS business, so why is it in decline? It goes back to 1 in 5 saying that they see no value in the service. But wait, we’ve done all of this work and the customer was in awe of what we were able to show them and they begged us to help them. How is that not value? You’re right, partially. They wouldn’t have signed that contract if they didn’t see value in what you had to offer, BUT, what have you done since you activated their contract? This is a key missing piece to most MPS businesses and is why, I believe, customers are not renewing and leaving MPS all together. We do a fantas-tic job at showing them why they need us and then as soon as they sign on the dotted line, our sales people turn back into copier reps and are never seen or heard from again until six months left on the contract. Where’s the value? The value comes from what you do after the contract starts. My VP of Sales used to say, “Signing this contract is just the beginning of our partnership. Judge me on what I do for you from this point on.” He was and is correct. Your sales reps need to be trained on how to manage a MPS contract, not just sell one. They also have to be compensated to do so. That is another crucial missing piece to the puzzle but that is for an-other conversation.

It really is pretty simple—show your customer that you follow through on what you say.

Is Your MPS Business in Decline? Why?

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How do you do that? That too is pretty simple. Stay engaged with your client. The best way to do this is by having quarterly reviews, semi-annual reviews at the least if the customer is smaller. Be prepared and have compelling data, not only to support why you are their vendor, but also to give insight and guidance to make their environment even better and less expensive. This is a great oppor-tunity to validate your original reason for being there and to show that your program is working, or isn’t working. Don’t be afraid to have that conversation with your client if your original program isn’t showing the results that you said it would. But also be prepared to show the changes necessary to get it on the right track. They will respect you for it and trust you even more. Are we showing value yet?

Use the tools you have internally to analyze the contract and environment.

Bring with you ideas and recommenda-tions on how to maximize their fleet of printers and where improvements are needed. This is also a great opportunity to increase your revenue by selling new gear. This step is just as important, if not more, as your initial presentation to win the business. That same team you had with you during your assessment should be with you during your review. Bring your service technician with you and let them give insight to the fleet. They know more about what’s going on there than you do. There’s so much value you can bring to your client when you just take the time to be their partner. You may be saying, “Ben, you’re not telling me any-thing I don’t already know.” I would re-ply, “You’re probably right so why aren’t you doing it?” If you want to see your MPS business continue to succeed and not stay in decline, do the work. Develop a plan on how to get it done and do it.

And if you do, I promise you your client will see value! ♦

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One of the biggest chal-lenges that service managers face is that of

territory management. This task is challenging because there is no standard pattern that will fit ev-ery dealer. The service manager has to balance a variety of factors to achieve optimum results.

Territory Management is a Necessity

In discussing this concept with dealers, most find that while they have territories, they need to improve their results. For the dealers thinking they don’t need to develop territories, I would recommend reconsidering that position. If you don’t, you will never achieve the optimum re-sults you could with properly designed territories.

I have heard service managers express concern with technicians developing a strong relationship with a customer and the potential risk that a technician will take customers with them when they leave. I will counter that a good technician-client relationship helps cement the client to the dealership. If properly nourished, the technician-client relationship can lead to additional sales op-portunities.

I remember having a discus-sion with a field supervisor at the time about the need for proper territory management. He ex-plained that in his days as a tech-nician, he would see technicians heading the opposite direction of the road he was traveling. Be-cause of a first available dispatch philosophy, the technicians spent most of their day staring out the windshield instead of fixing the customers’ equipment.

When I owned a dealership in El Paso, TX with two techni-cians, each one had a territory.

Size doesn’t matter when it comes to managing territories. Having them assigned to territo-ries still reduced the technician’s travel time significantly and im-proved our response time.

Goals of Territory Management

The goal is to apply available resources in the most cost ef-fective manner while achieving optimum customer satisfaction. This may sound complicated, but we are going to break it down to identify more clearly how you can do that.

The available resources in-clude your technicians, your parts, and your vehicles or mile-age. Optimizing one of these often times will have a negative impact on one or more of the others.

For example, if a technician’s territory has multiple vendors and models, the choice becomes to increase car stock or expect higher Hold for Parts (HP) calls. Restricting a technician’s ter-ritory to a single model would decrease car stock, but probably increase travel time.

Our goal then is to balance all of these factors in a way that generates the best outcome. We will look at how you might ap-proach this.

Organizational OptionsWe are going to look at some

of the ways that you can organize technicians, looking for the effect each will have on your depart-ment. Each of the options has both positive and negative effects depending on your territory.

We will also keep in mind that each territory has to be created in a way that acknowledges the technician’s limitation on how many copiers he can support, how much car stock his vehicle

can hold and how much training you are willing to provide.

By manufacturerFor dealerships with a reason-

ably compact geographic area, this is probably the first choice. By dividing the technical staff into teams that support one prod-uct line, training is simplified since they only need to train on a single product line. This allows them to develop more expertise and become more efficient.

By segmentFor this to be truly effective,

the territory needs to be compact geographically. If the territory is compact enough, you may be able to arrange the territory by both manufacturer and by seg-ment. This allows the most ef-fective use of parts and training. This method will also generate the highest possible proficiency in the technicians since they work on fewer models.

For dealers where it is not possible to align the territories based on model and segment, aligning them based on segment is another choice. One good ex-ample is separating out produc-tion print into a separate territory. In most cases, the clients will have certain common workflows, similar expectations and similar issues. While increasing the car stock and training requirements, the technician’s skill set may im-prove, or at least be maintained because he spends his day in the production environment.

By geographyOne of the most common

ways for dealers to organize territories is by geography. This is especially necessary where a dealership has territories that include significant rural areas. In many cases this may be the

Optimizing Territory ManagementNews BriefingService ManagementKen Edmonds



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only option for some areas. This method though requires the most training and the most car stock items, while reducing the travel time component.

For most dealerships, a combination of all of these options will be required to achieve the optimum results.

Tools to HelpThere are several options when it

comes to tools for arranging territories. The simplest is your existing service software and Excel. If you can extract the following information for each client and import it into Excel, you can then use the features of Excel to sort and group the equipment:

Manufacturer Model Segment

Address Zip Monthly Volume

With the data loaded, you can start to use the sort and filter tools to try and find a logical method to group your equipment. If you divide the number of

copies per month under contract by the number of technicians, that gives you the average monthly volume per technician. Using that number you could sort your machines by manufacturer, then by zip. Using that data, it becomes easy to group zip codes together to make territories with the approximate average monthly volume per tech in each territory. By changing your sort method, you base your territories on the criteria that are important to you.

BEI Services also has a territory map-ping tool, and it provides a much more automated process. Some of the other consultants in our industry provide simi-lar services.

What’s NextOnce you have a tentative territory

map with technicians assigned to their prospective territory, the next step is to review their car stock to make sure it matches the equipment in their assigned territory. It may be helpful to go back to the spreadsheet and look at the monthly

click volume by model in each territory to determine the initial car stock levels for their parts.

If you divide the monthly volume by model in a territory by the average yield of the parts in the car stock, you will have a good initial starting point. As you monitor the parts causing an HP call you can then adjust the value up or down.

With this tentative territory map you can also review each technician’s train-ing to make sure that it matches the as-signed models.

An Ongoing ProcessOnce you have completed the initial

territory assignments, you will want to periodically review and adjust the terri-tories based on the team’s performance. You may find that some technicians have more machines than they can effectively support and others have spare capacity. I would recommend that this be done semi-annually at least, so that you can make changes as the equipment popula-tion changes. ♦

Optimizing Territory Management


In my most recent article, I dis-cussed the need for building your Dream Team of advisors to

help you with buying or selling your business. One of the most critical members of your Deal Dream Team is your attorney. Hiring the proper attorney for your transaction, and utilizing his/her services and advice properly, can be the difference be-tween a successful and unsuccessful transaction.

Based on CFA’s 60+ years of transaction history, we have exten-sive experience working with all types of attorneys. Furthermore, through my own participation as the only non-lawyer in the International Business Law Consortium (www.iblc.com), I have been afforded a unique perspective into how attor-neys and their firms are best selected and utilized in a variety of transac-tion types. My experience working with attorneys allows me to share with you the Five Biggest Mistakes Clients Make When Hiring An At-torney.1. Lowest Price Does Not Necessari-

ly Mean Lowest Cost. Often when our clients ask for a referral to an attorney, they are concerned about fees. Just as often, these same cli-ents are more worried about cost than quality, assuming all attor-neys are alike. Unfortunately, the hourly rate (or total project cost) quoted by the attorney(s) you interview may not directly correlate to the quality of work/service provided. Attorneys in larger markets (New York, Bos-ton, Chicago, DC, LA) typically charge much higher rates than lawyers in slightly smaller markets (Cleveland, Dallas, Detroit, Oma-ha, Portland). Furthermore, while one transac-tional attorney may have a higher quoted hourly rate than another, he/she may be more efficient and will be able to get the work done in less time. Time and again, we have seen experienced attorneys accomplish a task in half the time of their less experienced col-leagues, thus reducing the overall

cost of their services. Accordingly, higher rates do not always lead to higher costs. It is also important to remember the more complex the transaction and the more “moving parts,” the higher your legal bill.

2. No Relevant Experience. The fol-lowing quote may terrify the other members of your Deal Dream Team: “My (brother/sister/child/fraternity brother/next-door-neigh-bor) is an attorney, he/she will be happy to work on this transaction for me.” Yes, any attorney who has passed the Bar exam is allowed to work in any area of the law, but you are wise to hire an attorney who has significant, and relevant, transactional experience.An analogy we often use is: Imag-ine a situation where a loved one (your child, your spouse, your parent) sustained a serious head injury. Would you entrust their care to a heart surgeon or a der-matologist? Of course not! You would seek the services of the best neurologist you could find. So why would you retain an attorney to guide you through a complex M&A transaction who does not have relevant experience?

3. No Bench Strength. Deals today are very complex and getting even more complex by the day. Where-as 20 years ago the simplest asset sale could be completed with a 10 page Definitive Purchase Agree-ment, today, the Agreement for the same deal would have 10 pages of definition of terms! When interviewing an attorney for your transaction, it is important to determine the strength of his/her entire firm. Given the complexity of deals, it is impossible for one attorney to be an expert in all as-pects of a deal; they will need to call upon their colleagues in the firm to support them in the specific disciplines in which he/she is less familiar. We have seen situations where our clients insist on using the services of their local, one-man law firm. These hardworking professionals can do a great job, but they can be

overwhelmed by the transaction. Make sure your legal team is up to the task or you risk getting outma-neuvered in the deal.

4. Only Hiring Local. Given the pre-ponderance of technology used in business today, the days of having to hire a lawyer in your backyard are gone. Furthermore, because of technology, it is rare indeed for opposing counsel in transactions to meet face-to-face anymore. Of course, the attorney you use must be cognizant of the laws of your local jurisdiction, but at least in the USA, a sharp attorney in Kansas City can close transactions across the country.Hiring an attorney from a low-er-cost region can provide you the opportunity to retain a top-flight firm at a lower overall cost. Also, if you live/work in a smaller mar-ket, looking outside the region may provide you with a larger pool of experienced M&A attor-neys from which to choose.

5. Not Trusting Your Instincts. Hir-ing and retaining a transactional attorney is a personal experience. You will be spending a great deal of time speaking with and listen-ing to this person. While they do not have to be your best friend, you do have to trust and respect them and their opinions and coun-sel. Too often, we see clients who hire their attorney for all the wrong reasons (most often price/cost driven). If you do not genuinely like and trust the person you are contemplating hiring, your experi-ence will be poor and you will not be satisfied with your attorney’s work.If you are successful in your busi-ness, you have been successful because of your ability to make difficult decisions. Hiring an attor-ney is not an easy decision, so you have to take proper precautions to make the right decision, including putting faith in your ability to lis-ten to your “inner voice” and trust your intuition. ♦

Five Biggest Mistakes Made in Hiring and Utilizing Your Attorney

News BriefingExit StrategyJim Zipursky

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Attendees participating in this webinar will learn:

Who is gaining and who is losing share?

Which segments are hot and which are not?

How is the global third-party supplies industry impacting the U.S. market?

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review of recent M&A activity, lawsuits, and other factors shaping the competitive landscape for both OEM and non-OEM supplies vendors.



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Ninestar Technology Co., LTD 64Phone: 1-626-965-6662Fax: [email protected]

NuWorld Business Systems 10-14Phone: 1-800-729-8320Fax: 1-800-829-0292www.nuworldinc.com

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OKI 4www.okidata.comPhone: 1-856-222-7083

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Ross International 9Phone: 1-973-365-9900Phone: 1-800-240-ROSSFax: 1-973-473-8800 www.ross-international.com

Seine Tech USA 55Phone: 1-909-869-0730Fax: 1-909-869-0736 [email protected]

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Webinar –Evolving Office Imaging Devices 65www.enxmag.com

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Replacing the webs in the fuser cleaning web cartridges is one way

to reduce your supplies cost when running these marvelous 4110 style copiers. It’s a fairly simple repair really. The first time you’re working on one, you might be uncertain after it’s taken apart exactly which way the web needs to be routed when you put it back together. This article will help serve to illus-trate exactly how these go back together, to shorten the learning curve a bit. First we’ll talk a bit about the part numbers for the web cartridges, and the commer-cially available aftermarket parts involved. Also we’ll see how the machine knows when the web is done. Next we’ll take one of these babies apart in our rebuild procedure. Finally, we’ll go over the simple web reset procedure.

Here’s one very nice thing about these web cartridges: the

fuser web/cleaning cartridges remain unchanged throughout the years for this style of machines. Copiers from any of the three families—4110 family (4110 / 4590 / 4595), 4112 family (4112 / 4127), and D125 family (D95 / D110 / D125 / D136)—can use any of the following interchange-able part numbers: 008R13042, 008R13085, 008R13000, or 108R00976. Likewise, this means the webs themselves (4110FW) and the web pinch rollers (4110FWPR) are inter-changeable throughout the style as well. Usually the pinch roll is ok for a second cycle, but the web itself should always be replaced rather than trying to rewind it.

The machine does have a “web count” which allows it to warn the operator when it thinks it’s running low on web material, but the system isn’t perfect. If the customer running the machine

runs all long pages (11x17 for example), it can run to the end of the web physically before the count is up. In those cases there may not be any warning that the web cartridge will need to be replaced soon. When it comes to the end of the web, the OEM web pulls clean off the end of the metal supply shaft. There is a pair of spring-metal contact arms riding on the supply end of the web roll, and once the web is gone, both of these make contact with the metal supply shaft. This completes a circuit designed to warn the machine that the web is completely out, triggering a hard stop to help protect the heat roll and also the web pinch roll. The newest generic replacement webs we have seen only recently, also have the ability to pull all the way off the metal shaft, which is a great improvement over the earlier products that were out there. Earlier generic webs were made with the web material glued to the metal supply shaft. On those, the web material would tear off, rather than coming off the shaft. The machine would not know the web was out, so the web pinch roll would get ruined, making it necessary to replace both the web and the pinch roll in those cases.

REBUILD PROCEDURE:1. Remove the rear gear plate

(two screws: 5.5mm nut driver or #2 Philips head). Watch out! The gears can fall off easily once the plate

Fuser Cleaning Cartridges - Rebuilding the Web Cartridges for the Xerox® 4110 Style: (WorkCentre® 4110, 4112, 4127, 4590, 4595, D95, D110, D125, & D136)

News BriefingTechnical TipsBritt Horvat

Fuser Web / Cleaning Cartridge



is off. See photo #1 to see how the gears are arranged.

2. Remove the web drive gear (from the rear end of the web’s “D” shaped take-up shaft), and the first double idler gear nearest the web drive gear. Also remove the web supply gear (that one has a one-way bearing in-side of it to keep the supply roll from turning backwards), and finally re-move the three rear bushings (plastic bearings): one from the web’s supply shaft, one from the web’s drive shaft, and the third from the web pinch roll.

3. Remove the old web and web pinch roller (a blue or orange foam roll in the middle). Check the condition of the web pinch roller. If it has flat spots or it’s deformed or damaged, replace it. If it’s still in good condi-tion, it may last a second cycle.

Photo #2: Remove Gears & Bushings

4. To install the new web, you’ll need to sneak the take-up shaft end of the

new web under the metal support bar at an angle (see Photo #4). Once it’s through, raise the take-up shaft out of the way, so you have room to install the web pinch roller. Note that the web pinch roller needs to be underneath the web material (see Photo #5). Install the web pinch roll in its front bushing and slide the rear bushing into position in the metal frame to retain the rear end.

5. Next, install the web’s supply roll and take-up roll shafts into their front bushings, and slide the rear bushings into place in the rear frame to hold the shafts properly.

Photo #3: With the web removed, the sup-ply shaft’s contacts can be seen.

Photo #4: Sneaking the Take-up Shaft under the metal guide bar.

Photo #5: New web in place: from supply roll, under metal bar, over pinch roll & under take-up shaft.

6. Slide all of the gears back into posi-tion, except for the web drive gear, and make sure all the bushings stay in place in the rear frame. Rotate the web’s take-up/drive shaft to remove any slack from the web material and then slide the web drive gear onto the take-up/drive shaft.

7. Reinstall the rear gear plate with its two screws and rotate the web drive gear on the take-up shaft of the web counterclockwise for several full rotations, to make sure the web ma-terial and all of the gears are turning nicely.

WEB RESET PROCEDURE:Now as to how to reset the web count

and get the machine running again, this is done by pressing the “9” and the “Stop” button simultaneously. The ma-chine will ask if you just replaced the web cartridge and you’ll choose “yes” and that resets the web count. Piece of cake!

That about covers it. Happy web re-pairs folks! Hope you’re all enjoying the beautiful autumn weather. ♦

Fuser Cleaning Cartridges - Rebuilding the Web Cartridges for the Xerox® 4110 Style

Photo #1: Gears (shown without rear gear plate)




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Documents