ENX Magazine Business Profile

Gary Johnson, president of Zoom Imaging Solutions, Inc., may not have had his sights set on a career in the copier business when he first began selling copiers 27 years ago purely by chance, but after discovering that this was something he did well, he’s still doing what he does best, including running one of the most successful dealerships in Central and Northern California. Originally known as WOLCO, the company became Zoom Imaging Solutions when Johnson acquired the company in 2004. The dealership services more than 9,000 accounts throughout the region and is Toshiba’s largest independently owned dealership. Over the years they’ve been consistently recognized by Toshiba with numerous awards and Johnson continues to maintain that tradition of excellence. In 2010 the dealership was recognized as

Toshiba’s U.S. Dealer of the Year, a testament to Johnson’s leadership and the quality of his 130 employees. We spoke with Johnson about running a successful company, the industry, and his 27-year career as a successful copier dealer.

Gary Johnson

How’s business?

Johnson: If we were in any other market, we’d be so much better off than where we are here, but we’re still able to grow in a bad California economy. We’re growing five percent over last year and we grew five percent over the previous year so we’re maintaining growth but I really have higher expectations. We’re dragging that economy around like an anchor as we try to grow and expand. In spite of all that, if we finish on pace we’ll probably have our biggest year ever.

As far as that five percent growth, what do you attribute that to?

Johnson: In early 2008 I decided to focus on growing this business to the next level. We were stuck at about $24 million in revenue. I felt we were solvent enough to take it to the next level so we started looking for acquisitions. We ended up buying three small dealers in the Bay area, outside of our existing marketplace in 2008 and early 2009. The first deal we closed, the same week the world fell off the edge with the banking situation of 2008. You spend all that money to make an acquisition and you think you’re going to get growth. But instead it provided replacement revenue for the losses and the hits we took in the Central Valley. It was brutal for about two years. Sales dropped 35 percent in the Fresno/Modesto marketplace and we saw a double-digit drop in our Sacramento Branch sales, but we made up for it in the Bay area growth. Looking back I’m glad I did it, but it wasn’t exactly the expected return on the investment. It kept our revenues even in spite of the economic challenges. We now have four Bay Area locations and our growth is coming from that investment. The Bay area growth is exciting. The dealerships we acquired were pretty small, so we’ve basically gone from zero revenue to expected revenues in 2011of $6 or $7 million. I’m happy with that and now we’re starting to bounce back in the Valley.

Dealer of the Year

Who are your customers?

Johnson: In the Central Valley the businesses we do best with are the small to medium size companies; we take great care of them and they love us because of that. It’s exciting to see a whole new type of large corporate customer in the San Jose and San Francisco marketplace. Our sales team has done a good job of winning some of that business and with Toshiba’s support that has proven a win-win for us and the customer.

A lot of companies talk a good game about what great customer service they provide, but ZOOM seems to truly deliver superior customer service. How have you gone above and beyond what your competitors may do to ensure customers are satisfied?

Johnson: Just stating you have great customer service is never going to be a huge advantage because there’s not a dealer that goes into this business that says, “We don’t care about customer service.” They all care, it’s whether or not they’re willing to put their money where their mouth is, and the difference between good customer service and great customer service is an attitude and a willingness to invest in the technology or personnel to handle the job. If you don’t do that, and instead you just suck all the money out of your company, then you are going to be mediocre at best.

We’ve invested a lot of money in different programs to better our customer relationships. We’ve put in a new CRM - Sales Chain and we utilize CEOJuice [client subscription manager]. Plus we continue to spend money in technologies like e-automate. We also invest heavily in training for sales, service and admin. It’s hard for most dealers to say we’re going to invest back in our company rather than putting those profits into their pockets and running to the bank. As an owner you must reinvest if you want to raise your organization to the next level. The little things make a big difference to your customers. We’re on CEOJuice, using their customer surveys and the customer scoring system, Net Promoter. The average business only scores around a 10 percent, some of the best like Apple, Trader Joes, etc. run in the 70’s to low 80’s. If you want to show growth you probably need a rating of 50 percent or higher. Zoom is currently over 80 percent. If there’s any negative feedback from our customers we’re on top of it immediately. We call the customer, we figure out what we did wrong, we look at our internal procedures and the root cause. We can even boil it down to a specific employee that’s not performing as we expect. We look at the specific event and identify if it’s a process problem, training issue, attitude issue, or wrong person, wrong fit. It’s those little things that make the difference.

Why do customers like doing business with Zoom above and beyond the excellent customer service?

Johnson: When I first bought WOLCO Business Systems in 2004, I read the book, Customer Satisfaction is Worthless, Customer Loyalty is Priceless. It really had an impact on me, like the title says, it’s not about customer satisfaction, it’s about customer loyalty. So we changed our whole focus about customer satisfaction to try and create loyal customers. If we’re always doing something above and beyond, that extra effort will keep your customer loyal
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Where did the name Zoom Imaging come from?

Johnson: When we made the purchase I wanted something catchy, totally different, and edgy. I wanted it associated with a fast, high-tech feel. I had a list of 50 names and none of them turned me on. Finally I got a call from my attorney and he told me that he needed a name so he could file the incorporation papers in time. So I went into our demo room, closed the door and turned off all the lights and sat at the copier. I was going to push every button and touch every part of the copier until I came up with a name that worked. It took me about four buttons before I got to Zoom—you know the zoom reduction and enlargement and realized that fit every single thing we wanted in a name. People ask me that same question every time we discuss the company, so it’s done its job.

How influential were Toshiba’s initiatives in managed print services for Zoom taking the plunge into MPS?

Johnson: We were getting into it before or about the same time they were getting into it. I don’t think we’re a success story in MPS by any means. A low percentage of our revenues are attributed to that part of our business. When Toshiba got into it they were helpful. I don’t mean this to sound negative, but I’d rather handle it myself. I don’t necessarily want my manufacturer taking over control of my customers and handling 100 percent of their MPS and I get a stipend off of it. I’m glad Toshiba is into it because they understand what we’re going through, but I still think in the end, as a dealer, the closer you are to your customer the better you can take care of them. I prefer this rather than participating in a large managed MPS program where you’re kind of the go between.

What is the biggest challenge of selling MPS?

Johnson: Getting my reps to focus on it. Once we get in there and do certain things, it turns around pretty easily, but the reps view it as something that stretches out the sales process and they want to close the deal. The biggest problem is getting buy-in from the reps that they have to do this. We’ve done a few things, but ultimately they get motivated by their pocketbook and we’re in the process of implementing some things that will strongly encourage them to do more assessments.

What portion of your business do you think MPS will encompass in the next three to five years?

Johnson: We’re going to have $25 million in revenue this year if you include the hardware, the printers and all the clicks. Out of that, we’ll probably do close to a million dollars in MPS revenue. For some dealers that might be a large portion, for us it’s a small percentage. I look at it as we don’t do much MPS because it isn’t a big percentage of what we do overall. It should represent 15-20 percent of our revenue and we should be doing more like $4-$5 million based on where we’re at right now. That would put us at a $30-million + company.

What is the secret to successfully selling a document management solution or any kind of solution for that matter?

Johnson: Again, I don’t think we’re very successful selling document management solutions so I’m not sure I’m the guy to answer that question. We sell document management solutions as somewhat of an add-on for our hardware rather than leading with the document management solution. We sell Drivve because it’s easy to sell. We sell a lot of Re-Rite, but it’s more like, ‘Here’s the copier, and oh by the way…” rather than leading with it and the hardware becoming the ‘by the way’, we do it is backwards compared to the method most successful companies utilize.

You state that you have a great team environment at Zoom. That can’t be an easy environment to create?

Johnson: It’s not—you have to invest a little money and a lot of effort. We put on a huge Christmas party every year which is not inexpensive, but all of our employees look forward to it. We do fun little things, contests, sales trips, Friday barbecues…it’s a combination of everything that you hear a lot of dealers doing. But you have to do that consistently. We try to instill a certain attitude within our management and staff that we’re here to work, but we also need to enjoy our lives. In the end I don’t like to see my employees working on weekends or after hours. I want them to put in a good eight hours and go home and be with their families and come back recharged and kick butt the next day.

What do you personally like about this business after 27 years?

Johnson: Running the business is a lot of work, but the fun part is the selling. I’ve not stopped selling through the entire process. That’s what I enjoy doing the most. I have the most fun when I’m sitting in front of a customer putting a deal together; convincing them we’ve got the right service, the right product, and the right solution.

What are some of your proudest moments in the industry?

Johnson: Going back to the early days, winning the Ricoh top salesperson in our area when I worked for Automated Office Systems where I got my start in Fresno. Being able to drive and grow a sales team as I got promoted quickly from a newly hired sales rep, to vice president of sales, Sr. vice president and then president of the company in less than 10 years at WOLCO Business Systems. Bill Leonard was a great mentor for me, during that time WOLCO grew from $6 million to $30 million. Ultimately my proudest moment was when I was able to buy the business from Bill and make it my own. From a recognition standpoint, winning the Dealer of the Year at the Toshiba dealer meeting this year is probably the highest I’ve ever been.

What’s the one thing you’ve learned about this business that you wish you had known when you first started out?

Johnson: I actually learned this fairly early, but I believe that in order to be successful as a sales rep in this business you need to stay put. After seven or eight months most reps hit the proverbial rookie wall. Around that time in my career I had a guy recruit me to sell water softeners in the evenings. It sounded like a good deal and I’d be able to keep my day job selling copiers. Then I started thinking, ‘I’ll be working almost 14 hours a day if I do this. If I just work harder for the eight hours I have selling copiers, then those other five or six hours I can go play, have a good time and enjoy my life. I don’t want to work every hour of the day.’

That was the changing point for me in terms of how I got focused. I’ve seen so many reps over the years that have talent, but the first time they hit a wall, the first time they struggle or it doesn’t go their way on a commission check, or they think the company they work for dropped the ball, they run to another company and just keep bouncing around and never reach any substantial level of success. If you want to be a successful copier rep you need to be committed to who you work for and when things get tough you need to stick it through and you’ll be better off for it. After you put in your first three years you get upgrades and referrals, after six years, and nine years, it’s amazing what kind of a customer base you can build and the success you can have in this industry if you don’t run every time there’s a problem.