To gain a better understanding about the viability of some of these opportunities I spoke with dealers in various dealerships across the country about the diversification strategies they\u2019re taking to ensure their long-term viability.<\/p>\n
Digital Signage <\/strong><\/p>\n There\u2019s plenty of buzz happening around digital signage as companies such as Toshiba and Samsung ramp up their digital signage product lines. Plus, don\u2019t count out Sharp with its professional displays and Aquos boards.<\/p>\n Toshiba is enjoying some big wins from a direct perspective with its digital signage, but the reality is it\u2019s going to take some time for its dealer channel to enjoy the same success. Toshiba\u2019s approach is also a little bit different than others because of its emphasis on content, which is ideal for dealers looking for a recurring revenue stream.<\/p>\n TJ DeBello<\/p><\/div>\n Stargel Office Systems in Houston, TX, is arguably Toshiba\u2019s most successful dealer to date when it comes to marketing digital signage. Last year it nailed down a big deal with the Houston Astros.<\/p>\n While that deal was an impressive one, TJ DeBello, Stargel\u2019s VP of sales and marketing, reports that Stargel is currently concentrating heavily on clinics and hospitals. \u201cThat\u2019s the low hanging fruit for us.\u201d<\/p>\n Not counting the deal with the Houston Astros, Stargel did about $350,000 in digital signage last year, including a $52,000 deal with a church.<\/p>\n \u201cWe\u2019re still learning and the margins seem pretty good,\u201d says DeBello.<\/p>\n Everybody at Stargel can sell Toshiba\u2019s digital signage products and the dealership relies heavily on Toshiba for education. DeBello says the company is planning on hiring a specialist as well as handling the installations themselves, something they currently outsource.<\/p>\n Perhaps the biggest benefit of diversifying into digital signage is the same benefit so many other dealers enjoy when branching out into other product categories. That\u2019s getting a foot in the door of a new customer. Stargel installed a $56,000 video wall in one new client\u2019s lobby. That video wall deal led to a $105,000 DocuWare deal even though Stargel doesn\u2019t have their copier business.<\/p>\n So far there\u2019s been no competition from other independent dealers in the Houston market. \u201cOur competitors are more on the national scene and most of the feedback we\u2019re hearing is they come in, give a quote, but they\u2019re too busy and don\u2019t listen to what they want and won\u2019t do the renderings,\u201d says DeBello. \u201cThey don\u2019t offer the personal touch, which is our strength. Our long-term goal is to get in there and do the marketing for clients [on the digital signage]. That ties into an ongoing revenue stream for us similar to a CPC model where we\u2019re billing them monthly or quarterly.\u201d<\/p>\n There may also be an opportunity in the future for Stargel integrating the digital signage into Toshiba\u2019s POS systems along with pursuing opportunities in sports arenas, cafes, and grocery stores.<\/p>\n Interactive Whiteboards<\/strong><\/p>\n Sharp has made a big impression the past few years with its interactive whiteboards, a technology that\u2019s become a prominent talk track at its annual dealer meetings. DPOE in Elk Grove Village, IL is one Sharp dealer that\u2019s embraced this technology and has been enjoying some decent sales, a little over 100 to date.<\/p>\n Chip Miceli<\/p><\/div>\n \u201cWe\u2019ve sold more than I probably would have expected us to sell,\u201d states Chip Miceli, DPOE\u2019s president. \u201cThe only problem with that product is that there\u2019s no recurring revenue.\u201d<\/p>\n What those interactive whiteboards have done for DPOE is create new opportunities, particularly with prospects the dealership hasn\u2019t done business with before.\u00a0 \u201cWe probably would never have gotten into some of these customers before and we end up doing more business with them once we get in the door,\u201d states Miceli. \u201cThat\u2019s the value.\u201d<\/p>\n The biggest opportunities Miceli has found for interactive whiteboards are manufacturing and law firms as well as anyone that does any kind of marketing and has a sales force. \u201cI have one customer who carries it all over the place,\u201d says Miceli.<\/p>\n Another client has placed the whiteboard in a kiosk in their conference room. This is an exception as it has a recurring revenue stream as DPOE is responsible for making sure that it\u2019s always up and running. \u201cWe charge them a monthly fee,\u201d states Miceli. \u201cAnytime they want to change content, we do that, but that\u2019s only one out of the 100 we\u2019ve sold so far.\u201d<\/p>\n What DPOE has sold can be credited to persistent telemarketing and attendance at networking events where DPOE displays the board and uses it for presentations. It\u2019s also in their showroom where it\u2019s used for, what else, presentations. \u201cIt\u2019s a lot of word of mouth; we haven\u2019t done much advertising and Sharp doesn\u2019t do much advertising so we just carry it everywhere and show it to everybody,\u201d emphasizes Miceli.<\/p>\n 3D Printers<\/strong><\/p>\n 3D printing was a hot topic at last September\u2019s BTA Grand Slam event thanks in part to a presentation by Mark Mathews, president of Airwolf 3D and panelist Cindi Gondek from the ACT Group, a Cromwell, CT-based office technology dealership.<\/p>\n Cindi Gondek<\/p><\/div>\n During the panel discussion on diversification strategies, Gondek acknowledged that compared to selling traditional office technology selling 3D printers requires a different skill set. Specifically, what\u2019s critical, in her view, is a different level of people for service, including high-level engineers who can talk about the various 3D printing processes. \u201cYou can\u2019t have copier salesmen selling 3D,\u201d she opined.<\/p>\n Gondek also cautioned the audience about the expense of getting into 3D printing. The ACT Group invested more than a half million dollars and it\u2019s taken a couple of years for the dealership to start seeing a return on that investment.<\/p>\n Another dealership doing okay with 3D printing is Fraser-AIS in West Reading, PA. It has been selling 3D printers for a couple of years now and is finally getting the hang of it. They generated enough business to add a sales rep this past June whose sole focus is 3D printers. A dedicated service technician is the most recent addition to Fraser\u2019s 3D team.<\/p>\n Daniel Fraser, new business development for Fraser-AIS, loves talking about 3D. He\u2019s candid about what it takes to sell the technology. \u201cBeing disillusioned is a good thing because I see it all the time, people are excited [about the technology], want to talk about it, and it\u2019s interesting to talk about, but most [prospects] aren\u2019t going to buy one.\u201d<\/p>\n Being disillusioned may seem odd to hear from someone who\u2019s had some success selling the technology, but he refuses to sugarcoat the opportunity. \u201cThere are some who will buy, and what they do buy will be very expensive. You can have high revenues, but a lower amount of transactions. It\u2019s prospecting intensive.\u201d<\/p>\n Daniel Fraser<\/p><\/div>\n What he\u2019s learned in the short period of time he\u2019s been selling 3D printers is how to better qualify prospects. \u201cI want to get rid of the people [who aren\u2019t going to buy] as soon as possible,\u201d he says. \u201cI wasn\u2019t doing that a year ago.\u201d<\/p>\n Mark Mathews<\/p>\n Mark Mathews, president of Airwolf 3D, speaking at the BTA Grand Slam event didn\u2019t sugarcoat things either. \u201cIt\u2019s a technical sale, which means you must understand materials, CAD, and the vertical you’re selling to,\u201d he told the dealers in attendance.<\/p>\n He also informed attendees that 80 percent of service calls are related to the print process, which makes things more complicated on the service side.<\/p>\n On a more positive note, the market is expected to grow between 25 and 50 percent over the next five years with the potential to become a $13-$22 billion market during this time period. Target markets include corporations, educational institutions, government agencies, healthcare, manufacturing, and consumers to name just a few.<\/p>\n \u201cA customer with engineers on staff doing CAD work is your target,\u201d said Mathews. \u201cThere are 20-million CAD seats worldwide with 35 percent of those in the U.S.\u201d<\/p>\n Mark Mathews<\/p><\/div>\n \u201cIt\u2019s a huge market, it\u2019s growing, fascinating, and fun, and if you have the right skill set and are willing to make the investment, it\u2019s worth it,\u201d emphasized Mathews. \u201cBut compared to MPS on the difficulty scale, where MPS is a 3, 3D printing is a 10.\u201d<\/p>\n Reconditioned Copiers <\/strong><\/p>\n In Huntington Beach, CA, Spectrum Business Systems, a Ricoh dealership, has found selling and renting reconditioned MFPs a profitable diversification strategy. In fact, those two business segments account for 85 percent of Spectrum\u2019s overall business.<\/p>\n Spectrum\u2019s clientele is mostly small and medium size businesses, many of whom have no qualms about reconditioned equipment. \u201cIt\u2019s especially strong whenever we\u2019re dealing with a startup company,\u201d reports Glenn Plank, systems engineer. \u201cThey want all the big features the big guys have, but they don\u2019t have the budget and furthermore they don\u2019t have the credit to buy that brand new machine. They usually perk up when we offer them a reconditioned machine with those same features.\u201d<\/p>\n Glenn Plank<\/p><\/div>\n With stats indicating that eight of ten new companies don\u2019t make it, why commit to a 3-5 year lease when the odds are stacked against making it? \u201cWe politely let them know, let\u2019s place a machine under a rental plan, if you grow bigger we can upgrade. If you get smaller we can downsize, but it leaves you the option to do that, whereas with a lease on a brand new machine and an uncertain future for your company, you\u2019re locking yourself into three or four or five years of payments on credit you may not be able to get,\u201d says Plank. \u201cThat approach really appeals to that small or startup customer.\u201d<\/p>\n Spectrum doesn\u2019t seem to have much competition in their market on the reconditioned and rental fronts. \u201cThat\u2019s why we\u2019ve been successful with that,\u201d states Plank. \u201cMany of these companies have been renting from us for 10-15 years and they just see it makes sense.\u201d<\/p>\n The key to that longevity is how well you support that client once it\u2019s placed.<\/p>\n \u201cAs we start to see the equipment get a lot of mileage on it and the service incidents rates pick up, we get in touch and tell them we\u2019re seeing a higher service level and we need to make a change at no charge to them,\u201d explains Plank. \u201cHow can they complain? I don\u2019t need the service headaches because the machine\u2019s getting up in mileage.\u201d<\/p>\n Social Media Services<\/strong><\/p>\n An emerging diversification opportunity is social media services. Yes, social media. Impact Networking LLC, based in Waukegan, IL, has seen this segment of its business grow during the past five years. Services offered by Impact\u2019s Creative Services Group include web development, branding, and online marketing.<\/p>\n Impact recently became a Google AdWords partner. With Google AdWords, a pay-per-click ad program, businesses can advertise locally and attract customers with the products that they’re searching for. \u00a0\u201cWe\u2019re one of the few partners in the Chicago area for AdWords,\u201d reports Rebecca Adolf, senior designer and online marketer with Impact Networking\u2019s Creative Services Group.<\/p>\n Rebecca Adolf<\/p><\/div>\n What does being an AdWords partner mean for Impact\u2019s customers?<\/p>\n \u201cBeing a partner and having the certification shows that we know Google\u2019s best practices for AdWords and Google Analytics,\u201d explains Adolf. \u201cThere are events we can host and we get promotions for money and discounts and promotions we can provide to our customers.\u201d<\/p>\n As far as Adolf knows, there\u2019s no competition to date from other dealerships in the market that are also offering social media services. Obviously, there are plenty of Web designers and SEO marketing shops who mostly take a cookie cutter approach. \u201cOur approach is to sit down with you, have face to face meetings, phone calls, and come up with the strategy and unique campaigns,\u201d states Adolf about Impact\u2019s approach.<\/p>\n Offering social media and Web design services is creating opportunities for Impact\u2019s traditional product offerings. \u201cIf you tell people you do online marketing and SEO as a way to introduce yourself you can open doors more versus coming in and asking about their copier,\u201d says Adolf.<\/p>\n Narrowing down the cost for these services is a little difficult, but Adolf says it mostly depends on how many social media updates or e-mail campaigns the customer does monthly or weekly. For example, for one client Impact does weekly e-mails, for other clients, it\u2019s less.<\/p>\n \u201cWe offer a monthly fee on an annual retainer and it can be anywhere from $500 a month to almost $10,000 a month,\u201d states Adolf. \u201cIt depends on the client, their budget, and their needs.\u201d<\/p>\n Clients who seem to be most interested in these services tend to be medium and larger companies although one Impact client is a small law firm and another a doctor\u2019s office. \u201cThis is a hands-on, time-intensive service so we can\u2019t offer low rates,\u201d says Adolf.<\/p>\n Higher Information Group in Harrisburg, PA also offers Web design and development services. That portion of its business originated within its internal print group, driven in part by the need for internal support for their own marketing and advertising efforts and client requests.<\/p>\n \u201cClients were coming to us and saying, \u2018we\u2019re not happy with our website could you help us out?\u2019\u201d recalls John Frisch, president.<\/p>\n He acknowledges that this is not a big portion of his dealership\u2019s business and that the Web design process can take a couple of months. As far as staffing the department, that\u2019s done the way he tends to hire for all departments within his dealership, recommendations from employees.<\/p>\n Final Thoughts<\/strong><\/p>\n Let\u2019s be straight, the diversification strategies discussed in this article remain just that, diversification strategies with the potential to add a few percentage points to the bottom line. It\u2019s unlikely that any of these will supplant a dealership\u2019s core business anytime soon. What they will do, however, is broaden a dealership\u2019s menu of offerings for existing accounts and possibly attract new customers. Either way, it\u2019s a smart way of doing business in 2015.<\/p>\n","protected":false},"excerpt":{"rendered":" Last month I wrote about the various trends sweeping the document imaging industry, many of those underscoring the need for the traditional office technology dealer to diversify. Yes indeed, diversification is the name of the game as printed output declines and dealers look for new sources of revenue. While MPS and Managed Services are squarely at the head of the pack of this diversification trend, we\u2019re not going to touch on those here, but address those areas in a future issue of ENX. Instead, we\u2019re going to focus on five other diversification opportunities, some more opportune than others. We\u2019ll also be presenting another five diversification opportunities this month in a complementary article on the ENX\/The Week in Imaging newsletter and Website. To gain a better understanding about the viability of some of these opportunities I spoke with dealers in various dealerships across the country about the diversification strategies they\u2019re taking to ensure their long-term viability. Digital Signage There\u2019s plenty of buzz happening around digital signage as companies such as Toshiba and Samsung ramp up their digital signage product lines. Plus, don\u2019t count out Sharp with its professional displays and Aquos boards. Toshiba is enjoying some big wins from a direct perspective with its digital signage, but the reality is it\u2019s going to take some time for its dealer channel to enjoy the same success. Toshiba\u2019s approach is also a little bit different than others because of its emphasis on content, which is ideal for dealers looking for a recurring revenue stream. Stargel Office Systems in Houston, TX, is arguably Toshiba\u2019s most successful dealer to date when it comes to marketing digital signage. Last year it nailed down a big deal with the Houston Astros. While that deal was an impressive one, TJ DeBello, Stargel\u2019s VP of sales and marketing, reports that Stargel is currently concentrating heavily on clinics and hospitals. \u201cThat\u2019s the low hanging fruit for us.\u201d Not counting the deal with the Houston Astros, Stargel did about $350,000 in digital signage last year, including a $52,000 deal with a church. \u201cWe\u2019re still learning and the margins seem pretty good,\u201d says DeBello. Everybody at Stargel can sell Toshiba\u2019s digital signage products and the dealership relies heavily on Toshiba for education. DeBello says the company is planning on hiring a specialist as well as handling the installations themselves, something they currently outsource. Perhaps the biggest benefit of diversifying into digital signage is the same benefit so many other dealers enjoy when branching out into other product categories. That\u2019s getting a foot in the door of a new customer. Stargel installed a $56,000 video wall in one new client\u2019s lobby. That video wall deal led to a $105,000 DocuWare deal even though Stargel doesn\u2019t have their copier business. So far there\u2019s been no competition from other independent dealers in the Houston market. \u201cOur competitors are more on the national scene and most of the feedback we\u2019re hearing is they come in, give a quote, but they\u2019re too busy and don\u2019t listen to what they want and won\u2019t do the renderings,\u201d says DeBello. \u201cThey don\u2019t offer the personal touch, which is our strength. Our long-term goal is to get in there and do the marketing for clients [on the digital signage]. That ties into an ongoing revenue stream for us similar to a CPC model where we\u2019re billing them monthly or quarterly.\u201d There may also be an opportunity in the future for Stargel integrating the digital signage into Toshiba\u2019s POS systems along with pursuing opportunities in sports arenas, cafes, and grocery stores. Interactive Whiteboards Sharp has made a big impression the past few years with its interactive whiteboards, a technology that\u2019s become a prominent talk track at its annual dealer meetings. DPOE in Elk Grove Village, IL is one Sharp dealer that\u2019s embraced this technology and has been enjoying some decent sales, a little over 100 to date. \u201cWe\u2019ve sold more than I probably would have expected us to sell,\u201d states Chip Miceli, DPOE\u2019s president. \u201cThe only problem with that product is that there\u2019s no recurring revenue.\u201d What those interactive whiteboards have done for DPOE is create new opportunities, particularly with prospects the dealership hasn\u2019t done business with before.\u00a0 \u201cWe probably would never have gotten into some of these customers before and we end up doing more business with them once we get in the door,\u201d states Miceli. \u201cThat\u2019s the value.\u201d The biggest opportunities Miceli has found for interactive whiteboards are manufacturing and law firms as well as anyone that does any kind of marketing and has a sales force. \u201cI have one customer who carries it all over the place,\u201d says Miceli. Another client has placed the whiteboard in a kiosk in their conference room. This is an exception as it has a recurring revenue stream as DPOE is responsible for making sure that it\u2019s always up and running. \u201cWe charge them a monthly fee,\u201d states Miceli. \u201cAnytime they want to change content, we do that, but that\u2019s only one out of the 100 we\u2019ve sold so far.\u201d What DPOE has sold can be credited to persistent telemarketing and attendance at networking events where DPOE displays the board and uses it for presentations. It\u2019s also in their showroom where it\u2019s used for, what else, presentations. \u201cIt\u2019s a lot of word of mouth; we haven\u2019t done much advertising and Sharp doesn\u2019t do much advertising so we just carry it everywhere and show it to everybody,\u201d emphasizes Miceli. 3D Printers 3D printing was a hot topic at last September\u2019s BTA Grand Slam event thanks in part to a presentation by Mark Mathews, president of Airwolf 3D and panelist Cindi Gondek from the ACT Group, a Cromwell, CT-based office technology dealership. During the panel discussion on diversification strategies, Gondek acknowledged that compared to selling traditional office technology selling 3D printers requires a different skill set. Specifically, what\u2019s critical, in her view, is a different level of people for service, including high-level engineers who can talk about the various 3D printing processes. \u201cYou can\u2019t have copier […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1649],"tags":[1457,140,1195,174,191,1616,1950,238,763,333,789,2071,2070],"_links":{"self":[{"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/11107"}],"collection":[{"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/comments?post=11107"}],"version-history":[{"count":2,"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/11107\/revisions"}],"predecessor-version":[{"id":11260,"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/11107\/revisions\/11260"}],"wp:attachment":[{"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/media?parent=11107"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/categories?post=11107"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/tags?post=11107"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"TJ](\"http:\/\/www.enxmag.com\/twii\/wp-content\/uploads\/2015\/01\/TJ-Debello1-e1422556432821-286x300.jpg\")
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