Started in 1987 by President and owner Jack Stargel as a typewriter company, Stargel Office Solutions is now celebrating its 30th year in business as a complete office technology partner, servicing the Houston metro area with annual revenue around $21 million. Stargel Office Solutions’ primary hardware vendor is Toshiba, Lexmark and HP, and they partner with Collabrance and Continuum for their Managed Network Services.
As a self-described “traditional” company, Stargel offers flexibility and attention to detail the way only an independent dealership can. They are a recipient of Toshiba’s coveted Dealer of the Year Award, are recognized by GreatAmerica as a Prestige Dealer and were one of ENX Magazine’s 2015 and 2016 Elite Dealers.
Houston is known for its oil and gas industry, and with falling oil and gas prices and subsequent buying freezes, it hasn’t been easy staying even-keeled. But Stargel has focused on working closely with their customers as consultants, putting their needs first, and taking care of their own employees. With an average tenure of 9.5 years for sales reps, 10 years for over 40 technicians and almost 16 years for their manager base, they put honesty, integrity and passion first, whether serving their customers or their own people. We spoke further with T.J. DeBello, VP of Sales and Marketing, about core values, how to keep good employees and staying on course in uncertain times.
How is business this year? Where do you see your greatest opportunities for growth?
DeBello: The greatest opportunities are definitely on the MNS and MPS side. We’re hoping for the oil prices to go up in 2017 and hiring on that side of the house. We’re hoping for 15-20 percent growth [in MNS], and in MPS, because we have a solid base there already. We’re hoping 10 percent on that side, conservatively. On the MNS side we’re billing about $800K a year in recurring revenue now for two years, and we’re thinking we can get that over $1 million, $1.2 million this year. On the MPS side we bill about $2.8 million so incrementally that’s a little tougher to grow as fast. Our goal is to grow that to $3.1 million.
How is the Managed Services segment of your business? Is it going the way you hoped?
DeBello: Yes. Last year we were looking to grow MPS faster, and it grew 8 percent, but the MNS side grew 30-40 percent, because we hadn’t been around that long and made a significant jump. We added 26 clients, so we really geared up at the end of 2015 and made a big push. A lot of reps helped to buy in, generating leads, and we had a dedicated MNS rep, finally. Once we got ramped up we were probably selling two to three deals a month the last six or seven months.
What was your dealership’s most significant accomplishment last year?
DeBello: Surviving all the companies going out of business! [laugh]. Our biggest accomplishment was to stay even and improve profits by being creative. We tried to help organizations that were in buying freezes or trying to consolidate. We tried our best to be a consultant. A lot of these oil and gas companies affect the churches in the surrounding area that don’t get as many donations. One of the largest churches in the U.S. is one of our customers and they even put a buying freeze on because of the economy. We didn’t lose any sales reps—we added sales reps—and we increased our profit margins over 2015 even though our revenue was flat overall. Just being able to regroup, help our customers out, and make sure we were set up to grow in 2017 was our mission and we accomplished that.
What was one of your biggest wins in 2016?
DeBello: We had a couple. We had a sports team that we landed, that was $700K in revenue, and then we had a clinic that split off from another company. That was a $620K deal, and included $125K worth of digital signage which we hadn’t sold before, so that was good.
What’s one of the biggest challenges lately?
DeBello: Weathering the storm with the way the economy was at the end of 2015 and 2016. Two of our biggest customers merged and they were oil and gas companies. They put a buying freeze on. They were each buying $2 million a year from us, so that’s $4 million we were getting from both companies that went down to $1 million last year. That was something we had to weather through, and I think a lot of that is changing.
Who do you see as your biggest competition, and how do you differentiate your company from the rest?
DeBello: Houston’s a funny market. There are only a few of us that have been around for a long time. But it’s funny how every six months that changes. I would say in Houston it’s probably Ricoh, just because of they bought out everybody and flooded Houston with all the sales people they had. We probably run into them the most frequently. What differentiates us from them is that we’re independent and local. That’s how we won the sports team. They specifically told us that. And we have guarantees: one is a three-hour guarantee or we’re going to give you your service for free for the next invoice, or we do a 90 minute response time, where we give you money back every minute that we’re late. And we do different programs. If you buy a color copier from us, 30 ppm or faster, we provide you with free black and white copies. If you’re averaging 10K copies in black and white, we’ll give you 10K for free, etcetera.
Is there a product or solution that you are looking to add in the near future?
DeBello:This year our goal is putting an emphasis into our people and hiring more people. We’re giving people bigger raises. We’ve talked about voice-over IP phones and 3D printing, but I don’t think it’ll happen this year. Our investment is back into our employees this year. We’re not at profit sharing yet, but we’re trying to set that up, and are starting to give raises based on tenure. Of the 100 employees we have here, we’re averaging 9-10 years with 70 percent of the people. Our customers get consistency and stability and people that believe in what they’re doing and are passionate about it.
Do you have any upcoming plans or events for this year? Any news to share?
DeBello: Our two big events that we always do is at the Astros, our baseball team here, where we invite about 300-400 people and put on a technology show for a couple hours. We have guest speakers. Last year we had Reid Ryan, Nolan Ryan’s son, and this year we’re trying to get Jim Crane, the owner of the Astros. They do a Q&A period. We invite our top 150 customers and our top 100 prospects. Last year we had about 450 people there, but normally we have around 300 people. We are also a big sponsor of Texas Children’s Hospital, and we work with them on the Bad Pants Open charity golf tournament in October.
What is one business marketing innovation that you feel exemplifies your company culture and values?
DeBello: We’re not a gimmicky company. Our core values are putting the customer first, honesty, integrity, passion and believing in our people, that kind of stuff. Any given time we have 45-50 technicians out in the field. The goal is to take care of the customer in a timely manner, and do it correctly and do it right. I don’t know if it’s innovative, but it’s definitely different from our competition. Each one of those technicians carries about $10K worth of car stock. Just in our warehouse alone there’s about $800K to $1 million worth of parts. I almost think that’s innovative in today’s market, especially in Houston, as everybody does real in-time parts shipping. They have guys go out, maybe they have the parts, maybe they don’t. They try to drop-ship it to the client and meet them there, and try to save money that way. We’re still old school in the sense that’s not how we take care of the customer. It’s important that our FCE is in the high 80s, and we see our competition at 50-60 percent. It’s just a different way of thinking about things.
What do you look for in your employees? How do you recruit and retain good ones?
DeBello: Recruiting is always tough. Our best employees come by word of mouth, but we do use recruiters. You have to take care of your employees. Give them a voice and the ability to take care of customers in the right way. That’s just who we are. I think keeping them is a matter of being respectful. We train them, giving them the ability to make more money. You’ve got to pay people what they’re worth.
How do you view the industry changing in the future and what are you doing to adapt?
DeBello: We’re a service company, and our job is to serve our customers. The hardware may change, the on-ramps may change, but if your company’s built around a service model like our company is, then it doesn’t matter how the industry is changing — as long as we educate ourselves, train ourselves and keep our core competencies of taking care of our customer when it comes to information. I assume it’s going to be more app-based, which is intriguing. And it’s going to be about how you display the information digitally and more quickly to clients.
What is your least favorite thing about your job?
DeBello: Probably the interview process. We are always interviewing. It’s part of Jack’s policy. Even if we’re not hiring, we’re always interviewing. I probably do around 60-70 interviews a year, and hire five to seven. It’s more about building a network. If I find the right person, I’ve never told no. We find the budget to hire them. So probably the least favorite thing I do, but the most important thing I do.
Outside of work, what do you do for fun?
DeBello:I have a 16-year-old daughter that does competitive volleyball, so a lot of our fun is spent traveling with her. Other than that we do a lot of stuff outdoors. We like to water ski and camp. Being in Texas, we all hunt.