For all of his success as the founder and CEO of Loffler Companies, Jim Loffler doesn’t feel as if his company has finally arrived.
Sure, the Bloomington, Minnesota-based dealership has checked off many of the boxes for success—15 locations, 565 employees, and projected sales in the range of $130 million for 2019. Loffler Companies is one of the leading Canon dealers in the nation, and it has added three companies via acquisition in the past year. The dealer has also cultivated a strong and growing managed IT platform to complement its businesses in MPS, copiers, production print, large-format, cloud, security and telephony, among other products and services.
Yet, for all these accomplishments, Loffler himself refuses to take the success for granted. Every day must be earned, he admonishes, and resting on laurels is not part of the playbook. The company has defined a set of core values that drives every employee to seek out his/her better self, and to provide a level of service that delights the client long after the implementation is completed.
We recently spoke with Loffler, along with Gary Volbert, vice president of managed business services and marketing, and Mary Steffl, director of marketing, to learn about how recent acquisitions, brand and inbound marketing initiatives have contributed to dealership growth in both size and stature.
How is business so far in 2019?
Loffler: Very good. The economy is chugging along well. Our sales are up. Typically, the second half of the year is our strongest period, so we’re projecting it to be a solid year. The acquisitions will help contribute to significant top line growth. We’ll need to invest in training, adding people and bringing new tools to those companies, so those take a while to get fine-tuned. But we’re optimistic about 2019 and beyond.
What does Loffler pride itself on?
Loffler: We’re a very diverse company, and we have made investments in all of our business units, which has positioned us well for the future. MPS is one area of pride and a major strength of ours in the local and national marketplace. A lot of dealers talk about being able to do MPS, but few can actually do it well. I am also very proud of the quality of our entire team, management, and our leadership team, which has been together for over 15 years.
Your company has been active on the M&A front in the last year, acquiring Laser Systems, Northern Office Outfitters, Optimum Communications Corp. and a new office in Sioux Falls, South Dakota. Can you talk about the strategy behind these moves, and what did each bring to the table?
Loffler: We’re trying to add companies that are in our wheelhouse. One of the companies has strength in managed print services. We also acquired an IT and telephony company, and we’ve added an IT team to our St. Cloud market. One of the companies offers physical security, an up-and-coming application in the IT stack. They are very good at physical security—cameras, software and monitoring for companies. We’re confident we’re going to see that grow dramatically in the years ahead. One of the biggest things with acquisitions is getting great people. Not only are you acquiring customers and expertise, you bring on a lot of best practices and great people that will help you grow.
What will you be looking to accomplish in future deals? What are the geographic and product/service needs you will be looking to address?
Loffler: We are looking for quality dealers with great people who fit our culture and core values. We’re really growing from a geography standpoint, covering the state of Minnesota, western Wisconsin, Iowa, and North and South Dakota. The Dakotas are under-served in terms of having Loffler’s set of complex integrated solutions available for customers. We have 15 offices, so we’re continuing to look at geographically expanding our footprint. In the future, we will be going into major market areas as well. For now, we’re really looking at just expanding the markets that touch the ones we’re in, providing the same product sets and managed services offerings.
CRN has ranked Loffler among its list of the top 150 IT Managed Service providers in the country. What has been the key to scaling your managed IT offering?
Loffler: It’s a really complicated area to get started in unless you have the right people. My son, James, took the helm of our IT business more than six years ago and deserves a lot of the credit in developing the right strategies and recruiting a team of talented individuals. He feels there are three keys to providing a quality managed IT offering. One is having a high level of talent on your team. Some have joined our team through acquisition and others through organic growth. Since we have a strong, innovative and positive culture, our turnover is low. Second, our process and automation has matured greatly over the last 10 years. We’ve implemented a lot of tooling that’s been optimized over the last five years. We are more efficient than ever before. The third key is providing a comprehensive solution stack. We currently deliver managed voice, IT, physical security, print and cybersecurity. Our ability to bring this all together and connect the dots for our customers has been huge.
Our target market for managed IT is clients with 25 to 350 users. After bringing in the great team of Clear North via acquisition, our professional services team can work on projects that can support up to about 1,000 users. It’s a great business to be in and we clearly see continued growth and success.
How long did it take to get comfortable with your managed IT offering?
Loffler: We’ve been in IT for over 15 years. We started back with PCs, peer-to-peer networks and Novell, which seems like a century ago when you think about technology. It took us over a decade, until about the last three years, to get to the promised land, earning well deserved recognition from our clients and the industry. Things change so quickly, and we take nothing for granted. The cloud has completely changed business from a selling a product to selling a monthly service. There’s a huge evolution going on in the IT business.
Volbert: What’s made the organization so successful in the past now drives strong IT growth. I remember reading an article about Jim and the business over 15 years ago, and his approach is to listen to the customer and to look for the next wave to catch, just like a surfer. He will let the waves that are not appropriate to the business pass, then paddle like crazy to catch the next big wave that can help our clients the most. That philosophy propelled growth years ago, and now it is driving growth for IT.
Brand awareness has proven to be a strength for Loffler, particularly in areas such as sports marketing. Can you tell us how this strategy developed?
Loffler: It starts by developing a top-notch brand. Seventeen years ago, we were selling equipment to a company called Larson Design, and Tim Larson had been developing brands for significant national companies. We ended up working with them on developing the Loffler brand, which has the name with the red bar through the two F’s. They really hit a home run with the red and black and the strong font developed that we use in our brand to this day. We’re very picky about what that looks like; it has to be the exact red, with the proportion of red to black, and the elements have to maintain consistency. It really stands out wherever we use it. I often get calls locally and nationally about our Loffler logo on the dasher board at Minnesota Wild hockey games. Changing any aspect or taking liberties with our logo would confuse people. Also, when we look for branch offices, we look for heavily traveled roads with ample signage opportunities. Our headquarters is close to the airport on H494, where 220,000 cars pass by daily. We put up a stadium quality, high-definition screen to continue to build that brand. We also brand all of our vehicles—120 cars plus trucks and delivery vehicles—with a consistent look. A client recently mentioned that our cars are everywhere.
Our partnerships with the professional and collegiate sports teams have been great in building the brand. The strategic use of sports partnerships is very well thought out, planned and implemented. We partner with the professional Minnesota sports franchises—the Vikings, Wild, Timberwolves and Lynx, along with the St. Paul Saints minor league baseball and multiple University of Minnesota sports teams. We have Loffler signage that is recognizable in the stadium to tens of thousands as well as on television and other media. These have been valuable partnerships helping each team succeed, aiding the community and building our brand.
Inbound marketing has been another success for Loffler and a key to its growth strategy. Can you tell us a little about the evolution of your website and the value of inbound marketing campaigns?
Loffler: It’s crazy to think that just about 15 years ago, we were spending $100,000 a year on Yellow Pages ads. I remember when we did our first website, we probably spent three grand on it. The attitude was, “Hey, I’m done.” Little did I realize that you’re never done with your website. Google is way ahead of us. People are coming to our website when they want to learn before they buy something that we have. We are focused on investing in it, measuring our performance and being state of the art when it comes to our marketing campaigns.
Volbert: When our clients shop, just like any of us, it’s clear they will often start by Googling phrases and questions to learn more before they contact Loffler to speak with a sales representative. Thus, about three years ago, we did a lot of research and determined HubSpot would be the best platform for driving our new website to make sure clients find us when they have a need or business problem in search of a solution. We can build inbound campaigns based on understanding our buyers’ needs and we create content such as blogs and videos as part of a campaign to make sure they find us when they’re doing the “shopping.” Mary and her team were key to researching what the options were, determining the best direction for us to take. It’s led to ongoing successful campaigns with inbound marketing, delivering great results and generating qualified leads.
Steffl: Because the company was growing so fast, we started researching marketing automation platforms about three years ago to not only meet our needs today, but years into the future. We determined HubSpot was the best solution because of its robust marketing assets and manageable learning curve to go live. Then the big task began with creating all of the content that we knew people were seeking. Businesses have problems they’re trying to solve and they have all kinds of questions. Trying to build that educational content to optimize success with Google, and build authority with the search engine is the key. We want to help people find the answers to their needs through our website and specialists. Maybe they’re trying to find specific information on Canon, Konica Minolta or IT. We need to make sure we have that searched phrase and content on our website, which helps build authority with Google.
We relaunched the new website just over two years ago. In that time, our organic traffic has grown by 153%, which is high growth. We also made a concerted effort to track how that traffic was bringing in business. That entails engineering within our CRM system, keeping up with every lead that comes in, and watching that entire buyer’s journey on the website. Our revenue brought in via the website has grown by 570 percent just from inbound marketing content. We know it works, but the challenge is consistently adding new content and keeping up with buyer searches. A website is always a work in progress if it’s done right.
Volbert: We thought the most valuable content we could generate would come in the form of blogs or white papers created by Loffler employees. Thus, everyone participates. Jim regularly writes leadership blogs, as does his son, James, with key trends in the IT world. We have many team members who write blogs across the business units to help clients. Hiring an outside organization to generate content would be easier, but clients see that our team members are the trusted advisers and subject matter experts.
With several top/best workplace designations under your belt, how has Loffler been able to cultivate a quality working environment?
Loffler: About eight years ago, one of my customers gave me a book titled “Traction.” The company was getting bigger and we were trying to figure out a way to communicate and keep us all rowing in the same direction. The one area the book stressed was the subject of developing core values for the business. We went offsite with our senior leadership team and over a period of a few days, we rated who we were as a company—our strengths and weaknesses against our competitors, what our future opportunity was—and really did a deep dive into what we valued. I believe the core values is a big driver in cultivating a quality working environment.
Our core values are simple: A positive attitude, living life with integrity, innovative, always putting the customer first, professionalism, driving for results, going the extra mile and trustworthiness. You hear these all the time, but when someone comes to work for us, they see these core values in action. We let them know that’s who we are as a company. If a candidate doesn’t have integrity or trustworthiness, we don’t want them. We communicate who we are up front. They understand our “why” of “helping you succeed.” We live by these values. I sent an email out to all the employees recently, sharing how a customer recognized our people for outstanding service. It served as a reminder of how good we are and how important it is to go the extra mile. If all of us do it together, our success is locked in. From hiring to annual reviews, promotions and even separations, we’re all measured against those core values. We hold all 565 people to that standard.
What was your biggest challenge in the past year?
Loffler: It’s continuing to invest in the future of the company. As a private firm, that investment commitment never ends. Identifying what the future opportunities are, acquiring companies to make it happen and bringing people to those opportunities is a big challenge. Also, the tax situation in the state of Minnesota is not favorable. Although we have some support from the federal government, state taxation (10% in Minnesota) really hurts the ability of a business to grow. It seems the government doesn’t understand the importance of working capital for businesses. That puts our business at a significant disadvantage compared to other states. That said, I’m confident there is no challenge that will hold us back as long as we continue to maintain the same culture, core values and focus on bringing client-focused integrated technology and managed services to our clients.
What are your goals for the next 12-18 months?
Loffler: We’ve acquired three businesses in the last year, so we’re looking to stabilize this transition as quickly as possible. We want to provide the tools and training, and fine-tune our support of them to be productive. We’ll continue to look for acquisitions, to optimize our business, and try to win as much as we can in a highly competitive business.
How do you view the industry changing in the future and what are you doing to adapt?
Loffler: Clicks are going down; we call it the leaky bucket. For us to maintain revenues, we have to do 6-8% more placements when you consider the declining amount of print, the reduction in the cost of the equipment, plus the dwindling cost of the parts and the supplies. The machines are more efficient. We’re aggressively going after market share in those areas and we’re doing that by offering a unified MPS, copier and IT focus, which few competitors do. Plus, we’re continuing to invest in IT and physical security opportunities. When you fast forward five years, we believe that it’s going to be a large portion of our business.
What do you like most about your job?
Loffler: For me, it’s not about money or possessions. It’s about building relationships, working with clients and employees who I really care about. That’s the fun part of it. It’s about being part of a company that has a reputation for serving others with excellence. I’ll put our team up against any other in the country. They do a fabulous job. We’re not perfect by any stretch, but I think our passion to help others is in the right place.
Outside of work, what do you do for fun?
Loffler: Darcy and I have so much fun with our five grandkids, ages 1 to 10. They all live close to us, so spending as much time as we can with our family is the number one priority once I walk out the door. I love music, along with boating and golfing when I get the chance. Darcy and I love to travel; we’re going to Italy this fall, which is one of our favorite places to visit. It’s all about seeing new places.
