When it comes to loyalty and support, Stephen Valenta clearly comes across as a foxhole-worthy business partner. The president of Offix, based in Gainesville, Virginia, related story after story about his company going to unusual lengths in support of loyal customers, whether it’s trekking to New Jersey to source a refrigerator or driving down to Florida to help a client move its equipment. These are the kinds of gestures that can’t be written into an MPS pact.
But Offix isn’t your garden-variety dealer. The company, which celebrated its 20th anniversary in 2019, abides by a technical-service mindset and a desire to cultivate relationships that run deep. Valenta isn’t concerned about adding sales volume, and he won’t traffic in cost-competitive scenarios. When he signs his name to an agreement, it has to be meaningful for both parties.
The company is flush; it has no debt, and Valenta squirreled away half of the firm’s profits since 1999 to be able to make strategic acquisitions and investments in personnel. When COVID-19 struck, Valenta did not need to lay off or furlough employees; in fact, he’s been hiring for key positions. He recently added a new vice president of sales (Mitch Riehle) and developed a marketing division bent on inbound marketing (led by a relative newcomer, Director of Marketing Matteo Recanatini).
Valenta has worked in the industry since 1980 for a trio of employers who eventually joined the IKON chain. But he found traction in 1999, using $15,000 in seed money to debut Offix. That first year, Valenta certainly got his hands dirty, handling every aspect of the business, and turned $1 million in business.
Twenty-plus years later, the company pulls down approximately $15 million, with the help of about 60 employees and three locations. A Canon-led dealer with Sharp, HP, KIP and FP Mailing among its offerings, Offix has branched out aggressively into mailing and production print/wide-format equipment, along with VoIP systems, scanners, interactive white boards and digital signage. MFPs and managed print services are still critical, but Valenta seeks customer solutions wherever possible, as evidenced by the firm’s recent addition of temperature-reading kiosks. Valenta aims to double the company’s sales within 24 months.
COVID-19 may have wrecked Valenta’s plans, but he soon leveraged the quarantine period to raise the company’s game from a knowledge and proficiency standpoint. We spoke with Valenta, Recanatini and service Vice President Ron Roby about how the company has leveraged its position and the “hand dealt to us” to ensure that Offix enters 2021 with guns blazing.
How was business in 2019? What were the keys that dictated your success?
Valenta: The year kind of mimicked 2018, when we had about three percent growth. It’s not quite where we wanted it to be, but we did have nice growth in MPS and mailing equipment, plus added more than 500 devices. Service revenue was down, however, and naturally it’s down this year due to COVID-19. People just weren’t copying and printing as much in 2019. We made some changes this year; we hired a new vice president of sales, Mitch Riehle, who is doing a fantastic job working with the team. We have a class of about 10 salespeople who are starting in mid-July, and we’re making a big push for 2021.
How were you tracking in 2020 leading up to COVID-19?
Valenta: We use CEO Juice, and they put out some really good alerts and analytics to watch. I would say 85% of our contracts are on base-billing, not cost per copy. So, while we took a hit on the cost-per-copy contracts, that wasn’t the case for base-billing contracts. I think we’re down 30-35% for cost-per-click billing. I’ve spoken to three large dealers recently and was sad to learn that they were forced to implement layoffs and furloughs. It seems to be that the larger companies were hit hardest. But we’re a lean, mean, fighting machine.
You recently welcomed employees back to work, capping a period in which Offix did not need to do furloughs or layoffs. How was the company able to weather the COVID-19 storm?
Valenta: We’ve never taken a loan from a bank; everything that we have, we own. We’ve put aside 50% of our profits for 20 years and we’ve been able to acquire five companies during that period. We’re looking at three more potential deals. We used this COVID-19 period to work on training for service, sales and CRM. As a matter of fact, our sales numbers are higher now than they were at the same time last year, even with all of this service revenue down. We’ve made money every month this year. It might not be the amount we normally make, but I don’t want to bust up a wonderful company culture and a great team just for the sake of making additional company funds.
We’ve been planning for 2021; we thought we were going to prorate our business plan for 2020, but seeing that our sales numbers are really going up, I think we’ll blow up whatever we have. But we’re really focused on 2021. In addition to hiring, we’re looking at expansion through additional branches or sales offices in two other markets to be named later. We have two deals that are close to completion. We’re actually only buying companies’ maintenance contracts, but we’re also negotiating one full-fledged acquisition as well.
Recanatini: Because we’re lean and well structured, we’re able to set aside cash. Steve’s experience and desire to maintain a nimble, well-funded organization allowed us to set aside cash for any contingency, whether it be investing in acquisitions or keeping our structure well-funded and afloat in moments of crisis. In fact, we’re doing both. We’ve done a great job of pinpointing the verticals that work best for us.
What sets Offix apart from the competition?
Valenta: One key is that we are a service-oriented organization. Just about every company says it has the best service, but for us it’s more than talk. We have a 2.75-hour response time. Most importantly, we don’t do break/fix repair; we do the old-fashioned preventative maintenance, which is the way you’re supposed to do it. We don’t want to see a customer’s machine every other week; we’d rather fix them all at once and move on. We go the extra mile for our customers. Plus, we don’t go after deals in which we can’t make money, because we feel it takes away from the customers that pay us to do a good job. We’re selective in our pursuits. We don’t want to burden our staff for the sake of revenue, which does us no good.
We rely on different tools, we use BEI Services (NEXERA), CEO Juice—anything we can find to improve efficiency. It really shows with our clients, and it’s one of the reasons we have a retention rate between 95%-98%. We don’t lose clients because of service. We may lose them because they just don’t pay or they go out of business. And we refuse to play the price game. There’s nothing we won’t do for a customer.
Roby: The focus and attention we place on customer experience is uncommon, I think. As a service-focused organization, we are willing to invest whatever necessary to ensure we respond to customer needs on their terms. In regards to our service department, one of the things you’ll never find here at Offix is automated responses; you’ll always get the chance to talk to somebody. We don’t let calls fall into voicemail. I’m very fortunate to work for a man like Steve who shares the same outlook on customer care that I do. It’s not that difficult. The whole team has those same expectations. In addition to our response time, we require our technicians to be ATSP certified. The program, managed by Canon, certifies a technician’s ability to not only service equipment quickly and efficiently, but also to provide courteous and effective customer interactions.
In fact, your company was uniquely positioned to hire personnel during the pandemic. Talk a little about your quest to hire “world-class talent.”
Valenta: We’re prepared to come out of this thing strong, and we’re prepared to grow. We’re taking what cards are being dealt to us, trying to be a company that wants to go out and do it. There’s no “woe is me, our bank account is empty and we need to get rid of 50 people.” We won’t sit and grovel. We want to be looking for acquisitions, we’re gunning for 2021 and we’re trying to finish out 2020 strong. And we’re a better company for the COVID-19 experience. Our folks learned more in the last 90 days than they have in the last year. To see how many orders we’re getting on a daily basis is amazing.
We were struggling to find quality employees prior to COVID, especially salespeople. Now, we’ve gotten to the point where we’re extremely selective, because we have so much to choose from. Many manufacturers have laid off a tremendous amount of talent, and we’re trying to scoop up as many good ones as possible.
Recanatini: We did a lot of training in those 10 weeks we had to work from home. We weren’t doing in-person meetings, but we were very structured. We had curriculums that we set up, weekly calls during which we checked in and shared information we had learned. We made a concerted effort for everybody from our techs to our salespeople and everybody else that paid off almost immediately, and continues to do so.
What sources did you use to find attractive candidates, and how did you manage the process during the quarantine? Also, in terms of judging candidates, is it more challenging interviewing through video conferencing?
Valenta: In addition to using our website and HR department, we worked with Indeed and other recruiting sources, including three headhunters. I hired our vice president (Riehle) from another company with the help of a headhunter, a process done through Microsoft Teams. It’s tremendous and we’re excited about having him. With Mitch, we were comfortable with one another, and we knew he would be a great fit. With some of the other candidates, you could tell they were pretty nervous doing a remote interview. There’s a lot of nonverbal communication that is hard to pick up when you’re on camera.
We’ve done well in learning how to successfully sell in a virtual environment. We’ve started training more on having meaningful conversations beyond text chat and email. When you’re selling from behind a camera, it needs to be a setting that mimics, as much as possible, what you’d experience in a face-to-face meeting. The person on the other end may not have his/her camera on, but we want to make sure they can see our faces. It’s been our experience that nine out of 10 people will want to have their camera on as well, which makes the conversation more meaningful.
During the quarantine period, Offix pivoted to offering temperature-scanning kiosks. How has this been received by clients?
Valenta: We’ve ordered them for our office and have sold approximately five. It’s a great product, but the supply chain is bogged down and we can’t get them out. Originally, there was a four-to-six week delay, but now it’s going to be about a 10-week wait. But there are a lot of opportunities out there for the kiosks. We have one client that wants to buy them for their concert venues. A trading card manufacturer is also asking about a large order, and we have a few school systems that would like to source them as well.
I think you’re going to see a lot of companies get into this business. There’s always the possibility of a second wave of COVID coming through. But I don’t think it’s going to end anytime soon.
Talk a little about the company’s explosive growth in wide-format, production and mailing machines. What has been the key to penetrating these markets?
Valenta: One of the things is we bought a mailing company, Frank Jones, almost three years ago. We also have our base of MPS and copier clients, and we’ve introduced mailing to them. We’ve gotten into production mailing equipment with high-end folders/inserters. Some inserters cost as much as a production copier. We doubled our mailing business from 2018 to 2019. As far as production goes, we’re building an entire department around the offering, led by a specialist and a team. We sold about 20 production machines last year, which was a big year, so we’re excited about the growth prospects.
Recanatini: The key is our ability to structure our process and teach our team the key things. If you try to sell production print equipment to a client that is well-versed in Fiery controls and other aspects of the equipment, you’d better know what you’re talking about or you’ll be laughed out of the building pretty quickly. Having these specialists in place, augmented by our sales structure, has certainly aided our efforts.
Tell us about Offix’s concerted push in the area of inbound marketing. How has the messaging and enhanced level of engagement raised the company’s profile as a solution provider?
Recanatini: It started with building the infrastructure; we had to rebuild our website and establish a calendar. We’ve increased our site visits by double digits and cut our bounce rate in half, which means we’re providing digital content that is engaging. We’re sending out about 45,000 emails a month, and 70% are going out through automated workflows. They’re not scheduled statically; recipients receive an email because they’ve taken certain steps and we recognize they’re ready to receive that particular piece of information. We’ve developed ebooks that users can download, and our Ultimate Buyer’s Guide for Copier Machines is one of the most popular. We’ll spend some money advertising it, and through SEO efforts, we’ll pull people into the communication funnel. They’ll start reading our blog and will become engaged to the point where they’ll give us their name. This process, which also uses traditional direct mail, entails communication pieces that also leverage our printing and folding equipment. All told, we’re hitting people at the right time with the right message.
The results speak for themselves. Our digital leads, those developed organically through our website and other digital content, have increased 2,200% year over year. We constantly try new things and fine-tune our plans. We know that not every marketing program is successful—I think 90% of marketing is failure—but we’re confident that the 10% that succeeds is able to make up for all the other activities, and allow us to grow. Having such an increase in leads is certainly a testament to the fact that inbound marketing works.
What was your dealership’s greatest accomplishment in 2019?
Valenta: We’ve come a long way in really putting together a great company culture, and I’d love to see it become even better with enhanced growth opportunities for employees. We’ve done a good job of promoting from within, including several key positions in the last year. We let the employees write the standards for our culture, which started things in the right direction. We wanted to hear from the employees, and their aspirations for Offix. That made a big difference. Getting the right mix of people is key, and we’ve done a good job of bringing some new talent into this company. Our service team is the strongest ever; we’ve had no turnover. If you look at the number of machines we support and the area we cover versus the number of people we have…I just don’t know how he do it.
Aside from COVID-19, what was the biggest challenge you faced in the past year?
Recanatini: Maintaining the level of technical and field service within an organization that is growing so quickly, and having to fill the pipeline with talent is always a challenge. We have to make sure that not only do we have the right knowledge in terms of technical skills, but also focus on whether somebody is the right cultural fit. We want to make sure that people are happy for the long term, not just because it’s a big investment to bring in somebody new, but because we know that starting a new job is a commitment and a challenge.
What are your goals for the next 12-18 months?
Valenta: We set down our goals for 2020, and gave up on them when COVID-19 hit and people had to work from home. We didn’t expect it would last this long, so we took it day to day, and if we could do as well as we did in 2019, that would be fantastic. Then one day, I decided we should take this opportunity to come out of COVID-19 strong and build for 2021. Our plan for the next year and a half to two years is to bring in talent and expand in markets with satellite offices. I want to take the hand that’s dealt to us and play a game called “I win,” so to speak. We’re going to grow no matter what we do. We have four things going on right now that I think are going to make a big difference. Our ultimate goal is to get 24-30 new salespeople within the next year and a half.
What do you like most about your job?
Valenta: It’s like a game for me. I love competition and I like to win. I try to encourage that with all of my employees. I have a bowler here who bowled three 300s one night. He’s very competitive and he likes to win. We try to have fun at work and do everything we can to win with any opportunity that we get.
Outside of work, what do you do for fun?
Valenta: I play golf and love boating. I have a bucket-list item of going down the intercoastal to the Bahamas, and I’m hoping to knock that out within the next 18 months. Then I’ll play golf when I get there. I’ve been boating for the last few months. When it comes to social distancing, you can’t get much farther away than being out on a boat.