In an Era of Sales Challenges, Dealers See Net-New as the Path Forward

It’s not the easiest time to be an office technology dealer sales rep. COVID-19, the supply chain fiasco, inflation, rising interest rates and other largely pandemic-spawned issues have placed a drag on activity in the business community as a whole. Conversely, the degree of difficulty that’s been created has opened a wealth of possibilities for those who thrive on opportunity.

As you’ll see in this month’s State of the Industry report on sales in the post-pandemic era, a number of dealers are capitalizing on their counterparts’ weakened ability to deliver value to their client base. Net-new isn’t wishful thinking, and we have numerous examples of dealers who’ve gone well beyond extending leases and offering refurbished equipment in an effort to sustain existing business. They’ll provide some tools and tips that have enabled them to ferret out net-new opportunities and add revenue in the most difficult environment in recent history.

Jim Morrissey,
UBEO Business Services

Looking at the pandemic strictly through the eyes of business, one aspect the period provided was the opportunity to not only embark on extensive training but to have meaningful conversations around what successful account penetration looks like in today’s world. UBEO Business Services, with headquarters in Austin, Texas, focused its training beyond print to become more workflow centric. Jim Morrissey, UBEO president, believes in order to truly own an account, the conversation (and engagement) needs to include production units, copiers, workflow and other elements that enable the client to realize its potential.

It helps that we’re product-agnostic. I don’t know how single-line dealers could survive what we’ve been through.

– Jim Morrissey, UBEO Business Services

The holistic approach is part and parcel of the sales reps’ overall success. “Flipping copy machines is great, but it’s not what the customers are seeking,” he said. “We spent a lot of time throughout the pandemic illustrating what good looks like, from Monday morning examples shared by reps to understanding concepts surrounding the cloud and other areas where customers are seeking expertise.”

Rather than refinancing the entire account, Morrissey and Co. focused on assessments that help identify the pain points and devise a plan for replacing or redeploying assets. Clients appreciate the best solution approach as opposed to a broad rip-and-replace campaign. With customers not in the strongest position for major outlays during the height or immediate aftermath of the pandemic era, this philosophy will be remembered (and rewarded) by clients when supply chain issues, inflation and rising interest rates aren’t as prevalent.

UBEO is also able to capitalize on accounts in which incumbent providers aren’t at the top of their game in regards to service and overall value proposition, thus net-new business has been brisk. In fact, Morrissey believes net-new placements this year represent an all-time high.

“It helps that we’re product-agnostic,” he said. “I don’t know how single-line dealers could survive what we’ve been through. Plus, our inventory is as high as ever because we have the cash to buy it whenever it’s available. We’ve been able to accomplish a lot of fulfillment through managing inventory. Before the pandemic, we hired a person responsible for all vendor relations and logistics. He’s dedicated a lot of time figuring out how we’re going to get product to customers. Sometimes it means not having A4, so we have to sell them used A3 in place of it. It’s all about adjusting.”

Customer Patience

While many end-users have exercised an abundance of patience and understanding regarding the economic and supply chain scenarios, frustration has begun to bubble to the surface regarding wait times for hardware orders. Erik Crane, president and CEO of CPI Technologies in Springfield, Missouri, notes his dealer has counseled sales reps to be upfront and transparent with clients as much as possible to mitigate unpleasant surprises.

Erik Crane,
CPI Technologies

To that end, it’s been vital to communicate the status of items that are in stock so reps can deliver equipment as quickly as possible. “Having hardware in stock is definitely a closing advantage if you have what the client is looking for,” he said.

CPI has witnessed an uptick in renewals on service agreements along with extensions of expiring leases—mostly attributed to economic uncertainty and, of course, the anticipated delays in wait times for hardware, which has stymied new lease agreements. “Conversely, we’ve seen clients sign for a new unit, knowing it’ll be a while until the hardware arrives,” Crane noted. “CPI will allow a month-to-month service billing until the new machine is ready for install. This is a win for both parties involved.”

CPI hasn’t materially changed how it incents for net-new hardware and solution accounts during the pandemic period. Crane believes there’s a certain percentage of clients that opt to remain with their incumbent vendor and a certain percentage that will make a switch, depending on conditions.

Trying to find competitive machines in environments where a client is willing to move is hard enough, let alone when you may have an extended wait for the gear.

– Erik Crane, CPI Technologies

“Trying to find competitive machines in environments where a client is willing to move is hard enough, let alone when you may have an extended wait for the gear,” he said. “As the economic uncertainty continues, clients making changes will become fewer as they look for stability in their organizations.”

Making Adjustments

Transitioning from face-to-face meetings to Teams, Zoom and other video conferencing platforms wasn’t as smooth for sales reps as one would hope. Brent Simone, president of Stratix Systems in Wyomissing, Pennsylvania, points out that three or four of his top performers—annual president’s club qualifiers, no less—struggled during the first four months of the transition, as they had crafted their approach around the traditional belly-to-belly meetings. Fortunately, the company’s development coach helped the reps adjust their styles to enjoy the same level of success experienced prior to the shutdown.

Brent Simone,
Stratix Systems

The rubber is hitting the road once more for Stratix; the dealer’s performance in 2021 exceeded 2019, and 2022 is tracking to be an even better campaign. This year’s figures are somewhat deceptive; 2021 saw the company log more than $2 million in backorders that came to fruition. Its true growth has come in the form of managed services, which increased 17% in 2021 and 25% this year.

“We finally figured out the cadence of how to get support resources to work with our prospecting team, our traditional MFP reps, to have qualifying documents and figure out who’s the right fit and the right prospect for us,” Simone explained. “Then we bring in a resource specialist, and we’ve been very successful at landing net-new managed service clients.”

While Simone can’t credit a “silver bullet” with Stratix’s success, it’s been a matter of tweaking the approach and focusing on fundamentals. In hindsight, one of the strategic moves implemented at the onset of COVID—emphasizing security and the IT offerings through free assessments—was critical in getting end-users to return phone calls, which was no small feat at that time. It was also a door-opener to expand the conversation around products and services core to the dealership.

…my people are highly incented to sell net-new business. It’s the only way we’re going to grow. If we just upgraded our current base, we’d be shrinking.

– Brent Simone, Stratix Systems

The 20% net-new growth Stratix currently sees can be attributed, at least in part, to the dealer’s handsome incentive package. “We incent, operating percentage-wise, probably 75% higher on the gross margin, and then we pay a flat percentage of any revenue for net-new,” Simone said. “Also, if [reps] have 60% of their quota net-new, they get a bonus for all the revenue that they sell. So my people are highly incented to sell net-new business. It’s the only way we’re going to grow. If we just upgraded our current base, we’d be shrinking.”

Catching a Break

Onerous supply chain issues weren’t an issue for some fortunate dealers, including Pulse Technology of Schaumburg, Illinois. President and CEO Chip Miceli reports that his manufacturer vendors have mostly been able to deliver in a timely manner. Adapting to video conferencing has been reasonably smooth; Miceli much prefers the in-person option, but Microsoft Teams has been the platform of choice for the dealer. Even today, the conferencing platform serves a valuable role.

“For our more rural branches, Teams meetings still take high priority,” he added.

Chip Miceli ,
Pulse Technology

Pulse Technology has spent much of the past year fortifying its staffing needs. In addition to eight rep hires, the dealer onboarded a new sales manager who works closely with Miceli and other members of senior management. Sourcing quality talent remains a priority for the dealer, and Pulse underscores that commitment by providing the necessary training and mentoring support to help individuals maximize their potential.

One of the newer offerings that’s bolstered Pulse’s service portfolio is document conversion from hardcopy to digital files. “Pulse Technology was built on print, but our expansion into IT, AV and software has opened new market opportunities for us,” Miceli said. “Selling multiple solutions is the way forward. Providing our sales team with tools such as ZoomInfo (database) and technical support specialists to help drive the value in the process, and a new CRM, has enabled us to manage what we measure.”

Pulse Technology was built on print, but our expansion into IT, AV and software has opened new market opportunities for us. Selling multiple solutions is the way forward.

– Chip Miceli , Pulse Technology

The road to net-new business has been forged with a leaner team, but Pulse Technology’s sales figures have returned to pre-pandemic levels. Miceli strongly incents for sales in both the traditional and more recent offerings, and the dealer empowers its reps to ferret out any and all solutions that can benefit the client.

“We let the business challenges dictate the solution,” he said. “We train our sales team to think outside the box, and we believe that incentives help them conduct themselves that way each day.”

Service Selling

In an age when some dealers reduced hours or their staff to reconcile lower revenue, Offix of Gainesville, Virginia, didn’t resort to any mitigation efforts out of fear of compromising quality customer care. Client outreach posed the same high degree of difficulty as in other geographic regions. When the pandemic receded enough to yield a somewhat normalized environment, it left an entirely different landscape in its wake, according to Tim King, vice president of sales. Client doors are still locked in regions such as Richmond and northern Virginia, while the dealer’s Norfolk office reps are finding a more welcoming environment for face-to-face meetings.

Tim King, Offix

While King has heard a lot of market chatter regarding the permanence of remote work and businesses doing away with centralized offices, he remains confident that on-premise operations will resume in the not-too-distant future for most clients. “Maybe it’s wishful thinking, but I believe we’re social animals, and that interaction we get with co-workers is important and keeps us healthy,” he said. “We’re still holding reps accountable to their daily phone calls, setting net-new appointments and getting out in front of as many clients as possible. It’s still possible, but just a little more challenging.”

Sticking to the basics, according to King, has enabled Offix to see an uptick in both its large-format and MPS business. Putting the customer first translates into a high rate of customer retention, but in terms of net-new placements, the dealer has struggled to attain its desired success level. One of King’s first initiatives upon joining Offix earlier this year was daily call blocks between 8 and 10 a.m. with a quota of two net-new appointments daily or 10 per week. While the initiative is still in its early stages, it’s had a salutary impact on increasing sales.

We’re still holding reps accountable to their daily phone calls, setting net-new appointments and getting out in front of as many clients as possible. It’s still possible, but just a little more challenging.

– Tim King, Offix

In light of the supply chain issues, garnering net-new business is more difficult as competitors have done a better job of insulating their accounts against would-be suitors, according to King. Competitive pricing to an extreme degree tops the list, which can make it harder on dealers such as Offix that don’t chase deals down the race-to-zero rabbit hole. That means leading with a different talk track that emphasizes its value proposition.

“Most of the [competitors] in our marketplace are just break-fix,” King explained. “We’re one of the few dealers out there that still performs preventive maintenance. But I think our reps are doing a good job of selling the value. We also have some strong guarantees that help us differentiate, particularly with service.”

Early Adopters

While remote conferencing technology created an adjustment period for many sales reps accustomed to in-person pitches, some dealers had long since leveraged the technology out of necessity. One example is Usherwood Office Technology of Syracuse, New York. Microsoft Teams helps unify 17 dealer offices across seven states.

Don Foley,
Usherwood Office
Technology

Don Foley, vice president of sales, notes that since the company leads with technology, offering used equipment wasn’t a priority pre-pandemic. Thus, when the supply chain constraints placed a drag on hardware installations, the dealer found itself with a wealth of used inventory at its disposal to help sustain customers until orders could be fulfilled.

“Our sales department has become better and more comfortable using the Teams platform and has developed a talk track around the supply chain issues, with the goal to under-promise and over-deliver,” Foley said.

In the past year, Usherwood employed a three-pronged approach with its sales force. The main thrust is to keep existing clients “happy and renewed,” according to Foley. The second initiative is devising account representatives’ assignments in a way that forces them to forage for net-new clients as opposed to just leaning on renewals. The third tactic entails coaching reps to make use of Usherwood’s seven different lines of business, ensuring they go wider with the existing base.

We have an incredible value proposition and find that when delivered to the right audience, bringing new customers on board becomes easier.

– Don Foley, Usherwood Office Technology

While net-new has long been a priority, the pandemic period underscored the need to continue pushing into unchartered waters. “Earning new clients has always been challenging, and our sales force earns more money for doing this,” Foley noted. “We have an incredible value proposition and find that when delivered to the right audience, bringing new customers on board becomes easier.”

Ship Comes In

Tim Renegar knows how to make the best of a terrible situation. The president of Kelly Office Solutions in Winston-Salem, North Carolina, has experienced his share of frustration during the supply chain saga. At one point, the dealer had nearly $2 million in sold equipment floating in the ocean, waiting to be unloaded. His customers, naturally, had little recourse since precious little product was coming in for most (if not all) of the industry’s OEMs. Shoulder shrugs do little to allay customer anger, but Renegar credits his sales and management team with stepping to the fore with temporary solutions in conjunction with the dealer’s leasing partners.

Tim Renegar,
Kelly Office Solutions

While the new freight was enjoying an extended cruise in the Pacific Ocean, Kelly Office Solutions mobilized with extended (lower) leases for existing clients, and in some cases, step leases in anticipation of the new gear’s arrival. The dealer also released some equipment that hadn’t been in use. The result was a 7% increase in sales over pre-pandemic levels.

“We’ve been much more creative in how we go about marketing,” Renegar said. “It’s made them better salespeople, more creative and willing to look at different options. We sold what we had in inventory, but it had to meet customers’ needs. We were able to get through this time in a very successful way.”

Tending to the dealer’s existing base doesn’t tell the full story. Nearly 30% of Kelly Office Solutions’ total equipment placements for the last fiscal year (ending in June) were net-new. And one of the catalysts for that success was the aforementioned ZoomInfo, a subscription-based SaaS tool that (among other things) provides information on prospects who are actively searching for products within a business’ portfolio. Renegar, initially skeptical about the technology, recently renewed his account and added more seats for his growing sales staff.

We sold what we had in inventory, but it had to meet customers’ needs. We were able to get through this time in a very successful way.

– Tim Renegar, Kelly Office Solutions

Wanting to be genuine and transparent about the dealer’s leveraging of the SaaS tool, Kelly reps provide full disclosure when cold-calling on the prospects. They explain how they know the would-be client is looking for a given product before beginning the process of asking for the prospect’s business. While the leads typically yield smaller equipment sales, the tool has provided a boon for extra revenue during a difficult period. But there have been larger deals.

“We closed a quarter-million hardware sale from a ZoomInfo search,” Renegar noted. “It added about 225,000 black-and-white clicks and another 60,000 color clicks per month. Initially, I was worried about the return on investment, because [ZoomInfo] is expensive. But my goodness, it’s paid for itself several times over.”

Ongoing Battle

Located a mere 25 miles from New York City, Electronic Office Systems of Fairfield, New Jersey, experienced some of the most draconian shutdown measures among its clientele nationwide when the pandemic struck. The dealer sustained a 30% revenue drop over consecutive years, creating one of the greatest challenges for President Andrew Ritschel since he founded the company nearly 39 years ago.

A member of the Copier Dealers Association, Ritschel had heard about member dealers sustaining revenue losses in the 10-20% range, but given the concentration of businesses in the geographically small New York City metro area, Electronic Office Systems was among the hardest hit. He implemented a 30-hour, four-day week and assigned his techs to any number of 50 different training courses through manufacturers and other educational outlets.

Andrew Ritschel,
Electronic Office Systems

Ritschel left no stone unturned. Since phone calls can largely go unanswered and clients/prospects are inundated with email (he gets as many as 100 per day), Ritschel had his reps send hand-addressed introductory letters to prospects vis USPS as part of a vertical campaign to increase contact opportunities. In addition to their regular outreach methods, sales reps drove through their territories looking for office buildings that contained crowded parking lots—an indication of on-site work.

“That became our key marketing approach after reaching out to clients, checking in on them and seeing if there was any way we could possibly help them,” he said.

Reps floated the idea of selling home consumer products, but Ritschel pointed out the futility of knocking heads with big box stores and Amazon to reap what would ultimately amount to about a $40 commission—a veritable loss considering the work involved. The same held true for temperature-scanning kiosks, which saw strong competitive incursions from Amazon.

We want to drive revenue, volume and unit sales; take care of our clients and find new ones. That’s our business, and anything that detracts from that is a problem.

– Andrew Ritschel, Electronic Office Systems

In the end, Electronic Office Systems stuck with a traditional line of attack, pursuing expiring leases with new equipment or refurbished gear. In other cases, the dealer refinanced existing lease balances over a longer term, reducing monthly payments. For many clients, Electronic Office Systems put maintenance agreements on hold or reduced volumes over a period.

The dealer gained traction with the addition of VoIP phone systems and interactive displays. Ritschel moved away from managed IT services in house and is instead networking with third-party providers. He also cut ties with underperforming sales reps, most of whom he had given the benefit of the doubt due to the pandemic before ultimately not seeing a productive path forward.

Ritschel believes the key is pushing through the constant mass of email and setting the stage for meaningful in-person conversations, which also hinges on making face-to-face and phone connections as opposed to texts. “We want to drive revenue, volume and unit sales; take care of our clients and find new ones,” he said. “That’s our business, and anything that detracts from that is a problem.”

Erik Cagle
About the Author
Erik Cagle is the editorial director of ENX Magazine. He is an author, writer and editor who spent 18 years covering the commercial printing industry.