You Don’t Mess Around with Jim
Directly above: Fathers and Sons (from left to right): Jim Loffler, founder and CEO; James Loffler, vice president, IT Solutions Group; CJ and Frank Cannata | Top: Loffler headquarters in Minneapolis, Minnesota.
Over Jim Loffler’s nearly 40-year career selling office technology, there aren’t many products or services he hasn’t been able to sell. With a commitment to his customers and business, nearly every opportunity he has taken has opened the door to yet another. Over the years, the successes and opportunities have added up to the establishment of a $115 million dealership.
During our most recent visit to Minneapolis for our 2018 Dealer Tour, CJ and I had the pleasure of hearing Jim’s story. He walked us through his background in the industry and how he grew Loffler Companies over the past four decades. However, what struck us most was his humility. Early on in our visit, he commented that people who do something really well don’t tend to boast about it, but rather think of it as “what you’re supposed to do.”
From the start, Jim’s version of what he was supposed to do meant striving for excellence. At the age of 20, he began selling dictation equipment and was soon promoted to sales manager, and then on to vice president of sales. Firmly committed to his sales career, he bought into 30% of the company.
It was this investment that ultimately provided him with the seed money to start Loffler Companies, Inc. in 1986. He founded the company with the ethos of providing the best products and services, as well as caring about his clients and treating them fairly, and Loffler Companies’ mission hasn’t wavered since.
“We believe that focusing on our customers, our employees, and the community makes for a great company,” said Jim with conviction. “If you do all those things well, the profits and success are a byproduct.”
As most dealers know, the early days of starting a company almost always are tough and require sacrifices. It was no different for Jim. To reduce his family’s expenses, Jim and his wife, Darcy, whom he met in eighth grade, along with their five children, moved into a trailer park. At this point, Jim was operating Loffler Companies out of a one-room office and had expanded the dealership’s product offerings to include Brother typewriters, telephone systems, and software.
When a client inquired about facsimile machines in 1988, Jim became one of the first dealers in his market to sell plain-paper fax machines. At the same time, Jim worked hard to establish the company as a trusted advisor to clients whose technology needs were expanding. Loffler Companies would soon add printers, copiers, color copiers, voice recorders, production print devices, and managed services with all that entails, managed IT, MPS, and security into its mix of products and services.
Loffler Companies Today
Today, Loffler Companies’ imaging technology suppliers include HP, Lexmark, Canon, and Xerox. Aside from imaging, the dealership derives 17% of its revenue from managed services, which by any measure is an impressive sum and another 10% from production print. The company has also shrewdly expanded into production and industrial print. With vendors such as Canon and Xerox in its corner, Loffler certainly has access to the technology that allows the company to rise to the top in its market. Xerox recently recognized Loffler in its Document Technology Partners of the Year Awards with the Highest Production Sales Award, highlighting the Xerox reseller that generates the most sales revenue from digital production presses.
Loffler Companies is now the largest privately owned company in the upper Midwest, providing integrated business technology and services. It has grown to nearly 500 employees and serves clients whose businesses are local, national, and international in scope from eight locations in Minnesota and Wisconsin.
“Our ability to grow is limitless,” stated Jim.
The Dealership that Keeps on Growing
Loffler Companies has a simple plan to meet its growth objectives: 50% organic by taking on customers from competitors and 50% via acquisitions, including acquiring competitors that have been having difficulty growing in this fast-paced industry environment. Since 2004, Loffler Companies has made 17 acquisitions, including the June 2018 acquisition of Optimum Communications Corporation (OCC), a St. Cloud, Minnesota-based IT solutions company with 85 employees. If Loffler has any secrets to growing through acquisition, it is the ability to integrate the acquisitions and maximize opportunities by giving the people in the acquired companies the tools and resources to be even better.
We asked Jim if he was looking in any way to emulate what the venture capitalists (VC) and dealerships funded by private equity money are doing in the industry today.
“We are going to acquire in bigger markets and grow those same businesses with a purpose that is unlike the businesses acquired by the VC companies,” he responded, alluding there is no end game to sell his business as it is with those other entities.
Jim is confident his company can meet its objectives for the future.
“By making good decisions, we can create the space to [continue to enjoy current levels of] growth.”
Another secret to Loffler’s success is the company’s talented executive team. From our observations, and Jim did not say this, this is not a one-man band leading the charge and making all the decisions. In addition to Jim, we met with several members of the senior team, including Neill Lee, chief financial officer; John Hastings, Sr., vice president of sales; Joe Nelson, vice president of operations; and Jim’s son, James Loffler, vice president, IT Solutions Group. The majority of this team has been together for 14 years, and we were impressed by their knowledge of the business and the industry during our meeting.
As for advice for those dealers looking to emulate Loffler’s success, particularly in managed IT, Jim recommended taking a look at their MPS business before venturing into managed IT.
“If you think MPS is hard, you’re not ready for IT,” he said. “MPS is first. If not, you’re just waiting for a competitor to come in and steal your business.”
Forward-Looking
Jim remains firmly committed to his bright future with Loffler, however, he is prepared for the future and the next stage for his dealership. When he is finally ready to step down, his son James will also be ready to step up. There is no timetable for that transition, or at least not one that Jim was ready to share. Given James’ maturity and knowledge of the business he demonstrated during our meeting, we are confident Loffler Companies will be in good hands with him at the helm.
But for today, Jim isn’t finished and he still feels there’s more to do such as potentially expanding into new markets such as Iowa and the Dakotas, as well as offering a managed security service. No matter what’s next or how big Loffler Companies becomes, Jim stated that Loffler will continue to do a lot of the same things and maintain the same core values and relationships with its customers as it always has.
“We’ll still be a family company helping others succeed,” concluded Jim, which is just another way of saying that he’ll be doing what he’s supposed to do.
How Loffler Companies Plans to Keep Growing • Make appropriate investments; • Catch the wave and paddle it like crazy; • Offer multiple products and employ multiple practices; • Move into the midmarket; • Provide cloud-based phone systems; • Acquire dealerships and/or companies in larger markets; and • Expand into the Dakotas.
Learning IT the Hard Way
Loffler Companies is no stranger to IT. The company first started selling PCs and services 20 years ago, and followed up with the acquisition of a small IT company. Yet, success was initially elusive.
“We got our nose busted,” recalled Jim, who said the dealership took on a lot of customers it shouldn’t have.
The challenge was defining who the right customer was.
“There is such a breadth of opportunity, and you have to stay in your area of expertise,” explained Jim. “If you stray too far out, you can’t scale it.”
He added customers must be committed to spending money to buy the right product because if they don’t, the dealership or IT provider can’t do its job properly.
Today, Loffler Companies has a partner success commitment outlining what the customer can expect, so they end up with the right experience and the right equipment. As Jim explained, it’s more of an integrated solution with the equipment and solutions working together. Loffler Companies also has a designated project manager that ensures the customer experience is ultimately a positive one.
“If you’re doing well in IT, they are going to buy everything from you,”
Access Related Content
Visit the www.thecannatareport.com. To become a subscriber, visit www.thecannatareport.com/register or contact cjcannata@cannatareport.com directly. Bulk subscription rates are also available.
You're viewing CR Live | 2018 Dealer Tour: Loffler Companies, in a text-only format to view this issue in all its entirety please download it from our Past Issues page
