Sponsored by GreatAmerica Financial Services
ACDI offers dealers a new diversification route with Terra Energy Services chargers.
The announcement in January that ACDI was entering the electric vehicle (EV) charger business was initially met with skepticism and curiosity. At that time, the war in Ukraine hadn’t begun, gas prices were stable, and ACDI had yet to hire Damian Cairns as sales director of the new division. Fast forward to November, and with the war still raging and increased uncertainty around gas prices, charging stations for electric vehicles don’t sound so outlandish. Interest in more sustainable transportation options, including electronic and hybrid cars, has been growing. According to a study released in March 2022 by Fact.MR, a market research firm whose clients include Fortune 500 companies, the global market for hybrid electric vehicles is likely to grow at a compound annual growth rate (CAGR) of 14% by the end of its 2021–2031 forecast period. Perhaps there is no time like the present for a dealer to pursue this diversification opportunity.
Mark Hart, vice president of business development and market for ACDI, views EV charging stations as a new revenue opportunity for sales reps and a service opportunity for service techs. “There are not as many printers in the field and not as many reasons for those technicians to be out there,” he said. “The thought of having something new [to sell and service] with Terra Energy Services excites dealers.”
When I spoke with Hart in April, he averaged two to four Terra Energy Services demos daily for dealers. Those demos have been paying off, and ACDI is adding dealers at a respectable clip. In June, the company announced that mega dealer POA would be selling the Terra chargers. All Copy Products is another large dealer with a footprint across multiple states selling the product. Those are massive votes of confidence for this product category and will likely inspire more dealers to take a closer look. But one doesn’t have to be a super large dealer.
Mark VanDenHoek, president of Office Advantage in Sioux Falls, South Dakota, is among the first group of dealers taking on the EV chargers from Terra Energy Services. He describes himself as a gearhead who likes anything to do with cars and technology. He also has a background in electricity, is a pilot, and has been watching electric vehicles grow in that sector. VanDenHoek’s dealership may be small, but Office Advantage’s expertise in selling technology makes it comfortable for them to take on new technologies such as EV chargers. “We’ve been in the technology business a long time,” he said. “I started as an ISP back in the dialup days,” he recalled. “I wasn’t a techie per se back then, but I was fascinated by the technology.”
ACDI’s reputation also adds credibility. “There’s already trust there; you don’t have to reestablish a relationship or a friendship,” said VanDenHoek. “I also look at the potential margins. It’s not going to be an easy climb, but it’s exciting.” He acknowledged the challenges, particularly in a region where it’s not unusual for people in rural areas to commute 80 to 100 miles daily to work one way. “Anything that taxes the motor—cold, heat, hills, whatever, is going to cut down on battery life,” noted VanDenHoek. “We’re very rural, but that’s okay. We’re going to be out in front of some other vendors. I’m both excited and a little concerned about how quickly it will take off and where the need will be.” Office Advantage’s territory encompasses the Sioux Falls region, as well as Des Moines, Iowa; Minneapolis, Minnesota; and Omaha, Nebraska. Office Advantage promotes its new offering from Terra Energy Services on social media, such as Facebook. The morning I spoke with VanDenHoek, he had three proposals scheduled that afternoon.
Recruiting dealers in the U.S. represents ACDI’s first phase of its Terra Energy Services/EV charger initiative. In the second phase, the company will expand into other regions and markets, such as Latin America, and in phase three, it will add smaller dealers that will sell the product on a one-off basis.
Thanks to Terra Energy Services, some of these dealers are making new connections, such as the second-generation owner who recently met with the governor of his state to talk about the product’s rollout. “It’s the first time he’s ever met with the governor to talk about a product,” reported Hart. “He’s never met with the governor to discuss how copiers will help their state. But he had a conversation with the governor to talk about electric vehicles and EV chargers. It’s opening a whole new customer set.”
Ready to Sell
As with any new diversification opportunity, executive buy-in is key to success. That’s why ACDI talks to owners and dealer principals about the product. “That’s where it starts,” said Hart. And what are they talking about? Of course, margins are coming into play, but the conversations also focus on preparing their teams to sell the product, the investment necessary, and if they need to create a new division for the product.
The dealer who takes on this product must be willing to learn. “We’re asking them to establish a product champion in their dealerships,” said Hart. This individual must also be amenable to providing feedback to ACDI on the EV landscape in their state. This will help ACDI develop go-to-market strategies targeted to specific regions and better understand how to best service those markets.
Local service is a critical selling point. According to Hart, none of the companies that manufacture and sell EV chargers offer local service. “That’s what we’re keying on,” said Hart. “If you’re a dealer and interested, I want to know why. We’ll talk about what it means and how they’ll do partnerships. They’ve got to be comfortable with hiring an electrician. Many are partnering with a local electrical company.”
Hart doesn’t expect the average down-the-street rep to sell EV chargers. Instead, he envisions an agent that can sell digital transformation. “This is more of a consultative approach of addressing what the value is to that customer,” said Hart. “Your solution specialist, the ones that can have that conversation and consultative talk, would do very well.”
Office Advantage eventually plans to hire subject matter experts (SMEs) to sell the product. VanDenHoek is also exploring options to contract with dealers in some of its other markets. “We’re very small, and I can’t manage it with my [existing] staff, but we want to be able to participate in those markets if we can,” he said.
ACDI recommends taking a vertical approach with EV chargers and Terra Energy Services, citing, for example, retail as a viable target market. “If you’re going into retail, what does it mean to a retail location?” asked Hart. “Some studies say people spend a dollar in a facility for every minute outside a retail location. So, it would help to discuss that value versus how many clicks or kilowatts per hour you use. What’s it going to do for that customer?”
VanDenHoek identified medical facilities, municipalities, entertainment facilities, and restaurants. “We’re speaking with someone who owns hotels with travel plazas and convenience stores next to them. If I’m going to have a meal or an overnight stay, why not charge my car at the same time?” he said. Multi-family dwellings, builders, and architects are also part of the plan. Office Advantage is speaking to multiple architects about having the EV charger specs included in their new building specs.
The Service Angle
One concern that dealers have is service. “It’s like, ‘we can’t run wire, we can’t do this and that,’” said Hart. “That’s a given. I’m comparing it to production print equipment, which requires something other than a regular plug. You’ll need an electrician to do the first install, do the wiring, and get everything to run. From there forward, there are two types of technicians required. One, if a board or a card reader goes down. That’s no different from what dealers are replacing today. The second is the network, so that’s software. If they’re having trouble authenticating users as they would on a copier today, then you would need a network services technician. Could they be both? Absolutely. But at the front running wire and cabling, digging ditches and all that, we’re not recommending anybody does that. Find a local person. If not, we can do that for you. We’ve built relationships with electrical co-ops and electricians that can do that work for us in pretty much every state in the U.S.”
A Crazy Idea?
Hart is aware of the naysayers and admits this is not for everyone, just as managed IT, or production print isn’t. “Those naysayers are always going to be there,” he said. “But there will be dealers willing to adapt and have those digital transformation conversations. They will look at EV chargers and add new solutions for their customers. And we’re going to be there to help.”
For the skeptics, VanDenHoek says, “Check back in two years. I’m excited about the opportunity, and we’ll give it our all. Unlike the print business, where everyone knows what everything costs, part of the beauty [of EV chargers] is that there’s not much awareness yet about the technology and what it costs. With mystery, there’s margin.”