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The right partner accelerated the dealership’s IT business.
If at first you don’t succeed selling IT services, you might try, try again, or find a partner with the infrastructure and expertise to put you on the fast track to growth. That’s exactly what The Swenson Group did in 2013 when it partnered with Konica Minolta’s All Covered.
Prior to 2013, The Swenson Group was, as President Dean Swenson described it, dabbling in IT services. Originally, IT was a customer-driven initiative. Even if clients had an IT services provider, they called the dealership with their printing and scanning issues. Instead of asking the client to contact their IT company about the IT-related problems, The Swenson Group implemented remote tools to solve the issues. While a cost-effective solution for everyone, it also raised customer expectations, prompting customers to ask The Swenson Group to fix other IT-related matters. Next thing you know, the company is doing deep-dive assessments, and even though it was making money from those, Dean realized he didn’t have the bandwidth or financial resources to build a proper IT services organization. The solution was to find a partner. As a Konica Minolta dealer, All Covered was a natural selection.
“When All Covered was acquired, we sat down with them and pioneered the dealer program, which is still evolving,” recalled Dean. “But in the buy, build, or partner mentality, I wasn’t willing to build an IT business from scratch and lose a bunch of money until I made money.”
A Parallel Approach
Thanks to the All Covered partnership, The Swenson Group takes a parallel approach to IT services. “We have a nice inside-outside game where we’re a local company with internal talent and capabilities, but we also have this huge infrastructure behind us,” said Dean. “Most of our focus with All Covered is on the reoccurring revenue. That is the fastest way to grow our top-line business.”
That top-line business is expanding mainly due to the new doors that its IT services offerings are opening. “We’ve been fortunate that when we get the IT deal with the net new company, ultimately, we’ll get a seat at the table for the peripherals and usually win that business,” said Dean. “Because we are doing more for them, we bring more value, which makes us stickier.” It doesn’t hurt either that IT services allow The Swenson Group to engage with individuals at higher levels within customers’ organizations.
All Covered provides a variety of IT offerings, as well as additional expertise, experience, and support that would be challenging for the dealership to deliver on its own. A recent example is managed voice services. “All Covered has a unique business model where they’ve acquired best-of-breed MSPs and then, they invest in them to scale, and those offerings are available to dealers,” explained Dean. Managed voice is one of those offerings and currently represents a small, albeit complementary, piece of the business but offers the potential for growth.
Although many dealers who partner prefer to white label their partners’ IT offerings, The Swenson Group takes a different tact, even though the contract is with them. Dean understands that some clients would rather not trust their IT infrastructure to a small IT services company, even if it is an established office technology provider. “We’re not a huge company, but because of All Covered, we have the infrastructure and the experience,” said Dean. “For the right client, they get the best of both worlds.”
The Swenson Group is the organization that’s accountable to the client and coordinates QBRs (Quarterly Business Reviews), but because of All Covered’s comprehensive offerings, it can solve more problems than most other MSPs or dealers offering IT services. “Managing your network, providing a help desk, and having a network operation center, all that is pretty much standard, and everyone does it,” said Dean. “We’re trying to bring other things that a mom-and-pop [organization] or local, regional franchise can’t.”
For example, The Swenson Group does a fair amount of business with health care and financial organizations, two verticals where All Covered excels. “All Covered has people who will actually be part of audits,” noted Dean. Information security and compliance, and mobile device management are other capabilities that The Swenson Group can offer customers. The dealership’s reps often lead with cybersecurity, an area where All Covered does a great job, according to Dean. “Then we’ll move into multifactor authentication, which is a hot topic right now,” he added. “If you don’t have that, you’re not going to qualify for the insurance requirements many companies need if they are in a compliant industry. We might get in the door offering something like that, and then prove ourselves and be able to have more conversations.” Another segment of cybersecurity where Dean sees opportunity is dark-web monitoring, something that many MSPs who monitor networks don’t do.
When The Swenson Group began dabbling in IT, there wasn’t much focus on recurring revenue. “It was just the assessment, and we would get $10,000 or $20,000, but at the end of the day, the assessment should lead to something reoccurring,” opined Dean. “But we didn’t have the infrastructure to do that at that time. We did several deals and made some money, but if I could do it over again, I would have done something to get the reoccurring. That’s our mantra now. We have minimums that we require on a reoccurring. And if a sales rep says, ‘Can we just do it for this?’, we’ll say, ‘We can’t be all things to all people.’”
One of The Swenson Group’s strategies for selling IT begins with asking customers to share their IT initiatives for the next 12 to 18 months. “I respectfully tell my reps to be quiet and listen,” said Dean. “More often than not, we find somewhere we can help and turn that into some type of reoccurring support.”
As office print continues its downward momentum and customers have less need for traditional document imaging technology, Dean believes a dealer can elevate the customer relationship and raise the trust factor with IT services. “It’s easy to simply be considered a vendor in the customer’s eyes in the MFP world,” he opined. “However, if you do a good job, you can really become a strong partner with the client when you are delivering IT services.” That’s why partnering was the way to go for The Swenson Group, enabling it to elevate its game in the IT space.
Sidebar: TAG Team
Recently, The Swenson Group joined Technology Assurance Group (TAG), an organization of leading managed technology services providers in the U.S. and Canada. According to the TAG website, TAG members integrate all technology solutions, including IT cloud-based technologies, cybersecurity, telecommunications, AV, video surveillance, access control, and managed print. The mission of the organization is to increase its members’ profits and sales through education and to ease their introduction of new technology to the marketplace by leveraging their combined intellect and purchasing power. “We’re looking at bringing more low-maintenance items in-house that are more profitable and complement what we’re doing,” said The Swenson Group’s President Dean Swenson about his reason for joining TAG. “There are things that TAG brings to the table that we’re taking a hard look at to determine what we can do internally with the bandwidth and infrastructure we have to increase margins and bring more value.”