The basic question is always there: How much of every office technology dollar you bring in is profitable?
Profitability is the primary measure of a business’s ability to generate earnings (aka profit) after operational costs and expenses over a month, quarter, or year. While “slow” periods are not unusual, one needs enough in the bank (or a great credit line) to get past them.
How profitable are you? A business can be satisfyingly profitable, revenue-rich while spending more than it earns, or be profitable but slow-growing, perhaps because it is not using its resources, including people, as effectively as possible. Profitability signals financial health, sustainability, and the ability to return value to its owner(s). So how can you be more profitable? One way is making sure your sales team is doing all it can to move the needle.
Be strategic
Moving that needle requires sales calls that help meet a company’s profitability goals. There is more to this than simply making more calls or closing deals. One of the most effective approaches is prospecting, said Kate Kingston of Kingston Training Group, a firm that has helped hundreds of office technology dealers and OEMs increase sales. Prospecting is a strategic process for helping identify potential customers and turning them into buyers. Its goal is securing face-toface meetings in which a sales rep and a prospect can determine how a product or service can be a good fit for a company’s needs.
“When prospecting with a vertical approach, you can pursue all the law firms in your territory at once (for example) with the same messaging and schedule a meeting with all of them,” said Kingston. “Then you do same thing for other verticals, such as medical centers, ad agencies, schools, and so on.” Each call is tailored to a particular type of business and its goals for compliance, security and profitability. This means understanding how the needs of law firms differ from those of ad agencies. This helps arm a sales rep with knowledge about needs that are unique to each type of company.
Kingston said this monetizes group calls. She recommends sales teams secure six net-new first-time meetings each week so they can approach their quota as a minimum expectation instead of a goal. Doing this each month changes the profitability of companies of any size. Beyond monetizing prospecting calls this also “weaponizes” sales calls.
Breed confidence
Such prospecting also breeds some confidence in your office technology dealership. It shows that your team is aware of how various solutions are used based on a company’s needs. This is also the beginning of weaponization: In addition to asking educated questions, sales reps can use what they learned during the call to refine their sales pitch when meeting with individual companies. Like this: ‘Firms like yours have also said they have trouble doing X. We know that can be a challenge! We have several devices that address that concern. How would that be a help for you?’ This may get the sales rep closer to a deal.
Obviously, the more services you can charge for, the more profitable you can be. But there can be a “gotcha.” In this case it’s that each offering should justifyits existence by either making money or being part of a service that does. Cybersecurity may seem profitable because multiple customers are using it or because its positive revenue is part of a broader service, such as managed IT. Whenever possible, pay attention to how the parts of individual services contribute to your revenue streams and remind customers of their value. One place to start can be your back room.
Profitability comes in sizes
Smaller office technology dealers may think that real profitability is limited to bigger shops. They could be wrong. Laryssa Alexander, president of Field Service at ECI Software Solutions, said the back office of a dealer can be a source of profit. “Contracts, billing, and service tasks are [often] spread across separate systems. This slows down work and creates opportunities for errors that can cost businesses money downstream,” she said. Having one system account for all these functions streamlines any dealer’s business and reduces costs, which translates into increased profits.
Alexander said applied AI (AI tailored to specific uses) is another tool dealers can use to aid profitability. “By helping tailor product recommendations and manage contract pricing automatically, the buying experience matches what customers get at many other places.”
Other paths to profitability
Other profitability drivers may be worth consideration as you look for ways of fattening your bottom line. Some may not fit all dealerships, so pick which could work for you and adapt as necessary. You may not see results right away but that’s no reason to put them off. Some tools of profitability don’t show up right away.
- Go brain picking. You can learn a lot by asking customers questions in non-sales conversations. You may find needs you can fulfill or efforts you can support. When possible, make sure these conversations position your company as an office technology dealer that provides services for cybersecurity, managed IT, managed print, and so on. You no longer want to be defined as the copier and printer guy.
- Talk with your OEMs. Because they see many dealers, OEMs may know ways of adding profitability you do not. As in, “Dealer ABC increased his profitability about 8% by doing this,” and then describing what was done, what it cost, and the approach taken. Equally important, an OEM may also know what does not work or was poorly executed. Listen!
- Talk with dealers you don’t compete with to learn what has and hasn’t worked for them. You can often learn a lot from their experiences. It may be useful to have a sense of how similar or dissimilar your dealerships are. You may already do this.
- Pursue incremental sales to existing customers. Suppose you have 21 customers. Maybe you can sell one additional MFP—or a better one—to every third customer or ones with similar needs. That makes a small difference but may open a door. Now that they’ve said yes, is there anything else you can sell them?
- Expand your market when possible. You may be a big game hunter at heart, but don’t dismiss small customers that need only a couple of devices. A dozen smaller companies that each need only one MFP still add up to 12 MFPs that are better sold by you than by Amazon, Staples, or Walmart. Remind these companies that big-box retailers often carry exclusive models that can differ significantly from those you offer and may not include service and support. Then make a compelling offer and expands your market.
- Offer free trials of managed IT and managed print services, along with support and coaching. Then let the “technology value” go to work. Customers often appreciate the value of a technology once they experience it, finding they can justify the cost.
- Outmoding is a weird word that means eliminating old technology that doesn’t work as well as newer versions, is ignored, or requires exception processing that costs time and money. Compare, for example, a customers’ copiers, scanners, and printers that don’t automatically send a digital copy of a file to the cloud or other storage medium the way many new models can. Such instant, automatic backup can be important, but your customer may not know it exists.
- Attract new talent. Some services may require familiarity and skills with newer software, computers and other devices. You may need people with—or willing to acquire—new skills. It costs money to train staff or add new people, but they can increase what your dealership offers. Training makes new h ires p rofitable faster while enhancing the value of your dealership.
- Refine operations, perhaps with a more efficient use of staff. Many dealers are already thinly staffed with people doing multiple jobs. Can your team be used more efficiently? It may be possible to get more done with the same number of people, perhaps even reducing overtime. Ask your team and see what they say. They may have suggestions!
“When it comes to profitability and prospecting, some is good, but more is better!” said Kingston. “Prospecting is a skill to be practiced and perfected, because when you make more meetings, you make more money.”
You may already do some of these things but not think of them as paths to profitability. But they are. Smaller dealers are more than capable of meeting enterprise expectations,” said ECI’s Alexander. “The key is choosing tools that enable them to operate at the scale and speed needed.”
Pick from the ones described here, or invent or find ones that work for your business. Start today. Put the profits in your pocket or use them to take your business up a level or two. Above all, don’t stay where you are because someone, like the competitor a ZIP Code or two away, may add to her/his profitability and leave you playing catch up.
Raising the Bar on Profitability
Sometimes, it’s the money you don’t spend.
On a Sunday afternoon, the person who signs purchase orders at one of your office technology customers ordered a garden hose, a book, four reams of paper, and an inkjet printer online in about three minutes from a couple of retailers. Then went for a walk. On Monday she ordered three MFPs and a copier while your sales rep smiled from across the table. Then she went into a meeting. What’s wrong with this picture?
Like it or not, online retailers are changing the way business is done, just as they seem to be setting prices.They have less overhead but may also be more efficient in other ways. Like how they handle data. The order for the MFPs and copier was passed to you, making its first stop enroute to the back officd of your dealership where the order was processed. It was further ensnared in a service contract, billing and more, perhaps spread across several systems.
“This creates a bottleneck, slowing down work and creating opportunities for errors to slip through,” affirmed ECI Software’s Alexander.
This bottleneck costs dealers money for billing, equipment and invoicing that can aggregate into real money. Putting all these functions for all your customer into a single platform can trim a dealer’s response times to questions and backroom costs, ultimately aiding profitability. This makes it much easier for tracking device profitability, automating meter reads, and streamlining supply fulfillment. More importantly, such centralization and automation can help dealers take on more business by shortening response time and boosting productivity without adding extra staff.
Table stakes
Such attention and access to details is not trivial. “It’s increasingly table stakes,” said Alexander. “The largest buying group is millennials who grew up with rapid technological change. They expect the same real-time convenience in their work environments.” So, when they call about a product or an invoice your dealership can have an immediate answer. “Dealers who have recognized this shift and acted on it are seeing it pay off,” added Alexander.
Your back office is one place where profitability can grow but the size of your operation has little to do with it. Alexander noted that “…smaller shops are not shut out of larger accounts, but they should understand that profitability [with larger accounts] changes what you bring to the table.” One thing is security, which the internet has made increasingly important. A cloud solution can provide smaller dealers the same data encryption, user authentication, regular backups, and adherence to industry-standard security protocols that a large corporation expects. Since it happens in the cloud there isn’t a big upfront build and help is usually at the other end of the phone line.
She also noted that bigger firms commonly look for integration with software tools they use. Supporting integrations with leading industry solution providers helps dealers navigate these environments. Finally, dealers who offer flexible purchasing options, such as initiating leasing through e-commerce, have a competitive advantage.
