Getting any “money left on the table” may mean adding to what you offer within the office technology space. Intimidating as it may be, it’s important to look to the future. You already know that copy and print, which may have been how you got started in this business, may no longer be the cash cow it once was. Yet it reliably brings in revenue and will continue to do so. But suppose you offered more?
Business as usual. Really?
Some dealers say the term “diversification” is closing in on being offensive. But look at it like this: Diversifying can be a path to increased profitability—as in making your business worth more. This does not mean your normal offerings are wrong, only that they may not be keeping pace with an evolving business environment. There are new capabilities some customers would like—if only they had a service provider (like you) they could rely on for support.
Diversification never meant deep-sixing fax machines in favor of MFPs, “dissing” copiers, promoting faster A3 devices, or even having managed IT. It could be heavy lifts like comprehensive cybersecurity, managed print services, end-to-end network support, offering production printing equipment, or more. Or, it could be a lighter lift, such as digitizing scanned documents or adding full-color, wide-format systems. Moreover, it is knowing enough about each customer to recommend a product or service before they call you. This, by the way, can make you look like a genius. And, it all drives profitability, as does focusing on value.
“The most profitable areas are those providing the best value,” said Jocelyn Gorman, president of Document Solutions Inc. (DSI), a mid-sized dealership in Albuquerque, New Mexico. This avoids a race to the bottom while making your dealership harder to replace because your offering is tied to outcomes.
In Gorman’s view, new products and services should be efficient, scalable, and a good fit with your other offerings. In building these, dealers should have:
- solid vendor relationships, which help with advice and guidance;
- standardized processes for implementation and support;
- familiarity with individual customer needs;
- a committed team.
The latter can be especially important because your team sees customers more than you do. “Profitability accelerates when the entire company is rowing in the same direction,” added Gorman. The result is reduced waste and increased accountability with profitability as a natural outcome.
The path to doing and being more can be a learning process. Sometimes the fit isn’t right, so if you’ve tried hard and something doesn’t work, you may have to change something or let it go. Either way, learn from the experience
“Areas from which we’ve learned what works and what doesn’t have become our most profitable because we are adamant about learning from our mistakes,” explained Chelsey Bode, CEO of Pearson-Kelly Technology in Springfield, Missouri. This learning, she noted, was part of the educational (and experience) expense of taking on a new product, vendor, or service offering. “We eventually tweak it or toss it.”
Don’t stop!
Pay attention to what makes money. Don’t stop doing those things when adding products or services that can add value. This is why a solid understanding of customers and their so-called pain points is so important. You’ve probably been told here and elsewhere that services such as managed IT and cybersecurity are critical to success. This remains true in the big picture and long term, but is not the case in every market or for every customer.
However, this doesn’t mean you can ignore it because your top four customers don’t have a need for, say, managed IT. There may be others that would value these services. This is a key reason for listening to all your customers so you can understand their businesses, their needs, and how you can support them. “Some of the soft skills and client understanding go beyond the product and even the service,” said Bode. Importantly, it helps develop trust in your dealership.
Look at this pragmatically: “Print, the basis of your business, remains strong, stable, and profitable,” noted Gorman. “It has recurring revenue, mature processes, and lower risk compared to offerings like cybersecurity. Services like managed IT, VoIP, and AV are not necessarily more profitable or more important than print.” And here’s the kicker: Copy and print are a reliable foundation upon which you can add skills and expertise in other areas.
Here’s an example. Customers may have a lot of hard-copy pages that contain useful but relatively inaccessible information. “Dealers are having success in the digitalization [scanning] of hard copy documents for preparation and loading into document management system software. This supports customers’ digital transformation,” said Jim Coriddi, chief dealer officer at Ricoh USA. When bundled with services for implementing and supporting document management software, this can provide dealers with both one-time archive scanning and ongoing revenue streams tied to software support. The copy and print business remains profitable, and you have added a profitable capability that adds value for customers.
Another way of adding profitability is communication services such as digital signage, as described in “Microcapsules to the Rescue” in the December/January issue of The Cannata Report. In contrast to more complex undertakings, this adds products, services, and broader capabilities without requiring highly trained, specialized support.
“Sexier” topics
Some customers may raise discussions about “sexier” services such as cybersecurity, compliance, and managed IT, maybe to learn about it or see if there is a fit for their organization. Hearing and discussing these interests can help you learn about potential needs and alert you to what customers may be thinking about. Keep all this in mind because it may be important later. Meanwhile, ascertain whether there is a service or product they can use right away.
Looking ahead at the office technology horizon
Always look at the big picture with the future in mind. Don’t give up on what you do well while striving for more profitability. Diversification is just a way to increase profitability. “AV and managed services will be equal to print business in the long term,” said Gorman. Realize, given the pace of technology, the long term may only be five years. “The opportunity is not choosing one path or technology over another but adding services that add value while relying on print as the steady engine of profitability.”
