Industry leaders discuss what’s next in a post-COVID world.
Above: Clockwise from top left, Baggott, Buysse Contreras, Dellaposta, Waldinger, Young.
One of these days, we are going to stop writing about the pandemic. I promise. But until it is eradicated and a faint memory in our collective consciousness, there is no avoiding the topic. Because of that, our first virtual panel of 2021 examines the pandemic’s impact on different segments of our industry, lessons learned, positives that have come out of this challenging time, and advice for dealers on how to get business back on track in 2021.
Participants include AJ Baggott, COO, RJ Young Company; Phil Buysse, SVP, general manager, office equipment vendor services, U.S. Bank; Joseph Contreras, commercial marketing executive, office solutions, Epson America, Inc.; Deb Dellaposta, president, Doing Better Business; Dan Waldinger, senior director, B2B marketing, Brother International Corporation USA; and Stephen Young, president, Square 9.
CR: What was the biggest lesson your organization learned during the past year?
Baggott: We learned that all the strategic planning and preparation in the world cannot possibly prepare you for everything. The biggest factor to success within an organization when facing this kind of unpredictable disruption is the ability to be agile and the willingness to change. Unfortunately, we saw many organizations attempt to maintain the status quo to ride out the pandemic to devastating end-results. We were fortunate that our leadership team saw the necessity in changing our approach to not just survive, but to thrive amidst the pandemic. We took bold action early to secure the business financially and position ourselves to experience growth in certain segments of our business while also launching new product lines, services, and offerings that offset some of the revenue and profit declines experienced in our core business aftermarket.
Buysse: The importance of agility to manage through trying situations. Although the environment was difficult, our employees and organization remained committed to taking care of each other and our clients. Our ability to adapt quickly to the adversity that we were all facing, helped deepen the trust and relationships we’ve built over the years.
We also saw the incredible resiliency of this industry. When it seemed the whole world left the office, our clients continued to bring solutions to the market, to their customers, to help minimize the impact of the pandemic.
Contreras: The biggest lesson Epson has learned as an organization during the past year was being flexible, nimble, and quickly adapting to market needs. No one predicted what was going to happen and what kind of impact it was going to have. While our first priority was ensuring the health and safety of our employees, partners and customers, our next priority was to address the needs of our dealers and remain engaged with them. We had the opportunity to focus on strengthening those relationships and offer help. We provided a series of webinars and training to either refresh their skillset or provide new tools for sales and customer outreach. Building and strengthening relationships has been very important, this year more than ever. It was refreshing to see how our team and our dealers have been able to adapt and do so quickly.
Dellaposta: How resilient and prepared our team is to handle any challenge. Our core value of family continues to shine through all the adversity we faced this year.
Waldinger: Perhaps the lesson is really more a reaffirmation of the importance of remaining nimble and that the ability to adapt is among the most vital elements of an organization for continued success. It goes without saying that the pandemic changed everything about our way of life and how we work, and we’ve seen the evolution of work come to the forefront much quicker than would have happened in a normal year. So, resellers and OEMs need to continue to make adjustments to their offerings as the needs of end-users evolve. For instance, the workforce is now more mobile than ever, and there is an opportunity for dealers to extend printing and secure document management services to their homes. Resellers now have the opportunity to consult with and redefine how users deal with this new reality. Yes, the revenue mix and margins per client may change, but selling solutions, new services, and thinking differently will help secure the future.
For Brother, leaning into trends like this will allow us to better serve our dealer partners, and, by extension, the end-users that utilize our devices and services as needs change in the time of the “new normal.”
Young: I believe that as an organization, Square 9 became much more appreciative of what we have built over the last 15 years and how special our team really is. Like most companies, we needed to do some serious soul searching in March as this crisis unwound. It wasn’t just about what we needed to do to move past the challenges we were facing. We also needed to look at the type of company we are and our responsibilities to our employees and our customers. Finally, we needed a strong vision to determine how we would look as a company once this pandemic was behind us.
Our first step was to redraft our mission statement with a clear message of sustainability and protection of our employee’s well-being from a health and employment perspective. We allowed those principles to guide our decision-making process throughout the pandemic, and the outcome has been better than we hoped. Our employees responded with a strong sense of ownership towards the challenges we were facing. More importantly, they joined together to overcome them in a way that made me very proud to be a part of this team.
As a result of their response, we were able to protect our employees’ jobs and keep them healthy, all while expanding our product capabilities, distribution markets and positioning ourselves for a strong post-pandemic performance.
CR: What goals have you set for your company in 2021, and are those goals different than what you might have set if we weren’t in the middle of a pandemic?
Baggott: As a company, we have set a goal to achieve our 2020 budgeted goals in the core business in spite of the fact that we continue to experience issues from COVID and forecast ongoing declines in click volumes going forward. Our unlimited programs continue to have significant momentum in our marketplace, providing our customers with some level of stability and predictability during unpredictable times. Further, we experienced substantial growth in our managed IT services and other managed services offerings in 2020 and are setting a goal for even more substantial growth in those areas in 2021. We have found many opportunities to expand inside our current customers accounts, but also to break through into new customers who may not be looking for a print vendor but need our expertise in other areas. We experienced nearly 200% growth YOY in these areas and expect that sort of momentum to continue.
Buysse: We believe in the importance of striving toward continuous improvement both in team member and client satisfaction. If we take care of our people, the goals we have for client growth, innovation and increased engagement will take care of themselves. This is true in 2021 and has been our approach for years.
Contreras: Our goals are not all that different compared to pre-pandemic. We are in growth mode, continuing to invest in the business, and are excited that we can bring new and differentiated technology and solutions to the dealer community.
We are continuing to support dealers’ growth in two ways: 1) through incremental revenue opportunities, which we have already shown that we can do and 2) educate and guide dealers on service efficiencies that can positively impact profitability. In addition to sharing best practices, we are also providing guidance on where to consider investing. The ability to deliver a product that can help improve their overall service capabilities and profitability is going to resonate with not only our existing dealers but dealers that may be considering the Epson product line. With our newest introduction of high-speed color MFPs, we see this as a tremendous growth opportunity not only in the office but also in supplemental production environments. That, coupled with our strong A4 portfolio, gives dealers the ability to offer solutions that are in high-demand and can drive incremental page volume revenue.
Dellaposta: We recently held our strategic planning session and feel cautiously optimistic about 2021. We have a solid team, and we have several enhanced promotions to drive net new business and continued acquisitions. The pandemic has helped us focus on where we excel, and we are going to continue building our growth strategy around those areas.
Waldinger: Brother has truly continued to live and breathe our motto, “At Your Side,” and in 2020, we have worked to strengthen our culture through honest and open conversations. Over the past five years, we embarked on a cultural transformation and introduced “Strategic Culture Drivers”– a moniker for a series of behaviors that we recognized are essential towards shaping our culture and driving a high-performance organization. This year has confirmed that living our shared values and following the direction set through our strategic culture drivers is the key to professional and business success whether we are working from home or at one of our facilities. In 2020, we have made great progress on our path of cultural transformation with a renewed sense of comradery and employees feeling taken care of during such a difficult year. We also continue to invest in our communities through ongoing donation efforts, from PPE during the pandemic to supporting small businesses, which support Brother year-round.
For our B2B business specifically, we’re also planning to focus on continuing to build deeper relationships with our dealers in 2021. Relationships like this benefit both the dealer and OEM since they foster information sharing between the two and help both be more efficient. We have a history of great relationships with our dealers, but the pandemic underscored that these relationships are a key to success, and we’re looking forward to continuing to foster them as we move into 2021.
Young: Our expectations for 2021 are actually very high, with projected growth returning to between 25-30% now that a vaccine has been released. I still think Q1 will be a struggle for some organizations, but we saw our best months of the year in Q4 and believe that will carry forward into the new year.
Virtually every executive or business principle that I interface with has stated their intent to dramatically expand their managed services business, which focuses heavily on a cloud content management offering. We took aggressive steps during the pandemic to demonstrate exactly what our products were capable of and where they can take dealers going forward. With dealers now having the option to offer their customers an on-premises purchase, subscription on-premises rentals, and a fully cloud-enabled subscription model, they should have everything they need to grow this side of their business.
CR: It’s difficult to identify a positive after what we’ve all been through in 2020, but in what ways was your organization able to turn 2020 into a positive?
Baggott: We were able to take away several positives from 2020.
- We brought on new revenue lines and offerings for our customers. These were wildly successful and fueled significant growth in many of our developing markets and territories. Specifically, we expanded our technology solutions offerings to include Verkada security offerings, VOIP/phone systems, and digital mailroom solutions that include contactless delivery lockers and mail automation technology. Each of these offerings saw immediate traction in our markets and with our sales teams. The transition to remote working and the need for ways to safely continue conducting business made these offerings critical necessities for our customers.
- While some organizations were cutting individuals, we took the opportunity to invest in some incredible talent to bring our service offerings to the next level. We were able to see some immediate ROI from the individuals we brought in. As we’ve continued to preach throughout the pandemic, our people remain our most valuable asset, and we want to ensure we are always looking to bring talented folks into the RJ Young family.
- We accelerated our 3-year plan to transition in managed IT and managed services into a 12-month transition plan. While some of this was out of survival or necessity, it was also driven by demand from our customers. As they worked feverishly to move to a remote workforce, we were able to leverage many of our services and technologies to help them in this transition.
Buysse: We saw our organization’s commitment to employee safety and client success through a more flexible work environment. We saw individuals step up to serve in ways they’ve not been asked before as they transitioned to home office spaces and managed to find new ways to communicate with clients and coworkers and maintain productivity while juggling difficulties like child care, distance learning and other family members also working from the same home. We learned how to connect and relate to clients in different ways and move forward with stronger relationships. We gained confidence in our ability to face extreme adversity.
Contreras: The last year was challenging, and the pandemic tested all of our partners as A3 business and page volume was negatively impacted. However, the positive news is that we have been able to help our dealers adapt.
A significant shift in market demand was toward the sale of A4 products, both printers and MFPs. As thousands of companies were having employees work from home and schools were implementing distance learning practices, the demand for A4 products skyrocketed, both for hardware and ink. We quickly identified that need and rapidly developed marketing materials that our dealers could use to address work-from-home/learn-from-home application needs.
Given the breadth of our lineup and TCO advantage that our PrecisionCore Heat-Free Technology delivers, dealers were quick to pick up the portfolio and incorporate it into their MPS offerings. We’ve heard feedback from a number of dealers that this is giving them the opportunity to re-engage with customers and present a compelling solution that is new, highly reliable and cost-effective.
Dellaposta: In the past, we had large customers ask us for our “Disaster Recovery Policy” or “Pandemic Response Policy.” This year, we were able to see our Pandemic Response in action. While we never want to have to do this again, it is very reassuring for both our clients and us how well prepared we are to have no disruption to the business services we provide.
Waldinger: We were able to find new and improved ways to connect with our partners this year. Since face-to-face interaction was no longer possible, we had to be creative in how we interacted with them in order to maintain the relationship. Having close relationships with our dealers allows us to have a better understanding of end-user needs, so we can adapt to meet those needs. We want to keep the lines of communication open, so our dealers can share their valuable feedback and know that we listen while also providing them with information that can help their business prosper. We had to find alternative ways to provide value, and we feel we were able to do that this year, which will set us up for continued success in the future. For example, we launched our PATH, or Partner Authorized Total Hub, which is a one-stop-shop for marketing and other information that our partners can utilize at any time. This has allowed us to more easily share resources with our partners and stay connected when we can’t be together in person. We expect this hub to continue to provide value for our dealers even when we return to “normal,” and certainly believe this launch was one positive outcome of this year.
Young: I’ve heard 2020 described repeatedly as “a dumpster fire,” which really sums it up for many companies. We were fortunate to have a product offering that allowed organizations to work more effectively regardless of whether they worked from home or the office. This allowed us to get through the year with minimal impact. We committed early on to retain as much of the expertise we’ve developed as possible throughout this crisis and even pick up some new talent along the way, so the positive is that coming out of this year, we are positioned to respond immediately with a strong team of professionals as demand continues to grow.
CR: What adjustments is your organization making to operate in this “new normal” where more businesses will have more employees working remotely even after the pandemic?
Buysse: We continue to look to innovate and adapt as the market changes. We released a new solution for financing remote office equipment. We continue to utilize technology and integrations to make it easier for customers to work with us either remotely or in the office.
Contreras: With respect to service, we have implemented a new method of delivering hands-on service training using virtual technologies. The virtual, hands-on service training is live, instructor-led, and a highly effective complement to self-guided learning. The hands-on format is conducted through a conferencing platform that sees live instructors guide dealers through disassembling, reassembling, and flagging product differences from one generation to the next.
This has resonated with dealers and technicians, and our partners appreciate that technicians no longer need to be removed from the field and sent to another region or state to receive training.
Virtual engagement with dealer sales teams and end users will also become a mainstay going forward. The way that events and demos are being conducted has evolved. Being able to connect with and stay engaged with a broader audience, and do so more frequently, introduces new approaches to consider. The Ink Boldly virtual event we held in November was a tremendous success and well-received from dealers. At a time when communication and engagement was low in the industry, we seized the opportunity to stay engaged, and the feedback from our dealers and growth in our business reflects just that.
Dellaposta: We are focusing on products and solutions to help organizations integrate the remote worker more securely. We have many of our team members working remotely also and have shifted to holding virtual meetings. We already had our demo rooms set up to hold virtual demonstrations for clients, and we are finding this more and more useful.
Waldinger: We’re very focused on being a resource for the return to the office and meeting the new needs that will arise as organizations find ways to bring employees back. It’s been predicted that print volumes will not rebound to the same levels as before the pandemic struck, and we can all agree that looks very likely with the increased mobility of workers moving forward. We see an opportunity in accommodating these “new normal” and mobile needs. With that in mind, we’re looking at approaches like balanced deployment, in which multiple printing or scanning devices are spread around the office, as one way to assist with the transition back (this is known as “the six-foot-office”).
Balanced deployment eliminates the need for employees to congregate around one machine and assists with keeping a social distance while helping employees feel comfortable returning to the office. In conjunction with a balanced deployment approach, we’re also zeroed-in on low-contact solutions. For example, apps that allow users to print or scan from their mobile device lower the need for contact with the actual printing or scanning device, again helping to reduce employee concern. Returning to the office means large-scale changes for many organizations, and we see a big opportunity in providing guidance and solutions that can help them make the transition smoother.
Young: I personally was never a firm believer in the concept of a remote workforce. It was my opinion that a creative process like software development required strong collaboration, which I doubted could be achieved remotely. Three years ago, I acquiesced to my management team and approved a work from home Friday policy that allowed our staff to avoid the weekend beach traffic on I-95. In hindsight, it was probably one of the best things we ever did.
Since everyone was already set to work from home comfortably, there was very little required to work remotely full time. All our business applications are cloud-based so we simply went home on March 17th and have worked without interruption remotely ever since.
I now believe that we can work with equal if not greater productivity as a remote workforce. I also believe a willingness to allow people to work remotely will open new labor markets for us to draw on in the future. I still believe office space will be required going forward, but we’ll likely reduce that space significantly as we plan to continue to support telecommuting after the pandemic is over.
CR: What advice do you have for independent dealers to get their businesses back on track in 2021?
Baggott: I would encourage independent dealers to think outside the box figuratively and literally. The decline in clicks, shift from A3 to A4, and cultural shift to a services-based model, make this an incredible time for change in our industry, but that can be good or bad based on the response of the independent dealer. As an industry, we must recognize that our service delivery and expertise are more valuable to our customers than the commodities that we sell. Marshall Goldsmith wrote a book with a very telling title called What Got You Here Won’t Get You There. Independent dealers have to look for those areas of opportunity adjacent to their core business that allows for them to maximize their expertise and service delivery model. If an independent dealer isn’t interested in this type of shift, then it may be time to consider selling.
Buysse: I would point to what we’ve seen successful dealers do. Controlling what you can control and adapting when it’s beneficial and necessary. Knowing that taking care of your people will result in taking care of your clients. Taking advantage of this time when companies are either going back to the office or a hybrid model to bring new configurations and solutions. Sharing ideas for products and programs with financing partners to benefit from developing them together.
Contreras: The industry is going to evolve. First and foremost, my advice to dealers is to ensure that they have a range of products that they can offer that can address and meet these needs to go forward. While the near-term focus has been around A4, I don’t see the demand for A3 going away. It’s a matter of how it’s placed or how it’s utilized within the office. It’s more about where the share of the page volume is going.
Continue to diversify. Consider categories such as wide format, scan, projection, and label printing where dealers can potentially capture more share of wallet with existing clients and support expansion into complementary and adjacent markets.
Lastly, stay connected. Maintaining a solid relationship with customers and maintaining a steadfast presence will ensure dealers have visibility to opportunities as they present themselves.
Dellaposta: Surround yourself with the best people in the industry who will help you be open to and facilitate rapid change.
Waldinger: First and foremost, being adaptable will continue to be a must for dealers in the coming year. The industry is poised to undergo even more changes next year, so having a flexible mentality will still serve dealers well. In terms of specific changes, dealers should be ready for the ongoing move from A3 to A4 devices in offices. This change will only get faster in the year to come, so dealers must be ready to capitalize on the opportunity. We would also recommend expanding managed print services since dispersed workforces will create new and different security and service needs on that front. Offering a scalable subscription model that addresses both the office and corporate WFH (Work From Home) needs along with the trusted relationship that dealers have established are value propositions any client would welcome. It all really comes down to being ready to assist with digital transformation. The pandemic has expedited this process for many organizations, and dealers that are able to provide value in aiding that transition will find many opportunities for success.
Young: I don’t know that I have a glass ball for 2021. But it’s clear that diversification and managed services are more relevant than ever. There’s no denying that print took a hit, but I believe it will see a resurgence this year. The question is, by how much? Will customers return to their offices once this is all over, or will it simply be too hard to return completely after telecommuting for more than a year?
I believe successful dealers will have to look at how people are working to sell and deliver the tools needed for a changing business environment. We have already seen that content management, workflow, and digital transformation are a big part of this. Still, I suspect VoIP, managed network services, and security consulting will be growing markets as well. Especially products in the cloud space can be utilized from virtually anywhere while still offering a consistent recurring revenue stream.
The office equipment industry has always been the trusted technology partner for many companies, but I believe that their footprint needs to expand. This is likely out of the comfort zone for many dealers, but it’s a strategy I’ve seen being embraced by many of our most successful partners.
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