Leveraging Solutions to Grow Your Business

Following is an article recently published in the May 2008 issue of ENX magazine:

Leveraging Solutions to Grow Your Business (and sell more hardware)
By Darrell Amy
 
Selling office equipment is tougher today than it has ever been.  The customer’s expectations are higher.  The implementation and training is more involved.  And competition is driving profit margins lower and lower.

Then there are forces outside our industry.  Getting the attention of new customers is more challenging than it has ever been.  Have you noticed that our society is downright hostile to “cold calls?”  In the past year, congress has literally passed legislation against cold calling to individuals on the phone. 

At the same time, hiring, training and retaining sales people is a growing challenge.  In the old days, it was hard enough to get a new sales rep up to speed.  What about now with all of the technology?  How do you get a sales person up to speed? 

With this increased competition and increased resistance, what can a dealer do to retain profitability and grow revenue?  Well, you could churn your base.  Sure, it is profitable to roll leases. But what about the clients you are losing?  Is your market share growing? 

How are you going to get new business?  The starting place is attention!  You need to capture the attention of your marketplace.

The problem is commodities don’t capture attention.  Consider the personal computer.  Remember the days when a PC cost over $5,000?  Remember how exciting it was to watch 64 kilobytes turn into 2 megabytes and then 10 gigabytes?  Remember the buzz about the new Windows 98 system?  What about the advent of the internet and email?  It all used to be so exciting until…

…it became a commodity.

The New Reality:  MFP = A Gallon of Milk
Commodities are hard to sell.  Let’s face the facts:  the copier has become a commodity.  Yes, even the connected digital multifunction system is quickly becoming a commodity as well.  Sure, you may get a quick boost from the new color enabled devices.  But even color will quickly become a commodity. 

There are two problems with commodities.  First, the profit evaporates.  InfoTrends put it well: 
“It is critical to keep in mind how unkind mature markets are to the profit margins of commodity products.  This is especially true in mature technology markets.”

The second problem with commodities is that they are BORING.  The customer has seen it before.  They are not interested.  And this is a big problem.

Your Attention Please
Attention is the key success factor for a sales person to attract new business.  If you don’t get the market’s attention, your sales people don’t get appointments, no proposals are generated and you don’t sell any new customers.  (Sound all too familiar?)

So, how do you recapture the attention of your marketplace?  In reality, the fundamentals of success have not changed.  The key to winning new clients is to capture their attention with a meaningful message that shows a positive return on investment.  So how do we capture their attention?

What are business owners concerned about?  This answer is simple:  they want the same thing you do.  They want to sell more at a higher profit, gain competitive advantage and lower their liability.  What do we have that can address these issues?

The new document solutions message is a great attention–gaining entry.  Instead of the sleepy “Want to see the latest and greatest copier bell and whistle?”, what if your reps led with this kind of message:

The reason I called today is to help your company be more successful. Just as your company provides accounting services (fill in the blank), we have specialized for 35 years in helping our clients with their documents.  You see, documents are the key vehicles by which information flows in, around and out of your organization.  And whether they are paper-based or digital, the flow of these documents can have a tremendous impact on your:  bottom-line profitability, competitive advantage and maybe even reduce your liability.  What types of documents are critical to your business?

Now, that is a conversation starter.  Better profits, competitive advantage, reduced liability?  You have my attention—go ahead!

The Big Myth
There is a big myth out there that solutions sales are incompatible with the traditional way of doing business because the sales cycle is too long.  I would propose to you a different reality:  selling commodities is incompatible with your traditional copier sales model because the profit is too low.  Plus, hardware won’t get you what you need to win sales.

Consider this possibility:  It may actually be easier to get through more doors and close more sales with a solutions message than by using the traditional methods.  Let me share a couple of real-life examples:

Case One: The Stingy Car Dealership
A tenured sales rep with over ten years of successful experience had been trying to get the attention of a multi-lot car dealership.  The owner would not see him.  The owner’s son had an unyielding position that it was more economical for the dealership to buy desktop copiers from Sam’s.   Even after a free survey of all their equipment, the owner still was not interested.  (The sales rep did not have his attention.)

So the sales rep decided to take a different approach.  He approached the owner from a document perspective instead of an equipment perspective.  He learned about their paper storage and retrieval issues.  The owner directed the representative to meet with the auditor and controller.  In the end, they purchased a full imaging system and a fully loaded multifunctional system—all with very healthy gross profits.  The client is very happy and the sales rep expects to sell hardware to each of their five store locations.

Case Two: The Competitor’s Customer
In this case, a brand new sales rep with minimal sales experience approached a 25-member accounting firm on a cold call.  The firm had been a long-time client of the largest competitor in town.

Instead of asking about their copiers, the sales rep was trained to ask about their documents.  He secured a meeting with the owner and their IT consultant.  In the meeting, the rep and the document solutions specialist shared the benefits of an electronic filing system.  Half-way through the meeting, the owner asked if a copier could be used to scan documents into the system.  Of course, the answer was yes.  Then, the owner asked if the dealership sold copiers!  (I subscribe to the opinion that it is a great thing when someone asks if they can buy something from you!)

After a demonstration of the imaging software and scanning from the MFP, the owner was impressed.  Upon further investigation, the owner learned that they could manage scanned documents with their accounting software.  However, the trust built during the discussion of their documents earned a $65,000 hardware sale, once again, with healthy profits.  Best of all, a strong competitor was unseated.

New Clients + New Profits
In each of these cases, the solutions message was leveraged to gain the attention of a new client.  One situation resulted in a profitable software and hardware sale.  The other resulted in a profitable hardware sale.  The key is both were new clients and both were profitable.

How do these stories hit you?  Do you see the opportunity?  Or do you see the potential threat to your current base by progressive solutions-oriented dealers?

The fact is, it really isn’t a big stretch to move into the solutions business.  You are almost there.  How, you say?  Your dealership’s core competency is that you understand documents.  Until now, you have positively impacted the flow of these documents by providing systems that increased copy productivity and lowered output cost.  With the first generation of MFPs, you helped with print productivity and cost.  Is it really that big of a stretch to think of adding some software utilities to help your clients increase their productivity and lower cost with their forms, storage, retrieval or workflow issues? 

Well, that sounds so simple.  On one side of the coin, it really is.  On another side, there are some fundamental issues that a dealer needs to address to make this adjustment.  Some of these include:

1.    Repositioning Your Dealership.  
Your clients and potential clients likely see you as a hardware provider.   They need to see you as a credible source of document solutions.  This is a marketing issue.  Outside of running some advertising or specials, marketing is a relatively new necessity for copier dealers.

2.    Designing a Strategic Plan.  
There needs to be an intentional plan.  Again InfoTrends says it well.  “As with most fundamental business changes, many vendors will attempt the transition to a solutions model out of reactionary response rather than proactive planning.  The challenge that these vendors will face is executing in a timely and coordinated manner, as the transition could take years and their competitors may already be securing market share.  Those who adopt a ‘wait and see’ approach before transitioning are less likely to respond in time and their chance of success is lower.”  Do you have a strategic plan?

3.    Sales Training.  
No, I’m not talking about more product training.  In some respects, our sales organizations have too much product training.  Instead, they need to learn what benefits capture the attention of business owners.  Then they need to learn how to recognize opportunities.  They need to learn how to close the hardware business now and engage the services of a specialist to design and implement a profitable solution.  These are staffing and sales training issues.  

What Now?
The solutions imperative is upon us.  You can leverage the solutions message to solve your most fundamental problem:  getting attention to win new, profitable business.  In the coming issues, we will explore each of these three critical areas. 

The solutions message is real.  It works.  You can and must make this transition without sacrificing the hardware business that you have worked so hard to build.

Darrell Amy is an innovative Market Repositioning Specialist.  His emerging company, Dealer Marketing Systems, provides solutions sales training and marketing services to help dealers succeed.  You can learn more at www.dealermarketingsystems.com or contact him directly at damy@dealermarketingsystems.com or 501-626-4110.