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Grow Business by Integrating Value-Add Services & Solutions

6 Mar, 2008 By: Toshiba Toshiba imageSource

Grow Business by Integrating Value-Add Services & Solutions

imageSource Editor, Sand Sinclair, recently sat down with Toshiba America
Business Solutions¹ newly appointed President and Chief Operating Officer, Mark
Mathews. They talked about the ever-changing landscape of the independent dealer
channel, and what dealers can do to stay competitive and profitable. Here are
highlights from that conversation.

imageSource: Thanks for offering up your time today, Mark, and
congratulations on your recent promotion. It has been an interesting year for
our industry, with the explosion of color sales, manufacturers¹ increased focus
on building their direct dealer channel through acquisition, and the effects of
a generally flat market. Many dealers are sensing the winds of change though our
industry, and looking for insights and strategies to survive and hopefully grow
their businesses. Given your more than 17 years in this industry, what¹s your
take on the future of the independent dealer?

Mark Mathews: Thanks, Sand. First, the independent dealer channel is
key to Toshiba¹s overall market strategy, both today and in the foreseeable
future. Our independent dealers make up the primary source of our distribution,
and in fact contribute more than half of our revenue. The industry is evolving,
and I can tell you that for sustained success in a highly competitive market,
dealers, both independent and manufacturer owned, have to extend their vision if
they want to experience long-term growth and success. Now is the time that they
really have to make that transition from being focused on the quick hardware
sale that¹s purely price based to building a sustaining customer relationship
that comes from providing value-add services and solutions. If they stay focused
on hardware only, they¹ll see their profits continually decrease year-over-year,
and ultimately will get left behind.

iS: Historically, dealers have made the bulk of their income from
selling the box. Is it really realistic or even financially feasible for dealers
to look to change focus and offer more in the services and solutions arena?

MM: It¹s not only realistic, it¹s necessary. Every day the MFP is
becoming more and more of a commodity, and one of the most significant problems
dealers have had to face over the past year or so has been the intensified price
squeeze many manufacturers are putting on their hardware in an effort to close
the sale. It¹s a short-sighted strategy based on price that ultimately reduces
dealer profitability, and sometimes eliminates it altogether. To counter this,
TABS encourages our dealers to approach the situation from a different angle.
Instead of closing deals based only on the price of a box that¹s ultimately the
same as the box your competitor is offering, increase the value of the box
through solutions offerings, and in return, build a value-based relationship
with your customer. From our vantage, the most successful and profitable dealers
are those who are actively offering value-add solutions as part of their

iS: Makes sense, but from what we know, dealers haven¹t really
embraced solutions selling en-mass as of yet. What do you think it¹s going to
take for the independent channel to come around to solutions selling in a
significant way?

MM: I think for many dealers it¹s like facing anything new and
unknown. Perhaps for some dealers, selling solutions appears much bigger and
more challenging than it actually is. Some other dealers may still be doing just
fine focusing on hardware sales and don¹t yet feel a significant need to change
strategies. The proven truth from our dealer base is that, for dealers with
long-term vision and a desire for sustained growth and profitability, value-add
services and solutions are a great opportunity and don¹t require a significant

So, for those dealers open to investigating solutions, the first step we
recommend is to look at your technology partner and what they currently offer in
this area. More reluctant dealers can start with a smaller, simpler solution
offering, and then look within their existing customer base to see who it may
benefit. Selling simple solutions to the customers you already have strong
relationships with is a great jumping-off point for dealers. For example, one of
the most successful solutions Toshiba currently offers is our e-BRIDGE Re-Rite
solution, which provides advanced optical character recognition capabilities for
the easy scanning and electronic filing of paper documents. Re-Rite has proven
itself to be very easy for our dealers to embrace and sell, and it offers strong
value to a wide variety of customers. Most dealers who start small and get a
taste for the process and the success that comes with it are then much more
optimistic and eager to expand their knowledge and offerings in the value-add
solutions arena. We also find that once an independent dealer gets their foot in
the door on value-add solutions, they quickly jump to more robust offerings like
print management services, e-discovery and document security solutions with
great success.

iS: Let¹s shift focus away from what dealers should be selling in
order to be successful. We¹re in an election year, and on the verge of a
recession according to some economists. Do you have any other advice to help
dealers survive?

MM: It¹s a pretty tough market out there for a variety of reasons
mentioned today. What we do know is that when the market slows and budgets for
capital equipment decrease or disappear entirely, we really encourage our
dealers to look at alternate methods of generating sustaining income. For
Toshiba dealers, this includes offering customers managed print services.
Toshiba¹s Total Print Management is a true value-add for customers, which is
especially important in trying economic times. Not only can the program improve
the initial equipment lease and reduce hardware and supply costs, it also
provides customers the opportunity to improve fleet efficiency, often times
resulting in overall cost reductions and higher profit margins for the dealer.

iS: Well Mark, you¹ve certainly provided some valuable insights for
our readers to consider. What¹s coming up next for Toshiba?

MM: We¹re holding our 2008 Dealer Meeting this month (March) in
Southern California, and while I can¹t share any details, I can tell you that
color will certainly be a significant focus. We¹ll be introducing several
exciting existing model replacements, and I think our dealers will be very
pleased with what they see.

iS: Well, with that, have a great dealer meeting Mark. Thank you for
your time, and again, congratulations on your newly appointed position as
President and COO of TABS.

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