ITEX 2007 - Roadmap toSelling the Total Document System12 Jan, 2007 By: Editorial Staff imageSource
ITEX 2007 - Roadmap toSelling the Total Document System
Once again, ITEX will gear up to host thousands of dealers and hundreds of vendors to premiere the absolute latest technology and cutting-edge education in order to teach dealers how to best leverage document solutions in the industry today.
In addition to the event’s daily power-packed program of activities, including dozens of education sessions from six categorical tracks, and show booths full of the best technology from over 230 vendors, two full-day Dealer Business Forums will offer exceptional opportunities to impact attendees, held conveniently one day prior and post the 2007 show floor opening.
The focus on Forum 1, The Roadmap to Selling the Total Document System has a "Master Class" approach that is designed to take dealers from core competency levels to advanced understanding of the latest trends and forecasts in the industry. This informative session is designed to give dealer attendees the platform and ability to develop their own well planned strategies for success in the US Office equipment market, letting dealers explore just how they should structure their businesses today in order to profit.
Dealers will find the best road map and key signposts for "staying alive and well" throughout the industry’s revolving doors due to rapid introduction of new technology. Dealers will gain knowledge of the evolving balance between hardware and software services and IT advances, learning how to add/keep intrinsic value for them and their customers in order to maximize existing and new business opportunities. From the ground up to complex problem solving, executive levels of strategic disciplines are examined. This class will not stop at the theoretical; every session is designed to answer the dealer’s question of, "What do I do next?"
Forum 1 affords dealers the real opportunity to acquire the latest skills while networking and trading ideas with colleagues and peers. Dealers will learn about the current state of the industry, and the forecasted opportunities that lie ahead for the taking. As this information is made available just prior to ITEX’s doors opening, dealers can utilize the new strategies to their advantage, as a guide for making the best use of their time on the trade show floor, in addition to their overall business. What would normally take months to learn from multiple sources can now be acquired directly in just one day, and the forum is intended to make a real difference to a dealer’s strategic business plan.
To fully impact each dealer’s business, four top industry experts will make practical, workable recommendations from first-hand experience, in order to provide a viable framework for dealers to convert and apply the information to their own dealership. A Q&A session is included to allow each dealer to get a full understanding of the strategies presented. This forum will arm dealers with the best information to scout out the finest products and potential partners found at ITEX, and beyond.
To preview Dealer Business Forum 1, imageSource sat down with the session’s consultants and analysts: Richard Norton of Docutrends; Lou Slawetsky of Industry Analysts; Bob Sostilio of Sostilio & Associates Int’l; and Charlie Pesko of Infotrends to get their views on topics to be discussed:
imageSource: With products at parity and the traditional copier market maturing, where are opportunities for dealers to grow their businesses? What advice would you give a dealer today?
Sostilio: Our workgroup office space has become a replacement market with newer models introduced at lower price points and more functionality. As a result, contribution to overall revenue may be constant or declining while contribution to profits is no longer significant. Therefore, dealers must start adding efficiencies to their service department such as pre-diagnostics prior to dispatching; allocating coverage by output volumes instead of geographical boundaries; and managing their supplies and parts inventories. These areas contribute greatly to a dealer’s profitability and provide better opportunities then taking on another product line.
Slawetsky: When products, such as workgroup MFPs, reach parity, as is the case in today’s market, they become commodities. The result is a steady decline in both selling price and margins. Research performed by Industry Analysts, Inc. shows a price decline of more than 40 percent for products in the 40 – 50 PPM speed range during the last four years. We currently note at least two products in that speed range selling for approximately $2,000. These include copy, print, scan and fax functionality. We are rapidly reaching the point where the selling expense for these products is greater than any profit they might generate. Dealers must look to areas where they are able to generate incremental revenue at higher margins. Market activities such as LAN service, print management, scan services, facilities management and the integration of their systems with specific applications, all represent significant opportunities.
Norton: In a very overused word, it’s solutions. Dealers should find the software packages that are most complimentary to their installed base of customers, become authorized resellers of that software, sell the software, and ongoing support services to their customers. This approach is working for many dealers already and dovetails nicely with the current dealer business model that is built on a sale with an annuity revenue stream based on service.
Pesko: Certainly the key to any successful strategy for coping with copier market maturity is to concentrate on capturing page volume. This is where the profits are. Service and supply margins on color pages, for example, offer up to four times the profit margin of a monochrome page, so having an effective sales strategy for increasing color placements is an obvious first step. Similarly, dealers should work on developing a production copier business, because of the exceptionally high page volumes that are found at that level of the market. But most importantly, dealers should move to a solutions-led business model. This type of approach is critical to surviving, and even thriving, in the current mature market. Dealers must change their relationship with the customer from one of simple transaction fulfillment to one of consultation and partnership. Our studies have shown that solutions-led selling puts significant margin and revenue back into copier deals, and changes the nature of the business relationship so that price is not the primary driver of the sale.
IS: What factors (sophistication of product, direct distribution by mfrs., margin pressure, etc.) within the office equipment market represent the biggest threat to dealers today? And, is there anything they can do about it?
Sostilio: In my opinion, the biggest threat today are the manufacturers’ own branches that now compete with its own dealers. Many of the branches offer pricing below dealer wholesale pricing and force dealers to make some really bad deals, or lose business. Dealers are going to have to look at their manufacturer as a direct competitor and perhaps take on a second, non-competing line as well as lock clients into longer-term leases.
Slawetsky: Yes, the single factor that perhaps has the greatest impact on dealers – one to which they cannot easily respond – is the increased frequency with which they must compete with direct distribution from their primary vendor. Increased same-brand competition always has the effect of reducing margins. When that competition comes from a vendor that may be price advantaged, margins are reduced even further. Dealers must develop alternate strategies if they are to continue generating the profits necessary to make them viable businesses. These could include adding services, extensive workflow analyses, the integration of overall security systems, and the addition of alternate brands, all of which we address in depth at the ITEX Dealer Business Forum on March 20th, in Las Vegas, NV.