It is not an uncommon story in the imaging industry — or any technology-based industry, really — for a business to look completely different today than it did 10 years ago. After all, technology evolves, so it makes sense for a successful business to evolve along with it. The key word, however, is successful. For every business that has successfully completed a transformation, there may be 20 other empty offices, vacant factories and forgotten names. It stands to reason, then, that a business founded in 1998 is a success just by virtue of its continued existence. One that is not only existing, but thriving, goes beyond success, and becomes a model of excellence.
Founded in 1998, Digitek is such a business. When it launched it was focused largely on storage media, as the name might imply to those still familiar with the medium. Although the firm dabbled in certain imaging products early on, it was relationships with companies like Sony, Fuji and Maxell — leaders in the field of storage media at the time — that really grew the business. By 2004, says Digitek CEO Paul Martorana, the business incorporated some imaging supplies but was about 70 percent storage media. But Martorana was not content to let that rest.
“We saw the writing on the wall that the media space was going to be in decline, and meanwhile the imaging supplies market was a multibillion dollar market that was growing,” he says. “That’s when we made a concerted effort to bring on imaging lines like HP, Xerox, and more. We felt that if we could offer them to our customers we could get some traction — and that’s what we did.”
For that reason, says Martorana, Digitek isn’t necessarily a household name in the imaging industry. “We’ve been around for a while, but we started with one category and then made the decision to refocus on this channel. We haven’t really been a focused player in the space until the last six or seven years or so.”
It has been a busy and productive six or seven years, however, with loyal customers working with Digitek as it expanded from its Virginia headquarters and into Chicago and California, as well as Columbus, Ohio, with the purchase of an additional storage media company. However it was HP’s Tier 2 program that really put Digitek on the map in the imaging space. That program sought to push marketing programs from HP through to the smaller dealers and give them the attention that may have been lacking from the larger distributors.
“Our dealers could now get credit from HP for puhases they made from us,” said Martorana. “That opened the door for us to go after many resellers that wouldn’t really speak to us before, and helped us get onto the scene. There were a lot of little resellers out there, and we said, it’s great you have these giant distributors for selling to the CDWs of the world, but who’s going to take care of a lot of the smaller dealers? We felt it was a chance to close the gap with the SMB dealer. We pioneered that model.”
From that point, it was just a matter of time for Digitek. “We grew pretty rapidly at that point and other manufacturers took notice,” recalls Martorana. “Lexmark signed us up a couple of years ago to be an authorized supplies distributor, and Xerox after that. And this year we got Xerox hardware.”
Now an authorized distributor for Lexmark and Xerox as well as HP, Digitek opened a Dallas location last year, and in the past year has increased its square footage for distribution by 50 percent. And although Digitek still sells some storage media — Martorana says it is approximately 15 percent of the firm’s revenue — it has become firmly entrenched in the imaging supplies space.
Tier 1 success
A big part of Digitek’s success has been its relationship with HP. As many in the channel know all too well, there has been a great deal of change among HP’s supplier relationships over the last couple of years, so simply noting that in 2015 Digitek is a Tier 1 distributor for HP is impressive. That, too, has not been without challenges.
“When HP was eliminating the Tier 2 program, we were elevated to a Tier 1 distributor if we so chose. That was an adjustment,” recalls Martorana. “We had been purchasing through distribution, getting product in one or two days, and now we were getting product in eight days. But overall, it was fairly smooth. The rough part was the transition from open to authorized, where the number of authorized dealers were pared down.”
In early 2013, HP made waves in the channel by announcing new programs and business models for its partner network that would lead to a more tightly controlled distribution channel in the U.S. Effective November 1, 2013, in order for resellers and distributors to order or sell original HP supplies, now categorized as “authorized products,” they were required to be HP Authorized Partners. A year later, in November 2014, further changes to the supplies distribution policy meant resellers must have “qualified” status — reportedly leaving just a small percentage of resellers that once sold HP supplies remaining as authorized resellers.
“There are big things happening at Digitek,” says Aaron Dyck, Digitek’s senior director of solutions. It’s no exaggeration — there are big things happening indeed. Dyck, who came on board in mid-2015, brings with him a long and impressive imaging-industry pedigree and big plans.
In addition to being an authorized distributor for HP, Lexmark and Xerox, and the aforementioned Xerox hardware, the firm distributes HP, Lexmark, Source Technologies and Troy printers, as well as shredders. It also offers its own lines of remanufactured and compatible ink and toner. The firm’s Premium line puts its primary focus on the highest quality possible, while the Expression line is Digitek’s value line, which, says Martorana, is primarily sold into the federal arena. “By virtue of our headquarters being near Washington, D.C., we do a lot of federal business,” he says. “We help our resellers who need to provide government support with specific labeling on toner and boxes, shipping overseas — we do well with the federal dealer channel.”
As is the case for most players in the channel, however, Digitek is looking far beyond transactional selling when it comes to supplies and other product lines, and is bringing on board a plethora of solutions for its partners as well.
Digitek is currently integrated with the Private Supply Network, PSN functionality of e-automate. This technology is a next-generation solution for electronic fulfillment from ECi. This functionality will bring all the features of PO Processor workflow inside e-automate to reduce the number of clicks and speed up the overall order process. “We just recently brought on e-automate,” Dyck says. “We’re very excited about the opportunities that brings with it. We have our own dedicated gateway so we can do EDI and XML transactions direct, which we have with numerous partners so we can connect with them.
The valued partner
Dyck has other plans as well; plans that include being a truly integrated resource for Digitek’s partners. For Digitek, that includes not just meeting all their partners’ needs, but anticipating them.
“From a dealership perspective you see a lot of buzz around managed IT and network management — when people own the network they own all the devices, and there’s a collision course,” he says. “There’s document management in that mix as well — it’s either the next natural step from MPS, or a complement. We looked at all that and said, there’s a huge opportunity to help our dealers grow. They’re either acquiring or merging, and they are looking for ways to train their sales reps on multiple solutions. We see a need in the market to create a consistent and repeatable platform for sales training. We’re not talking event-based sales training via webinar or onsite, and the training is not about product, not speeds and feeds of copiers or printers, but fundamental selling skills for managed IT, managed print services and selling solutions.”
From that observation of needs came PartnerPro, a suite of business growth products that Digitek has been building for several months. Encompassing professional sales training, lead generation and inbound marketing services, PartnerPro is an online single-sign-on, video-based e-learning platform focused on selling MPS to win, selling managed IT to win, and professional sales coaching with the selling-to-win program. Partner Pro is an online, visual platform designed to help dealers create a consistent and scalable training platform for all of their sales reps helping them generate more leads and bring in more business.
“PartnerPro gives dealers the ability to ensure all their sales reps are trained on 2016 concepts,” explains Dyck. “The sales landscape has changed, and with easy access to information the buyer is more educated and informed than ever before. The challenge of sales is how to position your products and services within your customer’s business strategy and I don’t care what they sell — it could be water, toner, or printers, everyone needs to have a good grasp of the fundamentals. You watch a 15-minute video and take a quiz. After going through seven to 10 modules for each solution set you get a certificate, and they can always come back to reference it.” It’s a solution, says Dyck, for a lot of dealers who are struggling with high sales rep turnover.
Although it might seem surprising when speaking of 2016 sales concepts, a lot of focus is on the dealer’s website as well — surprising not because the Web is not still a traffic generator, but because there are businesses not utilizing their websites to the fullest.“
“Dealers want more sales leads, and we feel they don’t have enough,” says Dyck. “So we launched an inbound marketing/lead generation service. Dealers can completely outsource inbound marketing. We’ll blog for them, we’ll help with SEO value and with social channels, we’ll create content, emails, and white papers. We’ll convert website traffic and provide ROI specifically on how they’re leveraging their websites.”
PartnerPro will offer specialized training for MPS reps as well. “We focus on how to elevate the value of print to the decision maker, and how to challenge the current state of managed print — to differentiate,” says Dyck. Additionally, the program teaches that critical factor — expansion. “How do we help them branch out into complementary services, like workflow, mobility, security, as an extension of their MPS programs?” asks Dyck. PartnerPro features training specifically built to address those questions. Participants receive a custom-branded prospecting video, selling props for reps in the field, and branded brochures, so they can showcase themselves as an MPS specialist leveraging content that’s relevant in today’s MPS climate.
Also expanding its MPS capabilities and adding to its partner roster, Digitek recently announced a partnership with print management company Print Audit, in which Digitek distributes Print Audit’s Premier, Accelerator, and Insight software solutions.
“Print Audit brings a unique platform to our dealers in regard to user management,” says Dyck. “They have a ton of analytics in tracking — if someone printed 55 color pages, for example, they’re able to track who printed it. It takes it one step beyond managing hard copy output to managing the user — what’s the user actually doing? That’s who’s pushing the button. If we can help steer that behavior in the end user environment, we can really help streamline them. You hear a lot of conversation from Print Audit about being able to change the way they bill and report managed print, and that goes hand in hand with our 2016 approach from our training perspective — how do we help them branch out into complementary services?”
Of course, Digitek has long offered an internal MPS infrastructure as well — a hosted FMAudit solution, integrating with ECi. “For dealers that want to outsource their MPS operations, we can install the software or we can manage it,” says Dyck. “We can run assessment services for the folks that don’t have the resources to go out and tag or map the devices. We have a full, turnkey MPS infrastructure, and what’s unique is that it’s a one-box solution. Hardware and supplies, whether OEM or compatible, we drop-ship direct to the end user and we can set up and configure it for them. It’s tailored depending on what their needs are.” The many distribution locations mean that Digitek can drop-ship hardware and supplies across the country in one to two days. The firm also provides full-service recycling capabilities for both consumables and hardware.
Digitek is branching out further as well, with thought leadership webinars a big item on the agenda. “Think TED Talks,” says Dyck in describing the new initiative in which Digitek plans to bring thought leadership to the marketplace on a monthly basis. “Maybe it’s industry specific, but maybe not. You may want to know about the economic climate of North America, or hear from a New York Times bestseller on how to grow your business. We want to bring fresh perspective, technology, and ideas forward to the dealers on a monthly basis, just to help be that trusted advisor.”
It’s a unique perspective from a for-profit channel dealer, but one that is becoming a bit more common, as more and more frequently companies that once tightly guarded their secrets for success are now sharing them with partners and yes, competitors. Dyck says it’s another way in which technology has changed the face of business. “With the advent of the Internet of Things, the speed of technology, you can’t hold your cards close to your chest,” he says. “Share as much relevant information with your audience as you can so they look to you as a thought leader and trusted advisor.”
Martorana agrees. “We’re dealing with Buyer 2.0, but many dealerships are trying to operate and sell like they did 10 years ago. Consumer and purchasing habits have changed. Ten years ago very few people searched online before making a purchase. Today, 70 percent of purchases have already been researched through the Web and the buyer has an idea of what they’re going to do before contacting the vendor. That’s a huge shift in the way people buy. In order to respond to that, dealers and resellers need to have a relevant voice, and a value proposition that’s going to compel the buyers that contact them, and that’s one of the areas we’re focused on.
“It’s about creating a compelling value proposition to differentiate Digitek from others,” he continues. “Why is someone going to choose us over someone else? It’s important to have a compelling response, and the dealers who are facing the industry headwinds have to ask themselves the same thing, and decide where they want to be in five or 10 years. We’re going to help people grow the solutions business because we believe that’s the future.”
This article originally appeared in the October 2015 issue of The Imaging Channel.