“First, get your facts straight. Everyone is entitled to his own opinion, but not his own facts. Second, decide to live with the facts. Third, resolve to surmount them.”
– Alan Greenspan
Do we have enough facts about what has happened to office printing in the past 10 years?
The imaging channel is dominated by OEMs, distributors, finance companies and pundits that have vested interest in making dealerships spend more time in the “review the facts” phase of the organizational change paradigm. I have spent much of my last five years in blogging trying to convince dealerships that these facts are so clear that they must be accepted and quickly actioned upon.
Review the facts
Apart from the home market, where most dealers have no business, print volumes are down over 20% in the past year. ALL OEMs are down over 20%. Supply vendors are down 20%. This is on top of the past decade where revenues declined anywhere from 30-40% depending on how they are measured. Over the same period, the economy grew an average of 2.5% per year. It would be hard to deny these facts. The strategy from some industry players is not denial, but obfuscation; they will accept “some weakness” in “some areas” but quickly point out that there is opportunity “over here.” Their “over here” is always inside the industry. Not outside. They are careful not to scare you with facts.
Your emotional state as I present the facts is not my concern. Well, actually it is. If you listen to others, you may be lulled into doing nothing. So, I do actually hope you are genuinely afraid of the status quo. You should be. These facts then are scary. They need to be lived with.
Doing nothing is the worst course of action. As revenues decline, especially at this rate, costs quickly overtake revenues. Working capital and equity shrink along with company value. Most have been forced into significant cost reductions. This is a temporary measure. Xerox, for example, has done an excellent job here, and right before the pandemic hit it had returned to predictable profitability with costs matching new revenue realities. But then, COVID-19. Xerox is a large company with cash, good leadership and options.
Cost cutting is not a strategy. Really what you are saying is “we match our costs to revenues, to make profits.” That’s what every business does. As the saying goes, you can’t cut your business to greatness.
Many dealers underestimate the effect this has on their employees. Many employees want to be part of something successful. As a leader you need to engage with those employees and give them something to believe in. A reason to stay. A reason to be engaged. When the whole industry is in decline, how are you going to buck that trend?
If we turn our attention to customers, many view print as a less important piece of their technology puzzle. Some have tried to parlay office print into document management. There is merit in this, but you run headlong into giant competitors like Microsoft, Google, Amazon, and Salesforce. This seems like “doubling down” on print instead of branching out from it.
There is a lot more to office print dealers than print. Let’s consider your strengths:
- 100s or 1000s of customers with decades-long relationships
- A strong local brand and presence
- An extensive knowledge of leasing and finance
- Field service technicians
- Access to strong technology brands
What can you build with these strong foundational blocks?
The most difficult, and riskiest part of a business venture is customer acquisition. It’s also incredibly expensive. Print dealerships have spent decades acquiring customers. In some respects, you got so good at it you didn’t think it was a big deal until, well, getting new ones started getting harder and harder.
An obvious outcome here is to reevaluate your emphasis on new customer acquisition and focus more on expanding sales to your existing customers. So often in our customer base we find that existing customers are happy to give local partners a bigger share of the purchases they make anyway every day. Technology like laptops, displays, software, equipment are all products they would welcome help acquiring. Your ability to install products, to finance them, to add a human touch to acquisition via an intelligent sales team, adds value that many national entities do not have.
New business directions are difficult. They require changes. Changes in people, and resources. Money needs to go from one line item in the budget to the next. Employees need to be repurposed or replaced. It’s difficult, but the alternative, doing nothing, is worse.
Our industry doesn’t need to discuss the facts any longer. It’s time to evaluate your options and execute.