The End Is Nigh

I've been dealing with this for years, yet last month I pocketed more than $8K in commissions.

Most of the items you mention are true.  We do need to sell more units, however I'm a large market area, and also have lots of competition.  Yes, prices are eroding, but you keep sane and realize there are clients that you can make GP on and those you can't.  You need to identify who those clients are.  You can do that by digging deeper, such as asking what manufacturer did they have before this one and or what dealer they did business with before the one they have now.  This can establish brand and dealer loyalty.  If it is there or not.

Value, there are clients that value our services and others that don't, many seem like they don't. 

You need to add value, more on this later tonight, stay tuned.....

Czech, I don't know how long (total years) you've been in the industry. The wealth of knowledge you've brought to the questions I've asked in the forum tell me probably longer than the 5 years you mention. I have only been in the business full time for 10 years. I have been around it with my father since I was a kid....30 years.

i do think some, if not most of your points are valid:

I like Art usually have about 6-8k per month on commissions, just selling boxes. I am in a big market with a lot of competition. I do think the points that are accurate in my eyes are differentiation of equipment, GP, giving boxes away, and expectations. 

I do agree that there is very little differentiation in products anymore. They all do the same things and of one does something others don't a sales rep better capitalize immediately because in a matter of months a firmware will be released to do the same thing.

GP is shrinking thanks to the manufactures  who have decided that the dealer channel is not important. The Japanese have decided the dealers are not their cash cow anymore so direct is the way to go to keep the factory running. I just fought for a deal with low margin and the service on a 1000 copies per month was at .004. Eventually I think the directs will all be sold off again one day and it will coke back around to the dealer channel. I will say though that I still have plenty of deals that I am able to have 2-3k or more of GP. Kind of goes back to volume for me. I'll take a few hundred dollars commission on 10 machines instead of losing so many trying to put thousands in a couple deals.

I think giving boxes away is the new norm and I don't know if it will change. I see guys around town giving it away at their cost to put numbers on the sales board. I also find that those people don't last but the company keeps pushing that because it's a new account and they get the service revenue. 

Expections will probably continue to rise due to the decreasing revenue thanks to the A4 market. One of the things I try to put in the customers head is that if they buy an a4 device today and in a week, and month, or a year they "have" to have 11x17 for something they will be stuck with equipment they can't use. I have won many deals over competitors selling A4 just buy hammering that point to them.

i do agree it is harder to sell value now because a lot will turn around and tell your competition "we'll give me "X" solution with this many users and this many workflow add on's and with a 30 page per minute color woth 4 trays and fax. I see it all the time. Someone calls and says I need a particular machine and they know way too much about the options of that machine. I will give them a price that is very low and if they call back that is great and if they don't call back it's probably even better since they will be the pain in the ass customers anyway 99% of the time.

i still love this industry and think the dealer channel will be sitting pretty in a few years. The directs cannot sustain the level of losses they incur regardless of what they say at dealer meetings or to the industry analysts etc.

I would love to hear more from others about specifics you use for selling value. I don't think customers really care about guarantees for service anymore because it's to tough in their minds to take a risk and change even if they are upset. I had a client this week, who we share devices with a competitor in their offices tell me he bought a Konica Minolta from my competitor because the price was right and he didn't think I would be able to come close to the pricing he got. Then he said he hated the Konica Minolta devices and the companies service but in his mind he couldn't "not" buy it. 

More for Czech

I see what you do on LinkedIn, I see what you write, you my friend "is the value" that you bring to your clients! 

Like I stated before, selling copiers now seems to be more about identifying those clients that you can ands can't make GP.  You need to make that assessment ASAP during discovery.  There are many boxes I don't make money on (GP), however there are spiffs from the manufacturers and @ $200 bucks each for some color units, you can pocket another $1K in spiffs. 

Don't let a bad month or a bad quarter affect you, there is GP to be made!  Just saw one of my guys get $3K on a 25ppm color box, they are out there.

"really don't know how to sell on value anymore because it feels like there is none to offer. "

Value:  You need to add value to your offering, something different than what the others offer, whether it's personal training for the hardware, a special guarantee, hand holding, or finding that pain point that no other manufacturer or rep can relieve for them. I'm now adding value with Print Rules and that's one of the first items I talk about, screw the speeds and feeds, talk about something that can save the client time and money!

It could also be offering up your SEO knowledge for a free hour session for some of your clients. I've offered up my services for social media, and sat with the customer for one hour to teach some of what I now.

The blog I wrote the other day about the paper lock trays, that makes me different, you need to find products, solutions or ways to make yourself and your dealership stand out in the crown.

"When you help solve a problem for someone, they take your recommendation and ask 3 other people to quote the same thing."

Well, this happens from time to time, again offer them something your competitors can't.  If there is no pain, then it's pretty much a commodity sale, get the sale, screw the price and move on to the next deal. I think you sell Canon right?  If so, there is some really cool stuff that Canon has that you can use as a lockout feature!

"People just want a cheap box and companies in town will do anything to sell that."

True and not true, there are companies and people that will pay for your services so they can concentrate on their core business. 

"Proposals continuously disappear into limbo and following up after doing a demo or proposal appointment feels like pulling teeth."

Proposals suck! 

Here's my proposal, and order doc, a maintenance agreement, and a lease all highlighted and little green arrows stating, "sign here".  The intent which is mild, is that I'm here to have you sign the order. I will offer proposals for higher end systems and or 3 or more systems. Other than that I will not email, mail or fax the customer anything. I state that I will drop by with my proposal (which is the order docs), answer any questions, review the terms and conditions and then throw in, "if you like what you see, I'll have the documents all ready to move forward".

I'm thinking you may have fallen into the trap of emailing or dropping off proposals. I've been there and done that, and most of the time, doing that process gets me nothing, and like you stated the deals hang in limbo.

What I like best about this industry is that you never know what tomorrow will bring. Meaning, as long as you keep prospecting, keep working and keep a decent (yeah, I know, it's tuff) attitude, you will do well.

Kid, you're in a slump, it happens to all of us!  Change some things up, no emailing or dropping off proposals, trying working some higher end offerings. I love working wide format because the clients value IT, they value time (time is money) and most wide format users have multiple units, thus I get to sell them not only the wide format, but the MFP too!!  It takes as much effort to sell one copiers does 3-5 copiers.  Break your GP into weekly goals, like,  OK this week I want $2K.

Start higher with your pricing so you can offer your own promo's, believe it or not there are clients that assume a higher price means better value, more reliable.

Let me repeat, I read your stuff, I see what you do on LinkedIn, I'm often thought, WOW, that Czech is really good at what he does, wish I could do what he does.  That's no BS!

Change it up, work hard, be different, don't email, mail or fax anything every again. Oh and one more item, if you haven't close the deal, before you leave that office, schedule a follow up appointment right there and then. Also, don't be afraid to walk, if they don't want to adhere to your terms (tell them this is your time frame for selling) and guidelines.

Hope this helps!!!1

Czech,

    I'm right there with you man. Art and Jason, I respect you guys in this industry but sometimes when I read your posts I think you are either living in a different world I'm in, or I need to get out of my area and sell copiers somewhere else (which is probably the latter).

     In my small location in Central PA (not even a major metro area), it's a constant race to the bottom. I look at the GP and CPCs you guys post, and I would KILL just to make $1,000 - $1,500 GP on deal. I got a guy who is selling his service for $0.035 color and $0.005 up and down the street, and giving the machine away. I am constantly up against other companies' Sales Director/Manager in deals, and there is 2 companies that I always against the owner himself. What that means to me, is that they can give the machine away just to get the service revenue for their company and they get paid from the profits. Meanwhile, a sales rep like me needs to sell GP on the machine to make money. Maybe perhaps that's the reason why I'm always up against sales managers and owners, because they cant keep reps around to sell at these ridiculous prices and make any money.

    Thank god my company has gotten good at selling reconditioned equipment; I wouldn't be able to live if I sell new equipment at SALES COST just to get the deal. And pretty soon, everyone will hop on the reconditioned boat and the race to the bottom starts all over again.

     FYI, I have been in this industry and company for 7 years now. I love my company (small indy dealer) and the people I work for, but just like Czech this industry is taking its toll on me.

jayjay

thanx for the reply,  there's much to be said about the difference in markets that we server.  I'm competed with dealers owners also, and have lost 90% of those deals also.

Just like your dealership is great with refurbs, we really don't get into those.  I focus on wide format to limit my competition, most times that puts me in the driver seat. Maybe just focusing on pre-owned, refurbished is the way to go.  Just and idea.

Art, thanks for your reply. A lot of GREAT points in there. I literally spent this weekend relaxing (much needed) and thinking about what you said. Here is what I've been thinking about:

• 12-18 months ago, I could win competitive deals quite easily with $2000 GP. Now, I'm losing with $1500 in a 45-ppm colour box. That means American pricing has flooded the rest of North America, where $1000-$1500 in GP in a commercial street deal seems to be the norm. To increase my closing ratio in competitive deals, I need to cut my margins. Simple as.
• Working on learning where I can add in additional GP and where I can't is something I definitely need to work on during the discovery phase. It's more about reading people and the situation than anything.
• If the market is dictating that $1000-$1500 GP is the norm, and price is the greatest determining factor, how are we any different from car salesmen? The more I research and stay abreast of industry news, the more I realize that all copier brands are the same.  So if we are finding situations where we can "add" additional GP in, doesn't that mean we are just overcharging our customers because we are abusing the trust/relationship we've established? To me, this is like a car salesman selling a car at a higher price to an elderly person because he knows he can get away with it. I used to sell solutions to peoples' problems, but now all of the products can do the same thing. I literally feel knots in my stomach when I sell one copier model to a competitive customer for $4000, and the same copier to a base customer for $6000. What justifies the additional $2000? There is absolutely none when the service and product are the same wherever you go.
• I've completely lost faith in Canon when they recently revealed they spent $100 mil on R&D for their new Canon IR 5500 and 6500 series. It's FULL of bells and whistles, none of which I see have any true benefit to the customer. Why would they throw that kind of cash into improving a commodity? Much like Apple, they better invent some new products soon because you can only improve a copier/tablet/laptop/smartphone so much before every product looks and functions exactly the same.
• Based on everything above, I'm not quite sure how to hit quota anymore. Are quotas even realistic? Will copier sales reps start to get paid like car salesmen and telecom reps?
• This industry is what it is, and I've had a 9-year goal that is 4-years away from completion. Momma didn't raise no quitter, so I'm going to stick out this industry for the next 4 years and then GTFO. Greg "Nostradamus" Walters has been talking about the death of the copier for a decade. But for the first time, I actually see it, feel it and believe it. I just feel amazingly blessed to work for such a great dealer that understands the life of a copier rep and is extremely lenient. I've sold $44,000 GP YTD (Jan to Present) -- any other dealer principle would've fired my a$$ by now!!
• Thanks again for the responses and even more so that we have a forum like where we can reach out to for advice/venting/etc!!
• Final thought: https://www.youtube.com/watch?v=lsSC2vx7zFQ -- I watch a motivational video every morning while drinking my coffee. Sometimes it's just grit that gets me through the day!!

A lot has been said. Some I don't totally agree with. Here are just a bunch of random thoughts.

* First off, $44,000 YTD??? Is that calender year? The last thing I would be worrying about is GP.

* I only work major accounts from an assigned list. However, when I had a territory, I didn't require GP out of every deal. If I could prepare and email a proposal in less than 10 minutes and that was all that was required of me, I'd do it with next to no GP. If it stuck, I've bolstered my revenue and got Aficio Points (Ricoh's rep incentive money). Conversely, I get GP wherever I can get it. Yes, that means my faithful customers are paying a higher price than strangers. I got over that 20 years ago. If they signed the order, they must have felt it was a fair price. I have only lost one major account in 10 years and that was because the home office moved out of territory. The day will come where I will be exposed but I will have to lose a lot before I'm worse off than I would have been.

* The industry has definately changed. Dealers probably need to have twice as big a territory/rep as they used to... Half as many reps. More deals going down by email. Get in the door, then make a difference. Identify current customers with an upside potential and work now to make yourself worthy of their future business.

* Quotas need to be lowered and a greater % of the hardware GP needs to be going to the rep. It still is about the clicks for the dealer and he needs to recognize that the deal has to happen first and a quality rep is the only way that can happen and a quality rep is not going to work for $40K a year.

* Don't assume that just because other boxes do what yours does, that the competitor knows that. I would bet that anyone who frequents this site is 90% more knowlegable than the typical sales rep. Most reps are new and short term.

* If someone would rather do business with you, help make it happen. Maybe they are willing to sign a lease with a 3 month longer term in order to do business with you. Maybe you can match the competitive lease payment for the first year if he would allow a small step up on subsequent years (Step lease).

* I sell a lot of equipment that are shipouts. My accounts aren't MAJOR on a national scale but they may have a half a dozen offices outside of our territory. Many companies feel like they have to locate and buy from the dealer in that state. I take care of that for them. I locate and select the authorized dealer, I negotiate maintenance and training expectations in advance, and I make sure everything happens as scheduled and according to terms. That is my value add with some of my accounts. Go to their website. Ask them how decisions are being handled now for those outer locations. Convice them there is a better way.

I'm sure I'll have more to say later.

good stuff old glory, we think alike!!!