Imagine Technology Group (ITG) turned six years old in April, but its roots go back much further. The company was born from a group of employees who worked together at a previous dealership and wanted to be able to provide the type of customer service than they were able to in that past life. With the help of the former owner, they got the backing to start what would become ITG in 2011.
The company started as a Sharp dealership and then added Toshiba and Lexmark in the next three years. VOIP and network services were added in 2014. ITG has grown rapidly, with expectations to reach about $9 million in revenue this year.
Mary Ellen Franz, Managing Partner
That growth is fueled by the same passion for customer service that drove those employees to start the business. All those employees are still with ITG, which is currently led by Managing Partner Mary Ellen Franz. She is the wife of Bob Franz, previous owner of Copier Brothers, who helped the employees start the dealership.
ENX spoke with Franz about the history of ITG and why employee loyalty, customer service, and a total solutions approach make it a success in the highly competitive Arizona market.
ITG has an interesting backstory. Can you tell us about it?
FRANZ: My husband owned a copier dealership in the 80s and 90s, a Toshiba dealership in both the Tucson and Phoenix markets. He sold the dealership, but after his non-compete expired, a group of his employees and previous customers contacted him to get back in the business. The employees were not happy with the way they were able to take care of their customers with the current companies they worked for, and the customers were not happy with the type of support that they were getting. Both groups appreciated the customer-focused approach Copier Brothers had.
We had no interest in going back into the business at the time, but we were willing to support the employee base in Tucson. About five years later, we had the same opportunity in Phoenix, where some of our previous employees had heard about the success we were having in Tucson and wanted to start a business in the Phoenix market.
When I came in to help, there was a core group of previous Copier Brothers employees. In the last few years we have grown from five people to about 37. Many of these additions worked together, either at Copier Brothers or other companies in the industry.
I didn’t know the people very well because I was never involved in the original business. Our kids were little and I was doing stay-at-home mom stuff. I just knew my husband had a lot of respect for the employees. It’s worked out beautifully. They’ve been incredibly welcoming. I’ve been impressed with their willingness to listen to what I have to say and to take direction. It’s mutual. I have a world of respect for them and their patience with me learning the business.
What is the one thing that ITG prides itself on?
FRANZ: Absolutely customer service. We have employees who have worked together for such a long time. They had been working for different companies, and when they found out we were starting this organization, they chose to work together because of the experience they had in the past. I pride myself on taking care of the employees and making sure I’m doing the best I can do. It also reflects in their ability to take care of the customers. They have a lot of flexibility to do what they think is right. They don’t have to get a lot of approval. Our decision making is right here in our office.
ITG is a relatively new company, yet you’ve seen good growth. What’s the secret?
FRANZ: We’re expecting about 25 percent growth this year. We had about 600 percent growth from 2012, which was our first full year of business, to 2015. From 2015 to 2016 we saw 15 percent growth. About 75 percent is hardware and MPS, about 25 percent is managed IT and other services. This year we’re expecting 25 percent growth, and the majority of that is expected to come from additional IT services. We have a few other major accounts that we’ve identified and are comfortable that we will be able to win this year. When looking at a three-year comparison, we show impressive growth. We were one of American Express’s 50 Fastest Growing Women-Owned/Led Companies in 2015 and a runner up for 2016.
ITG is a unique environment, not your typical start-up. While ITG is a young company, a lot of our employees have been working together for close to 20 years. This type of history provides a very cohesive group which is able to rely on each other and allows for quick decision making and a “got your back” mentality. When looking to add new employees, we’ve had great success with hiring people whom we’ve had positive previous experience with and inviting them to join our team.
We offer a lot more than the standard copier dealership. When we went back into this business we knew that the copier business itself was not as profitable as we had experienced in the past. That’s why we offer more variety of office technology. In addition to multiple copier lines, we do VOIP phone systems, managed network services, document management, and IT solutions. Our growth will be more in the additional services we offer instead of just the copiers going forward.
Phoenix is a unique market. I’ve been told by the manufacturers that it is a very competitive market, more so than a lot of other places. We have every direct office here in the valley as well as some of the major dealers. It’s incredibly difficult to sell commercial with an up-and-down-the-street approach. We look for more medium to large corporations, and we’ve had great success in winning some national accounts, which has contributed to our growth.
Is your growth coming primarily from new accounts?
FRANZ: Yes. Most of our contracts are for multiple machines. I would say 60 percent are for multiple locations, and I think we do well with that because of our approach to customer service. Our customers have had other providers in the past and weren’t happy with them. We’ve done a really good job of winning those accounts and keeping the customer happy. It takes the price point out of the equation.
Are you looking at other areas of business to add?
FRANZ: We’re focusing on expanding our IT services. ITG recently hired a vice president of information technology, who was previously with the University of Phoenix Apollo Group. His focus is to identify specific products to take to our customer base which will allow us to expand our IT service offerings.
IT offerings in the copier world are kind of new, and everyone’s trying to get into it. We find it difficult if someone looks at us as a copier vendor. They may not trust us with IT services because they don’t have that experience with us. When we introduce our VP of IT early in the sales process, his credentials bring more credibility to what we offer. From the beginning, ITG is represented as a technology solutions provider, not a copier company, which allows us the opportunity to discuss multiple strategies where we can help the customer.
Whether we lead with copiers or service depends on the customer. If we’re in a new situation with a new prospect, we prefer to open with the technology side and then bring copiers into the offering as we learn more about their business.
What was your biggest accomplishment of the past year?
FRANZ: 2016 was crazy. We had a lot of changes in 2016. We started the year by moving to a new facility. We moved from about 4,800 square feet to a facility with almost 18,000 square feet. The extra space has allowed us to make some modifications to expand our service and setup area.
In July we switched our ERP system, moving to MWA Forza. We did it in 99 days. I was pleased with the transition, and the support we got from MWA was excellent. Because they are local, they spent a couple of weeks here at our facility and sat down with our employees to understand the processes. I know we got a lot of extra hand-holding because of our location, which made the transition easier. The SAP Business One product is absolutely phenomenal. My director of finance came from an SAP background and she has been thrilled with the Forza product.
On the backend, the warehouse and logistics pieces went well, too. Everything is automated. One of my employees continues to delve into the system and finds new ways to do new things and improve our processes. Again, showing how critical our employees are to ITG’s success.
By far our biggest sale last year was the contract for Northern Arizona Healthcare, in Flagstaff, Arizona. We took over the contract for approximately 1,200 units including printers and copiers.
Because of the deal, we opened a new office in Flagstaff, which allowed us to expand our territory to Northern Arizona. We also won a school district last summer, about 80 different copiers and multiple printers.
Why do you think you won the hospital and school contracts?
FRANZ: I believe that the relationship was important to both of them and that we could truly show them some cost savings.
The hospital was unhappy with its current provider, which they felt was not working with them to help lower cost. They had put some objectives in front of the provider, but the vendor was not willing to renegotiate and modify the service contracts.
We came in with the approach that we were going to work with the users and cut back on the number of units in the facility. We also made a standard MPS effort to look at where the print is going and how to make it more efficient. The hospital from the top down is really working with us because it’s important to their future. They want to cut costs, and we showed them a plan to get them to their expected cost savings during the next few years.
The school district was a unique situation. The person we worked with there had recently won a grant to place iPads throughout the school district from Apple. She also had no email backup system and no firewall in place.
We went in originally to look at their managed print contract, but by the time we finished, we had taken over IT services, implemented Microsoft 365, replaced the district walk-up fleet as well as provided them a managed print contract. Then we installed Papercut in the units in the field so that she could control the users’ printing from the iPads.
It was a multi-phase approach, and that’s why we were successful. By offering more than copiers, we were able to look at the district’s entire spend between IT services, copiers, labor to provide managed network, and printing. We were able to save money and provide more service than the district was currently receiving. It involved about 10 different ITG employees.
What do you look for in an employee?
FRANZ: The most important thing I’m looking for is loyalty. I’m looking for someone who appreciates that we have a unique environment and we’re not looking for somebody who’s going to job skip–what we call “retreads.” I’m looking for someone who is willing to make the investment to learn our business and help both themselves and the company grow.
Where do you find them?
FRANZ: Good question. I wish I could find them easier. One of the biggest challenges we have is finding employees. Phoenix is an incredibly hot market. The employment rate is one of the lowest in the country. The majority of the people we’ve hired recently have been through relationships with our employees. They like working here, tell their friends about it, and then their friends want to work here. They are cautious about who they recommend because they don’t want anyone who’s going to be a negative employee.
What other challenges have you had in the past year?
FRANZ: Cash flow. We are a young company, and our typical deal is much larger than a standard copier deal.
What changes in the industry do you think could most affect your business?
FRANZ: We’ve all seen the decrease in paper, and I think the biggest impact in our future is becoming more of a one-source solution for all of our customers. We need to provide them with all of the office technology that they need: from their phones, to their output devices, to managing their network to helping them with IT solutions. Even with larger corporations, we find that we can do specific projects to help them and offload some of their IT services. Being a bigger-picture provider will help us offset some of the print decrease we see in the industry.
What excites you the most about the work you do?
FRANZ: I really like our employees. I think they are a great group of people. I do enjoy meeting and working with the customers, or learning about the industry from our dealer network and manufacturers, but what I’m most excited about each day is just coming in and watching this group of people take ownership of what they are doing and make the company better. I absolutely love going to work, being around the people, and seeing what’s next for ITG.
What do you like to do for fun?
FRANZ: I like to ride my bike, and I enjoy cooking very much. My daughter is a senior at the University of Arizona, so every Sunday night she typically shows up with a car-full or two of her friends for a home-cooked dinner. That’s a big highlight for my week.
