Gary Willert
How long have I been in the business writing about the imaging and office technology industry? It’s going on 27 years yet I can’t believe I’ve made it this far without crossing paths with Gary Willert, president and CEO of LMI Solutions. Willert acquired the company, which was originally founded in 1992 as a manufacturer of aftermarket consumables, in 1996 and has since expanded its reach into the MPS arena, including consulting, training and marketing, and print management software.
A stranger no more, I spoke with Gary earlier this week about LMI and MPS. I think you’ll find his comments illuminating.
How’s business?
Willert: Really good, we finished last year up 35 percent and eclipsed the $50-million mark, hitting almost $52-million, and so far this year we’re 25 percent ahead of last year.
What are you doing right?
Willert: I’m very critical and think we’re doing everything wrong. We’ve put a lot into our programs over the years and continue to add to them. At the end of the day we still need a good product and a good quality product for an MPS environment. We just try and do the right thing, take care of our customers and do whatever we can for them.
Who are your customers?
Willert: A lot of them are in the BTA channel and into some form of MPS. They’re typically more progressive companies that are trying to further their businesses and their customer’s businesses as well. And a lot of them are now getting into managed services.
Why does a dealer come to you for help with MPS?
Willert: Everyone has some form of MPS, but maybe some are missing pieces here and there and their programs are stalling. It could be not having the right people to sell it, not having the right compensation program, or turnover. We’re listening to our dealers to find out what they’re missing and how we can fill in those gaps and help them succeed.
Some companies are doing extremely well and growing their MPS business, but we can still add to that through some form of training. We have online training modules that stress management print—why managed print and how to sell it—and we also do individual training for the sales people, best practices kind of thing. We’re going to continue to do that. We have more modules we want to offer to our dealers and that’s one of the things they’re looking for, that training piece. They have the same difficulty as everybody does, finding good sales people and getting them up to speed so that they’re productive.
It’s all about education, isn’t it?
Willert: We’re not out to compete with consultants or those people who are really smart and know what they’re doing. We have our online training which takes four hours. There’s 10 modules and you take a test at the end of each module before moving to the next one. A sales manager or the owner of the dealership can monitor their progress. Since the training is online, it’s not taking away from anyone’s work time. They can do it over the weekend. Plus this is available for new sales reps now rather than waiting for the next person to come in and train them.
It’s not the end all because obviously the sales manager still has to do a fair amount of the sales training, but it’s definitely a big jump start. Global has standardized on it and just through them alone we’ve had thousands of reps go through it around the country. It’s a great program, repeatable, sustainable, and easy. It educates that new person or a veteran about what MPS is and what they’re trying to accomplish.
As a supplier of aftermarket products I’m curious what percentage of your dealer customer’s business today is transactional vs. MPS?
Willert: The majority is still transactional, but there is a high percentage of MPS customers that are doing it and getting it. There’s a lot of dealers that still do both, they don’t want to get rid of the transactional business because it’s a revenue stream. At the same time they’re trying to convert it to MPS and that’s where some of the success is questionable.
It depends on the dealership as to how much they’re converting. A good example is ‘I have the business already, what’s my incentive to convert this to a contract?’
There you have it. It’s a matter of priority, how much time and effort they want to put into that versus new business and maybe gain some of the customers they don’t have and putting them on MPS.
Most businesses are the same, and LMI is no different, it’s time, resources, and priorities. That percentage for us is growing every year, but you still have quite a few large dealers still selling transactional business.
What do you say to people who say that MPS has become a commodity?
Willert: It’s definitely become more price competitive, but I wouldn’t say it’s a commodity at all. It’s all in the presentation. Some companies are going in and been very successful saying ‘I don’t need to see any of your devices or your fleet, I’ll take everything on for a penny and a half or a penny’, whatever it is and they’ll take their chances. And they’re still successful and growing their business, but in a way it’s become a little commoditized when you do that.
The ones that are doing it right are the ones that are getting into those accounts a little bit deeper and trying to be that consultant and monitor their devices and see where’s the cost and how can you optimize all of your imaging devices. Let’s face it, LMI is in this business, and I’m sure we can make improvements based on what we’re printing in our offices. There’s always opportunity to do things better and the ones who have been successful are the ones taking more of a consultant approach versus pricing. But it is getting more price competitive no doubt about it.
What are some of the trends affecting your business today?
Willert: The managed service side is making an impact and that’s going to be dealer by dealer and OEM by OEM. Konica Minolta is a good partner of ours and they’ve been very successful on the managed print side, but now through the acquisition of all those managed services companies they’re coming at it from that angle and then adding on the managed print. That’s interesting. We’re seeing some of the larger dealers going with a similar approach. It’s definitely converging and I see it coming down the road and bundling with the managed print side.
And you see LMI fitting into that scenario?
Willert: We’re definitely looking at that in terms of what we can offer to help get our dealers into that space. Are we into managed services at this point, no, but we’re trying to augment the managed print piece with the managed services side and offer different solutions as far as monitoring and fulfilling—once again streamlining their processes. If we can eliminate costs on their end it’s a big win for them and for us.
What are some of the biggest challenges facing LMI today?
Willert: There’s a lot going on in our world, the clones coming in from China. There’s one company that HP just went after, and I see Canon and HP really cracking down on some of the illegal stuff. At the same time they sued them they kind of gave the remanufacturers almost an endorsement. I see that as something that is right around the corner.
As you know, HP’s profits have not been stellar as of late and even Canon is looking for ways to improve their growth and profitability, and they see that as an obvious one to go after. I’m surprised they haven’t gone after it a little bit more aggressively in the past. That could be a real challenge because honestly, the numbers in the past have been 600,000-700,000 cartridges a month coming into the states and that’s a big gap for people like us and the industry to fulfill. It sounds great, but the reality is no one has excess capacity to replace that volume. That’s not going to happen overnight, but I see that as a challenge.
What can we expect to hear from LMI during the rest of the year?
Willert: Our next push is 100 percent recycling. In other words we want solutions for our customers to have a true end of life certification when they return product and cartridges. The bottom line is everything is being recycled and we have a solution now that’s unique in the industry that we’re going to unveil shortly. We’ve unveiled it at some small shows like the DSG Group and Executive Connections Summit in Scottsdale, and have some unique solutions we’re going to be offering to our dealers that are a true 100 percent recycling effort.
It’s not going to be remanufactured, which is the best choice, because that’s putting it back into the stream with a good viable product. This is no waste to energy, no burning of the cartridges which is what most have done in the past. It is truly recycling. We’re excited about that and see that as a potential game changer for a lot of end users, especially your Fortune 150 companies who all have huge sustainability programs. It’s just a must in that world and the educational institutions are all for it and have been doing it for a while and they’ve been looking for solutions for a while. I think it’s going to be a big opportunity for us and our dealers.
