John Lowery
A couple of weeks ago we presented a news item on Applied Imaging, a Michigan office technology solutions dealership, entering into a strategic agreement with Ricoh to acquire various Ricoh accounts in Traverse City, MI and Northern Michigan. The agreement took effect May 1, 2013 but didn’t hit the wires until June.
In case you missed it, Applied Imaging, a Ricoh dealer for the past 20 years and now Ricoh’s largest dealer in Michigan, is supporting the sales, service, and supplies for select Ricoh commercial accounts in Traverse City and Northern Michigan areas from Alpena to Mackinaw City. It’s too soon to tell if this is the beginning of an industry trend or a Ricoh business strategy, although a statement from Jim Corridi, vice president, Dealer Division, Ricoh Americas Corporation, in the press release announcing the agreement, disputes that.
“[This] is an example of Ricoh’s commitment to expand our business and collaborate with our dealer community. While this agreement with Applied Imaging is not part of a national strategy for Ricoh commercial accounts, we have identified a unique opportunity in Michigan to provide a stronger collective Ricoh footprint in this segment and look forward to continued success for our customers in the area.”
Reading between the lines, this move underscores the fact that nobody tends to do service better than an independent dealer, and that’s certainly an area where Applied Imaging excels.
Recently I spoke with John Lowery, president of Applied Imaging, about how this agreement came about. “Ricoh has already known if they had opportunities where we could partner like this one, that we were interested,” he notes.
Ricoh approached Lowery last October about taking over their Traverse City branch. “Ricoh felt it made sense and we felt it made sense and we went ahead and did it,” says Lowery. “It’s really a terrific example of Ricoh’s willingness to partner with their dealers.”
Some of the accounts Applied Imaging is now responsible for were former IKON accounts along with a fair amount of Ricoh Global. Most of the accounts are SMBs although they recently won a large account with the Michigan National Guard thanks in large part to being able to say they now have an office and technicians in Traverse City.
Although Lowery won’t describe this as a trend, he feels that other manufacturers should consider this approach. “Are they best at manufacturing or are they best at servicing large accounts?” asks Lowery. “They need to focus on making sure that they’re making the right decisions for them.”
From a geographic perspective, there are a number of areas where it makes sense for manufacturers to partner with their dealers rather than taking a direct approach.
“I’m involved on dealer councils and the independent dealer community wants to see a larger percentage of the business come from independent dealers,” says Lowery. “There was a point with Ricoh where the distribution balance was weighted more heavily with Ricoh than the independent. We’re seeing that shift and it’s starting to come back and the growth of the independents is also having a big impact on that.”
Applied Imaging has added staff to service these new accounts, including hiring all the Ricoh employees who were working for Rich direct in those markets, ensuring continuity with the new client base. “The only thing that changed is that each tech now has an Applied Imaging vehicle rather than using their cars, giving Applied Imaging more exposure,” states Lowery.
For Applied Imaging, this is an opportunity to grow their presence in these two markets as well as increase their market share with additional accounts. “We went from managing 12,000 accounts in February and then after two acquisitions representing about 1,500 machines—one in Detroit and one in the Traverse City area—and the Ricoh [acquisition], we added another 1,500 on top of that,” states Lowery. “We now have over 15,000 units under contract now.”
Lowery isn’t certain why Ricoh selected Applied Imaging, noting they had other options. “We had a great relationship with them for a long time and they knew we wanted to increase our footprint,” he speculates. “They were looking for a dealer that had strong financial backing and one that had been around for a long time. We’ve been representing them since 1987 and they know us pretty well, I don’t want to say it was an easy decision, but it was the most credible decision for them to make.”
