I learned the importance of diversification at an early stage in my career. When I joined Des Plaines Office Equipment (a predecessor to Pulse Technology that my father founded), his instructions to me as a new employee were very broad in nature, telling me to just go and “sell things.”
The customers and prospects I called on had office-related needs, a number of which our company didn’t sell at the time. I would bring these orders for products to the office, and in some cases, we added these new items to our offerings. That was what diversification looked like to me in the late 1980s.
Successful salespeople must be good listeners. They must have the ability to follow up effectively on what they hear. And if a customer suggests a product or service they need, why not accommodate the request if it makes good economic sense?
I’ve always believed in the importance—and necessity—of diversification for any business seeking to continue to grow.
These aren’t the easiest of times for our industry. We’ve come off a pandemic that seems not to want to release us entirely from its grasp. The economy has had its ups and downs, there’s increasing consolidation and we’ve seen a decline in the print side of our business. If ever there was a time when it would be critical for our dealers to diversify, it’s now.
Over the years, we’ve diversified our offerings in many ways. The most significant was our expansion into IT, or managed network services, and that’s the first step I recommend to any dealer seeking to expand, for a couple important reasons. First, IT/managed network is a logical extension of technology services that dealers already provide with MPS, and secondly, it’s a model with recurring revenue. Any company in our industry seeking to grow should have IT as a key offering. Without it, other add-on business models can prove to be a steep uphill climb.
My second bit of advice is that, in addition to IT, companies should seek to diversify through offerings or add-ons with recurring revenue models.
Adding EV charging stations seems to be a popular consideration among dealers. And it does meet the recurring revenue criteria. However, it’s crucial to investigate the investment needed—not just the charging stations themselves, but the complexity and cost of the electrical work required to build it out and maintain it. You’ll need an electrician, and depending on where you are in the United States, possibly a union electrician. It will all come down to whether the cost to get into that offering is prohibitive.
Office products and office furniture are areas that dealers may also consider (we offer both). We added office furniture through an acquisition we made in Indiana a few years ago. The upside of selling it is that almost every business will need furniture sooner or later. The downside is that it’s not a recurring revenue model, at least in most instances. One way to make this a truly successful add-on is to find larger companies as customers—those that are adding locations, rehabilitating buildings and constantly upgrading. Under those circumstances, this could prove to be a successful additional business offering; otherwise it may prove to be largely a model of “one-off” sales.
Other areas of potential expansion could include VoIP products and document management. With the move toward a more “green” office environment, document scanning and management looms a bit larger on the “wish list” of many business owners and office managers, and it’s a natural add-on to MPS and related services.
We’ve found success in a conference room subscription model. Equipping businesses with interactive boards, panels and sound systems for their conferencing needs is increasingly popular, driven in part by the changes to the workforce brought about by COVID. We lease the equipment and provide all the on-site support needed. Ten years ago, many of us would have regarded state-of-the-art conferencing capabilities as more of a luxury than most do in today’s workforce.
With the right technology, the clarity and resolution of wall-sized screens can literally make you feel as if you’re in the same room with people who may be thousands of miles away. With this technology, it made sense for us to look beyond what we were doing and see where else it might go. In addition to our subscription service model, we’ve found a use for the technology in outdoor signage. One successful project we completed is an outdoor sign for the Schaumburg Boomers, our hometown baseball team.
With efforts to diversify offerings, what’s right for each dealer will vary. For 2024 and beyond, dealers should be mindful, though, that structuring a company around MPS and heavily relying only on print volumes may not be enough to sustain themselves. It’s important for dealers to think beyond copiers and printers and be open to new avenues of revenue—ideally, recurring revenue—that will help them stay strong.
