When Konica Minolta Business Solutions acquired Muratec America four years ago, David Clearman’s world suddenly became a lot larger. Now, with the former’s complete product line at his company’s disposal, Clearman—Muratec’s senior director of sales and marketing—is keen on proliferating these products and services to go wider and deeper with new and existing accounts.
senior director of sales
and marketing, Muratec
Equally as exciting, however, is Clearman’s quest to open up the dealer’s world to include small- to mid-volume inkjet and toner label devices, with a focus on the myriad of packaging label applications. With higher margins and ample recurring revenue opportunities to peddle supplies and substrates, Clearman is tasked with educating dealers on the abundance of opportunities and acquainting them with new talk tracks and terminology. It involves engaging a different set of personas within a client’s organization, but these audiences are ready and willing to have a conversation. In fact, Clearman believes that up to 80% of dealers are well positioned to add label and packaging solutions to their arsenal.
The end game, from Clearman’s perspective, is to not only introduce dealers to a rich, new revenue stream—a welcome addition at a time when A4 gear is ciphering business share from larger, more-profitable A3 units—but also position Muratec’s KM-addled product line as an argument in favor of garnering primary vendor status among dealers. Clearman shares the challenges Muratec has encountered with exiting the pandemic and the quest to parlay a high volume of activity into sales success heading into 2022.
From a hardware placement standpoint, where have you seen the greatest success in the past year? What verticals have proven to be the most fruitful?
Clearman: We have seen a big increase in dispersed workers. Companies are coming back to work, either in their home offices or smaller offices, and are needing technology and capabilities. But they may not require that big, centrally located A3 device cranking out copies. We’re not seeing businesses coming back to these large offices full of people, cubes and centralized printing. We’ve seen a huge run on anything from 25 to 45 copies per minute on the MFP side. Color certainly has been a big part of that. Higher scan volume is great, and we’ve naturally seen a spike in A4 volume. Muratec has been an A4 company for 25 years, so we’re kind of getting back to our roots from that standpoint.
Provide some insight into Muratec’s strategic approach during the pandemic and how it pivoted to meet the needs of its reseller partners.
Clearman: We haven’t changed too much. We’ve tried to stick to our basic strategy, which is to be easy to work with, easy to do business with—that’s a message our president, Jim D’Emidio, often cites. We know dealers can’t carry a lot of inventory, and we’re OK with that. We want to provide the best support and pricing possible. Our small- to mid-sized dealers are looking for a way to do business with their customers without having to jump through a lot of hoops with their manufacturer. We’ve never had quotas for our dealers. Last November, we started offering more bundles, an MFP combo package in which a dealer can select a package without adding bits and pieces. Dealers can select bundle A, which provides a 35-copy-per-minute MFP and all the peripherals. That’s been well received. We need to be flexible when the dealer requires some kind of special program on the fly, and we can make it happen. We emphasizing that with our dealer partners.
How would you characterize the first half of 2021? Are we seeing a return to previous demand levels?
Clearman: The first half of the year has been tricky. It’s been extremely hectic and busy with calls for pricing and opportunity questions, as well as inventory issues. We didn’t see business ramp up to normal levels in the first half. It’s been a little slower from a sales standpoint, but the activity has been fabulous. If we can get all of those deals closed that Muratec and the dealers have worked on, we’ll be in great shape. We have to work around inventories, expectations and dealers having to replace devices they wouldn’t normally replace. The dealers are seeing different types of volumes—higher volumes from their lower-end machines but typically not the bigger devices. As for run rates, some of those devices in the field are still quiet. The large workgroup machines are showing little to no volume. Dealers are still trying to tackle that, and we’re trying to help them out with other devices.
I don’t know that we’re going to get back to our previous demand levels from a volume standpoint. We see offices changing. I was in Atlanta a few weeks ago, and office buildings that were once packed on a daily basis now only have eight cars in the parking lot. That tells me they’re doing business in different ways, and dealers have to figure out how to help those smaller, dispersed workgroups do business.
It’s been four years since Muratec was acquired by Konica Minolta. Talk about how this partnership has shaped Muratec and its ability to scale in the office technology space.
Clearman: It’s been quite a ride. It took a bit more time than expected to get acclimated to being acquired by a large company. We went from having three people in our marketing department to 40. From a marketing and support standpoint, it has been quite a learning curve. Our expectations of the product have definitely increased our confidence with the dealers. I’ve been with Muratec for 26 years, and this is the first time we’ve had a full MFP product line. We also have access to Konica Minolta’s support and that has been a big plus. We used to have four regional guys who covered the whole country, and now we have 20 in each region, addressing the sales, support and service sides. It was quite an eye opener to be brought into the organization, but it’s been good. It’s raised our level of expectations.
With the label market expected to reach $41 billion by 2024, how is Muratec engaging with dealers in a consultative manner to take advantage of that growth trajectory?
Clearman: This is the most exciting part of my job right now. The label and packaging industry is really coming to us and the dealers will soon recognize these opportunities. Dealers such as Pacific Office Automation have embraced it and are having success. We have a dedicated team that supports both the Muratec and the Konica Minolta dealer channels. Our guys talk directly to our dealers and area sales managers, and we’re supporting them. Our team talks with production print specialists, regional sales managers, dealer business managers, dealer reps, etc., about labels and if they need us, we engage directly with the prospect to offer samples or just talk terminologies or processes that the dealer may not be comfortable with yet. This is still about putting images on paper, and I remind the dealers of this during my presentations. Instead of paper, we call it media, and it’s on a roll. It’s not really about changing a dealer’s paradigm, but rather providing insight into terminology and industry.
The label and packaging industry is really coming to us and the dealers will soon recognize these opportunities. Dealers such as Pacific Office Automation have embraced it and are having success.
— David Clearman, Muratec
When dealers approach a customer or print shop, they’re going to be asked different questions by a different group of people. Our label team of subject matter experts (SMEs) is there to explain everything so that the dealer can quickly become comfortable with the talk track. That’s taken a little more time than we’ve expected. When we jumped into the label business seven years ago, we thought the dealers would embrace it more quickly. It’s been slower, which is understandable. It can be somewhat intimidating when a customer starts asking questions about media and top coating. That’s where our education and support come into play.
Is it a matter of dealers needing to market label printers more aggressively?
Clearman: We have collateral pieces there for support, but I tell dealers to keep it simple. If a field rep can ask a few extra questions during sales calls, they can find out if there’s a label opportunity. One of the challenges is dealers are going to be calling on different types of businesses. They’re used to meeting with a business manager or office administrator, but the label and packaging conversation is usually geared toward a marketing person or production manager. Fortunately, people in those positions are often willing to talk, even on a cold call. I’ve done tons of cold calls with dealers, and the marketing or production people will say, “OK, what do you have for me?” It is a focused conversation, and we usually know right away if this is a prospect or not. Many dealers want to know, “What do I do if they say yes?” That’s when dealers can call me and my specialists, and we can continue that conversation. But it’s certainly a growth area for dealers.
The entry-level to mid volume label market is a very specific group, but it’s also a wide one. I’d say 80% of our dealers can handle this type of product.
— David Clearman, Muratec
When dealers are ready to take that next step in the process, we provide sample kits that explain what’s in the package. One of our devices is a press that prints images on corrugated boxes. We’ll put a kit together that is a printed box with labels inside. Reps can provide the box, with their business card inside, to a production or marketing manager at a company such as a print shop. If the client has a question, they can call the rep and have a conversation. Aside from the terminology, the maintenance programs are a little different. It’s not a cost-per-copy/label program, but we can put them on an all-in-one program. The margins are really nice for the dealers. Right now, there’s not another manufacturer that is really talking about labels and packaging like Konica Minolta. Our customer engagement center (CEC) in New Jersey is filled with packaging, wide-format and label devices.
What are the recurring revenue opportunities with label printers?
Clearman: There are standard consumables—inks, print heads—and when they run out, clients can pick up the phone and call up their dealer. Most dealers will put these on a maintenance agreement as opposed to cost per copy. These machines are not service-intensive, because they don’t have a lot of moving parts, so the margins are going to be high because there’s not a lot of servicing post-installation. We also have approved media from five different vendors that supply media ranging from basic paper label stock to synthetic media, glossy BOPP, estate paper and others. That’s a new revenue stream that they don’t see on any other product, aside from wide-format. Some dealers may not want to deal with the media, but most will once they see the potential margins. If they don’t want to handle it, we can do direct dropships to the customer.
Talk a little about the vertical potential you see in packaging. Is this a tougher sell for the typical office dealer?
Clearman: An example that I use is breweries. They are attractive because there’s a label on every beer bottle and 50% of all beer cans. But they are also one of the hardest sales you’ll get from a label perspective, because breweries want to spend money on making more beer and the packaging is not always a priority. The best areas to focus on are those where the emphasis is on the product info, ingredient accuracy and clarity, presentation and marketing as opposed to sheer volumes of packages. Industries like chemical/cleaning, pet pharmaceuticals, CBD and cannabis. If a dealer calls on one of those businesses, in which short- to mid-run labels are important, they are on the right track.
The sales process can be quick. During the first two months of the pandemic, we had a dealer that had been calling on a chemical company for labels. The end-user couldn’t get labels from their regular vendor for the hand sanitizer they were producing, so they inquired about making the labels in-house. That deal went from order, to shipment, to up and running in five days, and it was a profitable sale for the dealer. In some cases, these deals can get pretty competitive on a cost per page or cost per label, and that may extend the sales cycle. If you talk to a print shop, they typically want to see samples, see it output and put it under a loupe. That’s where we come in and help.
It should be easier for dealers once they wrap their heads around it, because their competitors aren’t typically other dealers. They’re mainly competing with regional print shops or online providers. The potential customers are already purchasing their labels. If they bring label production in-house, turnaround time will be better, and the convenience and creative factors go up—things that are worth a lot to these customers. It’s about more than price; they need to be high quality and durable. We educate the dealer regarding expectation-setting for customers. The entry-level to mid-volume label market is a very specific group, but it’s also a wide one. I’d say 80% of our dealers can handle this type of product.
Is there anything new on the horizon from a product or partnership standpoint?
Clearman: There’s a number of things going on that we can’t share with the masses just yet. Konica Minolta is constantly introducing new products in production print and industrial print, which my group doesn’t directly support. One update is a fifth station for white printing on its higher-end toner label device. Konica Minolta and Muratec have a desire to grow this label and packaging division, which is exciting. The CEC in Ramsey contains a lot of products that are geared toward packaging, labeling and embellishment. We’ll continue to work with our partners, such as Memjet and MTeX, which are building new products. Our product development team will determine which ones we think are going to be effective in the U.S and we’ll continue to get better products that cover more of the print segment that we’re targeting. We have to make sure that the dealers know that we have these products and that they can sell them.
What is Muratec looking to accomplish in the second half of 2021 and into the new year?
Clearman: We’re continuing to ramp up. Last November, we got the full product line in place, so we’re still getting this product out to our current dealers. We’re probably going to be looking at a new group of dealers. We historically have sought opportunities in different markets and geographies as a secondary or tertiary vendor. With the full product line and now with the labels, companies will recognize our ability to be their primary vendor. That is our focus. As other manufacturers start to fall out of the industry and the segment, we’re going to be there to pick up where they left off. I challenge my guys to talk to as many dealers as they can about taking on Muratec as their primary vendor and what that means. We know the dealers well and understand what they’re looking for from a standpoint of service and service revenue expectations. This is not our first rodeo in supporting the dealers. We’re excited about the possibilities.
