With an event as significant as the pandemic, which brought fundamental changes to the way business is conducted, comes a set of challenges—some readily apparent, others taking form and identity with the passage of time. The latter count is as frustrating as it is interesting: like a legacy, it can sometimes take years to fully understand the impact of these fundamental, and perhaps permanent, alterations.
The Great Resignation era is a prime example of a pandemic spinoff in which the true impact on business may not be readily apparent for years to come. The mass exodus from the workforce created a gaping cavity in employee rolls, and the federal unemployment rate has been stuck at a paltry 3.6% from March through June of this year, according to the U.S. Bureau of Labor Statistics. While there have been recent indications of an upward tick, it’s done little to stoke the pool of available talent—which is good news for the job seeker, but a tall task for HR departments.
Tech workers are in high demand. According to CompTIA’s “State of the Tech Workforce” report released earlier this year, technology-related employment increased in 44 states during 2021. The report also projected 2% growth for 2022, or 178,000 jobs.
Anecdotally, many dealers have reported significant staffing challenges, particularly in sales. As in the case of tech positions, a dearth of available talent has set the competitive bar higher for compensation plans. Dealers are waging battle against other business verticals that can offer more lucrative terms.
Relationship Obstacles
The upshot of the employment landscape, with four million Americans changing jobs per month, is its underlying impact on business-to-business contractual agreements. In our industry, the turnover of dealer sales reps and the ever-changing face of client decision-makers can often be the source of longstanding accounts being unseated. It’s an opportunity and a threat; a new CIO/COO could reassess current vendor relationships, ultimately opting to bring in a provider from a previous business engagement. Likewise, a new account representative at a dealership may not have the same sway with a client as the previous rep. If both the rep and the decision-maker are new, it certainly can jeopardize a longstanding partnership once the agreement expires.
Obviously, it’s not so black and white. A quality dealer is reflected up and down the organization, and the value proposition isn’t relegated to any one individual. Still, as we look at our State of the Industry report on contractual success and the common denominators that can cause a deal to be lost, it’s the tenuous state of relationships that can often play a significant role in the viability of ongoing engagements. Clearly, however, it’s not the only reason dealers lose clients.
Repeat Business Systems (RBS) of Albany, New York, has been fortunate to not lose any employees from its main branch during the past three years. Its competitors haven’t been so lucky—either through neglect by a new rep or a lack of understanding the needs of a given account, it’s prompted end-users to explore other avenues, including RBS, according to President Dawn Abbuhl.
One of the more bewildering examples of lax technical service came from a rival company that reportedly sent its end-user a part for a machine, along with a how-to video for installing it. This YouTube-era, do-it-yourself fix certainly goes against the grain of fundamental service protocols.
“Whether it’s true or not, the point is that service has been a challenge because acquiring, attracting and maintaining really good technical staff, service technicians and field engineers is a challenge,” she said. “Thankfully, we have a full, talented tech team, but we’re looking to fill our bench just to make sure we stay that way. We’ve seen slower service responses from competitors, and in some instances, our competitors are trying to find ways to service customers when they don’t have the manpower.”
Appropriate Technology
This DIY example certainly gives new meaning to remote diagnostics, but RBS has found better ways to automate processes. Abbuhl notes Ricoh technology (among others) provides the ability to remote into a client’s copier, allowing service, IT or other personnel to navigate the cursor and demonstrate functionality or how to accomplish a given task. But there are limits to the degree in which a service provider should impose upon a client to rectify an issue without endangering a machine and an SLA.
“It’s not a substitution for a service call,” she said. “I do think automation is great, and I think that there’s something to be said for using different types of automation. I’m just not sure that this case is one of them.”
We observed in our main feature (page 12) how the race to the bottom is anathema to the highest-performing dealerships, and many make it a point to avoid engagements in which the end-user’s primary motivation is to secure the lowest possible price. When a provider is pitching low price, invariably corners must be cut to maintain some level of profitability. Service level is often the victim of these deals.
Kyle Elliott, president of Spectrum Technologies in El Paso, Texas, believes super-low-margin contracts that result in poor professional services execution often lead end-users to regret opting for the low-cost provider. Some dealers, he notes, compound the situation through their indifference.
“I think these competitors have the ability to execute well enough; they just aren’t motivated to do so,” Elliott remarked. “And in a period of high inflation and OEM price increases, pricing out large opportunities is all the more important.”
At the core of the contract breakdown lies the inability to deliver on promises. The answers given in an RFP aren’t promises per se, but a guide map to what a dealer believes it can deliver. So, exactly why can’t competitors deliver on these promises? It’s a case of not having the technology or the ability to automate, notes Larry Weiss, president of Atlantic Tomorrow’s Office in New York City. Having manual processes for managing an account is the biggest step toward disappointment, failure and an eventual parting of ways.
But it’s not as if the solutions aren’t within reach for the typical dealer. “If you’re manually managing this account and you’re not leveraging FMAudit, PaperCut or any of the remote tools, you’re doing yourself and the client a grave disservice,” Weiss said. “If you’re not leveraging a help desk, and instead you’re still servicing based on a dispatch call, that’s the core of not delivering on your promises.
“It all stems from not leveraging the technology that’s out there today. You see these competitors who don’t have a monitoring policy. Everything’s manual, there are no automated processes in place—especially auto toner replenishment—and that can lead to a disaster. For a company such as ours, which can offer all of this automation, it can pave the way to new business.”
Long Game
In the end, whether it’s poor technical service, a lack of attention/indifference to the account, or the inability to deliver on promises, the big picture of client relationships cannot be overemphasized. John-Austin Shepard, vice president of sales for Nauticon Office Solutions of Gaithersburg, Maryland, has observed a combination of all these telltale elements in the process of unseating incumbents.
As competitors continue to reconcile their staffing woes and struggle to deliver on SLAs, it opens the door for dealers such as Nauticon to illustrate their value proposition. And the degree of end-user dissatisfaction with incumbent providers will become more apparent when contracts expire against the post-pandemic backdrop.
“Most clients want a true partner, not a vendor who only calls them when their contract is up for renewal,” he said. “We’re seeing organizations wanting to have more regular business reviews and aren’t receiving the same attention they were pre-COVID, which provides us with an opportunity to be that trusted advisor.”
