A Conversation with Systel Business Equipment’s Keith Allison
Systel Business Equipment Co., Inc. based in Fayetteville, NC is doing more than $50 million a year in business, firmly positioning them as one of the top dealerships in the Southeast with 11 locations across the region. In addition to the office technology business, Systel has a highly successful printing operation. One thing not to be ignored when looking at the company’s growth and its expansion into new product and services as well as new geographic markets is that the company’s President and CEO Keith Allison, is fearless when it comes to investing in his company and leveraging assets as well as customer feedback to make his dealership the best it can be.
You’ve been doing what you’ve been doing for so long now and you’ve been extremely successful, do you still find the business fun and challenging?
Allison: It’s always challenging. If this business wasn’t challenging, everybody would be doing it. At least to my knowledge there aren’t a lot of people opening up new dealerships from scratch anymore like in the ‘80s because it is so challenging.
A lot of the business is hard and I have to admit that some parts are not fun—the mundane things, balancing personnel and getting the people in the right jobs and keeping them motivated. I’m not a very good detail person and get bored easily, especially with administrative-type issues and detail-type work. I like to make quick decisions and move onto the next project. And I like having people around me who can grab the ball and run with it. But a lot of what I do is fun.
How is Systel doing this year compared to last?
Allison: We’ve had phenomenal growth since the great recession began in 2009. We were up 13 percent last year. I don’t have the exact numbers in front of me for this year, but we’re up about 9-10 percent in sales over last year.
One of the things Systel prides itself on is its phenomenal response time. How good are you?
Allison: At least in the Carolinas, response from a manufacturer and a lot of dealers is within two to three days. We’re two hours and sometimes less. That’s for all calls, including PMs. Take emergency service out of it and we’re probably around 40 minutes, especially in the metropolitan areas that we have saturated with techs and where there’s no driving time. That’s an advantage for us.
A lot of dealers like to talk about how great their service is, but you’ve made an effort to truly deliver, haven’t you?
Allison: My purchasing agent who has been with me for 28 years tells me that when obtaining services from other companies whether it be car repair or anything, nobody gives the kind of service we give to our customers. That’s true of our industry in general; we provide better service than most industries do.
The gap has widened between what we deliver and what our competitors are delivering after they’ve cut costs. They’ve cut people and now they don’t have enough techs to respond to all the calls and they can’t figure out why.
What do you think happened?
Allison: They find themselves over-budget for service personnel in their business model. It’s a result of giving away service on deals to move their hardware. Manufacturers are especially guilty of that. They want that hardware out there to keep the factories running. Now the necessary evil called service is coming back to haunt them. A lot of them, even though they won’t admit it, are trying to get out of the direct business, simply because they’re not set up to run an efficient service operation.
What’s the biggest challenge of running a dealership today compared to when you first started?
Allison: Back in the 1980’s when you grew rapidly in a capital-intensive business it was a challenge to fund your growth. Today, there’s so many products—hardware and software—it’s a challenge keeping up with them and the latest technology and matching that to customer needs, plus training our sales and service force. We can take our people out of the field for training 30 percent of the time and it’s still not going to be enough time in many cases for what you need out in the field. The challenge is the number of products we’re selling and being highly efficient and proficient on these things.
Have customer attitudes or expectations changed much compared to when you first started in the business?
Allison: They don’t seem to be as demanding. That’s because the copiers work now and they used to not work. That’s the biggest difference between then and now—we sell them something that works. You can run paper through the document feeder without it jamming all the time. Document feeders and sorters, especially third party add-ons, used to be so sensitive. You moved them an inch and jam, jam, jam. We used to have thousands of service calls for paper jams.
You conduct frequent customer surveys and have high satisfaction levels, often in the high nineties. If you know you’re doing well, why keep asking?
Allison: I go back to the basics and tell people all the time, if you don’t measure something you can’t improve it. We try to measure and benchmark almost everything so we can continue to improve. No matter if it was 99.9 percent, we still can improve. Customer satisfaction is a continuous process and not a one-time thing and you’re continuously working to do better.
You can benchmark and try to take things to that next level knowing you can never be perfect, but you still strive for that goal, which is an irony in itself, striving for a goal that you can never accomplish.
You even measure idling times on your vehicles?
Allison: Yes, we measure that and even the average price paid by people who drive company automobiles per gallon of gas. We have 200+ vehicles and our fleet manager gets an e-mail if someone is driving recklessly or substantially exceeding the posted speed limit. We measure the costs and we have efficiency in our vehicle fleet. We’re using them for 160- 170,000 miles and we use synthetic oil. We have a PM kit we send out every 15,000 miles to the [driver of the] vehicle and they have a designated place where they have the old parts removed and replaced with the new parts. They then return to us the old parts to make sure they were replaced just like we do with copiers.
Back in the ‘80s when everybody was getting out of the fleet business and paying their people mileage to drive, we did the opposite. I’m not one to follow the trends. Our sales manager and even some of our sales reps have vehicles. A vehicle is a big perk nowadays and we make it so the technicians can use their vehicles to some degree personally, so they don’t have to buy another automobile.
It’s not original by any stretch, but one of your marketing strategies is focused on business solutions beyond equipment. How have you trained your sales reps to go into a customer and lead with one of those solutions?
Allison: I try to train them not to go in and lead with anything. The fault with many sales reps is they go in and start pitching the product before knowing the customer’s needs and wants. The reps get nervous; it used to be they would hand out brochures and said “we have this, we do this, etc.” I try to teach them to go in and get to know the customer and get acquainted with them and find out what they do, about their business, number of employees, understanding document flow and document needs, problems, all the things you should know before you propose a solution.
We’re trying to get them to understand that more. We’re a designated HP warranty and service provider in the Carolinas and Georgia. Because we own our own software (Labrador), we don’t have to pay license fees like our competitors. We can go in and put in the software and any HP product they buy over the Internet or anywhere else, it automatically registers with us and HP for warranty work. That’s free of charge for the customer and most of them like that. If you want supplies, we can set that up for you using the software.
That’s how our reps get to know the customer and that’s how we get all the information about their equipment, usage, etc., and the rep does a nice favor for them, of giving them information about efficiencies and then we can go in and talk about ways to save them money. The key is understanding the customer’s business and not selling them something they don’t need because the last thing I want to hear is when somebody comes in and right away tries to sell me something without knowing what my needs are.
Now that you’re older and wiser after all these years in the business, what’s the one thing you know now that you wish you knew when you first started?
Allison: I’m older, I don’t know about wiser. If I knew what I knew now I probably wouldn’t be here now. I look back at how leveraged we were in the ‘80s and ‘90s. Those leverage ratios would scare some people to death. I was buying a lot of real estate and leveraging that to leverage our business growth.
Another is the Internet. I envisioned we’d be able to send documents over telephone lines to other copiers for printing. Oddly enough they didn’t do it over telephone lines. If I knew how big and important the Internet was going to become, I would have focused on that area sooner and been out of the gate faster.
What does Keith Allison do to relax?
Allison: I collect super cars, anything over 500 horsepower—Aston Martins, Ferraris. I went to driver training when I bought a ZR1Corvette, which comes with 658HP standard and GM sends you to driver training school. I thought I knew how to drive until I went there.
I have a collection of guns. I’ve worked with the military and got to train with Special Forces. I go to their shooting ranges and work with their special weaponry. That’s always relaxing. I like to play golf, but it’s hard for me to find five hours when I can get away to play golf.
I enjoy real estate deals. I’m always looking to buy property. It’s almost like gold mining, finding that gem or diamond and turning it into something profitable.
What’s next for Systel?
Allison: We’re shooting for $100 million. The cycle in the business is you have a rapid period of growth, you plateau out, you grow again, you plateau out. You need that time when you plateau out to focus on your back office, your support system, your people, your training, and everything you need to move to that next level. Otherwise you’d be growing in a straight line and if you grow fast enough, the service and support folks can’t keep up.
