If the office technology dealership industry had its own Mount Rushmore, it’s safe to say one of the etched profiles would be that of Chip Miceli.
The president and CEO of Pulse Technology, the soon-to-be Schaumburg, Illinois-headquartered dealership, is nothing short of an industry rock star. He can be spotted at various manufacturer events, particularly those held by Sharp, Canon and Kyocera. Actually, Miceli recently returned from Japan, where he toured the global headquarters of Epson and was intrigued with the possibilities offered by that OEM’s flavor of inkjet printing.
Miceli is a frequent speaker at events held by various organizations, including the BTA, and often sits on dealer panels to offer his views on any number of topics relevant to the office technology space. Add in peer-group participation, advisory boards and various consultative hats, and you have an executive with thousands upon thousands of frequent flyer miles to his credit.
Why the adoration? Miceli has a reputation for being a no-nonsense executive who speaks his mind. He loves the give-and-take interaction offered by peer groups and speaker panels, and is always willing to provide perspective to fellow dealers on just about any subject under the sun—from the value of managed services to the best red Cabernet wine (more on that later).
Miceli is the caretaker of a company founded by his father, Vince, in 1955. Chip and his brother, Victor, bought out their father in 1988, and 30-plus years later the former Des Plaines Office Equipment (DPOE) has continued down a growth path, aided by the acquisition of McShane’s Office Solutions in 2015 and Kramer Leonard in 2017. Bolstered by product acquisitions, including office furniture and interactive flat-panel displays, Pulse Technology has topped the $30 million plateau.
We talked to Miceli to learn more about Pulse’s technology push, its new headquarters and future acquisitions, as well as his take on some of the industry’s hottest topics, including Xerox’s quest to obtain HP.
How was business in 2019? What were the keys that dictated your success?
Miceli: I didn’t expect it to be such a tough year. We saw a lot of customers consolidate, sell out. When they get bought out by companies located out of state, we lose that business. We’ve been offsetting the lost customers with new ones while making sure we keep our existing ones. It’s just been a strange year. We’ve had some decent months here in the fourth quarter, so hopefully we’ll finish up strong.
What sets Pulse Technology apart from the competition?
Miceli: We’re very innovative and technology driven; we like to bring new technologies to our customers. During the recent Epson trip to Japan, I got to see an inkjet product that’s going to change or disrupt the marketplace. Customers like the fact that we bring different technologies to help their businesses. We were one of the first dealers to jump in with interactive boards for conference rooms. We were one of the first companies in MPS, and we started in MNS 10 years ago. We’ve got some cool stuff we’re planning on for 2020.
During your trip to Japan, were you impressed with the company’s PrecisionCore inkjet technology, which does not use heat? Do you see this as a game changer, or merely another tool in your arsenal?
Miceli: I believe the technology is going to go to inkjet eventually. It probably won’t happen in the next year, but as the print quality of the product comes around, I think it’s going to overtake laser. More and more people are being cautious about the environment, and the fact that it doesn’t have ozone coming out the side of it and uses less power is going to lead customers in that direction. The question is, can they live with the current copy quality of it? In testing it, we’ve found that if you use better paper, you’re going to get more-desirable results.
Do you see any obstacles with the technology?
Miceli: Not yet. We’ve had one in our office for three months now and it hasn’t broken down. We’re running the hell out of it. From a service standpoint, our techs are going to like it. The only difference is, if you’re using a regular 20-lb. paper, the paper curls because it doesn’t come out dry. Some people might not like that. I don’t have a printer in my office, so when I print to it, the paper is ready to go by the time I reach the printer. So it doesn’t bother me any.
In fact, you plan to offer it in MPS programs for Illinois and Indiana clients. What is going to be the key for proliferating this type of technology?
Miceli: We’ve already pinpointed some organizations for which we think it’s going to be more successful than others. In Illinois, all of the casinos are now able to do sports betting. This is a good product for them to print the bet sheets every day at an economical price. Also, a lot of schools have resorted to using Chromebooks. They are always printing out tests and information off them; they’re still printing like crazy. We use it to print our invoices and it works well for us. That’s a competitive market.
You’ve never been one to shy away from offering new technologies if you see an opportunity to sell within your client base, but do you have a sense for why some colleagues are loathe to branch out?
Miceli: A lot of dealers are just set in their ways. They’re doing well and aren’t interested in learning more. They get settled in and stick with what they know. When I talk to dealers across the country, it always amazes me how antiquated they are in their thinking. For any dealer who’s been doing this for a while, they’ve gone from analog to digital, and that was a big change. You have to wonder why these dealers aren’t evolving. The companies I bought in Indiana weren’t evolving; they didn’t do print management. One did some break/fix IT, but didn’t do MNS. The other one didn’t do anything in technology, it only sold office supplies and furniture.
I shocked them a couple of weeks ago by buying a technology chair. They said, “What the hell’s a technology chair?” You program the app to your height and weight, and it adjusts the chair to the way you should be sitting in it. If you like the way it feels, then you’re good. If you want to change it, you can and then lock it in the way you do with a car seat. The cool part is, when you’re sitting in it incorrectly, the app notifies your phone that you’re not sitting correctly. People like to sit at edge of the chair instead of putting their back into the back of the chair. The back of the chair holds your back up, and if you don’t do that, it leads to back aches.
I’m always looking for something different to bring to my customers. One of my people came to me and said he wanted to do a different ERP to give us another product in that area. I knew right then that I wanted to be involved, because currently one ERP provider is buying up everybody, which is going to put dealers in a situation in which they’re going to be paying more money for a product that they’ve been using for years. Dealers are being held hostage because there’s no competitor right now. We put together a product that competes against other ERPs. I didn’t love it at first, but we were inventing the wheel. We’ve pretty much got the wheel taken care of now.
Do those dealers who refuse to adapt and decide to sell out actually help fuel M&A market?
Miceli: That’s why you see all these companies buying everybody now. Marco is growing by leaps and bounds by buying all these small dealers who don’t want to grow. Part of the problem for some dealers is that they don’t have the money to grow. About a month ago, I was talking to dealer who said he was selling his business. I asked what they do and he said, “Sell copiers. What else should we be doing?” They needed to invest in MPS, but he said that he couldn’t afford it. That’s the problem, and that’s why they sell.
I really don’t want to see the independent dealer disappear, so I’m really involved to help others and make them successful.
Chip Miceli
The deals that interest me the most are the ones in which they sell, but still own a piece of the action. Visual Edge is an example. Some dealers believe the industry is going to grow further, but they just don’t have the money to increase their business, so they make a partnership with Visual Edge in the hopes that when they sell the company lock, stock and barrel, they’re going to make more money than if they had sold out today. Unfortunately, my thinking is if that you don’t diversify into managed services, video walls or other technologies, your print business is going to dry up.
Of all the newer ancillary offerings that are coming to the foreground, which ones would you endorse, and which ones would you avoid?
Miceli: I’d never say something isn’t a good idea until I tried it and failed. Today, I think the one area that people should be talking about is cybersecurity. Dealers can team up with some of these organizations that do it all for you and allow you to sell their services. That is a no-brainer. As dealers, we know how to sell monthly payments. Ransomware protection is something on people’s minds today and should be easy to sell. We’re going to kick that off next month. We’re a little bit behind in getting on board, in my opinion, but it took some time to sort through the choices.
How is the move to your new Schaumburg, Illinois, headquarters progressing?
Miceli: We’re pushing to get into Schaumburg sometime in December. It took a little while to get things done. Right now, we’re putting floors in, and we have the furniture coming in two weeks. Hopefully, we’re able to do a Christmas party there for some of our customers. The grand opening will likely be (this month). It’s tough; my brother Victor has been handling most of it. He’s in sales, so it’s taking him away from selling, but he’s taken our vision and ran with it. Unfortunately, we didn’t realize how much time we would have to spend getting it done. Hopefully, it will get finished in the next 30 days.
From our perspective, I want to grow MNS and start really pushing cybersecurity. Those are the two growth areas that are really viable.
Chip Miceli
Will you be active in the M&A space in 2020?
Miceli: We’re always looking, but I don’t know how far I want to travel. I never thought I would be in Indiana, either, but the opportunity came and I took advantage of it. There are a couple of other companies we’re looking at in Indiana, so if things move along well, we’ll probably end up buying them. The only other state that might work for us is Michigan. I don’t envision straying outside of the “U” around Lake Michigan. I thought we were going to go into Wisconsin, but nothing materialized up there.
What is the value of being active in the industry?
Miceli: I believe the industry’s been very good to me. I’m involved in different organizations because I love to give back. I really don’t want to see the independent dealer disappear, so I’m involved to help others and make them successful. Hopefully, the dealer network never goes away.
Every dealer looking to grow their business should be involved in a peer group. There’s quite a few of them out there now. When we started the Select Dealer Group, the goal was to exchange ideas and best practices. Regardless of how big or small the dealer is, I can always take home ideas they have that I can use in my organization. That’s what’s helped me get to where we’re at today. Once SDG was filled up, I told the BTA that it needed to start another peer group. They did, and that one (PRO Dealer Group) is doing well.
I like being an influencer. As part of the Sharp advisory board, we help them come out with better products and improved programs for the dealers. The same holds true in going to Japan with Epson; they sought out ideas that would help their products be more disruptive in the marketplace.
What was your dealership’s greatest accomplishment in 2019?
Miceli: The new facility in Schaumburg will just blow people away. I can’t wait until it’s done and unveiled. We made some good inroads into Indiana, growing our business out there and making it more successful. Also, I hope some of the advice I’ve given dealers throughout the year has helped them grow more.
What was the biggest challenge you faced in the past year?
Miceli: The biggest challenge is finding salespeople who can sell this type of technology. That’s the biggest challenge that all companies have today. There’s not enough people out there who can talk the talk that we need to discuss in this industry, let alone find people in sales who really want to sell. It’s probably always been that way, but I believe in the last couple of years, it’s been our biggest challenge.
What are your goals for 2020?
Miceli: It’s going to be an interesting year. I think we’re going to see a lot more companies sell out, and hopefully we’ll be on the receiving end of a couple. Even though it’s an election year, I think there’s going to be a shift in this tariff issue that’s screwing up our economics. I believe our current president is going to do something to settle down this tariff war, which will take care of the issues we’re having with overseas vendors. Election years are supposed to be great for the economy, but the last couple have not been so hot. Hopefully this year is going to be a little different.
From our perspective, I want to grow MNS and start really pushing cybersecurity. Those are the two growth areas that are really viable. We’re going to do a big push for Epson, so I’m hoping that their product is going to help me grow that segment of the business. I believe that inkjet is the future, and the faster I can learn how to sell it, the more ahead of the game we’re going to be.
As the industry continues to contract and evolve, what will be the keys to success for the dealer community?
Miceli: If I was selling the Xerox or HP lines, I’d make sure that I have a backup line. If that merger goes through and they put someone in charge of it to make it successful, it will hurt the dealer network. If they screw it up like they’ve done everything else so far, then it will be great for our network. I’m not sure which one will buy the other, but sooner or later they will become as one. Here’s the problem with that merger: Xerox has branches all over the United States, so they can be more disruptive than the dealers, especially if they’re selling HP or Xerox. If you go up against a Xerox branch, and you’re doing print management with the remans, (Xerox) can sell HP OEMs for cheaper than we can sell remans. That makes for tough competition.
What do you like most about your job?
Miceli: It’s fun. I get to travel and meet new people all the time. In Japan, I met a lot of nice people who are in the large-format industry, so I made a lot of new acquaintances. I’ve been having a lot of fun in Indiana because there’s a brand-new product, office supplies, I’m talking to people about…well, it’s old product, but new to me. That’s what keeps me doing this. I’ll probably keep at it until the day God says “Time’s up.”
Outside of work, what do you do for fun?
Miceli: I have a 5-year-old grandson who lives with me. That’s my buddy and main priority. When I came home from Japan, I could hear his little footsteps tearing through the house. He ran right up the stairs and into my arms. I’m looking forward to watching him grow up.
I love tasting different red wines and collecting them. Keeping track of them is almost a full-time job. I’m a Cabernet drinker, so if you like Cabs, there’s a couple nice ones out there. Del Dotto has a really bold Napa Cab. Castello di Amorosa has a nice Cab and a nice blended Cab. It all depends on what your pallet can handle. If you normally drink inexpensive wine, then you taste more expensive wine, your taste buds do change and then you won’t want to drink the inexpensive wine anymore.
