Warning: These are highly trained professionals with years of experience in performing these maneuvers. Please, do not try this at home. This caveat usually precedes a televised or in-person stunt act. People of a certain age will recall the exploits of Evel Knievel and his motorcycle leaps, or perhaps magician/illusionist Criss Angel and his ability to unshackle himself from underwater captivity.
Seldom is this warning label applied to a feature article about an office technology dealership. But in the interest of the fiscal well-being of any dealers that should attempt this “at home,” we feel compelled to issue such guidance as it pertains to United Business Technologies (UBT) of Gaithersburg, Maryland. This $50 million dealer’s post-COVID business blueprint goes against the conventional grain to an extreme degree, and the only way to replicate its success is to boast a particular set of skills that have been acquired over a very long career (apologies to Liam Neeson).
So, what’s this so-called dangerous formula employed by UBT? It sells hardware (primarily Canon) with a sweet spot of enterprise accounts, including some major names in the entertainment and legal spaces. UBT thrives in selling hardware during the most difficult challenge—the supply chain shortage—in recent history. You won’t find managed IT on the menu, and managed print services is somewhat of an afterthought. No voice-over IP. Ancillary products and services? Not really. Furthermore, its growth is 100% organic—zero acquisitions.
How does a dealer grow by $40 million in 22 years using that formula? It all starts with the UBT brain trust of CEO Armen Manoogian and President/COO Stu Wise. Manoogian carved out a successful career at Capital Office Solutions (COS), and when he purchased UBT in 2001, he brought over his management team. In 2019, Wise imported his 35 years of experience from ComDoc (part of Global Imaging Systems, now Xerox Business Solutions), where he held executive leadership positions at the $170 million performer. It flows down to a lean and mean sales staff of 11 that averages $2.4 million in sales per rep. In fact, four of UBT’s sales reps made Canon’s top 25 list nationally for sales last year.
Hardware Heaven
Had UBT experienced a significant slowdown in focusing on hardware (it also carries HP, Brother and Toshiba gear), then perhaps the ancillary path may have been followed. But the dealer increased hardware sales to $26 million in 2022 and is on track to hit $30 million when the 2023 tally is completed—a $10 million improvement over the 2019 pre-pandemic performance.
That’s not to say UBT didn’t get battered and bloodied; it did, and service revenues suffered. Inventory was a battle, but in the end, sales billowed quickly and the dealer is pushing past pre-COVID levels.
“From a business point of view, we all thought we were drowning in 2020,” Manoogian said. “We got beat up pretty badly on service revenues and were down significantly. But we landed some major accounts, and we’ve clawed back to within 14% on a run rate versus pre-COVID. Given the number of people still working from home, I didn’t think we’d do any better than 25%. I’m pretty proud of the organization and how our people have brought us back to very respectable levels.”
Wise noted that he and Manoogian talked at least a half-dozen times about diversification opportunities during the toughest stretch. But the thoughts of offering water, coffee, VoIP and other ancillary products faded in light of the continued hardware placement success, particularly net-new enterprise accounts.
“I’m not smart enough to carry six or seven different products/solutions and figure out how to incorporate them and make money,” Wise said. “We have a very simple formula that seems to be working well. I give Armen credit in terms of what he’s built here. Culturally, we have people who’ve been here a long time, and that doesn’t happen in this industry unless you take care of people financially and demonstrate that you care about them.
“Certainly, we can learn and get better, and maybe we’ll expand into other areas, such as Canon’s AMLOS. But our livelihood will still be based on copiers—that’s what we live and breathe.”
In addition to wise, UBT enjoys the services of four additional senior staff executives: Dale Hopkins (technical service), Doris Green (finance), Cindy McCormack (pricing) and Terence Matthews (geographic sales). Each of these team members have worked with Manoogian at COS and UBT for 30-plus years.
Enterprise Excellence
The question thus becomes: how does a dealer lean primarily on hardware sales during a time when sourcing boxes can be problematic—and with a somewhat modest sales staff—yet continue to push the profitability arrow skyward? UBT has become adept at landing the “whale” accounts, Fortune 1000 and nationally renowned entities including Paramount; CBS; Discovery Channel; the Securities and Exchange Commission (SEC); Marriott; and Paul, Weiss of New York, one of the largest law firms in the world. Locally, UBT has 25% of the Washington, D.C., legal market and also counts numerous higher education and private schools among its clientele.
The dealer also opened an office in Pittsburgh this year with a new rep, and she’s utilized UCC prospecting tools to produce a million dollars in sales. Given UBT’s initial success, the plan is to add additional resources to expand the business. With an overall staff of 85 employees, that amounts to $600,000 per person, proving the dealer can be lean and productive.
Wise and Manoogian point to a trio of value propositions that enabled UBT to thrive in such a hotly contested space: an unconditional, one-year, money-back guarantee on all machines (UBT claims to have the only unconditional return policy in the industry); an average tech tenure of 28 years in the service department; and a client retention rate of 98%. The guarantee has been a staple at UBT for 25 years and applies to everything from single-unit buys to 1,500-unit purchases. In a typical year, the dealer may see eight to ten customer returns out of 2,000 placements—roughly less than one-half of 1%. That one-year guarantee is followed by machine replacements up to five years if the units aren’t performing to customer standards.
Manoogian points out that it’s a practice many dealers eschew. But the confidence it conveys to clients is palpable.
“We tell our customers that if we’re getting a lot of returns because service isn’t as good as we make it out to be in our sales pitches, then we couldn’t afford to do it,” he said. “Taking the risk away from the customer is an enormously effective sales tool. And our financials are bullet-proof, otherwise our financing companies wouldn’t allow us to do it.”
The peace of mind it provided during the pandemic was essential, according to Wise. For example, clients could order 15 units and need not worry that they’re adding too much capacity, given hybrid work environments.
“We would typically renew for 15 units, and the client would have the option to turn some back in during the next 12 months,” he said. “They more than likely wouldn’t, but having that option provides them comfort during a difficult time. We’ve not suffered as a result from a selling perspective.”
Canon Fire
Another point of confidence is the quality of the Canon product line, which the executives feel is the best model-for-model performer, a fact backed by BEI [NEXERA] statistics. “Everyone tells their customers that they have great products, but when you can back it up like that, it’s very persuasive,” Wise said. “It really does ring true with the customer that we’re serious about what we say.”
The value proposition triad has been instrumental in UBT executing its quest for net-new business, such as this year’s addition of the SEC account, which represents several million dollars over 10 years. The dealer turned to Convergo and its Fanatical Prospecting program, and has spent considerable time during the past two years on telephone prospecting. An “About UBT” video was created as another touch point for reps to follow up with prospects. Each Thursday, the sales department holds a meeting during which success stories are shared in addition to numbers reporting and progress on pipeline activity. Sprinkling in the unconditional guarantee, the Canon advantage, service competence and the track record of customer satisfaction provides a strong push point for foray into unchartered accounts.
“We utilize the book,” Wise said of Convergo, “but you have to have the discipline and repetition, and we’ve gotten the buy-in from our sales team. This year, we’ll be close to 30% in truly new account business, not upgrades. Fanatical Prospecting works for us. It’s a little old school, but the formula is successful.”
To make it even more competitive and fun, UBT created a Most Wanted program as an offshoot of Fanatical Prospecting. A vertical market, typically one in which the dealer isn’t as strong, is selected as a target, with prizes and drawings for identifying a large account. The aforementioned UCC tool identified approximately $2.5 million in opportunities for the Pittsburgh market, and it will be used in the northern Virginia counties to help replicate that level of success in the new year.
Success Tools
Identifying targets and gaining access to C-level executives is only the start, and the ability of UBT’s staff to close deals makes all the investments worthwhile. UBT is also in the process of adding sales staff to the stable. Canon tools such as the imageWARE enterprise management console and uniFLOW print management provide more ammunition, and UBT extends into facilities management and IT through its strategic partnerships.
“This isn’t magic,” Wise said of UBT’s attack plan. “We’re not saving lives or souls. But we’re pretty effective in a space that people say is either flat or deteriorating. Our market share continues to grow, and I think with the landscape of the competition, we’re going to continue to seize the moment.”
The future of MPS is a bit more clouded in the post-pandemic realm. With clients operating on premises in varying degrees and the demand for managed print not as strong, UBT has chosen to shift its focus. The execs attended a Canon dealer owner meeting recently during which MPS wasn’t even broached, and Wise that felt spoke volumes about its current state. Thus, new accounts, corporate in-house and production equipment now occupy the proverbial front burners.
“We had high hopes for MPS because schools have done so well, but with COVID, we just couldn’t get to the people,” Manoogian remarked. “It’s been amazing that we’ve sold as much equipment through Zoom and teleconferencing as we have. We’re starting to get more person-to-person appointments, so maybe MPS will start to show some life signs.”
Production equipment is a bit of an enigma for UBT. The dealer thrives on highly profitable service operations, and commercial printer accounts simply didn’t yield enough profits, so the focus was turned to corporate in-house print shops. Still, universities and hospitals are a tough space to crack, and UBT hasn’t “hit a lot of home runs” in the in-plant/CRD world.
Still, UBT is positioned for production success with an in-house showroom containing several production devices, coupled with a 35-year veteran from Xerox, Dave Alfredo, who leads the charge as vice president of production systems. Each week, three to four customers are brought in for demonstrations to “kick the tires” on a number of Canon offerings, providing a tremendous opportunity to engage in more expansive conversations.
Wide-format devices are another area of opportunity, and Wise believes the manufacturer’s high-end units represent a potential growth segment. While one-off sales are far less common, Manoogian notes some of the bigger accounts have included wide-format placements.
Invaluable Insights
One of the benefits of flying the Canon flag has been the opportunity to participate in the Canon Partner Forum, which includes other high-performing luminaries such as Loffler Companies, Datamax, ImageNet Consulting and the Gordon Flesch Company. About every two months, the execs will jump on an hour-long call with the group of seven dealers to talk about best practices, personnel/recruiting or financial issues. The feedback and sharing of ideas is quite attractive and provides value for UBT on any number of fronts.
“It’s a good feedback session for us and certainly a group of talented leaders with 25-30 years of experience…we can bounce ideas off one another,” Wise noted.
However, don’t expect UBT to get involved in the M&A game anytime soon. Manoogian has fielded calls from all the industry’s notable consolidators, but he sees no reason to hand over the reins. Adding Wise to the fold emboldened a long-range approach. Manoogian points out that of the top 10 Canon dealers nationally in terms of total purchases, UBT is the only one that doesn’t acquire dealers.
“I can’t find a business that throws off the kind of cash that this business does,” Manoogian said. “As long as I can stay healthy and Stu’s in the game with us, I don’t see a reason to sell. It’s still fun to us and we love to compete. We’re not perfect; we lose some deals and that’s painful. But we win a lot more. This industry still has legs, and 10 years ago, I doubted we’d still be doing this so successfully today.”
Keeping the UBT team satisfied is part of the reason the dealer continues to flourish. Its pay scale is in the industry’s upper echelon, and it’s safe to say that most (if not all) of the reps qualified for the president’s club trip to sunny Marco Island in Florida earlier this year. Keeping things loose is important; Wise is the mastermind behind all of the company’s contests and motivational quotes. Whether it’s a crab fest in the parking lot, holiday parties, Power UP awards or tech breakfasts, simple gestures tend to provide a higher MPG in the eyes of team members. Keeping it simple, in the process of doing things few others can accomplish, has no greater advocate than UBT.
“We have three thermometers outside my office that measure hardware sales, and each year it continues to grow,” Wise said. “We’ve got a good flow going, and we’re already looking at $8 million to $10 million in the first quarter of 2023. As long as those thermometers continue to grow, people are happy. If we can get a couple more ‘most wanted’ new account whales, we’ll knock it out of the park.”
Wise Words: Senior Leadership Addition Reinvigorates UBT
With 50 years of experience under his belt, Armen Manoogian is more than qualified to identify talent. Thus, when he was able to pluck Stu Wise away from a dealer in Cleveland and install him as president and COO, he knew UBT would be in capable hands for the long haul.
“I’ve never met a sales executive as effective as Stu, and I’ve had some that weren’t so effective,” Manoogian noted. “He really knows how to structure big deals and get in the mix with the reps in terms of C-level contacts, making calls and closing deals. But beyond being relentless, he’s one of the most likable people I’ve ever met in the business. He’s really done a super job for us.”
Manoogian isn’t alone in his assessment. The UBT sales team values Wise’s effectiveness and ability to enable them to increase revenues and commissions. It was a fortuitous addition for UBT, as 35-year veterans of nine-figure dealerships don’t often land on the free-agent market.
While the leadership duo doesn’t always see eye to eye on all aspects of business, they’re quite simpatico on the big picture elements that enabled UBT to thrive over the past three years since his arrival. It also sealed the dealer’s future.
“It was a difficult decision to move to D.C. after 35 years, and a large part of it was I believed in Armen, the senior team and the company,” Wise said. “We’ve got good leadership in place, we care about our people and invest in their development, and we have fun. We’re in a pretty good place. If Armen agrees to keep me, I’m going to stick around for a while.”
