Larry Weiss
Founded in 1959 as Atlantic Photocopy, Atlantic, Tomorrows Office has grown from a five person operation to a 250+ employee corporation, supporting more than 18,000 organizations in the greater New York and Tri-State Area. They’re not just an office technology dealership either but have evolved into an IT solutions company that provides horizontal niche market services to small and large corporations in the New York City metropolitan area. Atlantic’s offerings include imaging, IT support, document, management, and managed services.
Steering the Atlantic ship is Larry Weiss who took the company out of bankruptcy in 1982. Larry is one of the most successful and candid dealers on the scene and a familiar face at manufacturer dealer meetings. He truly is the epitome of a straight shooter. Recently I spoke with him about his business, the challenges of running an office technology dealership, and how Atlantic is leveraging new technologies, services, and solutions to remain competitive and successful in the markets they serve.
How’s business?
Weiss: We’ve had a very good year. We’re up 20 percent for our fiscal year that ended August 31.
Why do you think that is?
Weiss: It had to do with some acquisitions we made last year and the addition of two product lines—Kyocera and Konica. The Konica product has had a major impact on our business because of their great production product line. We’ve experienced great success in this sector.
As far as acquisitions is that something you’ve done historically over the years?
Weiss: I’ve done about five since the spring of 2000. . I’m always looking to do acquisitions. I’ve owned this company since 1982 and this last acquisition was in May 2010.
Having done a few acquisitions over the years, are you smarter about it now?
Weiss: Absolutely.
Any one thing you wish you knew then that you know now?
Weiss: The first thing you learn is make sure they’ve paid off their leases. A lot of these companies upgrade the leases, but they don’t send the money to the leasing company. Then you get letters from the leasing company, ‘We started a new lease with you and you’re supposed to pay off the lease.’ That’s one of the things they can hide very easily. If you’re not asking that question, you can end up acquiring a company and find out that for the last year or six months as they were trying to sell the company they just upgraded the lease and never sent the money to the leasing company and terminated the other leases. That’s the big lesson we learned.
Who are your customers?
Weiss: We have a strong vertical focus in healthcare, educational, legal, insurance, and accounting. These are all paper-intensive companies that are always looking for ways to streamline efficiencies. We didn’t start out looking for these verticals, it just happened over time, now we obviously leverage that.
Why do they like doing business with Atlantic?
Weiss: Because we’re easy to do business with. If something doesn’t work, no problem, we’ll take it back. I think that’s what people want to hear rather than ‘Try this or did you try that?’
Tell me about your Seal of Satisfaction?
Weiss: We introduced the Seal of Satisfaction in 1984 and it lays out all the guarantees we provide. The most important thing is, for whatever reason the customer doesn’t think the product is reliable, we’ll replace it. A lot of [customer] service information will bear this out. Most of the time the customer’s perception is what dictates whether you keep a machine in or not. These machines today are very reliable. What happens is when you deliver a machine and the first couple of days it doesn’t work, a customer’s perceptions become reality. We never argue with the customer. If they don’t want it, we just take it out.
When it comes to servicing [the equipment], we have fast response times and are on the leading edge of most dealerships. We’re now doing remote installations. We get all the information in advance in our site survey and our Help Desk has spoken to their IT person and when we deliver that product it is all plug and play. That’s created a huge advantage because there is nothing more disruptive to a business today as when you deliver these devices because there are too many people that need to be involved in installation and training. We can do this remotely and it’s saved us a lot of time and made the customer happier.
You’re also doing well on call avoidance, right?
Weiss: We get about 6,000-6,500 services calls a month and we’re knocking down 10-15 percent on avoidance, eliminating them at our Help Desk. We’ve actually eliminated the word dispatch and are using the word ‘Help Desk’ because we have a Help Desk for our IT business. We’re assimilating the two so that we can eliminate most calls at the desktop. We’re trying to respond faster and cut our costs. If we get this right and we will, we’ll be able to cut our costs and increase profitability. I think most companies in our industry recognize the need to get this done sooner than later and everybody knows they need to do it, but frankly I don’t see the urgency in a lot of dealers or the manufacturers to do this.
What’s been the biggest challenge of making this remote strategy work successfully?
Weiss: The salespeople. Now they have to know how to demonstrate the equipment. In the past the IT person or the service technician would show them how to use the equipment even though it was the salesperson’s responsibility. Now what happens is the salesperson is totally exposed because we’re not on site installing the copier at the account and the customer wants to know how to use the equipment and the salesperson doesn’t know how to do it so the salespeople’s resistance to sell this is the stumbling block. We’ve got a lot of really damn good salespeople who don’t know how the thing works and so that’s the stumbling block. We have to figure out how to do that.
What are you doing to fix that?
Weiss: One of the things we’re kicking around is making the salesperson responsible for learning how the machine works. If they are not capable of providing training to the client, we’ll charge them a fee to do the training. As harsh as this may seem, it really may not be a big deal to them because now they pay $425 for our connectivity charge. Obviously if I’m doing it remotely my costs drop substantially so I can probably get away with cutting that in half.
That’s my workaround, I haven’t implemented it yet, but it’s not difficult to implement. I really wish they would get better at the technology because if you can show somebody how to use it and how it works, you become better at selling it. I’m not at the point where I’m doing this yet, but right now playing a little bit of hard ball, ‘You’ve got to learn.’
You mention you have a good relationship with all of your manufacturers. That’s not something I hear all that often. How do you make it work, because it can’t always be the most perfect situation?
Weiss: I go out of my way to make sure I understand their position and clearly want to convey to them my position. I think good communication is what is needed for both of us to be successful. I also know that they are my vendor and my competitor, and this can make for a dicey relationship. We need to make sure we communicate at all times and that the playing field (pricing structure) is level. Therefore, the pricing, the programs, and the support needs to be in place for this relationship to work.
You seem to be a lot more flexible than some other dealers I know.
Weiss: Quite frankly, I don’t always beat them up. Too many dealers play hardball and pound and pound and pound, and at the end of the day you may win a lot of your battles, but you’re going to lose the ones that you’re not aware of because let’s face it, you have to give and take. You just can’t be a taker.
I think it’s true respect even when I’m negotiating pricing and special deals, I don’t beat them up to the bottom line. I don’t want my customers to take every last ounce of blood out of me and I work the same way with my manufacturers.
What’s Atlantic’s approach to MPS?
Weiss: We’ve been selling managed print services for six years. MPS takes on many different flavors, you can be selling the HP toner and providing free service, that’s one form; you can be doing a true cost per copy with or without assessment. We’ve now advanced to a true model where it’s done right down to the fulfillment where we tag a printer and the barcode on that printer has information, so when that printer needs toner the toner is shipped right to that location. All the meters are being read into the system, based on the click charges.
How do you sell MPS?
Weiss: Two years ago we realized that the best way to get this done is not through your copier reps. We’ve been in the managed IT business and have been selling monitoring for quite awhile. We find that the people selling the monitoring for the network elements—routers, servers, desktops—are much more in synch to offer managed print services. What’s interesting is they’re not selling copiers. And copier people no matter what they’re trying to sell it always comes back to getting this thing under lease so they can upgrade it. They’re not looking at their reoccurring revenue. There isn’t a copier person that isn’t going to say within 30 minutes, ‘Let’s put it on a lease.’
You’re not going to do MPS that way or you’re not going to sell a lot of it. We add it into our monitoring costs and it’s a reocurring revenue and whatever the plan is you’re doing it on a monthly basis, they’re signing two-three year agreements, but they’re not leases. We find that the client is more acceptable to that presentation because the copier person at the end of the day is going to say, ‘How can I spin this thing into a lease?’
And you know what, I get it, I don’t think they’re wrong. We’ve been doing that for awhile and have been pretty successful. Our monitoring business has been growing and is doing well lately. We’ve finally got it right; we’ve got the right management team and our numbers are moving in the right direction.
You offer a broad menu of professional services, how did you get into that and how has that portion of your business grown?
Weiss: That’s the managed IT. How we got into it was simple. Back in the late eighties/early nineties when Ricoh had the first machines to be connected; at that point the copier was the heart of the network. We became successful in servicing the heart. Customers liked what we did so when the opportunities presented themselves, people said, ‘Can you service our network too?’
But it’s been a long struggle. We’ve been in that business for a long time. We started to make money when we were doing business with one account in the healthcare field to the tune of $5 million a year, then they got into financial difficulties and we ended up having to sue them and settle for the million dollars that they owed us. So we’ve had to rebuild that business and now we’re poised to see that part of our business take off this year.
But it’s been a long struggle. We’ve been in that business for a long time. We made money and then we were wrapped up with one account that was supplying us with $5 million a year in business, and then they owed us a couple million dollars. So we’ve had to rebuild that business and now we’re poised to see that part of the business take off this year.
What are some of the solutions/software that Atlantic has been successful selling and why?
Weiss: By manufacturer, Toshiba had the ReWrite product and that thing has grown into Drivve, and that’s a really great solution. On the Ricoh side, PrintDirector and DigiDocFlow has been real good. We just try to narrow down to two or three solutions.
We all know about eCopy and Equitrac. With Kyocera they have the Hypass/Kyocapture and you’re able to do Planet Press. Kyocera has some pretty amazing applications. Konica has the iPhone application to be able to print from the iPhone. Due to Konica’s production presence we sell some software that goes with the Fiery such as Digital Storefront, Veritable Data, etc. and do it at no cost and make some pretty good money. But it’s a struggle to get the reps to sell it; it definitely slows the sales process down and they have to learn it.
What are you doing to encourage reps to sell these solutions?
Weiss: I’ve made changes to the manager’s comp plans to make sure the reps sell it. Our new comp plan just came out and our managers understand fully they’re being charged with a certain percentage of units sold that must have software solutions.
Where’d you come up with that idea?
Weiss: We’ve gone the route of training the reps, gone the route of making the reps understand. We’ve got it documented that if you sell a software solution you’ll increase the gross profit of the deal by 22 percent. But the sales people just look to go out and hit and run. As much as our sales people do a really good job, they’re not looking to complicate the sale. We’re going to try something different and charge the managers with the responsibility that 20 percent of products sold by their team have some sort of workflow solution. I tested it during the last quarter of this year, and told the managers there’d be a bonus if you get this done and in the first quarter it’s going to be part of your comp plan and you’re going to make less money. It’s been tough. I can’t say it’s worked well, but we’ve sold more software solutions in the last quarter than we’ve ever sold.
What’s the one thing you know now that you wish you knew when you entered the business?
Weiss: I wish I understood technology better and spent time understanding how this business was going to change. It’s not a copier business now and I’m at the whim now of a lot of people that understand the technology. If I had to do it all over again I’d taken the time to understand the technology and the computer. I saw it coming. I just chose not to deal with it. You can make jokes about what you don’t know, but I wish I didn’t have to make jokes about it.
What gets you out of bed in the morning every day and into the office?
Weiss: I love it. They say if you love what you do you never work a day in your life. I’ve never worked a day in my life.
