Of all the values inherent with being a member of a peer group, a notable one is insight into a potential new revenue stream, an offering that may be somewhat off the beaten office dealer path, but still may be a source of incremental dollars. Let’s be honest, there are no product diversifications that are guaranteed to be hot sellers, and a lot of variables factor into the success a given dealer may experience: geography, customer makeup, and the volume of competitors already offering it, to name a few.
Consider that there are dealers, perhaps in your market, who have found 3D printing to be a profitable venture. What we’ve learned, as an industry, is there are precious few opportunities for recurring revenue with 3D. It requires a particular niche, perhaps clients in the AEC sector who rely on modeling. The opportunities are so scant, it’s not worth the effort for a majority of dealers.
This is an extreme example, of course, but having a group of peers with experience in some of the more mainstream diversifications and managed service disciplines can provide insights into the pitfalls and tripping points they’ve experienced along the way can help you be more prepared in your own journey. This week’s State of the Industry report on peer groups examines some of the most valued caveats dealers have picked up within their peer group interactions.
3D(on’t)
Speaking of 3D printing, it can be the poster child for adjacencies to avoid for dealers such as GoodSuite. Dan Strull, CEO of the Woodland Hills, California-based dealership, notes there was a time when his company “took on anything and everything,” but the lessons learned from his involvement in the PRO Dealer Group have fostered a more judicious approach.
Sometimes, however, the advice of others doesn’t always resonate. While one member was espousing the potential lucrative opportunities that 3D printing offered, Strull demurred and decided it wasn’t for him.
“It required a decent-sized investment in cash to get started, and I didn’t see how it was going to work,” he said. “I don’t think many people have made money on it. I feel it was a good decision for me.”
Strull isn’t the only exec who refused to buy into the 3D game. Jim George, president of Cincinnati-based Donnellon McCarthy Enterprises, became sold on the idea of EV chargers through another peer group of sorts, the Executive Connection Summit, and signed on with ACDI. But while he watched several dealers make significant investments into 3D and saw internal pressure from his sales staff to take on the adjacency, George ultimately could not envision a consistent revenue stream.
“A lot of us discussed it, but I just didn’t see a future with 3D,” he said. “Some dealers went all the way in with 3D, and now they’re all the way out. You can’t be the best at everything.”
Managed Services
Most peer groups offer panel discussions that examine the pros and cons of diversifications, such as managed services. Carter Hertzberg, the president of Nauticon Office Solutions in Gaithersburg, Maryland, noted his group held one such panel consisting of dealers who have already embarked on managed services; they shared their experiences and challenges as a benefit to those who have yet to commit but are interested.
“Every dealer has different goals,” he said. “Topics ranged from when to lean on outsourced resources versus hiring and building a team internally, along with best-in-class systems and products. Another example would be the pitfall of selling production devices to print-for-pay operators. While our peers have consistently warned against this practice, we’ve certainly made the mistake enough times to recognize that they were right all along.”
From scenarios involving HR to some of the more nuanced conversations surrounding acquisitions, Chelsey Bode loves the trust, vulnerability and frank conversations that arise during Copier Dealers Association (CDA) gatherings. It’s not a “brag fest”—egos are checked at the door, and whether it’s panel discussions or one-on-one interactions, she’s gleaned ample perspective that has helped her in moving forward as an owner.
“One of my favorite sessions the CDA does is a panel of six dealers that talks for 10 minutes each about one innovative thing they’ve implemented within their organization,” said Bode, CEO of Pearson-Kelly Technology (PKT) of Springfield, Missouri. “Some of it is really simple and creative, like communicating with your entire organization whenever a new account has been added. This lets the service techs know they have a new customer coming into their territory that they’re going to be servicing. We took the idea and made it our own. It ties in sales, admin, service and the implementation teams, so that everyone knows the [new client] is going to be doing business with us. That first impression with [clients] is everything.”
The Unexpected
Dealers can gain solid insights into how to go about handling the unexpected, and perhaps nothing qualifies as a greater emergency than a severe business disruption such as a cyberattack. Joe Blatchford, the CEO of Image 2000 in Valencia, California, recalls the time a member was conspicuously absent from an American Co-Op Group gathering, and learned the dealer friend had suffered a cyberattack over the weekend. The experience was an exercise in not only cybersecurity but also backup/disaster recovery.
Worst-case scenarios such as these can shake a dealer exec to the core, but having information as to the next steps in dealing with such a traumatic experience can provide some level of comfort. “All hell broke loose for him that weekend,” Blatchford said. “The group can help guide you to what you need to do. They can recommend people for you to call, the insurance companies that dealers use. A peer group can certainly help when situations such as this arise.”
