Sam Errigo has heard the criticism regarding the high cost involved in obtaining net-new business, but the president and CEO of Konica Minolta Business Solutions knows it’s the price to be paid for entering a competitive market to gain more market share. And meaningful growth is foremost on Errigo’s mind.
“If all you do is churn your base, this is what we know to be true,” Errigo said during the April 4 press conference with industry media. “The next transaction that you make will be less than the previous transaction in terms of the number of units and revenue.”
With clicks continuing to dwindle and the on-again, off-again state of President Trump’s trade tariffs, Konica Minolta revealed a few announcements that are aimed at enabling its reseller community to be more competitive. One is a new dealer agreement, replacing the previous 10-year-old accord that will sunset June 30, and another is an inter-territorial program that will initially cover KM branch to dealer engagement.
Laura Blackmer, president of dealer sales, gave an overview of both initiatives. The dealer agreement, which was shared with reseller partners the day before the presser, effectively wipes out the territorial boundaries that previously governed dealers in favor of an authorization program. Dealers can now step outside their previous territories as long as they have certified Konica Minolta technicians local to that new region being targeted.
Any dealer that inks the new agreement prior to June 30 will be authorized to sell under this modernized model, providing they have techs that can support office products and/or production equipment. “Having tightly-defined geographic models is not a contemporary way of growing your business,” Blackmer noted.
What’s more, contract quotas—long a measuring stick for performance and distribution management—are a thing of the past. It’s been replaced with a 90-day cancellation without cause stipulation, but Blackmer doubts that it would ever be used.
“I need distribution. I need dealers to be engaged, but I also needed to give us an out,” she said, noting retired BTA counsel Bob Goldberg had given the new program his legal blessing.
Konica Minolta also announced an inter-territorial program (ITP). Dealers that have forged agreements with customers that have multiple locations, some outside of the dealer’s footprint, have long relied on OEM branches and other dealers to provide installation and service. Now, instead of needing to hammer out pricing agreements with five different dealers/branches assisting on a sale, for example, dealers who sign on with the ITP can enjoy standardized pricing and avoid the haggling. ITP is the result of collaboration between the manufacturer and its dealer advisory council.
There will also be an opt-in portal where dealers can log in and use their dashboard to coordinate ITP agreements, keeping all communication and updates in one source rather than relying on emails and phone calls.
Talking Tariffs: With a fluid situation that seemingly changes hour to hour, Errigo and his team have been huddling to do the math on potential, and real, tariffs that President Trump has promised. Although the president announced a 90-day pause on the tariffs Wednesday, the now-60% tariff on Chinese goods took effect (and was subsequently bumped to 145%).
Konica Minolta previously moved its manufacturing out of China in favor of Japan and Malaysia, but the OEM still purchases parts and supplies from China. It would not be a quick pivot to use another country for sourcing, he said. Still, when the smoke clears and the final tariffs are negotiated, Konica Minolta—and all manufacturers, for that matter—have either increased prices already or will do so at some point this year.
“We have a lot of work and analysis to do in the coming weeks to determine how to best handle a price increase,” Errigo said. “There will be an increase; it’s a matter of when we will do it. We’re watching the situation and not overreacting. As we’ve seen before, [tariffs are] on again, off again.”
