The last couple years have presented unprecedented challenges for our industry. And while there have been many discussions around how companies must diversify to adapt, we’re reaching a point where it’s been beaten to death. It’s my belief that the real opportunity lies in looking internally to improve the disciplines in which you’re already skilled. This would not only improve your profit outlook, but will also pay dividends in every area you choose to take your business.
There are obvious, and some not-so-obvious, areas where we should place our focus:
- E-automate: NEXERA has been performing “forensic” audits of our customers’ e-automate systems. Over 90% of them uncovered systematic process problems that resulted in lost revenue. More often than not, this was due to procedures that were interpreted as being correct and becoming standard operating procedure, even though they were actually wrong. Reviewing each area where data is entered in e-automate and creating a best practices document can pay for itself in very short order to eliminate mistakes.
- Service delivery: Tracking service statistics for almost 30 years has shown that equipment performance has improved, but the actual efficiency of service delivery hasn’t changed much for the bottom 90% of dealers. Certainly, for the top 10% of dealers, it’s changed dramatically. If you’re planning to move to IT services, these inefficiencies will destroy your profitability, as the normal issues of time management expectations, call backs, hold for parts, committed courtesy calls, excess or obsolete inventory and the like are still huge problems for most dealers.
- Sales behavior: While a wildly unpopular subject, a reform of our sales processes needs to be considered in this time of so much change. In NEXERA’s database of over 4 million devices, over 46% of them are in the lowest of 12 volume tiers and average fewer than 1,200 pages per month. NEXERA has proven since day one that many models don’t perform well when producing less than their expected page volume. This happens because we comp sales on a percentage of gross profit, and larger machines meet this need. But because we all comp the same way, customers hear the same message from every salesperson—that they need the larger machine even if a cheaper, smaller one would do the job. As an industry, we need to consider right-sized products for our customers’ desired outcomes. This will likely require changing our sales compensation models as well as how our manufacturer relationships work.
- Billing model: For many years, we’ve believed our complex model of customer billing must change. But just as when color was first introduced to our industry, subscription-based billing is only slowly being adopted by the more progressive dealers. Print volumes are declining, so revenue will obviously decline because our billing models are based on volume. Moving to a simpler, flat-rate model accomplishes several positive benefits:
• Reduction of administrative overhead.
• Reduction of the need for meter acquisition costs.
• Improvement in billing experience for customers.
• Allowance for volume declines for a longer periods before affecting revenue.
• Possibility of blending into other services that are user or subscription based—this change is a must. - Ecommerce and social media: I put these two together because very few dealers do them well. While we all dabble in them (or at least say we do), this will become a bigger part of how we interact with prospects and customers. It won’t replace the relationship aspect, but it will be a bigger component of those relationships.
If as an industry we could take the things we already do well and improve them, there will be more resources available to assist you when you need to change and adapt. And those disciplines will impact the profitability of those same changes. If you struggle with any of the above, please contact NEXERA and we’ll show you how to address most of these areas of opportunity.
