Selling Distinct Products/Services Trevor Akervik, Marco Tom Callinan, Strategy Development

Trevor Akervik Director of Managed Services 13 years with Marco Copier Territory Sales Rep Copier Sales Manager Director of Managed Services Was the 1 st member of the team Sales atmosphere was almost 100% hardware focused Knew less than zero about IT industry Wasn’t 100% convinced it was the right career move…

Tom Callinan Founder and CEO Copifax, Philadelphia 1987 Sold to IKON September, 1997 VP Ops/CFO IKON MidAtlantic District, 1998 Marketplace President, NYC 1999 – 2001 Southeast Region President, 2002 – 2003 VP/GM Northeast Region, 2003 VP/GM East Region, 2004 – 2005 Strategy Development, 2006 Graduate of the Wharton School, University of Pennsylvania

Management Drives Changes Organizational change can’t be led from the front line To be successful in a new business you need strong leadership and management processes – Ensure you have those in place before you try to change the behavior of your sales professionals Once leadership is in place use education and incentives to change the front line employees

When measured by employees, what size firm do you target Copiers – 50 – 250 How about for MPS – And for MNS – Using Market Segmentation Copier MPS MNS

Segmentation Takeaway A traditional copier company’s base most closely mirrors an MNS target market Even with that overlap only 20% of your copier customers will be good MNS clients Nevertheless, 20% of 2,000 customers = 400 MNS clients – At $2,500/month/contract = $12 million business

Targeting ZBA Accounts Sampling of 100 businesses in typical industrial park: 40 percent are single placement segment I or low end segment II with fewer than 10 employees (80% of US firms have < 10 employees) 5 percent are Fortune 500 Companies looking for a national provider 5 percent are branch offices with purchasing at corporate outside of the area 5 percent are your own customers 5 percent are in another rep’s CRM in your office 60 percent of your time is wasted randomly cold calling You want to focus on the other 40%, those that are highly profitable and can buy MNS or MPS in addition to equipment As you add other business offerings to your core customer segmentation becomes critical 7

List Manage Sales Professionals “The job is hard. Really, really hard. ‘But, not for the reasons you think. The combination of an awful lot of freedom coupled with the absolute necessity of a disciplined mindset’ can be a dangerous combination for most people.”* You are not hiring well educated business managers or entrepreneurs so provide them some structure *Article Source:

Territory Design To Maximize Revenue You can calculate your estimated annual revenue from equipment upgrades at every level – Company, branch, sales team, sales professional Each machine in field (MIF) has a value – Determined by segment average unit selling price and average life in field – MIF becomes foundation of quota Not all ZBA accounts are created equally – Focus on the accounts with the greatest ROI, with investment being sales professional’s time “Territory” = list of MIF and ZBA accounts MNS quota is developed from technology in field (TIF)

MPS Resources MPS specialist target companies with 250+ employees (major accounts) with SME as overlay for <250 In accounts with fewer than 25 total devices, lease upgrades should be banished as an event Use the lease upgrade cycle as your opportunity to perform a study of the customer’s document environment – Mobile has changed how people print – The current hardware environment has probably been in place for 10+ years, before most of today’s technology was invented

Market Segmentation Benefits You get the greatest ROI on your sales investment – You’re selecting where your resources are deployed rather than leaving it to happenstance Your sales professionals have a greater opportunity of achieving success – You know they are spending their time on the correct accounts Your sales managers have a defined list to help the sales professional penetrate and expand – The focus is on making progress in each account, a great way to identify areas to develop each sales professional You know specifically which clients and ZBA targets should be targeted for MPS and MNS

Market Segmentation Summary A mid-market sales professional can realistically handle 250 accounts – 520 hours/quarter, 1 hour/assigned account, 50% of time devoted to selling activity Focus your sales professionals on the accounts with the highest value to your company – At an average of 3 MFDs/ZBA and a ratio of 80 MIF/ 170 ZBA you have ZBA opportunity of 510 MFD, 2,000 printers, and professional services and MNS wallet share gains Provide them with the training and give them a quota for MPS/MNS

Who Buys Your Product The decision maker for copiers/MPS – If company < $15M = owner – If company < $40M = owner or CFO – If company < $80M = CFO or CIO – If company > $80M = CIO or Director of IT For MNS you almost always want the owner with a strong CFO as distant second They have their life’s histories on LinkedIn so we don’t need to drop by to determine who they are

The Sales Formula Prospects X average transaction size X close ratio = revenue Close ratio has the lowest improvement rate (from X to Y) “Prospects” is easiest variable to significantly improve Average transaction size can be improved more than close ratio – MPS can increase your average transaction size and MNS can significantly increase the transaction size

The Sales Formula [Prospects X 1.5 (50% improvement)] X (average transaction size X 1.2) X (close ratio X 1.1) = 1.98% of original revenue Driving pipeline growth is the holy grail of sales growth

Account Planning Session (APS) Each manager spends one hour per week per rep developing strategy and tactics in accounts that will not close for > 6 months – Start at 5 accounts but once proficient can cover 10 in one hour Multiple goals – Develop more relationships—get higher and wider – Look for tangent approaches—MNS/MPS, software, branch location placement, application – Increase share of wallet—displace competitors – Increase pipeline so that you grow and gain market share – Develop the sales professional!

Pipeline Management If you grow pipeline you will grow your business! Pipeline measures effectiveness of APS Three phases for copiers – Phase 1 = 4 – 18 months out (20X quota) – Phase 2 = 31 – 90 days out (10X quota) – Phase 3 = next 30 days (5X quota) Three phases for MPS/MNS – Phase 1 = 4 – 9 months out (20X quota) – Phase 2 = 31 – 90 days out (12X quota) – Phase 3 = next 30 days (7X quota)

Success in MPS/MNS If you want to know how your program is progressing simply measure your pipeline growth over a rolling 12 month cycle Pipeline provides you visibility into future periods and ability to adjust today

MANAGEMENT DRIVES THE CHANGE

How Do Your Core Reps Qualify an Opportunity? Type of SMB Decision Maker Type of Partners They Seek About 20% of SMBs

COMPATIBILITY MATRIX

Sales Deployment MNS needs to be supported by SME In the equipment space the same SME can be used for MPS and MNS The equipment sales professional is quarterback In major accounts MPS can be supported by direct sales specialist

Setting New Client Expectations Transitioning the relationship to onboarding resources: – Allows sales to refocus on selling – Bridges the gap between sales and service – Builds credibility and enhances the client experience

The Quarterly Technology Review Provides a report card of delivered services Response metrics – changes the conversation to facts rather than feelings Plan for client’s future – acquisitions, new office expansions, growth or decline in employee counts

What’s The Future of The Core Rep? As copier industry matures, there will be fewer “copier reps” and more “technology reps” Hire to this model today so you can transition employees into the new role Focus on advanced solutions to continue driving market share gains

It’s all connected Hire the correct sales professionals = lower turnover Lower turnover = better developed sales professionals Territory design ensures fair assessment, good use of time, and ability to sell all offerings APS = more prospects (pipeline), ability to expand share of wallet, and sales professional development Pipeline measurement = future period visibility and ability to see growth prospects

Pitfalls Of Implementing Better Management Pain in change – The fact is that today’s “no management” is easy: Go cold call and when you find an opportunity I’ll be there for you – Scientific management requires some upfront work (territory structure) and a disciplined focus to employee development – Initially, near term results are emphasized over short term results (develop the employee and build the pipeline) – Managers have to adapt to real management

Benefits of Better Management Transition of focus to employee and pipeline development won’t change short-term results You’ll recognize the same revenue this month you would have had you not launched the change! Sales professionals are held more accountable then before They must have strategies for penetration in all accounts in their territory They have to prepare for all the meetings, both internal account development as well as customer meetings The manager can help them identify opportunities for MNS, MPS and wallet share growth They will grow their 18 month pipeline in all revenue streams

Summary Strong management is key when launching a new business Make certain you call on the correct sized company and the correct level – Focus your sales professionals…don’t hope they find the correct accounts Front line manager needs to be change agent using account planning sessions to educate the sales professional and drive pipeline Pipeline is measurement of future growth You need the correct direct or overlay positions

Summary (cont) Core equipment sales professional is quarterback and does initial account qualification Spend time to on-board the new client successfully Use the QTR to keep clients informed and expand share of wallet Hire to the future

Thank You Trevor Akervik Tom Callinan