The OfficeWare Advantage: A Conversation with OfficeWare President and CEO Richard Maxwell If you’re looking to model yourself after a successful office technology and solutions dealership, look no further than OfficeWare in Louisville, Kentucky. In 14 years, OfficeWare, Inc. has grown into a $20 million company. It represents Canon, Lanier, and HP, and is known throughout the markets it serves for adding value via its people, partners, processes, knowledge, and culture. The company is focused on offering customers what they call “Integrated Document Solutions,” backed with customer-focused “Total Care” document output and management solutions. Besides document management, OfficeWare is speeding along at the head of the curve with managed print services and data security offerings as well as a successful recycling program. Whatever they’re doing, they’re doing it right. ENX spoke with Richard Maxwell, OfficeWare’s President & CEO and a 34-year office equipment industry veteran, about the company, the industry, and its strategies for success.                                                                                                        Richard Maxwell You had a flat year last year, how’s business this year? Maxwell: Pretty good. Through the first six months of our fiscal year we’re up 6 percent. Our profits have held strong, and we landed some large managed print services contracts and we’ll be picking up revenue from those during the second half. I’m anticipating a good year overall. We’ll probably end the year with a 10 percent increase. If business is up, what are you doing differently? Maxwell: Speaking for the past two years, I’d say we’ve been paddling very hard. It is a tough environment out there and we’ve put more emphasis on capturing new accounts, and it’s paying off, so we’re probably growing at the cost of the competition. What’s making it easier to get in front of those new prospects and turn them into customers? Maxwell: Part of it is focus. What we did this year was ask each sales rep to identify 25 prospect companies in their CRM database that they were truly going to target. We also added some rewards if they closed those targeted accounts. That’s really helped. The other side of the equation is in today’s environment, customers are more willing to talk because they’re looking for answers and ways for you to help them reduce their overall costs and streamline their processes, and that’s our method of sales. Even though it’s been a difficult two to three years of late you were able to increase your workforce from 96 to 107 team members since 2009. How were you able to do that and why? Maxwell: 2008 was actually a good year for us. Some of those net additions were catch-up from the prior year. Other new hires are to facilitate new managed services contracts and engagements. For one account, we’ve added five people to be on-site at a large managed services engagement even though we haven’t billed one dollar yet. We view this as a tough economic time, but also a time of opportunity. We’ve worked hard and continue to invest in people, technology, and infrastructure so that we not only succeed in today’s environment, but if the economy turns, we’re ready to take advantage of it. Who are your customers? Maxwell: All over the board as you could well imagine—everything from large healthcare organizations, universities, city government, and down to mom and pop businesses. In particular we try to be vertically focused. In recent years we’ve become big in the legal industry. We have always liked healthcare, government, education and manufacturing, and we’re pretty established in real estate, although that’s been tough in recent years. Why do customers choose OfficeWare? Maxwell: When customers meet OfficeWare team members I think they’re favorably impressed. Plus for many years our approach has been more consultative oriented and less product oriented. I would venture to say if you surveyed a number of our customers and asked what brand of equipment they use, there’s a good chance they wouldn’t know. They’ll probably just say, ‘OfficeWare handles it for me.’ That’s by design. We value our relationships with our manufacturing partners (Lanier, Canon, HP), but we really understand that OfficeWare is the brand and through our ‘Total Care’ approach handle all of their needs. The machine is just one piece of the puzzle. Who do you view as your biggest competitors in the market? Maxwell: We’re in multiple cities so it varies by city, but I would say across the board IKON has a pretty strong presence. In each of our markets there tends to be one strong local dealer in addition to ourselves. We have direct selling Konica offices in our market and a direct selling Toshiba office, but day in and day out we probably knock heads more with local dealers in each market. Tell us about your Total Care Equipment Usage Agreement? Maxwell: The Total Care concept has evolved and continued to evolve over the years. It got its grass roots with cost-per-copy contracts many years ago. Total Care is really a total solution and that’s what the customer wants. They don’t have to handle all these individual elements themselves. We try to make sure we have a complete solution. We stay abreast of technology, and we leverage technology whenever and wherever we can. As the customer’s needs and expectations have changed, as technology has changed, the Total Care concept has evolved as well. As an example, one of the pieces of the puzzle of Total Care is the OfficeWare Cares Recycling Program. That didn’t exist five years ago. In recent years another piece of the Total Care puzzle is our Optimize software, which monitors and reads the customer’s devices on a regular basis. We’ve written the interface to feed it into our backend billing system for consolidated billing. Another example is called eDocs Suite, which is a suite of proven software products that address specific document applications such as scanning and backend document management systems. This software portfolio has continued to grow. Total Care continues to evolve and grow. We try to make sure we stay one step ahead of the competition because as they watch it and see it, they’ll try to emulate it. We’ve done a good job with that and haven’t been afraid to invest in the things that are needed to take it to the next plateau. There’s a lot of talk of late about managed print services. How do you fit into that picture and how do you see this portion of your business growing? Maxwell: One of our 2010 goals as an organization is to make managed print a way of life within OfficeWare. We don’t want it to be a specialty item or an item that only specialists talk about and sell. We’ve been working on this for several years now and are beginning to enjoy an accelerated rate of success, and we love it! It’s what we do extremely well. We think the boundaries between printers and multifunction devices are becoming blurred, not just from a technology standpoint, but the customer is starting to realize that they really need one decision maker to address both. Like most dealers, we wish we had enjoyed greater success faster, but it’s taken awhile to figure it out and I think we’re on the right track. Today about 25 percent of our machine base is printers. I’d like to see it 50/50. What do you see as the biggest obstacle to success in offering managed print services? Maxwell: It’s very unusual to go into a customer’s print environment and find complete standardization. Normally they’re not 100 percent an HP house or 100 percent a Lexmark house. You might find Dells, Samsung, and other names. I think that within the mindset of the true spirit of managed print services, we need to take care of all of those printer brands for the customer. That’s a pretty big internal hurdle and took us awhile to get over it. What do you wish you knew when you first started down this road that you do now? Maxwell: I wish I had bought a small printer company a couple of years ago. That would have accelerated the learning curve. You have the OfficeWare Cares Recycling Program. What was the reasoning behind that, how does it work, and how much of a difference does this make to customers? Maxwell: With some customers it means a lot. Some have taken this environmental initiative quite seriously. For others it’s nice to have, but not overly important. Basically we established a relationship with a national toner recycling organization and partnered with them. We collect the empty toner cartridges or our customers can send back to us from any manufacturer. Once we reach a critical mass we’ll load them on one of our trucks and take them to this national recycling center. The reason we did it this way is each of our manufacturing partners has a recycling or green initiative, but they’re all a little bit different and we found it confusing to the customer. We wanted one simple approach, which is to simply return it to OfficeWare and we’ll take it from there. Obviously there are some associated costs we incur, but we think it adds enough value that it’s worth the investment. Security is another growing area. Where are you enjoying the most success with your security solutions and what types of solutions are you finding resonate most with customers? Maxwell: We’ve always been aware of the hard disk security issue and made sure customers were aware of it as well. It’s in our agreement and has been for years. I think the CBS News story a few months ago was eye opening not only for our customers, but for us because we always deleted the data from the disk but weren’t totally aware of the ghost image risk. After that story ran, we jumped on it quickly, devoted a lot of resources to coming up with a good solution and interestingly enough, now that we can answer the questions, it’s not as big an issue in our customers’ minds as it was for awhile. Again, it’s just one more piece of the puzzle. I wouldn’t call it a big opportunity, it’s almost a must have. I don’t think we’re going to gain a lot of business because of it, but I think we would lose a lot of business if we didn’t have it. You have an annual customer satisfaction survey, what specifically have you learned from those that you’ve been able to take and improve your customer satisfaction levels? Maxwell: In some cases it reinforces we’re doing a good job in a particular area. We’ve always received high marks for customer service. In recent years, some of our lower marks might have come from billing, yet we thought we did a great job with our billing process. Following up on those surveys we learned what the customer really meant was our leasing partner was having difficulty with the billing. Working with our leasing partner we were able to improve the billing process. The survey is a barometer, and it’s not always what it necessarily appears to be. When you get low marks you really have to dig into it as opposed to just jumping to conclusions. What is the biggest challenge of running an office technology dealership today compared to 14 years ago? Maxwell: Technology has made it a lot more complex. Thirty-four years ago all we sold were copiers. We might have had three or four models and that’s all we had to be good at. Obviously, software, technology, and integration have made it more complex. Having said that, I think it’s a lot more fun because the ever-changing technology is what keeps it fresh, keeps you motivated, and keeps you interested in learning and continuously improving. What gets you out of bed in the morning and excited about coming to work every day? Maxwell: It’s really exciting when you give people a goal or a challenge and see how they come together as a team and respond. Watching the team and team members grow is very rewarding, as is being part of an ever-changing industry. If it weren’t changing I’d probably grow bored pretty easily. Scott Cullen has been writing about the office technology industry since 1986 and is a frequent contributor to ENX Magazine.