Three dealers share their VoIP diversification stories.
We may only be a month into 2022, but many dealers are already worried about the ongoing trend of declining print “clicks” for the year ahead. Most agree that diversifying their service offerings is one solution to the ongoing problem. Voice over Internet Protocol (VoIP) services is one technology net that more owners and managers are casting.
There is little doubt that “margin pressure on copiers and clicks is very high,” said Erik Crane, president and CEO of CPI Technologies, a nearly $10-million dealership based in Springfield, Missouri. Last year marked recovery for CPI, which bounced back to exceed its 2019 sales numbers after a rough 2020. Crane and his team hope to grow revenue by at least 15% this year. Beyond selling and servicing traditional office imaging technology manufactured by HP, Toshiba, and Xerox, Crane noted that he is always looking for ways to diversify its product and service offerings. VoIP is one of those ways and can be an ideal fit for many dealerships like his.
VoIP technology allows telephone calls to be placed over an internet connection. With broadband’s rise, VoIP has become a more popular, digital communication alternative to traditional phone lines and mobile networks. It also encompasses long distance phone service, as well as conference and video calling. Crane pointed to one silver lining in the COVID-19 cloud: “The lockdowns revealed a lot of outdated technology in the office,” he explained, as online meetings (think Zoom) and conference calls have boomed during the pandemic. Despite marketing VoIP services with limited success since about 2018, CPI has seen a huge sales spike over the past 12 to 18 months.
CPI’s customers cover some 80 counties in four states: Arkansas, Kansas, Missouri, and Oklahoma. The demand for VoIP among them is small but growing, Crane said. In 18 months since offering the service, the firm’s related revenue is in the area of $500,000. Crane admitted he was nervous about liability at first. He wondered: If a network goes down and the client can’t conduct business, can the dealer be held legally responsible? Choosing a solid tech partner helped to allay his exposure fears (see sidebar). “Crexendo has proven to us that they know how to respond to adversity,” he added.
In the southeast United States, Kathryn Murph, president of ABR Digital Office Solutions echoes Crane’s concerns, as well as his recent successes. “The downturn in clicks is a concern, and additional resources are needed,” said Murph, whose dealership serves a 60-mile radius around the Savannah, Georgia, area, including parts of South Carolina. She has seen her share of profit-margin ebb and flow over three decades in the family business. “We are all still dealing with this global supply chain issue, so there’s not much equipment to deliver,” she lamented.
Murph emphasized that hanging telephones on a network is no different than hanging MFPs on a network. ABR now manages somewhere in the neighborhood of 275 VoIP lines for its clients. “Our average installation is about five lines,” she noted. “My goal is to get up to 1,000 lines by the end of this year.” Included among the company’s 32 employees are six sales representatives who render that number “totally manageable,” according to Murph.
Lower operating costs are among VoIP’s biggest advantages. On average, landline phone systems can cost businesses as much as $50 per line each month. This rate comprises local (and sometimes domestic) calls only. Many VoIP plans, in contrast, are available for less than $20 per line, according to Nextiva, one of numerous VoIP solution providers. Of course, a reliable internet connection is required. “The network has to be able to handle [call] volume, so there is a lot of testing involved,” explained Barry Simon, president of Arkansas-based dealer Datamax.
Ways to resell VoIP
When it comes to (re)selling VoIP services, having the right personnel in place can improve sales closing rates. CPI promoted Joshua Glover from within. “Josh has tenacity,” Crane said of his technology director, who oversees IT installations and set-ups. “It helps to have the right call plans, too,” Crane added.
At Datamax, a larger dealer with 250 employees serving customers from 10 locations in Arkansas and Texas, VoIP leads are shared with the copier side of the business, which partners with OEMs Canon, Konica Minolta, Kyocera, and Lexmark. “We have dedicated [IT] sales reps, too,” Simon says. “The copier folks can pass leads to the IT side, or they can be involved.” Either way, they get credit that applies to the dealership’s President’s Club trip.
ABR takes a different approach. Due to lower-than-expected return on investment (ROI), Murph’s dealership no longer plays in the managed IT arena. “Our regular MPS reps sell VoIP,” she noted, relying on an in-house specialist possessing the skill set for more advanced installations. If a job gets too complex, they can turn the account over to her and still get a finder’s fee.
Customer adoption of VoIP has not been as rapid as many industry observers predicted. Murph believes education is the catalyst. “Many customers perceive a big difference in telephony,” she said. “They don’t think to call ‘their copier people’ for these services.” She identified three keys for dealer VoIP success:
- Prove your sources.
- Demonstrate your skill set.
- Stress your techs.
Her third point can be a major factor. “Tech people have no skin in the game,” she explained. “Their presence can lower the fear factor and reticence of many prospects.”
Internally, Murph expressed frustration about the inability to gain traction with ABR’s VoIP offering. “We offered kickers in commissions, a higher percentage of gross profit, and even [tried] SPIFFs—for every phone, they got ‘x’ number of dollars—but we’ve only had moderate success.” This year, she is playing hardball by instituting new rules: A mandatory number of VoIP and MPS sales per quarter was announced in late September of 2021.
If these newly established goals are not met, bottom line consequences will cut into representatives’ commissions on their MFP sales. It’s for their own good, she reassured. “Our sales department is extremely tenured yet open to change,” Murph noted. “They need to understand that the industry is not what it was.” Perhaps surprisingly, she reported that there has been no pushback to date. ABR hopes to see true results by the end of the first quarter of 2022. Adding 200 new VoIP lines in the first quarter would be a great start to 2022.
Selecting the Right VoIP Partner
A few years back, ABR Digital Office Solutions purchased a VoIP solution for its own employees to use. “So, we already had the expertise of getting on a network,” said Kathryn Murph, ABR’s president, “but our installation experience was horrific!” When the time came in late 2020 to partner with a VoIP technology provider for reselling purposes, she chose to work with turnkey, cloud-communications company Intermedia. Fellow dealer Datamax selected the same vendor. Both firms had been introduced to Intermedia at a Copier Dealer Association (CDA) meeting.
“We wanted a dealer program, not just a percentage,” said Datamax’s President Barry Simon, who sought a partner who can do installs and take care of the customer after the sale is made. Intermedia conducted a training session for Datamax’s legacy copier sales force. Additionally, Intermedia “gave us dollars to incentivize our people during the kickoff phase,” Simon added. “Reps with the most leads won cash.”
In the Midwest, CPI Technologies opted for Crexendo’s cloud-based phone system, about which Erik Crane, president and CEO of CPI, received strong references regarding uptime. For him, choosing a VoIP partner came down to responsiveness. “As a business owner, I respect when people are responsive and get back to me in a timely fashion,” he said. “The people at Crexendo are excited to work with us, and their answers are thorough and transparent. I never feel as though they’re hiding anything.”
Like CPI, Datamax has seen VoIP growth over the past 18 months. “It’s still small, less than 5% of overall sales,” Simon reported. “We hope to be up to 700 users by year’s end.” He concluded that VoIP business often leads to copier, MPS, or other IT business, and vice versa.
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