Dec 5, 2013
There was an awkward moment in one of the conference sessions at Konica Minolta’s recent dealer meeting. Polly LaBarre, co-author of Mavericks at Work, was summing up her presentation and she asked listeners if they would promise to ‘walk into the office stupider, and ask more questions.’ Promoting stupidity seems like a losing proposition but the ‘asking questions’ part is right on the mark, and I think it is a good reflection of the way that Konica Minolta conducted its ‘Shape the Future’ event, which took place November 17-19 at the Venetian/Palazzo Resort in Las Vegas.
First off, earning the trust of their dealers has to be a number one priority of any such meeting. Konica Minolta’s biggest asset in this effort is Rick Taylor. A former copier dealer executive, he knows the issues they face. In perhaps the most revealing moment of the entire three days, Rick promised the dealers that he would have a BTA lawyer review the typical Konica Minolta dealer contract for fairness. This is a good example of listening and responding appropriately, and it came directly out of a focus group with the dealers. Several other items give an indication of Konica Minolta’s pro-dealer stance:
- Konica Minolta dealers are now selling more units than KM’s direct locations (more on this below)
- Konica Minolta’s extensive support organization includes specialists for wide format, production print, printers, etc. with each team supporting thirteen dealers. Konica Minolta thinks this level of support is much more extensive than its competitors.
- Konica Minolta announced that it is offering two educational programs at no charge to its dealers. One is a Harvard University online business curriculum and the other is the Edge (Learn, Lead, Succeed) leadership development program from Bluepoint, which is now being extended to dealer executives.
It’s also clear that Konica Minolta is forward-thinking about other areas such as vertical market solutions, IT services, and the production market (more on this later). Another surprising new venture for Konica Minolta and its dealers is 3D printing. Konica Minolta brought 3D Systems to the event and said that it would shortly announce a formal partnership with them. The impromptu introductory session with 3D Systems on Tuesday afternoon was packed with dealers whose questions got right to the heart of the issue: What are the margins on equipment and consumables? When can I start selling? All of which was way too early for a precise response from 3D Systems (keep in mind that a deal between them and Konica Minolta has not been signed yet) but it did point out the high level of interest.
Konica Minolta reported on a very positive 2012 fiscal year and also gave some detail on the first half of its 2013 fiscal year. Rick Taylor shared with the audience what he called a ‘brag sheet’ of Konica Minolta growth figures: total company revenue up 6% for FY2012 (which ended in March), hardware revenue up 8%, and 9% more units than the previous year. Rick’s two biggest growth numbers showed software solutions up 44% and IT services up 59%. He said that through the first six months of FY2013 the results are following a similar pattern. He pointed out that dealers accounted for 52% of units sold (with 48% going through Konica Minolta branches). This was the first time that there were more dealer than direct sales, with the biggest dealer month ever coming in October 2013. He added that machines in field (MIF) and print volume were up too. All very good signs, particularly when it was noted that Konica Minolta Business Technology accounts for three quarters of Konica Minolta Inc.’s business.
Another point made by Taylor (in the Q&A session with press and analysts) was a change in their acquisition strategy. Taylor said that Konica Minolta has bought five or six IT services companies, one business core dealer (with another closing soon) but the in the next 12 to 24 months there would be acquisitions of a different type of company. He didn’t necessarily say which type, but added that it would be in another connected business segment. Overall, he noted, their strategy is to be opportunistic with acquisitions.
Alan Nielsen, Konica Minolta’s head of dealer sales, noted that the number of dealers had been downsized by more than 180 over the past five years. The current number of dealers is 334. At the same time the company is adding headcount to its business intelligence service (BIS) and dealer organizations.
Konica Minolta stressed the point that it is looking to bring IT managed services into every discussion. They said that about 20% to 25% of dealers have been enrolled, trained, and staffed to sell All Covered solutions. Dealers need to go through this process if they want to offer business process and document management solutions from Precision Discovery.
The Production Market
I had the pleasure of moderating a session called ‘Get Passionate about Big Iron’ which had three of Konica Minolta’s biggest dealers represented on the panel: Darren Metz of NovaCopy, Steve Gau of Marco, and Doug Pitassi of Pacific Office Automation (POA). These dealers spoke about the needed infrastructure for production-market success, which includes having the right levels to sell and support production color. This includes sales reps with color knowledge, color support specialists, and service technicians accustomed to production environments. The competitive nature of all-inclusive click programs was a key point that came out in the Q&A. All three dealers said they do their best to hold the line, particularly given the 24×7 support requirements of commercial printers.
From a product perspective, much of what was displayed in the production area of the showcase had been demonstrated at PRINT 13 and even without the KM-1 it was an impressive collection.
- Among the products previewed at the event were the 100-ppm color bizhub PRESS C1100 (set for release early summer next year) and the twin-engine monochrome bizhub PRESS 2250P. Of particular note in the production area was the attention paid to in-line finishing through partners such as Duplo, GBC, and Tec Lighting. The bizhub PRESS C1100 was shown with a SD-513 booklet maker that can do a 3-side trim and produce a square-edge bind. The Duplo DC-646 slitter/cutter/creaser produced a nice example (see below) of a promotional piece with a tear-off panel. TEC Lighting showed a TruCoat UV coater attached to a bizhub C1070 and reported that it is having a lot of success placing these units. The bizhub press C8000 had a GBC punch unit, a booklet maker, a 3-position stapler, and an SDD booklet maker with 2-side trimmer.
- The importance of finishing and substrates was underscored by Konica Minolta partner Mohawk, which showed some great examples of how substrates can be the lynchpin for high-value print jobs. These included identity cards on a synthetic stock (from Mohawk’s Embedded series) and some nice pre-perfed and pre-scored boxes on a premium substrate (from Mohawk’s Dimensional series).
- No mention was made of Konica Minolta’s relationship with Screen (first announced at the On Demand show in 2011). It is safe to assume that it’s over.
- It was great to see EFI CEO Guy Gecht among the Konica Minolta partner representatives at the event. Konica Minolta notes that many of its new 75-ppm color bizhub 754 units were being installed with Fiery servers.
- Even though it was not shown, the KM-1 was a big topic of discussion. Konica Minolta said that it expects to have one beta unit installed in the first half of 2014 with the first shipments starting fourteen months from now. Konica Minolta expects that some of its dealers will be involved with sales of the KM-1.
Konica Minolta went all out in the execution of this event. The glitzy Venetian/Palazzo Resort and Casino was a fine venue for the 1,100 or so folks in attendance. In addition to the Konica Minolta presentations and sessions, the dealers were treated to music from a nine-piece rock band, inspiration from CBS play-by-play man Jim Nantz (“the voice of Konica Minolta”) and hilarity from comedian Dennis Miller (his best Steven-Wright-inspired line: “The Air & Space Museum, despite the name, is not empty”). Part of the fun was that Konica Minolta executives were clearly enjoying themselves. Whether it was Rick Taylor in a cowboy hat making a grand entrance as country singer Tim McGraw or Kevin Kern and Jun Haraguchi rocking with the band, they all seemed to understand that a good mix of information, communication, and entertainment was the right formula. And the dealers I spoke with responded well to that. I was a bit lucky, however, that this was my only dealer meeting of the fall. Many of those in attendance had also been to the Ricoh, Sharp, and Toshiba events. For some perspective on those events, see the following:
- Toshiba LEAD – The Race to…wait for it…One Billion Dollars! (David Ramos)
- Sharp’s 2013 National Dealer Meeting …. In Transition (Barbara Richards)
In addition, you may be interested in these blogs, which I wrote after previous Konica Minolta dealer meetings:
- Inspiring Customer Passion: The 2012 Konica Minolta Dealer Event (January 18, 2012)
- George Will and the Blues Brothers (May 4, 2010)
- Building Trust: Konica Minolta’s Vision 2009 Dealer Event (January 13, 2009)
More blogs from Jim Hamilton