Ricoh Convergence 2013 – My First, Second and Third Take

With over 1,200 attendees and representation from 597 Ricoh dealerships, Convergence 2013 was Ricoh’s largest dealer event of all time. The executive team was very accessible and honest in their self-evaluation of where they have been, mistakes made along the way and creating specific plans for addressing the issues and growing the company.

First Take – Dealer feedback was overwhelmingly positive. Positive feedback is to be expected from the category of single equipment line dealerships producing $25+M in annual revenues. But that is, in a way, like the kid who was teacher’s pet in my fifth grade class telling me every day for a year how great Mrs. Salo was while she treated me and the other 80% of my classmates like second/third rate citizens. When I say overwhelmingly positive, I am referencing principals from $2+M hardware-centric dealerships in Rural, USA to sophisticated $25-to-$100+M multi-line and services-led dealerships of Metropolitan City, USA. Direct feedback from dealer principals:

  • “Senior leadership is listening”
  • “They are addressing the issues and challenges”
    • Order fulfillment
    • Product launches
    • Ricoh value proposition
    • CHAMPS was a disaster but they took NDC (National Dealer Council) feedback and are improving the platform
  • “They are finally enforcing the rules of engagement and building trust with me”

Measure up this level of good vibes and positive comments vs. feedback I received 16 months ago after the last national dealer event (feedback that by the way, a large percentage I could never repeat here because my grandmother would wash my mouth out with soap), you can understand why my first take is regarding positive feedback and senior leaderships willingness to adapt to and address the business issues impacting this constituency.

Second Take – Jim Corridi, Vice President of the Ricoh U.S. Dealer Division and David Greene, Senior Vice President of Sales, Ricoh USA delivered a channel message that was consistent throughout the event, however they also had a few surprises.

  • Services-led go-to-market strategy
  • Become easier to do business with
  • Balance dealer vs. direct sales
  • Dealer unit sales are now 35.3% of total unit sales (curiously, they didn’t share revenue percentages)
  • They emphasized Ricoh exclusive dealers repeatedly through the first general session and even closed by asking for multi-line dealers to consider Ricoh exclusivity.
  • Hiring outside talent – I think fresh perspective is good. And I see Ricoh’s willingness to bring in talent from other industries with specific skills that can be transferred to compliment and develop Ricoh’s current talent as phenomenal.

Third Take – The most important facet of their message during the event (in my opinion) was Strategic Alliances. By now you are fully aware that the traditional components of our industry are changing, and rapidly. Nobody needs to tell you about decreasing equipment placements (you’ve all seen the data) or the shift from A3 to A4 hardware and corresponding decline in average unit selling price (you’ve all more than likely experienced it first hand). Nobody needs to tell you that images are decreasing along with equipment placements (you are sure to have measured volume attrition in your service dept. metrics during internal reviews). Oh, and compounding all of this is the revenue per image and per device is also declining.

Ricoh has done some nice work commissioning research and understanding what is driving these changes.

  • Smart devices are here to stay.
  • 3 generations working side-by-side.
  • Employees are mobile.
  • IT budgets are tight.

This initiative is led by Dominic Pontrelli, Senior Vice President, Marketing, and supported by Kim Castagnetta, Director RAC Strategic Partner Program and Ricoh Global Alliances. The current and future strategic alliances success will be vital to Ricoh’s ability to deliver measurable results both in the direct/dealer channels and position the company to make fundamental changes  in order to help cope with shifts in the market environment. As Ricoh positions their services portfolio of managed document services, business process optimization, communication services, production printing services, IT infrastructure services, sustainability management services and lastly application services, they will need to continue with this development of new alliances and increase collaboration/integration with partners like Diamond Marketing Solutions, IBM, Nuance, Oracle, NSi, EFi, Objectif Lune and Westbrook Technologies (recently acquired by DocuWare, Inc.) to name a few.

The event horizon that I don’t hear any manufacturer’s reference directly or publicly is something Jeff Hayes, President of InfoTrends, wrote about in September. The annuity stream model of our industry is at risk long term. Example, International Paper announcing it will permanently close its massive Courtland, Alabama mill by the end of the first quarter of 2014. Closing this facility will lower the entire paper industry’s capacity by 8%…that means the entire capacity for paper manufacturing/production…will disappear by close to a tenth with one event…and it’s not coming back.

I know this is difficult for manufacturers and industry players to discuss (at least publicly) and before anyone starts mocking with silly statements like “there will be a paperless office when there is a paperless bathroom” for making this case, I will leave you with this point on change. The typewriter was invented in 1860′s and was the core business of many companies for years and is still in existence to this very day, but does anyone build their business plan today around selling and servicing them? I’m impressed with Ricoh for their willingness to acknowledge mistakes of the past adopt best practices from their acquisition’s various platforms, invest in and position change with a focus to continuous improvement.

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