Ricoh Convergence arthealer Meeting

I’m on my way home from another three days in Las Vegas where I attended the Ricoh dealer meeting. What a difference a few years makes. As renowned analyst Frank Cannata noted at dinner last night, “it wasn’t that long ago that they were practically booing you off the stage at the general session.”

I remember that meeting and while Chairman and CEO Martin Brodigan acknowledged things are going really, well he was also clear that Ricoh still has a long way to go. I think that message was well received by dealers. Indeed, this meeting lacked the tension felt at the last few dealer shows. While the previous one held in Oct. 2013 was a big step forward, this week continued the trend, taking things even further in the right direction.

The event started with SVP Jim Coriddi up in front of the largest crowd Ricoh has ever had at one of these shows, up 10% over the last meeting. Jim is a long-time Ricoh man with over 30 years in the company. In that time, he’s seen and survived it all and dealers seem love him. After practically blowing the dealer channel when the company was focused almost entirely on direct sales just a few years ago Ricoh has made great strides bringing dealers back into the fold.

A lot of the shows I’ve been attending over the last year have had record attendance. Long gone are the days where the principle would head home and say he/she saw the new 30 and 50 and 75-PPM machines. Today’s manufacturers are showing sophisticated solutions that are often over the head of many owners and because of this, they’re bringing their teams. Rather than try to explain everything, many are using these conferences as incentive trips for their reps.

There’s a ton of value to bringing younger reps to these shows. A rep out of college just sees a box on his/her showroom floor and thinks nothing of it. Just another printer. But a rep that comes to a meeting like this can’t help be blown away by meeting the CEO and senior execs, seeing all the products, meeting all of the support people and on and on. I love the idea of bringing reps to these shows.

Several slides stated that Ricoh’s goal is to be the number one dealer provider in the industry and dealer business is starting to creep back up to 40% of their sales – a nice change to the estimated 19% they were at about 5 years ago.

Production color was way up last year (19%) and Ricoh is number one in production color with 25% market-share. Jim loved saying how “nine years ago Ricoh wasn’t even in production color and now we’re #1.” Kind of has a nice ring to it if you’re a Ricoh dealer. It really is a pretty great story.

A big theme of this meeting was “collaborate” and Ricoh is actively looking for ways to help dealers. Turnkey programs like CHAMPS and the Managed IT Services from last year’s mindSHIFT acquisition are just two examples. mindSHIFT will become available to dealers beginning in April. Ricoh is also working on lead generation, enhancing field support and digital marketing and creating customer-facing and training videos. A lot of this is pulled together through their Ricoh dealer app, which is very nice.

Building on the collaboration theme, Ricoh rolled out their dealer council, bringing several members forward to tell the crowd how much Ricoh does listen.

The dealer channel built this company and a lot of this management team has been around long enough to remember that. Jim told us 80% of Ricoh family group dealers have been with Ricoh for over 20 years.

Looking back on the last year Ricoh did extremely well with their dealer channel compared to past years with 10 deals alone totaling $30+ million. In fact, two of these were brought in by Meridian out of Northern VA, home of Juliana McKee, one of my first bosses when I sold copiers back in the day.

One thing that’s pretty cool about Ricoh and I don’t see this much out of their competitors is they’re really a global company. Other Japanese subsidiaries operate as independent companies and there appears to be little coordination between them. They seem like completely independent companies in a lot of ways. Ricoh’s Chairman and CEO is from England, their SVP of marketing Tim Velek also ran the European group for a while before taking over his role here in the states, there are American GM’s (Steve Burger) in Japan, Japanese executives over here and so on. I wonder if this dynamic has a positive impact on their international business. I have a feeling it has.

Who Says the Market is Flat?

That’s how Chairman/CEO Martin Brodigan took the stage, talking about how Ricoh’s numbers are up, especially in office color. They’re also excelling in Managed IT with 3x the number of engagements as they had last year. “We will keep the peddle to the metal” he said on several occasions. He also noted that Ricoh has had “record growth from their dealer community for three straight years.” Dealer hardware grew 8% in this “flat” market. And the growth isn’t limited to hardware; IT Services will add another $170M this year.

I like Martin. It wasn’t long ago he seemed like the evil Emperor from Star Wars, making moves behind the scenes, rarely speaking to the dealers (or analysts) during a time when heads were rolling and dealers were ready to riot. Today he takes the stage with confidence, talks to the crowd and tells everyone not only how proud he is of where they are today, but also acknowledges that they still have a lot of work to do. It’s a good message and it oozes of humility. They should have had him in front of dealers a long time ago.

Q & A 

After Martin’s speech, he, Jim and SVP Dave Green took the stage for a Q&A session. Questions were asked of attendees prior to this session on the Convergence App and the team addressed as many as they could in the allotted time. You can watch the full session below. Pretty decent concept and I don’t recall another vendor doing this. Still, I would have also liked a Q&A session with the press, but this year they didn’t have one, instead opting for a nice private lunch with key executives.

Ricoh and 3D

One thing that Martin was very clear on was where Ricoh is with respect to a 3D strategy. To put it simply, there isn’t one. While the company globally launched 3D printers in Sept., and even though Ricoh Europe announced their partnership with Leapfrog 3D in January, Martin was very candid in saying the US isn’t ready. He didn’t say it’s not for us, but he did say they haven’t figured out how to make money at it yet and until they do, they’re not bringing it to our market.

I’d like to see Ricoh USA get this program moving. There’s money to be made here. I understand his caution in starting a major endeavor like this, especially after watching how they struggled for so long to get the CHAMPS program to where they wanted it to be but this window won’t be open forever. One of their most significant competitors started selling 3D printers last year and more than half their sales are coming from the dealer channel. All I can say is don’t be late for the dance. Martins’ exact comments can be seen in the Q&A video.

Single Line Dealers

Ricoh wasn’t subtle about telling dealers why they need to be single line. They cited our data to back that up and they’re right about one thing – margins and gross profit are better for single line dealers than they are with dual line. It’s a tough sell though after what this community has been through over the last 10 years and I can tell you that a lot of dual line dealers will never become single line, not for Ricoh and not for anyone. Still, the numbers don’t lie and if Ricoh can continue to be consistent and true to these guys they will surely get a few more to drop brand “B.”

One of the reasons dealers feel they need to carry a second line is obviously because of Ricoh’s extensive branch system. Dealers want something else to sell when they go up against the branches as there’s still the perception out there that branches have a price advantage that dealers can’t match.

Although I still hear complaints about Ricoh’s rules of engagement policies, I’m hearing a lot less of this and Ricoh has clearly addressed it. While there is always room for improvement, it’s way better than it was. Dealers don’t have to contend with branches coming in and undercutting them in accounts they already hold, at least not nearly as much as used to occur in the field. Over lunch, SVP Dave Green, who heads up both the dealer and direct channel told me flat out “if you hear of a problem like that, have them call me, if I have to fire someone, I will.” That’s what I like to hear!

International GM Steve Burger, the man responsible for Monster Garage, one of the most successful and fun competitive face-off programs I’ve ever seen spent some time with us talking about all of the R&D going on in Japan and how much our market is influencing current and future product.

He also showed us a lot of super cool stuff they’re working on, like integrating lens and imaging technology from their Pentex acquisition. He talked about how collaboration between the different subsidiaries is helping to make Ricoh a stronger company, both from a product and support standpoint. It was a great session.

I did a nice walk-through at the product fair (see video below). I have to say, I think there’s a lot of opportunity to improve on this and I don’t feel like they did themself justice here. The CHAMPS and Managed IT Services area was great but other areas could have been done more effectively.

I had the privilege of going to Boulder last year to see Ricoh’s production group and I really wish they had brought some of those products to show the dealers. I think they would have been blown away. In my opinion, the production area should have easily been twice as large as it was and instead of being all the way in the back, it should have been more prominently featured. I know it’s expensive to cart these machines around but you do this show once every 18 months. If you’ve got it, flaunt it, especially considering you have programs where dealers can bring your production team in to sell these products to their customers. Maybe a couple more presses and even some roll fed. Show your dealers what you’ve got!

I feel the same about the competitive lab, also pushed all the way to the back. This is a resource available to dealers unlike anything the competition offers. When a dealer gets into a bind they literally have a team in place that can give them competitive information because they’ve torn apart the machines and solutions and they know every detail about them inside and out. While a few competitors have labs, none of them have set them up as a field resource the way Ricoh has. Again, showcase this! It should be up in front with sirens and fireworks and lasers and smoke machines!

Their collaboration center was also kind of weird. It was pushed off to the side and because of the way it looked, I thought it was the network nerve center for the product fair. It wasn’t until VP Jay Dizzine took me through it. Yes there was a sign on it but I’m an ex copier rep, I only read when I have to. This is why you didn’t seen this area in my video.

Once inside I was blown away. Great stuff! Short throw projectors that put images on walls at almost any angle, collaboration tools that allow customers to create an interactive whiteboard on a wall by simply plugging in a projector. Seriously cool stuff. But again, if Jay hadn’t taken me in there I definitely wouldn’t have known it was there.

OK, enough complaining. Now here’s what I liked about their product fair. They had their new C7100X production series there. VERY nice. The production area also had some great finishers and binders (CP Bourg, etc.), partner products from Xante and more.

I saw the Education MFP and the Cloud solution in action (watch Elisa take me through it).

They also showed their Healthcare MFP and their new Legal MFP. OK, let’s be real; these are all the same MFPs. But like some competitors, Ricoh has grown to understand that vertical customers LIKE buying things they think were developed specifically for them. I don’t know why all manufacturers aren’t doing this. To their credit, Ricoh is one of the top two companies doing this at the moment and they’re definitely ahead of the pack in this respect.

All of you Ricoh competitors are going to hate this, but one of my favorite parts of the show was seeing Ricoh’s new user interface that’s starting to roll out across the line. FINALLY!!! They have been selling almost the same UI that I sold back in the mid ‘90s. The new screen is a HUGE step forward and makes their MFPs much more competitive. I don’t know why it took so long but your days of knocking on Ricoh because of their antiquated UI’s are pretty much over. The one I saw was cleanly laid out, responsive and <gasp> uncluttered. Nice job on this!

Here are my final thoughts. Ricoh’s numbers are up. CHAMPS is finally here and not only is it viable, it’s going to make dealers a lot of money. mindSHIFT is about to take them to another level and only one competitor can match this approach. They’re one of the elite production companies in our industry. The dealers are happier than I’ve seen them in years but still understandably wary. The executive team is solid and consists of people that have been with the family for years; familiar faces that most dealers really like. And finally Ricoh has clearly turned the ship around and has got their dealers back on board.

Nice job Ricoh, thanks for a great week and here’s to a successful year for you and your dealers.

~Andy