John McPhillips, MD of Digital Office Group, spoke to Nell Walker in October 2018’s issue of Dealer Support about the growth of his business and the secrets behind its success
The MD of Digital Office Group in Leicestershire, John McPhillips, has been selling Xerox products since the early 80s, becoming an agent for the company in 1992 after working at Xerox for several years before this. After two years as a sole trader, Digital Office morphed into a limited company selling Xerox products but only in the Leicestershire area. Although it was able to grow during this time – taking its team from four to eight people and moving to larger premises – the company was restricted as it was unable to sell beyond its home county.
However, in 1998, the European governing body rules changed, allowing Digital Office to sell in all areas. Before this time, the company turnover plateaued at £1m but within a year of the changes rose to £2.5m. Now, it has grown to a £6m company and is continuing to thrive, with its two business arms – Digital Office Systems and Digital Office Services – each moving into their own premises with 24 staff between them. So, having focused for nearly two-and-a-half decades on a particular type of product, what technology changes have driven Digital Office’s direction?
“It’s a very competitive market, and a mature one,” says John. “To think that only 20 years ago our business was all about photocopying, the change in our business model has been dramatic and this is due to the digital multifunctional device.”
Most devices are connected to networks or PCs and now allow printing from smart phones. Added to this, there are more and more software applications on offer; we are now able to download apps – similar to those used smart phones – onto the devices, which has made the simple photocopier a workplace assistant and valuable tool for customers.
John adds: “Competitors offer similar things in terms of technology and, on the face of things, look and feel similar, but when you start going into the various products and specifications, we differ greatly in terms of security, features and ease of use. We also stand out when it comes to our managed print service offering, which gives the customer greater continuity in terms of service level delivery, whether you are in Lands’ end or John O’Groats.”
John is passionate about the support that Digital Office offers their customers and how they are managed through the life cycle of a contract. The company has a robust process in place for ensuring that salespeople work to their fullest ability and visit every single customer, because, in John’s words, “A customer left and who is not contacted for a long periods, may not give you the consideration needed when replacing devices – it’s something that’s open to vulnerability. We believe our process and management of the contracts pulls us through. In today’s market, what makes us different is the way we handle customers and the integrity of the sales force when dealing with existing and new clients.”
The extra mile
The fact that Digital Office does very little selling online ensures that customers get the same level of service across the board – something that is vitally important from John’s perspective. It is this integrity which ensures that a vast majority of customers would rather pay extra to have their product delivered, installed and the detritus taken away, than buy the same product for less online and set it up themselves. John explains. “There’s very little value in us selling online. If a customer wants, for instance, an A3 printer, they can get it cheaper on the internet – but when the delivery driver drops it off, you are on your own. If there is anything wrong with it, the returns process might take from 7 to 12 days. You will pay only slightly more with me, but that is because you are paying for the additional service we provide. So, if there is anything wrong, it will be fixed or replaced that day.
“With today’s technology, the service level agreement has moved leaps and bounds from what it was just a few years ago, and this is due to the advances in what the device will report to our engineers and back room staff,” John continues. “We believe this is where we are very strong against our competition. It is in the analysis, implementation and delivery of an agreement that the customer wants that helps us win more business.”
Digital Office goes to great lengths to treat all of its approximately 2,500 customers the same, whether looking after them in respect of both hardware products and or back-end systems that they have provide. It has quite a stronghold in the construction industry due to understanding what is required by sites/regional offices, thanks to experience and skill. It’s an area a lot of companies wouldn’t want to get into; John says that part of the strength of Digital Office’s is its flexibility and real understanding of what is needed in this sector.
“We’re prepared to go that extra mile for people,” he says. “We’re prepared to work for the customer. At the end of the day, they pay our bills – the customer is still king.”
A family business
It is a service, which customers want and appreciate – and the reason Digital Office works so hard at this, is that keeping customers happy, is its number one priority. It is something John learnt when moving from a corporate salesperson to heading up a family business.
“As a corporate working for Xerox all those years ago, if you lost a customer, you probably had two hundred others in the bag, and you moved on – bearing in mind that, the following year, you possibly wouldn’t have those accounts anyway because you’d be relocated,” says John. “The pain of losing a customer wasn’t apparent back then. Running a family business, however, means that every customer account is almost like your own baby, and it becomes personal. When you have looked after a customer for many years, it does hurt to lose them.
“We’ve seen it where a customer moves on because they’ve found a device that on the face of it appears cheaper and then discovered that it’s not and returned to us, which is great but painful when they first move. Unfortunately, when you are selling a commodity product, the money element becomes all-important and some of the real value added that you provide, gets lost in the mire. So, as a family business, you tend to look after your customers a bit more because you realise you’re not going to have a business at all otherwise.”
Caring for the team
The other most important relationship, which the business focuses on, is the connection between Digital Office and its staff. John’s employees are an investment in the creation of a strong, two-way relationship, which exists to add to the success of the company. As a result, as well as paying people well, Digital Office pours time and effort into their training. “We take new people on and don’t expect results from them for the first six to 12 months,” he explains. “Some other companies will take people on for three months and, if they haven’t sold anything in that time, just sack them. Who is wasting whose money in that scenario? If you are going to invest in someone, do so, making sure they have all the tools they need to enable them do the job for you. If you’re only offering half the tools, you can’t expect them to do the job.”
While Digital Office may not have complete control of its own destiny – beholden as it is to what Xerox does – it takes full advantage of the areas it can control. Organically, the business has grown enormously, and the next step is acquisition. John is currently in talks to buy out another dealer and merge, creating a larger sales force. If this does well, the business will continue to acquire in its quest for growth. John’s advice to other dealers looking to grow is simply, “Know your market space, know your product, know your customers and train your people.”
On how to keep the business on an even keel John says, “Running a business is sometimes like running a house,” he continues. “If you earn £100 a week, you can’t spend £110 – the same goes for a business. People throw money at things they do not really understand and then wonder why it did not work. Stick to what you know best and work around the peripheries – if you are not making money, stop doing whatever it is you are doing. It’s as simple as that if you want to survive in a very competitive market space.”
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