Welcome to Part 3 of our Evolving as an Office Equipment Dealer blog series, which will detail how Prosource—a company that offered traditional copier office equipment for nearly 30 years—expanded into managed services via acquisition. Executive Chairman, Ben Russert, describes their journey, the decision-making process, and major benefits of this evolution.
Building Off of Relationships
At the core of Prosource's acquisition was their customer relationships. Russert states:
"We're building business from our various relationships we have with our clients, and that's been an exciting addition to our offerings... We were being asked to buy a lot for our clients, being a customer-facing company. In finding another way to handle their technology and services so we could focus more on what they make money at, we were able to get to that key part of the relationship that can help them deliver value."
Weighing the Options
In this position to expand your services portfolio, there are options on how to best go about it. The two evident paths when it comes to managed services are: Build your own services offering or acquire an MSP.
Here's why Prosource went with the latter.
"Building our own services offering, turning it on and saying we're in this business didn't appeal to me, frankly—from a purely business owner's standpoint. I couldn't call myself an expert, and I felt that there was a lot on our brand and who we are were that could have been undermined. And I also feel that you really only have one or two shots at it to get it right...
We found that it was best we go out and try to find a company with a high brand quality, a very good client base, and the same values that we have to build a solid relationship.... About a year later, we've close to doubled the business. It's going quite well."
From this development have come a number of significant improvements, according to Russert.
"We all want growth, the right way. And, I think we've gotten that and, our company clearly did not come from the same cultural background that the new business did. So, intentionally, we've kept those separate for now and not tried to integrate the sales and marketing efforts under one roof in the same room, if you will. Instead, what we've tried to do is drive that expertise where it's required through the relationship managers and getting them in front of the customers—and having that work out...
I think what we could have done better, and continue to, is drive those resources to those relationship managers to increase their knowledge and capability when in front of customers and clients to deliver the message and get those experts in front of those clients faster...
One thing that I've learned and we'll certainly take advantage of is the ability for Continuum to help us with a lot of the things that we were doing on a smaller scale that you're set up to do and allow us to go build those relationships and have that expertise delivered seamlessly...
we certainly feel this is going to be a longterm, sustainable part of our business model. It clearly fits with the same business model of the recurring revenue and recurring business that we get from customers."
Advice for Other OEs
Russert stated, "We chose to acquire a business to actually get in it instead of just building it within. I think having a good business that you can rely on that has a good brand equity or status in that marketplace, with a customer focus, will serve everybody well. I would also say acquiring and partnering together is the most critical thing. There are a lot of things that we do well and there are others that partners do much better—so together we can help build the business.
Listen here to learn more about how to provide your customers with managed services faster through the right acquisition.