What’s Happenin’ With Lexmark – Dealer Meeting Review

By Lou Slawetsky – I’m picturing a staff meeting at Lexmark headquarters in Lexington, KY. The conversation goes something like this. “Hey, we’ve had one or two day meetings in Lexington for years. In fact, they’ve always been here. But, Lou Slawetsky moved to Florida. Let’s go there with him.”

So, they packed up and moved the meeting to Ft. Lauderdale. Tough duty for all. We awoke every day in a great hotel right on the beach. We got to view the ocean, beach and a bunch of A4 products, (along with 200 dealers) coupled with meaningful software solutions. “Meaningful,” you say? Well, I was immediately struck by the comparison with other vendor meetings, where vendors bombard dealers with 70 – 100 different solutions. Often, attendees are more confused when they leave than when they arrived.

Yes, there’s often a plethora (I’ve been waiting for months to use that word) of solutions, but without any direction as to which problems were being addressed. Not the case here. Solutions were fully integrated with the A4 products shown and demonstrated in the context of specific problem solutions. More on this later.

The meeting kicked off with Mike Johnson, VP of North America Business Channels, thanking the members of the press for their support. I thought this was a nice touch until he kept thanking different groups, (management, dealers, etc.) and I realized that he was thanking everyone in the room. Mike went on to describe the scope of the meeting as being focused on A4 color and solutions. And, focused it was. The stars of the meeting were clearly A4 color products with fully integrated solutions.

But first, Lexmark had to address the elephant in the room. Ron Binkauskas, VP and GM, NA Imaging Solutions, picked up this task, describing the Purchase of Lexmark as a “Strategic Alternative Process” (nice). Little was (or could be) shared beyond what we already knew. The purchasing consortium is Apex Technology, PAG Asia Capital and Legend Capital (a major stakeholder in Lenovo). The deal is expected to close during the second half of 2016.

Branding will stay as is. Lexmark headquarters will remain in Lexington, KY. Management will stay in place. Of course, this is all subject to change, as we’ve seen in other acquisitions. Still dealers understood that their brand relationship would be stable over time.


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Next, we heard from Brock Saladin, VP and GM Global Channel Sales and marketing, who shared Lexmark’s, channel strategy. We learned of two categories of partners:

  • Tier 1 – Distributors
  • Tier 2 – Dealers (260)
    • Copier
    • Progressive (IT)
    • Showed Traditional (Printers)

Copier dealers represent the most strategic SMB focus for Lexmark given their SMB focus. This group showed a 23% revenue increase last year.

Tom Knight, VP and GM of R&D reviewed Lexmark’s new technologies. Lest you think of the company as presenting “me too” technologies, nothing can be further from the truth. He showed a new low melt toner (Unison tm) a 6 micron dual component toner that flows like a liquid that yields 55k pages per cartridge (black).

The “star” of the hardware focus was the XC 8160/8150 – 50/60 CPM full color A4 MFPs. We’ve noted that other vendors in this market shy away from A4 devices so as to maintain their base of A3 devices. Not true of Lexmark. The company is focused totally on A4 devices with a strategy that includes:

  • Replacing A3 units with more cost effective systems
  • Replacing A4 units with more feature rich systems

While not new, the systems were launched earlier this year, dealers had limited exposure until now. I was reminded of NBC’s tagline for their summer rerun season – “If you haven’t seen it, it’s new to you.”

The product is unique to the market for a number of reasons:

  • Fastest A4 color
  • 120 images per minute scanning
  • MSRP – $26,000, increased to allow leasing flexibility.
  • Ships with 50k black and 17k color toners
  • Feeds heaviest stock in its class
  • Roll off packaging
  • Multi-position stapling
  • Hole punch
  • <.01 monochrome
  • <.07 color
  • 4 year warranty covers parts and maintenance kits (labor for first year)

I think this can be a totally disruptive product if it gains traction with Lexmark dealers. Clearly, Lexmark is not trying to expand into the A3 market. Rather, they are launching A4 products that could disrupt the A3 market.

Back to solutions. A ReadSoft partnership provides accounts payable processing from the Cloud that captures header and line item information from suppliers’ invoices, with no intervention.

  • ReadSoft Online provides accounts payable processing in the Cloud with a guaranteed minimum data capture of 98.5%.
  • Kofax Express provides batch scanning capabilities to allow for easy scanning, organizing and storage of documents. Image enhancement functionality is standard.
  • Lexmark Postage Printing – lets users print envelopes and postage at the same time for one pass mail finishing from the desktop. Electronic delivery confirmation and tracking are included. Believe it or not, this might have been my favorite solution. But, then, it never took much to keep me happy.

And there was plenty more for these imaging dealers to see.

Lexmark held an awards ceremony where the following companies were recognized for their achievements:

  • Canon IV – Top Enterprise Software Solutions Performer
  • Gordon Flesch – Top Sales Performer, North Central Region, Top ISS Solutions Software Performer
  • Millenium Business Systems – Top YoY Growth
  • Pacific Office Automation – Top Overall Sales Performer 2015, Top Sales Performer West Region, Top Color Revenue Performer
  • RJ Young – Top Sales Performer, South Region
  • TGI Office Automation – Top Sales Performer, East Region

David Ramos of InfoTrends gave an excellent overview on the health of the office imaging industry, which he says is declining 1% annually. He also identified some of the more profitable areas where dealers can focus. He then took some questions, see one of them below from Jim Oricchio of Coordinated Business Systems.

Bob Goldberg closed out the day with a great panel that included some great dealers.

Tons of great partner companies were at this event including ACDI and their PaperCut solutions, MWAi with their popular dealer-ERP system, Ringdale and almost a dozen others. These partners all have products and services that tie in nicely with Lexmark products.

Ringdale

All in all, this was a meeting focused on the dealers’ success. Great food, great friends, great excitement. Thanks, Lexmark, for including me.