How Sam Errigo is reconfiguring the go-to-market approach to tap growing markets and generate recurring revenue
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In the past 12 years since joining the company, Sam has been part of a long journey of transformation that has made the company profitable and ready for faster growth. During this period, Konica Minolta increased its market share in its core markets to 17% despite the secular decline in demand for printing and document management equipment. At the same time, the company has broadened its product portfolio and leveraged its world-class sales and service infrastructure to tap into the rapidly growing markets of IT services, business process automation and analytics that support the digital workforce.
Sam explained how he and his team have successfully transformed Konica Minolta’s go-to-market approach to pivot to high-growth markets while continuing to grow their share of the core business.
âWe have 150 years of history in imaging technology and a large, world-class infrastructure in place to serve our core markets in office and professional printing system networks,â says Errigo. âWe have been able to leverage these assets to develop growth markets that we are targeting in the market segments of Managed IT Services, Business Process Outsourcing, Robotic Process Automation (RPA) and data analysis. Basically, we’ve gone from being good at connecting things to good at integrating things. For example, in manufacturing, we integrate imaging technology in the production system to improve the quality control process. In healthcare, we use our innovations in imaging to improve key diagnostic processes. This opens up new markets and a whole new level of value for customers.
To enter these new markets, the company had to expand its portfolio of products and innovations. They have acquired more than 30 companies to bring innovations in growing areas such as intelligent information management, advanced imaging, help desk, RPA and security.
According to Errigo, the big keys to success were long-term planning and an emphasis on being smart about how they introduced new innovations to the business.
âAs we have transformed our business, we are taking shares from our competitors at all levels in our core business,â says Errigo. âOne of the biggest differences I can point out has to do with our acquisition strategy, and more specifically the way we have targeted companies to acquire and integrate them. This is an area where other companies in our industry have failed. We have acquired more than 30 companies to expand our portfolio of products and services in this new direction. I’m not saying we’re perfect, but so far we’ve been getting really good results. Acquisitions can be difficult. But we’ve really done our homework on figuring out how to integrate the companies we’ve acquired into our go-to-market system. We have therefore avoided many mistakes that lead to the attrition of sales representatives of the acquired company and the failure of existing representatives to understand, sell and support the products that these companies bring to our portfolio.
To effectively present these new solutions to customers, Errigo had to reconfigure the entire commercial architecture. Over the past few years, his team has changed the structure and focus of their sales channels, shifted the focus to cross-selling, profitable and recurring revenue streams, and refocused incentives for cross-selling. sales to motivate sales channels to sell both old and new solutions.
A big part of that goal has been to verticalize the sales team and develop expertise in key growth markets such as healthcare and manufacturing. âWe have turned to healthcare, education, government, legal and business clients over the past 24 months,â says Errigo. âWe have moved to a vertical approach for a very specific reason. We have to demonstrate expertise. We like to say that knowledge is the new currency because you have to be an expert to get in and have credibility at all levels with your client. It is impossible for a representative to be an expert in all verticals, so we had to verticalize.
âTo execute this strategy, we have assembled a team of specialists who support our sales channel in North America,â he continues. âWe have vertical market expertise with dedicated management that focuses on our main verticals. We also have support staff with subject matter expertise in our core capabilities such as security, RPA, cloud migration or content management that are important in these verticals.
Other changes made by Errigo to the business architecture include changing the coverage, assignments and incentives to make reps focus more on cross-selling IT services and moving from selling individual products to contracts. recurring monthly income.
âIf all we did over the next five years was sell a small percentage of our new services to our existing accounts, our business would explode,â says Errigo. âCross-selling is therefore a key objective for us. “
To penetrate existing accounts, Errigo asks its representatives to make âoff-cycleâ sales calls to customers to whom they have sold equipment. This allows them to explore ways they can help with software licensing, cloud migration, technical support, and networking services associated with a piece of equipment – rather than waiting up to six months before release. renewal of this machine and to offer them a new one at a reduction. “
Another way the Errigo team helps their salesperson become more efficient is to streamline the product portfolio to make it easier for our sales channels to master new products / services and give customers access to a more wide range of technologies.. âWe have concentrated our product portfolio precisely for the reason of our verticalization: you cannot be experts in everything,â says Errigo. âYou can’t sell value and be credible without being an expert, and it’s hard to be an expert in 300 different solutions. ”
âWe have segmented our software product portfolio into three areas: commodities, supported and emerging products / services,â he continues. âWe have aligned and allocated our resources, efforts and compensation to each of these categories. We define the core as products that are supported by Konica Minolta from cradle to grave. They represent 80% of our professional service revenues in all business sectors. And they leverage our support infrastructure, providing predictable service metrics to our customers. The company sells and integrates emerging products and solutions outside of the core portfolio through its strategic partners who help with installation and support. If a new idea or promising new service meets a customer need and is widely adopted by customers, they will migrate the offering to the main category.
Sam expects main and direct channel sales representatives to understand the entire product portfolio sufficiently to demonstrate that a solution exists within Konica Minolta and how to find the right expert to continue the conversation with the customer. “From a Sales Representative’s Perspective – If a question relates to our core expertise in applying imaging technology to their business processes and issues, we expect our frontline representatives to be well informed.” , he continues. âThey’re going to be able to point you in the right direction and if they need to follow up, they sure can.
Errigo considers the professional services infrastructure that Konica Minolta has built for over 150 years to support sales, service and delivery as one of the company’s greatest growth assets. This infrastructure is one of the main reasons Konica Minolta has been the industry leader in brand loyalty for years. âThe crown jewel of our business is the back-end infrastructure,â says Errigo. âWe have tremendous service and support capabilities nationally and globally. We believe that how we do things is as important as what we do. Sam wants to use this key asset as a platform to open larger and more profitable markets.
One of the main goals of this sales infrastructure is to simplify the sale of complex solution bundles and subscription services that generate monthly margins and recurring revenue. âWe need to think more holistically and bundle solutions, professional services, hardware and support into a subscription service program,â says Errigo. âRecurring service revenues in our direct sales channel increased to 43% for new contracts this year,â says Errigo. âWe have completely automated the workflow process and upgraded our existing SAP infrastructure to SAP Hana. We’ve made it easy for our sales organization to execute quote-to-order, from configuring solutions, quotes, delivering proposals to subscription billing for our business. Customers receive a common invoice for all of these different services and finance has the option of pulling it out of the billing system and using our P&L system so that we measure profitability.
Going forward, Errigo sees finding faster and better ways to access this expertise across the company as the next frontier of improving sales performance as the pace of innovation continues to grow. the market grows and the product portfolio evolves. âOur representatives may not have all the answers to all customer challenges,â he repeats. âBut having access and the ability to draw on knowledgeable resources that can help resolve issues quickly will be the key to success. We are therefore developing better systems and processes to support collaboration and access globally to better serve our customers. “
âBusiness transformation is not a single event or moment in time, but rather a series of thoughtful strategies that are adopted and executed throughout the business. It is made up of daily victories that push towards the common goal of change and the desire for a new future filled with opportunity, âconcluded Errigo.
Sam Errigo is the COO at Konica Minolta Business Solutions, USA, Inc.