Q&A / Identifying and Executing Your Business Strategy

Richard Cucco is founder and President of IMAGETEC, Inc. Launched in 1992, IMAGETEC is a provider of innovative document output and document management solutions that are designed to increase clients' overall ability to communicate, share information and increase employee efficiency. A veteran of the office products industry, Richard founded his first dealership at the age of 29, growing it into one of the top-selling Ricoh dealers in the country before it was sold. Much Shelist spoke to Richard about how his pricing and sales strategies have helped keep IMAGETEC at the top of its game for nearly two decades.

Much Shelist: IMAGETEC operates in a highly competitive, rapidly changing industry. What have been your primary challenges and opportunities over the past 20 years?

Richard Cucco: At the very beginning, our biggest challenge was to convince the industry that IMAGETEC's business model, which did not rely on a single product line, could provide and support a range of top-quality products and solutions from multiple manufacturers. Even today, the sales and distribution function in our industry is dominated by the very manufacturers that build the products. The closest analogy might be the automobile industry, where customers typically go to a Ford dealership to purchase or lease Ford models only.

On the one hand, we had a field of potential clients who were accustomed to purchasing office equipment, document management and printing solutions directly from the manufacturers; on the other, we had manufacturers that couldn't readily see a reason to sell their products to a company that might actually compete with them in the marketplace. We had to make both sides understand that they could depend on IMAGETEC to help them achieve their individual objectives.

MS: How did you meet this challenge?

RC: In order to succeed, we needed to differentiate ourselves from other dealerships, focus on a specific market, and then back that up with the highest levels of client service and reliability.

We successfully differentiated ourselves by providing what I call best-of-breed solutions, including both equipment and services. No matter what industry you're in, no single company can be the best at everything it does. The same is true in office products; certain manufacturers are at the top of their game when it comes to designing and building copiers, while others make the best scanners. However, the typical distributor will often try to sell a manufacturer's entire product line, even if there are gaps in quality or functionality. At IMAGETEC, we often combine multiple brands into a single solution that best meets our clients' needs.

Focus is the second element of our success. In addition to establishing our geographic range—the area on the map that we can serve effectively—we try to reach a very specific type of client. In many ways, these companies are similar to our own: mid-sized businesses that are locally owned, flexible and can implement decisions quickly without a great deal of bureaucracy. Let's say you have 300,000 businesses in the Chicagoland area. Of these, only 70,000 may match the profile of our preferred client. By knowing who these companies are, we can allocate our resources more effectively.

Finally, as a new entrant in the marketplace, we needed to gain credibility in the eyes of both manufacturers and clients. It all started with our commitment to providing top-notch service and support, which helped us win over manufacturers. In turn, they were willing to let us sell their best products with a strong record of performance, which led to happy clients and ultimately earned us the credibility we sought on both fronts.

MS: It sounds as if companies in other industries might be able to apply this same philosophy.

RC: Absolutely. While our particular points of differentiation and focus might be unique to IMAGETEC, the fundamental idea is that you must understand your business, identify your strengths and weaknesses, and know your clients. Armed with that knowledge, you can then create a plan and execute it successfully.

MS: Getting back to the office equipment market, your industry is incredibly price sensitive. How did you address that issue?

RC: As far as we are concerned, price wars are not the route to providing superior service and building long-term, healthy relationships. If we can't offer a solution with a pricing structure that allows us to deliver the level of support our clients require, then it is in everyone's best interest to walk away from the deal.

Of course, we also recognize that price is a factor in the purchasing process. So, rather than attempting to offer the lowest, rock-bottom pricing, we are focused on growing sales through "price proximity." In other words, we know what it takes to be competitive on price, but we also know the importance of value. For our clients, value means getting a customized, best-of-breed document management solution that enables them to become more efficient and more competitive. Value also means having a smarter, faster support team to resolve any issues or address changing requirements. We don't simply sell a piece of machinery or a batch of software. Instead, we provide a complete analysis of a client's situation—even getting into the details of equipment placement and mechanization of specific tasks—and then identify industry best practices to come up with the highest-value solution.

All of our strategies—pricing, differentiation, focus—have served IMAGETEC well over the years because they were rooted in a strong business model. Other strategies may work for other businesses. The broader point is that, in order for any particular initiative or policy to succeed, it must grow out of a sound business model. If you know your own company, if you know your clients and the competition, then the plans and strategies you come up with will stand a better chance of success.

MS: Are there other lessons you've learned in developing successful initiatives?

RC: One key lesson we've learned over the past two decades is the importance of surrounding yourself with smart partners. We try to be just such a partner for our clients. When it comes to document and print management solutions, we're the experts, and it's in this arena that we generate some of our best ideas. But we've also learned the value of sharing our new ideas with our own business partners. Our lawyers, accountants and bankers, for example, are able to ask tough questions and help us determine whether or not these new concepts and initiatives are valid. Once an idea has made it through this vetting process, we know that its chances of success are significantly improved.

If you have questions about identifying and executing a successful business strategy or would like additional information on IMAGETEC, visit www.imagetec.com or contact Richard Cucco directly at cucco.r@imagetec.com.