With its recent exit from the larger-format retailer (LFR) market, Oki Data Americas, Mount Laurel, N.J., has been able to redraft its channel plans and hopes to leverage solution providers to get its printers in the hands of customers. It is also taking the time to help them become better businesspeople.
Oki Data's exit from retail began last year when it ended its relationships with other office-centric retailers like OfficeMax and Office Depot. At the end of March, Oki pulled its last products from Staples' shelves, drawing the curtain on its relationship with that channel.
It was painful for the company from a market-share perspective, according to Oki Data CEO Stewart Krentzman. In its two years in the LFR market, Oki was able to become the second-best selling brand behind Hewlett-Packard, and had also been growing through the recommendations of store sales associates. However, as retail sales built brand-awareness that the company hoped would spill over and help it build its share of the SMB market, the results were disappointing. "It didn't happen to the level that we thought," Krentzman admitted.
Now the company is counting on its solution providers and is turning out products tailored for specific markets that will be sold through the channel. Oki Data's 1-year-old channel program, ProfitOps, has been a huge help in broadening the printer vendor's reach into the small business market. The program, which takes a focused approach to building partnerships, is thus far paying off. Oki Data grew hardware sales through the program by 350 percent last year.
"We do benefit if they're successful as a total company," Krentzman said. While he realizes that expecting 350 percent growth this year is perhaps too optimistic, his ambitions for the company are still high. "I would certainly like to see 100 percent-plus growth in the program," he said.
Rather than take over the market, Oki Data wants its partners to be willing to present Oki Data's printers as a first-choice alternative to market-leading HP.
For solution provider Paul Whalley, vice president of Whalley Computer Associates Inc., Southwick, Mass., partnering with Oki Data has been hugely beneficial. Whalley sold about $16,000 worth of Oki Data's products in 2004; by the end of last year they had built that up to $500,000.
"The reason ... we like Oki Data is because they don't go direct, and because they don't go direct, there are times when they actually help us. When they find opportunities, they need a partner, and it motivates us to be a good partner," Whalley said.
"We have a lot of resources and we're willing to invest those resources, especially with companies that pay us back on the investment," he continued, describing Oki's sales program as one of the best in the business. "Because the program is fairly limited, it provides a chance to sell a lot of their product at a better than typical margin."
Dan Schneider, senior vice president of business solutions for Sarcom Inc., Lewis Center, Ohio, agrees.
"Their greatest strength has to be their services capability," Schneider said.
For the small business customer, Oki Data is a perfect fit, he said. "Their supply costs are low, their entry point on equipment is low and they have good customer services. [Oki Data is] really built to take care of you, even if you're not a big, enormous company."