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Business Observer Friday, Sep. 29, 2017 1 year ago

Image isn't everything

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The founders behind a $200 million business pursue growth with the right systems in place. If not, says its chairman, 'playing catch-up is like being in debt.'
by: Brian Hartz Tampa Bay Editor

With the exception of, say, W.B. Mason, office equipment companies generally aren't known for making high-profile sports sponsorship splashes.

Tampa-based Dex Imaging, however, will be coming to more sportscasts near you thanks to deals with the Tampa Bay Buccaneers, Florida Panthers and Harrison Burton, a rising motorsport star and son of NASCAR legend Jeff Burton.

Dex Imaging recently celebrated 15 years in business. It's run by the father-and-son team of Dan Doyle Sr. and Dan Doyle Jr., who co-founded the company in 2002 with an eye toward becoming the nation's largest privately held dealer and servicer of office imaging equipment — copiers, printers, fax machines and such. The company also manufacturers its own line of toner cartridges.

The Doyles have kept the company private so it can focus on building a culture that puts top-notch customer service, employee loyalty and charitable donations ahead of profit.

Under the stewardship of Doyle Jr., Dex's CEO, the company has grown significantly — not only in terms of its revenue, which increased 17.2%, from $174 million in 2015 to $204.5 million in 2016, but also its ability to react to customers' calls for help.

Thanks to an aggressive campaign of expansion, acquisitions and hiring, Dex has been able to cut its technicians' average response time down to less than three hours. And with so many new locations being added to the fold, technicians' average drive time between calls has dropped from 26 minutes to 12 minutes, the Doyles say.

The acquisitions “strengthened our position” in several markets, says Doyle Jr.

“It creates a better end product for our customer,” he says. “And when we say, 'end product,' it's not really the sale of the machine. It's really the service we have to provide to maintain that machine for the customer.

“The [office equipment] manufacturers do a great job manufacturing the equipment,” he adds. “They may not do the best of jobs taking care of the customer. Their No. 1 goal is to manufacture a good product. Our No. 1 goal is to service the customer.”

Novel approach

With all this work, it follows that the company will need more employees. Dex has seen its staffing ranks swell, increasing from 687 employees in 2015 to 1,016 in 2016.

To help retain as many new hires as possible, the company instituted a profit-sharing program with the first 30% of its profits allocated to non-commission employees, such as its field technicians and administrative staff.

“Their attitudes are different when they're sharing in the profits,” says Doyle Sr., Dex's chairman. His son adds the program promotes a “self-policing” atmosphere in which employees, particularly service techs, take direct responsibility for the success of their colleagues.

“Let's say there are five service techs working one ZIP code, and four out of the five are doing five or six calls a day, and the fifth guy is doing three calls a day,” Doyle Jr. explains. “Well, they're all getting the same profit-sharing check, so the rest of them will sit that guy down and address him and say, 'Look, you need to pull your weight.'”

Growth Mode

Dex Imaging made a series of key acquisitions last year. It started in March, when it agreed to terms with Modular Document Solutions LLC, a $30 million Sharp dealership operating in 15 Florida locations. More deals followed in July and October.

Then came January, a particularly busy time for the company, with not just one, but four acquisitions.

In Clarksville, Tenn., it acquired two office equipment dealers - Radford's Office Technology and Rawlins Office Machines - where combined revenue exceed $1.2 million. Dex also expanded its Southeast footprint, acquiring Simile Imaging Solutions Inc., a $2 million Kyocera dealership located in Charlotte, N.C. It also acquired Digitec, a $3 million Sharp and Lanier dealership with locations in Tennessee and Kentucky.

In its early days, Dex expanded slowly, staying in Florida — first to Sarasota and Fort Myers, followed by Orlando and Jacksonville. The idea, Doyle Jr. says, was to grow organically and methodically, nurturing a well-defined, clear-cut organizational culture that could be applied to future acquisitions.

“We had a game plan of what we wanted the culture to be,” he says. “A problem you have when doing an acquisition, especially an acquisition that's larger than your existing facility in the market, [is that the newly established business] takes on the culture of the company you bought - not the culture that you've got in the rest of your organization. So, we wanted to make sure we were at least strong enough that our culture would survive and continue.”

Doyle Sr. is a veteran of the office equipment dealership industry since 1977, when he founded Danka Business Systems. He says while it's exciting for a company to be in a position where it can put its foot on the gas and surge into growth mode, without proper planning, sudden expansion can bring significant risks.

“The biggest challenge that you have is that you have to do things before you get there,” he says. “I was with another company at one time, and we grew quite rapidly for about 10 years. What I learned from that was to have your systems and procedures upgraded beforehand; hire the people before you're going to need them. Because playing catch-up is like being in debt. It's tough to catch up once you're under water.”

Sporting life

Beyond culture and retaining top employees, another part of the Dex strategy is in branding, and the sports sponsorships. Doyle Jr. says Dex Imaging's sponsorships are about more than glorifying the brand. The deals, he explains, have a tangible effect for Dex's sales staff.

“Our sales model, really, consists of hot-knocking,” he says. “It's traditional. You're out knocking on doors and finding leads. We use the sports marketing for brand awareness, so whether it's the Rays, the Bucs, the Lightning, we do it so the name is recognizable. So, when a rep is out knocking on a door and they introduce themselves, saying, 'Hi, I'm with Dex Imaging,' people go, 'Oh, hey, I've see Dex Imaging.'”

Doyle Jr. says Dex's sponsorship of young race car driver Harrison Burton aligns with its focus on promoting charitable and nonprofit causes that empower young people. “Harrison is a nice young kid that needed a shot, so we gave him one,” he says. “We helped him out with a sponsorship.”

Poised for change

The Doyles have charged ahead on the Dex mission against a formidable foe: technology that has reshaped the industry, and put paper-based business behind the times.

But the Doyles don't view trends such as co-working spaces, remote workers and paperless offices as existential threats to their business. As a dealer, not a manufacturer, Dex Imaging has the freedom to adapt to market demands. Plus, the executives see opportunity in the rise of cloud computing, which affords greater and easier access to documents.

“The industry will change,” Doyle Jr. says. “I see [that change] as a threat for what we would call large copy machines. We'll see less of a need for that. What you will see is more of a need for smaller, desktop-type units that print, copy and scan. People have more access to a document. So, if it is electronically filed where people can remote in and see that document, more people will print it out ... you'll see smaller machines, but more of them.”

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