Shaky times did not disturb these top distributors.
Lead by CEO Tom D'Agostino, Jr. and President Rick Wesley, Norfolk, Virginia-based SFI has captured the coveted No. 1 spot in BFL&S' Top 100 Distributors ranking for the third year in a row. Proactive thinking and hands-on involvement by SFI management has been at the heart of its success, for as D'Agostino observed, "When the decisions are made by an organizations' bankers or people in ivory towers it loses it competitiveness and esprit de corps."
And the rate of obsolescence of printing needs has inspired SFI to move its market share forward to provide supply chain solutions to fortune 2000 companies.
According to Wesley, SFI's growth is directly related to the igetsmart e-commerce platform, which not only connects the distribution centers in real time, but facilitates the coalescing of the sales force's expertise. "We completely marry together our acquisitions so our people on the West Coast can partner with those on the East Coast," explained Wesley. "This is so characteristic of SFI, and with more than 23,000 customers in North America, so necessary."
This is particularly true when serving larger accounts. In a move that D'Agostino said "emulates what the majors have done to corral accounts in the larger sandbox," SFI is capitalizing on a team-selling approach to court the Fortune 2000 companies.
As Wesley pointed out, "A large account with a big budget isn't going to be comfortable trusting that expenditure to one person." Typically, two or three representatives function as a team of experts specializing in the larger customers diverse needs, which increasingly revolve around outsourcing and the management and distribution of the customer's core inventory. As a result, SFI is as likely to be process managing the warehousing and distribution of furniture, light bulbs, juices and video game components, as it is commercial printing and promotional products. "It's a whole other bite of the apple for us," said D'Agostino.
However, the ability to serve as a fulfillment partner to these large Fortune 2000 accounts rides on the fully integrated igetsmart platform. D'Agostino and Wesley discussed one large account worth more than $10 million in business which has 1,000 different branch offices between Mexico and Canada. SFI was able to get the customer up and running on the system within 90 days—including foreign language and currency customizations.
Wesley explained that in some special cases, upcharges may be involved for customizations but for the most part, customers are not charged. "We see these additions and modifications as strengthening our system not only for that account, but future accounts as well," he said.
SFI has been able to successfully broaden its customer base by listening to wants and needs, "But the days of conducting business with purchasing agents during long lunches and golf games are over," said Wesley.
While some in the industry may believe that "mystery is margin" and have a tendency to confuse a customer into a sale, SFI believes that success for itself and its customers lies in education. "We see a real void out there and are attempting to fill it by offering customers a thorough quantitative analysis of their existing supply chain solutions," said Wesley.
SFI also sees this as a wonderful way to reinvest in its own sales force by orienting representatives to systems selling.
By Maggie DeWitt
#2 Proforma, Cleveland
Rather than fall under the pressure of the past year's economic uncertainty, Proforma—a network of independent distributors—grew strong. The reason, said Greg Muzzillo, owner and CEO of the Cleveland-based company, is because the shaky times of 2002 actually served as a catalyst for many distributors to seek to grow their profits and sales. In that search, he added, they found Proforma.
"We believe that the Proforma network is perfectly positioned to offer distributors dynamic ways through which to grow their sales, increase their profits and have more fun," said Muzzillo. "Basically, Proforma's formula for such success is that it empowers its independent distributors."
The empowerment Muzzillo referred to is the ability distributors gain to be their own bosses while sharing an abundance of benefits. Those benefits include a multi-million-dollar sales and marketing fund that provides owners with state-of-the-art marketing programs and tools, combined purchasing with preferred vendors giving every independent owner that is a member of the Proforma network the clout of a quarter-billion dollar company, access to superior technology including company store programs, automated sales and marketing tools and business operations efficiency technology, and the burdensome overhead costs with more than 600 independent distributors. These time-consuming overhead costs include invoicing, statement processing, collections and accounts receivables, vendor crediting, cash availability, payments an accounts payable and financial reporting.
Over the past year, this structure appealed to more than 100 independent distributorships that chose to become members of the unique network. Since 22 of them reported annual sales ranging from $1 million to $8 million per year, Proforma was able to grow to $227,702,000 in sales for 2002—adding more than $11 million in sales than what was reported in last year's study.
Additionally, Vera Muzzillo, co-CEO noted, "In these times everyone needs to be working a little harder and a little smarter." What makes this hard work pay off, she added, is Proforma's offering of tools that help to identify more qualified prospects, offer expanded product lines and market more intelligently.
In addition, the company introduced its distributors to three superior technological advancements—a professional sales, marketing and relationship tool, company proprietary software and the Proforma owner information management system.
But special services and technology can only be beneficial when the right people are using them, which is why Muzzillo attributed Proforma's success to the combined efforts of all the great people who make up the Proforma family, including 600 owners, an Owner Advisory Council, development coaches, a supplier network, an executive team and the more than 100 support center staff members. It is this philosophy of teamwork, he added, that helped Proforma reached its top-ranking distributor sales figures.
While Proforma has not made any significant staff changes in the past 12 months, it continues to grow its programs and resources that are available to the members of its network. According to Greg and Vera Muzzillo, such resources include sales and marketing programs created through its multi-million dollar marketing fund, as well as targeted direct sales and marketing programs developed in partnership with its preferred suppliers.
"Owners also benefit from Proforma's free credit insurance that they receive on their sales," they said.
Proving the effectiveness of Proforma's structure, Greg and Vera reported that current member satisfaction with the programs and services of this network has resulted in the referral of more than 60 percent of the new members welcomed this year.
As for what is to come within the next year, Muzzillo said he is planning to add more than 200 new members in 2003 and exceed $300 million in system-wide sales.
"It is our plan to add more marketing programs and technology in order to help our owners more effectively, reach their dreams and increase the number of million-dollar offices in our network," he said. "Further, we look forward to having our first billion-dollar year in 2006."
By Sharon Cole
#3 American Solutions for Business, Glenwood, Minn.
It has always been about the American Dream for Larry Zavadil, president and CEO of Glenwood, Minnesota-based American Solutions for Business, formerly known as American Business Forms. He is passionate about creating opportunities, taking chances, making choices and, more importantly, helping others to do the same. And it's this spirit which has placed American as the third ranked distributor among the BFL&S' list of top 100 distributors.
Established as a regional company in 1981, American now has more than 400 sales associates throughout the United States and Puerto Rico. According to Zavadil, it is the optional Employee Stock Ownership Program (ESOP) established two years ago that has been instrumental in recruiting and retaining the company's unique sales force, which helps to keep American on top.
Because it is a totally new concept, getting the ESOP message across is an educational process that's still unfolding, and the full impact of the ESOP on employees' careers and earnings won't be realized immediately.
Said Zavadil, "It's going to take approximately three to five years for people to really understand what the ESOP means to them. They're not used to getting something for nothing, especially something that has value, but they can see on their annual statements that their shares have gone up."
While sales associates have the flexibility to remain independent contractors, Zavadil hopes that those participating will consider their ESOP a cornerstone of their career at American. "It's having a piece of the rock without giving up any of the split or buying stock," he said.
Zavadil explained that on custom items, the salesperson receives 75 percent of the commission and the remaining 25 percent goes to the company. On stock items, it's a 50/50 split and promotional items result in a 65/35 split. The average combined product split, company-wide, is approximately 70/30.
However, there are situations requiring uniquely bundled solutions that may involve equipment or packaged deals, and blended splits are then developed to account for the variations. "Flexibility is important, especially in an environment like ours," said Zavadil.
American sales associates have been approached by other companies offering a 75/25 or even a 80/20 split, but as Zavadil pointed out, "The industry is not about splits the way it once was. Talented sales associates want to partner with companies that evolve with the customers and the market in order to create lucrative selling environments and provide e-commerce solutions." He added that most companies never get beyond a certain point in the evolution process, but American continues to embrace the changes.
For American, this has meant growing vendor relationships at a time when other companies are scaling back on vendors and product lines. "We have more than 6,000 vendors," said Zavadil. "It's important to treat your vendors as you would your customers."
Name Change
Zavadil's insight into human nature and the fickle marketplace factored heavily in one of the company's own recent changes this past August, when the name officially became American Solutions for Business.
"The industry hasn't been about business forms for sometime," he said. "Now it's about everything else, and our new name reflects our diverse product and service offerings." Those offerings include printing, advertising specialty products, office, cleaning and safety supplies, corporate apparel, document management and e-commerce solutions. The name also accommodates individual sales associates' areas of expertise. For instance, the newly designed stationery might indicate that a particular office is a graphics communication company doing business as American Solutions for Business.
On occasion, Zavadil has had new sales associates remark that there is so much to sell, they're not sure where to begin. He advised them to start with what they're comfortable with, and gradually incorporate the new products and services that give customers solutions to grow the business. He acknowledged, however, that moving out of the comfort zone isn't always easy. "We all like to choose the path of least resistance," he said.
Some distributors are reluctant to offer customers new products for fear that any snafu could be detrimental to the relationship and previously established business. But Zavadil contended that if the distributor functions as an integral part of the customer's team—like an employee—when difficulties arise he or she will become the solution provider, rather than the problem source.
"When problems crop up the boss doesn't fire the employee, he grabs him by the nape of the neck and tells him to fix it," he jokingly observed.
"Anyone can handle success," concluded Zavadil, "It's how someone handles problems that counts, and the biggest problems are always about communication. It's the number one area to work on when things are not getting done."
By Maggie DeWitt
#4 Global DocuGraphix, Chicago
Graham McClean, president and CEO of Global DocuGraphix, Chicago, doesn't take customer service lightly. "You've got to kiss your customers until your lips bleed," he said. "Never, ever let yourself be out-serviced."
McClean believes that adopting this code of behavior can help distributors win at least half of the battle; the rest hinges on developing a sound growth- and profit-oriented strategic plan.
His own plan is rooted in profitable growth, sharing resources, volume pricing and acquiring aggressive, profit-oriented companies whose values match those of Global DocuGraphix's—principally, awareness and sensitivity to customer needs, respect for the individual and an interest in offering new products and services. McClean knows that he is on the right track because the company continues to grow, and this year ranked fourth among BFL&S' Top 100 Distributors. "People feel good about our name and what we bring to market," he said.
Growth Through Acquisition
The key to a successful acquisition is to ensure that it will be a positive experience for everyone. Global DocuGraphix provides collateral materials, conducts a thorough presentation for the company and sends letters to every one of its customers assuring them of consistency in the service they have come to trust and rely upon. "Customers want to make sure that knowledge of their account and their needs isn't lost and that's the reason we retain the founders and leaders," said McClean.
By and large, acquired companies' sales forces are already experienced in form, label and commercial print sales, so education and training efforts emphasize the new programs and products, such as digital imaging, pressure-seal, print-to-mail and office products over the Internet. "Our marketing staff puts together an office-by-office roll out," explained McClean, "and we hold an annual national sales meeting that includes a tabletop show by 70 to 85 of our preferred vendor partners."
With more than 150 sales executives in 40 offices, Global DocuGraphix has a very diverse product line which essentially divides the company into five main divisions. The largest division consists of distributorships supplying the more traditional printed products. Then there is the imaging and document management division, as well as the relatively new and rapidly growing department that specializes in print-to-mail services utilizing pressure-seal mailing equipment. In addition, there is a program which allows companies to affiliate with Global DocuGraphix's name and resources while maintaining their own legal identity.
"We handle their payables and receivables and they have the benefit of our e-commerce and order management resource capabilities," noted McClean. "This reduces their investment risks while enabling them to better compete against the major directs."
The fifth division is TopForm Software, with Global DocuGraphix being TopForm's largest customer. Said McClean, "This allows us to make sure that the software is delivering what is needed in the marketplace for ourselves and everyone else," including links to e-commerce and electronic invoicing. While approximately 15 percent of Global DocuGraphix's business is currently conducted over the Web, McClean said, "Face-to-face selling will never go out of style. It's still the primary vehicle for getting business."
By Maggie DeWitt
#5 GBS, Noth Canton, Ohio
If one were to ask John "Skip" Dragoiu, president and CEO of North Canton, Ohio-based GBS, what has kept his company at the top of the BFL&S distributor charts, he would say it is something very plain and simple—the need to help customers succeed.
Maintaining its status as the fifth-ranked distributor two years running, GBS continues its commitment to exceeding customer expectations while also offering expertise in information technologies and management. "This method has proven itself to be the most effective way to assist customers in meeting their objectives," said Dragoiu.
Reporting $96.8 million in annual sales for the past fiscal year, GBS is up $2 million from last year's numbers. The jump is mainly the result of a newly developed team-selling approach, in addition to targeting markets that are in a growth mode, such as print-on-demand and labels, explained Dragoiu.
What has also contributed to GBS' increase are a few internal changes, including the first full year of employing a completely new executive management staff, as well as the implementation of a formalized sales process, a CRM platform, a new company-wide marketing initiative, a new NetFileManager tracing system and the integration of supply chain initiatives.
In terms of adjusting the the current economy, GBS implemented new sales techniques. Said Dragoiu, "At our Filing Solutions division we altered our sales approach by leading with total solutions selling, which offers traditional products supported by the latest in technology-based solutions. At our Computer Solutions and Document Solutions divisions we use team selling and again, technology-based solutions."
Dragoiu added that GBS has been able to push through tough times because of its commitment to excellence and noted that the company's ISO 9000-based quality management system contributed to GBS' rise.
As for a company mission, Dragoiu said, "Our newly drafted quality mission statement commits us to exceeding our customers expectations by providing innovative and effective solutions through continual improvement of our business processes, products and services."
Founded in 1971, Dragoiu said GBS is 100 percent employee owned and is comprised of three business units addressing different facets of information management.
Some of the products GBS provides include traditional business forms and related materials, labels, marketing literature, point-of-sale materials, ad specialty and promotional materials, filing systems, document management systems, document imaging, and customized industry specific software for credit unions, medical offices, government entities and contractors.
Its services are comprised of print and document management systems, which include analysis, design, procurement, warehousing, fulfillment, physical and electronic distribution, imaging, variable printing, mail services, inventory control systems, software development and network management.
As for what to expect from GBS in the coming year, Dragoiu said, "We are forecasting sales growth, which will be accomplished through some of the methods mentioned earlier, such as team selling, supply chain initiatives, implementation of the new ISO 9000/2000 standards and the addition of the best salespeople we can find."
By Sharon Cole