NovaCopy Dealer Profile

Product Diversification Breeds Success for Southeastern Company
4/4/2016


NovaCopy Logo


Fast Facts
History in Brief: Established in 1998, today serves over 15K customers in eight states; was the BTA Dealer of the Year in 2007, has been on Inc.’s list of fastest-growing companies multiple times, and is one of Konica Minolta’s top sellers of production equipment

Headquarters: Nashville, Tennessee

Locations: 9 (Missouri, Tennessee, Texas)

Employees: Approximately 320

Hardware Partners: (A3, A4, Production) Canon, Konica Minolta; (3D) 3D Systems, Creaform, MarkForged

Noteworthy Software Partners: M-Files, Nuance (AutoStore), PaperCut, Prism


In the grand scheme of the dealer channel, NovaCopy could still be considered a young entity. With the simple yet proven commitment to teamwork, technology and customer satisfaction, the company showed promise right out of the gate—promise that has now resulted in 16 consecutive years of revenue growth, primarily in the high single- to low double-digit range.

For Darren Metz, NovaCopy’s CEO, one of the reasons for the company’s success is best illustrated through a passion of his. “Skiing on snow and skiing on water require a different skill set, but ultimately they’re both skiing,” he said. “On the mountain you have to lean forward in your boot, but if you do that on the lake you’re going to fall. Fast. Replace just a few of the words in that statement and the same can then be said of our industry.”
 

Darren and Melissa Metz love to hit the mountains.
Skiing with Darren and Melissa Metz

This versatility is evident with NovaCopy, which recently crossed the 300-employee mark. The company’s coverage area has expanded to all of Tennessee and regions of Alabama, Arkansas, Georgia, Kentucky, Mississippi, Missouri and Texas—NovaCopy thus serves a variety of both customer needs and personalities. Revenue also continues to reach higher levels, from $30M in 2010 to $64M in 2014 and $70M last year.

“We’ve never really been flat in terms of placing products, but for one year during the recession our overall growth was exactly that,” Metz said. “Customers who we’d fought hard to win were closing down. Making new sales was becoming tougher. Worse, because we offer in-house financing, we were left holding an empty bag when leases went into default. NovaCopy has been able to shield businesses from third-party leasing games like insurance taxes, tax surcharges, property tax administrative fees and exorbitant late charges, but that didn’t matter. We were exposed to the downturn in a horrible way.”

The bottom line was that although the company saw 10-percent revenue growth in 2010, it had to give back that 10 percent. Disappointing as it was, NovaCopy circled the wagons and began aggressively diversifying its portfolio, including building out its service program—overpromising on it and outhustling the competition—to increase residual revenue. It acquired a couple of dealers, too. And there was more effort from everybody to make things right, to take that year as a learning experience moving forward.


“Skiing on snow and skiing on water require a different skill set, but ultimately they’re both skiing. On the mountain you have to lean forward in your boot, but if you do that on the lake you’re going to fall. Fast. Replace just a few of the words in that statement and the same can then be said of our industry.” –Darren Metz

With minor exceptions, Konica Minolta had been NovaCopy’s sole hardware brand for most of its existence, from A3 and A4 to production. In fact, the company was the largest single-line Konica Minolta dealer in the United States for a number of years. That changed in 2015, as NovaCopy took on Canon when it bought a Nashville-based dealer. “Konica Minolta has always been a fantastic partner and remains our No. 1 line,” Metz said. “For a long time we resisted adding a second, but this seemed like a prudent move.”

Oftentimes today, the word “opportunity” is tossed around like a deflated football—but make no mistake, it both connotes excitement and carries weight, especially in a transaction this large. “Canon truly does present us with many opportunities,” he said. “We have greater flexibility in deploying single- and multifunction printers. The imagePROGRAF inkjet series enables us to sell wide formats with solid margins into organizations we haven’t tapped yet. I’m positive that we’ll also add clients in the legal vertical. Maybe most importantly, Canon has had a loyal following for a long time, so it behooves us to keep all those customers happy.

“With this pair of strong brands, we can cater to virtually any customer in our territory,” Metz continued. “By creating separate salesforces for Canon and Konica Minolta, we can attack the market from two angles—with a lot of confidence.”

NovaCopy has recently enhanced its document solutions offering, providing a core group of products to help overcome its customers’ many business challenges. Software covers document management, cost recovery, advanced data capture, desktop document processing and OpenText, with technology from partners Canon, Fujitsu and Kodak.

The company tries to strategically limit itself in how many pieces of software it sells, while realizing it still has to employ the good old fashioned Swiss army knife approach every once and again. Along with offering Canon uniFLOW and Konica Minolta PageScope tools, NovaCopy is an active reseller of M-Files, Nuance AutoStore, PaperCut and Prism DocRecord.

Like some salespeople at other dealers, during the determination stage of the sales cycle, the NovaCopy account executive will open the discussion with software, citing how it can impact workflow, tighten security, reduce waste, and so on. “I feel it’s helping us stay ahead of the game, even if it’s only 5 to 10 percent of our revenue,” Metz said. “There could be $1,000 in a $10,000 sale tied to software, but the software might have been what got us the contract. It’s deceiving: We’re in the software business…it’s just that the hardware is part of the software deliverables.”


“With this pair of strong brands, we can cater to virtually any customer in our territory. By creating separate salesforces for Canon and Konica Minolta, we can attack the market from two angles—with a lot of confidence.” –Darren Metz

Product isn’t the only ingredient in NovaCopy’s profitable recipe. Although Metz admitted he’d like to see more clicks under contract, he did say that the company has had much better luck bundling MPS with hardware rather than approaching organizations strictly for MPS (single-function printers represent less than 10 percent of NovaCopy’s MPS revenue). And with its proprietary finance program, the company has one more service to promote and to help it differentiate from the competition.

Metz has personally been involved in managed IT (MIT) to some degree since he took over his father’s typewriter shop in 1987. One of the first things he did there was become a Novell partner, after which he slugged it away for over 10 years before selling off the business to the now defunct U.S. Office Products. He then began working with an early cloud-computing service organization, and by the time he rose to CEO of NovaCopy, he swore he’d never return to MIT, mainly due to its complexity. “We’re at about $3,000,000 per year in managed IT, and our per-seat licensing model seems to be doing the trick,” he said. “We look for Microsoft Office 365 implementations for small businesses and cloud-migration services on networks that have 10 to 25 users.”
 

Darren Metz also knows how to tear it up on the water.
Darren Metz Water Skiing

NovaCopy was an early adopter of 3D print and has found more success in this segment than many other dealers. The company is the top authorized reseller in the South for 3D Systems (for four years), MarkForged (also for printing) and Creaform (for scanning), so it’s well positioned to handle practically any customer requirement. Among the vertically integrated design and engineering businesses that NovaCopy has dealt with include aerospace, automotive, medical and plumbing.

With over 100 3D Systems printers in the field, the company has realized its staff needs constant training, which happens on Monday mornings and Friday afternoons, along with self-paced training online. One third of NovaCopy’s sales team has made at least one 3D sale—they want to be involved in new technology, but it’s a different kettle of fish and, as Metz explained, the next step is to get them comfortable with prospecting 3D opportunities. “We try to sign up clients with a service contract that outlines supplies costs, but it’s been a real challenge (roughly 5 percent of NovaCopy’s revenue is from 3D, with a 67/33 percent split between hardware sales and recurring revenue, respectively),” he said, adding that the company’s prototyping and short-run manufacturing service has seen an increase in business since debuting an online instant quote tool.

“3D print helps deepen the conversation with our customers, and we’ve had cases where a client walks in to talk about 3D but walks out with a copier,” Metz said. “To meet the demand and curiosity, we created our 3D University so we could handle the topic in smaller groups instead of on a one-on-one basis. 3D has a long way to go till it overtakes the tried-and-true technology, but we still see it having as much promise as we’d hoped it would—from a marketing standpoint, it’s the proverbial sizzle to the bacon. We don’t have much competition, but until more businesses figure out where it fits into their equation, there aren’t a lot of customers, either.”

So, as NovaCopy’s slogan goes, “What will you print tomorrow?”
 

Melissa and Darren Metz
Melissa and Darren Metz





 

Carl Schell
Carl Schell
Senior Creative Content Manager
With over nine years of experience at BLI, Carl is responsible for writing reports on printers/A4 MFPs, as well as articles on a range of industry topics. He manages editorial content and the company newsletter, too.

Follow him @BLI_Carl
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