Leon Howe is a salesman. Even though he has been involved with information technology for 28 years, he is as enthusiastic about his next sale as anyone you will meet. He understands the vital significance of relationships in selling, and imparts his passion to his staff. They, in turn, do the same for their channel customers. Howe is in what some would describe as the twilight of a very successful IT career, and he shared some insights with Tom Allen about relationships, selling and the channelLeon Howe's association with Star Micronics started when he was working in New Zealand as sales manager for the company that was then distributing Star, but which had not been very focused on printer distribution. "After leaving that company, the circumstances arose where, because of the good relationship I had established with Star and its executives, the distribution was offered to me through Genasis Systems, which [my then business partner and I] had set up as a software house in 1984," Howe explained. "From that point, the Star distribution became the focus of the business, and we subsequently extended the business to Australia." Genasis Systems - as the distributor for Star Micronics - was established in Australia in 1986.
In 1988, Star Micronics in Japan offered Genasis the right to use the name Star Micronics in Australia and New Zealand. Howe explained, "Ours was the only non-subsidiary company that Star has ever allowed to use the name, so we immediately changed the company to Star Micronics Pty Ltd.
Howe's relationship with Star developed to the point where, although Australia and New Zealand are the only countries in which it is represented by a non-subsidiary, Howe is considered by the presidents of Star's subsidiaries to be president of Star South Pacific. According to Howe, not only do they know each other well, he counts them among his personal friends. It is no small matter that the president of Star, S. Sato, honoured Howe with the status of "virtual subsidiary".
When asked why he was afforded this privilege, Howe gave a typically simple explanation. "Firstly, they were very happy with us because we'd achieved five times the market share of any other country in the world. Just as importantly though, we had formed a very good personal relationship with Sato (who died last year) and it was he who gave us the right to the Star name."
When Star confirmed its decision not to participate in the inkjet and laser market, Howe sought another manufacturer that used its own technology. The opportunity to partner with Lexmark came in 1995, at a time when, as he put it, there was still some money to be made in inkjet printers - prices were around $500 to $800. Today, prices have fallen to as low as $150, which he says makes it impossible for a distributor to promote a product. When the opportunity was presented to pick up the Minolta laser printer distribution, Star and Lexmark agreed to part company in Australia rather than create a conflict of interest.
Howe estimates that around 80 per cent of his business today is Star product, and the recent acquisition of the Minolta distribution represents the opportunity to diversify into laser products, a market in which Star does not compete. The range of Star products includes point of sale docket printers, printer mechanisms (embedded in, for example, ATMs or cash registers) and the new smartcard printers, which the company has dubbed VisualCard.
"We have around 2400 resellers in Australia and 600 in New Zealand, ranging from large computer vendors and system integrators through to retailers," says Howe. Among the key Star resellers are small specialist system integrators for a variety of POS applications.
According to Howe, the number of installed point-of-sale systems with Star printers is huge, and not all of those customers are even necessarily aware they have a Star printer when they need to replace the device. When that time comes, they often contact a Star dealer directly - the dealer doesn't have to solicit business. Selling a replacement unit is simply a matter of the dealer quoting a model number. Most dealers may only sell a couple of point of sale printers a year, but if they are focussed, dealers can sell hundreds each month, according to Howe.
Not all of Star Australia's resellers have access to all of its products - Star, Minolta or Alps. The specialist point-of-sale system integrators may never sell an inkjet or laser, and Howe said that other resellers may never engage in anything other than document printers.
"Sometimes a dealer may have a contact or prospect in a large organisation with a need for point-of-sale printers. We will go in to the prospect with that dealer, establish the exact technical requirements and specifications, and even lead the sale. We will never promote the second dealer over the first in the sale, and sometimes, because of the technical nature of point-of-sale or gaming systems, all our reseller brings is the relationship with the prospective customer. They might sell three printers initially but with the experience, they could subsequently find themselves in a potential deal for 500. "Gaming industryOf Star's specialist docket type printers, around 30 per cent are sold to the gaming industry. "The gaming industry uses some interesting applications, and there is a growing demand for printing coded vouchers instead of dispensing cash. There are a number of specialist integrators focused on this market for gaming machines alone," he said.
A recent acquisition, and an illustration of the importance Howe places on maintaining relationships, has been Star's mobile demonstration unit, a van equipped with 240 volt power supply providing a permanent touring show from Melbourne to Cairns and everywhere in between. Howe shuttles the sales staff around the country - and the various legs of the travelling circus - with a fleet of company aircraft and four staff members who also happen to be pilots. A similar arrangement exists in New Zealand with both the travelling show and the flyers. As Howe puts it: "We call on our dealers regularly . . . we've got God and speed on our side . . . we can outpace any company."
When asked about how Star Micronics deals with the channel, Howe becomes almost passionate. "There is nothing worse for resellers than, in the face of a potential sale, not having access to the information they need. Sometimes it might simply be to confirm pricing or delivery," he said. He has established a series of fallbacks for virtually every function in the business, and the sales team is structured on a pooled account basis.
This means that if a reseller rings to speak to the assigned representative, and that person is not available, there will always be someone who can intelligently assist the caller, even if it has to be Howe himself. He loves nothing more than to deal with his resellers. If there's a landing field nearby, you can bet he'll be there if required.