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Carl Schell
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RJ Young Dealer Profile

Learning from Missteps, Hiring Specialists Help Propel Growth

Dec 17, 2015 11:22:28 AM





Fast Facts
History in Brief: Began as a provider of ditto duplicators in 1955, currently offers office and production imaging hardware, wide format and display printing hardware, software solutions, services such as managed print and managed IT, and other related industry products, supplies and services; one of the Top 10 largest independent document imaging dealers in the United States
Headquarters: Nashville, Tennessee
Locations: 21 (Alabama, Arkansas, Florida, Georgia, Kentucky, Mississippi, Tennessee)
Employees: Approximately 500
Hardware Partners: (A3) Canon, Ricoh; (A4) HP, Lexmark, Samsung; (Production) Canon, Intec, Ricoh
Noteworthy Software Partners: Canon (uniFLOW), Idatix, Nuance (eCopy), PaperCut, Square 9


Numbers don’t lie. And when they’re plotted on a graph, particularly one titled “RJ Young’s YOY Revenue,” they can paint a very happy picture. From $37 million in 2000 to $70 million in 2010, RJ Young has topped $100 million for the past two years and will again in 2015—an outstanding achievement in this, the company’s 60th year in business.

For Hunter McCarty, RJ Young’s COO, much of the company’s overall growth can be attributed to one man. ”Chip Crunk followed his dad as president and CEO in 1995, so this is the 20th anniversary of Chip’s leadership,” McCarty said. “His vision was simply to expand beyond our original footprint. He allows his people autonomy in decision making and he’s always been aggressive in building out the company. We all recognize this is a mature industry, but that’s true only in some ways. There are emerging areas to explore, and Chip really does light the creative fire in finding new products and services.”

But success hasn’t been without its bumps and bruises. Take MPS, for instance. The company started out with managed services a decade ago, but McCarty said it was being both undersold and sold as a supplement, not a core piece. Then, a cartridge-based program was introduced but that didn’t do the trick, either. It wasn’t until RJ Young brought specialists onboard in 2010 that it saw an uptick in MPS. “We found people who are print savvy, partnered them with the sales team and formulated a strategy,” McCarty said. “Now, the main account manager gets a small commission but doesn’t have to manage the account, while the print manager has a genuine interest in making a sale around printing.”

Again, just look at the numbers. Service comprises 40 percent of the company’s total revenue, with 10 percent of that stemming from MPS. Over 700 million clicks per year are tracked—from single-function printers alone! “In a time when black usage is going down and color keeps going up, we’re picking up clicks across the board,” McCarty said. “This formula of specialists and collaboration, it’s worked well in other business segments but it’s been especially good with MPS, which is one of our key strengths.”
 

Hunter McCarty, RJ Young’s COO

With 10 percent of its revenue tied to production hardware, it’s no surprise that RJ Young is extremely active in this space. And as it did with MPS, the company sought out specialists to, in a general sense, aid sales reps in figuring out what device offers the best fit in a given environment. The same holds true for the software side of the house, as McCarty explained, where a versatile and solutions-knowledgeable employee can be the difference maker during a needs determination call. “Like with many plans at the outset, things change quickly so you have to be flexible,” he said. “Although I’d even admit we still haven’t reached a high level with software, we’re revving up this part of our business and have had a solid year.

“Our software specialists have played a major role,” he continued. “The message they’re communicating to customers is boosting productivity and lowering total cost of ownership through enterprise-class systems. Apps and close-to-the-device solutions have a little sizzle, but the biggest growth opportunity is with tools that can do many things instead of just one, like PaperCut or Square 9. We’ve also taken the approach of less is more, because then we can better comprehend not only our full software portfolio but the vertical aspect of each solution, too.” Thanks to its relationship with Canon, RJ Young has been successful with uniFLOW in legal settings, and the company also has a host of customers in the education, government and healthcare markets.

What about managed IT (MIT)? You have to be on the network, right? “Absolutely,” McCarty said, noting that RJ Young preferred to buy an organization rather than partner with one or build from scratch. “We purchased an IT provider in Chattanooga in 2012, and the transition took about a year. Managed IT is still being offered in a limited number of our markets. The concept of managed IT is closely aligned with our managed services business strategy, but when you’re fully involved with a customer’s network, there’s a limited margin of error. The skill level of support personnel and specialists is much higher with managed IT, so qualified talent is a must. Ultimately, we’d like our managed services to account for half of our total revenue. More contracts means more recurring revenue, that’s the easiest way of putting it, and getting more of these contracts is among our most important challenges.”


“In a time when black usage is going down and color keeps going up, we’re picking up clicks across the board. This formula of specialists and collaboration, it’s worked well in other business segments but it’s been especially good with MPS, which is one of our key strengths.” –Hunter McCarty

McCarty and his wife of 46 years are adventurous and try to travel—to places they’ve never been to before, preferably—as often as possible. They’re avid sports fans and they like competition. Above everything else, however, they enjoy spending time with their three adult children and three grandchildren. “Family is the backbone, it starts and ends there, and it’s been an amazing experience to watch our family grow through generations,” he said.

A mainstay from the moment he walked through the door in 1978, McCarty has obviously witnessed change upon change at RJ Young, including the growth of his work family, primarily via acquisitions. Since Chip Crunk took the reins, the company has been so active in purchasing dealers that it now covers virtually the entire Southeast. At the beginning, though, it wasn’t all rosy. “We bought three dealers in two years after realizing we needed a stake in the grass to be more local in new regions, but none of us had ever gone through something like that,” McCarty said. “The ones afterward were easier because we’d learned how to buy a business, how to acquire a business and how to integrate a business into our company, then we learned how to be more expedient with the integration. Today, no matter the hurdle, we’re in control of the situation from the first day—not the other way around.”

Even more than MPS, MIT and production print, wide format has potential to seriously bloom in the coming years, McCarty believes. He described feeling increased engagement from AEC firms, as well as a weighted move toward digital file output over actual print output (but the latter is still required). Also, “While we’ve struggled with 3D printing, it’s still several years out for most of the industry if you ask me, signage is a virtually untapped goldmine that could pay huge dividends for us,” he said. “Just look around, there’s so much of it, especially in retail and advertising. Then you begin to think where the signage is being produced and who’s supporting it. There are numerous suppliers of large format clings and window signs. We have to capture a portion of that.”

The company is looking to finish out a strong 2015 with one final 60th anniversary flourish. McCarty reflected that, awhile back, RJ Young set an intention of writing MPS contracts every month for at least one million impressions. Mission accomplished—it’s capturing over 12 million pages per year, and many of those are from new customers. “It’s one of our accomplishments I’m most proud of and gives me and the rest of the company tons of confidence that we can reach Chip’s goal of $200 million in revenue by 2020,” he said.
 

Specialists, particularly in areas such as MPS and MIT, have been a difference maker for RJ Young, which is headquartered in Nashville, Tennessee.