At least half a dozen master agents of Fuji Xerox Australia have parted ways with the printing manufacturer amid overly aggressive targets and customer support moving offshore, however, the vendor maintains the channel is "healthy and performing well".
Master agents are independent contractors who sell printing equipment on behalf of FXA and are paid a commission based on achieving revenue targets. There were understood to be as many as 30 across Australia at one point.
It is understood the typical agent generates anywhere between $4 million to $6 million of annual revenue for the printing vendor.
Now, many of these agents, representing millions in revenue and decades of experience, have separated from FXA. The circumstances of their exits are a point of contention. Some severed ties after partnerships spanning decades; others did not have their contracts renewed.
The largest point of disagreement has been increased targets, both revenues and units. This has led to even high-performing master agents unable to achieve the targets required to get commission cheques.
Master agents contacted by CRN would not comment, however, a LinkedIn search brings up a series of master agents who have updated their profiles to indicate they have separated from Fuji Xerox:
- Rick Buscombe ceased Melbourne-based FXA agency Fairfax Equipment in December after 17 years.
- Melbourne-based Adrian Godfrey ceased in December after 15 years in the Fuji Xerox channel, eight as a master agent.
- Tim Hoffmann's relationship as a master agent came to an end in February after 20 years with Fuji Xerox.
- Melbourne-based David Harrison ceased as a master agent in January after 25 years.
- Paul Cummings, in Perth, ended his master agent relationship in March after seven years.
- In May, Melbourne-based Sam Belleli capped a near-15-year career as a master agent.
A Fuji Xerox Australia spokesperson denied there were any problems, telling CRN that natural attrition was typical and that "our existing master agents sales team is very healthy and performing well, in line with the overall growth of the business".
"It is common for any sales-led business to have targets increase year on year, depending on the market. We can confirm that Fuji Xerox Australia's revenue targets for master agents are in line with the overall business and the current market," the spokesperson said.
"There has been no lost business here: in fact, our master agent business is strong and we have expanded our territories in Australia. This is in line with overall business performance, where revenue grew to more than $1 billion in FY16 - an increase from the previous year."
Analyst firm Gartner reports Australian print volumes have been falling at around 5 percent per year in Australia.
The issues in the master agent channel coincide with internal upheaval at Fuji Xerox Australia. The company has seen a series of top executives exit in recent months, including Asia-Pacific leadership, legal, accounting and HR. These changes came less than a year after FXA replaced its Australian MD, lost its CFO and ditched its auditors.
Internal FXA communications seen by CRN sound a worrying tone, with managing director Sunil Gupta expressing great concern about the results of an employee engagement survey. A video that was available online – but has now been taken down – sees Gupta telling the FXA team to "put the past behind us".
"We have a lot of work to do and that is what this year is all about. FY17 is an opportunity for us to work together to maintain our market leadership position and deliver our value to our customers. It is an opportunity for us to win back our rightful place as the leading operating company and for the leadership team to win back your trust.
"You have told us you do not know what we do or what our strategy is, and our customers also told us that we are quite difficult to do business with," said Sunil.
Gupta added that the company's overall employee engagement rating for 2016 was 37 percent, and that the company is targeting 60 percent in 2017. "We clearly have a lot of work to do."
Flood the market
Master agents are being encouraged to drop prices and "flood the market", one well-placed source told CRN.
This aggressive push for revenues has gone hand in hand with cutbacks in support, including offshoring the support centre to Malaysia, leading to a growing number of aggrieved customers.
"Their infrastructure cannot support the numbers," said a source. "Their helpdesk numbers, their support staff, their technicians, they have been culling them across Australia.
"Their customers have been calling us consistently – 'We are not getting toner stock, not getting billing right, not getting support we were promised'."
The FXA spokesperson confirmed the offshore switch. "As part of its ongoing efforts to be a customer-centric organisation, Fuji Xerox Australia announced the restructure of its Customer Support Centre (CSC) to deliver improved response times and quality of support in March 2016. The main implication of this change was the consolidation of resources and the migration of some support functions performed by the CSC to Kuala Lumpur, Malaysia.
"We can confirm that the latest internal and competitive benchmark surveys run by an independent market research firm continue to rank Fuji Xerox Australia number one in terms of customer satisfaction in the industry. The surveys measure brand image, sales representatives, product quality, online and hotline support, toner and drum supply, service engineers, billing and invoicing and complaint handling – among other metrics."
That perception is not shared by all, with one source telling CRN that a decline in customer satisfaction was putting agents' reputations at risk. "All their cost cutting has been customer facing. This is why many master agents are leaving. Reputation is everything in this industry and poor customer service is affecting everyone."
CRN revealed in February that Fuji Xerox Australia had backtracked on its plan to build a standalone enterprise IT services and software division after a little over a year, with most of the employees exiting the business.
Fuji Xerox Australia is a separate entity to Fuji Xerox Printers; the two companies have separate structures, reporting lines and distribute difference product ranges.
If you have any thoughts on this story you can contact the journalist directly.
Updated 8.48am 12 May: the video has now been taken down. CRN has also replaced term 'dealers' with 'master agents'.