Clover Offers Dealers a Silver Bullet

Clover Imaging Group is, if not an anomaly, a rarity in the imaging industry — a company with its roots as a cartridge remanufacturer that has managed to reinvent itself over the years, thrive, and evolve into one of the most recognized technology providers in the industry. Through acquisitions, expansion and rebranding, the Clover Imaging Group has kept both feet firmly in the game. We recently had a chance to chat with Clover’s Jim Cerkleski and Eric Martin to find out how the company is keeping up with the latest moves in the industry.

They started off by giving us a quick recap of Clover’s new “Silver Bullet” program, rolled out in early June. Silver Bullet is a partner program designed to help office technology dealers compete in the market — the latest tool in Clover’s arsenal of partner solutions. With Clover’s Silver Bullet program, dealers will receive up to 30% off their current pricing when they convert accounts that purchase HP imaging supplies to Clover’s premium quality remanufactured printer cartridges.

Cerkleski and Martin make no bones about Silver Bullet being a response to the most current iteration of HP’s partner program. Other major industry events, like the recently announced Xerox/HP partnership, simply reinforce Clover’s dedication to the program, which directly targets dealers selling HP.  “We’ve already got 120 deals and $8 million in new business. And that’s only with 100 dealers signed up in four weeks. We haven’t even hit the VAR channel,” Martin said.

“The beauty of this program,” said Martin, “is that as MPS gets more and more accepted in the market, these renewals come up every two or three years, and we have every OEM exclusively in all the major dealers.” When a dealer wins a new bid, he said, rather than replacing the existing machines with a line that dealer carries, instead the new dealer can support the devices with remanufactured cartridges.

Silver Bullet isn’t Clover’s first campaign to convert OEM users, but it is certainly the most direct. The Greensweep program, for example, offered up to a 10 percent rebate over and above any pre-existing program for OEM conversion to Clover products. Silver Bullet cuts out the rebates, offering net pricing for customers. It’s a sign of the increasingly competitive nature of the supplies space — the battle for which is nearly as old as the hardware industry itself. The terrain, however, has changed, evolving from the war between OEMs and remanufacturers to one that features new-build clone cartridges as an active third party in the battle.

“It’s gotten worse and worse,” said Cerkleski. “In 2013, Chinese clones made up 10% of the aftermarket. They represent 60% of the aftermarket today, and that’s in North America; in some other countries, they represent 90% of the market.” Legal action remains a constant, but ultimately remanufacturers like Clover remain in the middle, competing for market share with both the OEMs and the clones. Cerkleski, however, feels comfortable with his company’s position, noting that the sweet spot for Clover’s value proposition is where the need for quality and sustainability meet. Quality, IP issues and yields, he says, are too important to dealers to risk clones. At the same time, he notes an increased interest in environmental friendliness and sustainability among both current and potential customers.

Each year, Clover releases a sustainability report filled with eye-opening facts touting the superior environmental friendliness of remanufactured cartridges, and while the message has changed very little since the early days of the remanufacturing industry, the audience has. Global awareness of plastic pollution has hit a fever pitch, plastic straws are frowned upon, stores are charging for plastic bags to discourage their use, and cities and countries are enacting legislation like Canada’s recently announced ban on single-use plastics by 2021.  Today’s consumer is — finally — becoming receptive to the need for change when it comes to Earth’s rapidly deteriorating environment. The climate (pardon the pun) might finally be right for the aftermarket’s message.

“A clone cartridge is a first-use plastic; so is an OEM cartridge,” noted Cerkleski. “We can remanufacture that cartridge.”

The Silver Bullet program then, according to Cerkleski, is a win for everyone involved — a high-quality product that is value-priced, IP-compliant and environmentally sound. To this end, Clover touts its BLI test results hand-in-hand with its sustainability report in its messages; pricing, however, remains the most aggressive portion of the Silver Bullet marketing. Clover, Cerkleski wants you to know, has no contracts or restrictions and will never go direct.

Cerkleski is also quick to point out that although Clover is going head to head directly against a major OEM, the company also has close working relationships with many OEMs — important relationships that he would like to see continue and grow. Because ultimately, he says, what’s important is the dealer. “We’re focused 100% on the dealer,” said Cerkleski. “We support them, whether it’s transactional or MPS programs.”

We asked Cerkleski and Martin about recent press noting issues around Clover’s debt service. “We have put in place the right strategies necessary to remain strong, and the industry leader,” said Cerkleski. He mentioned Clover has enormous liquidity and is well-positioned to weather any storm.

While the battle for the supplies space is ongoing, Clover shows no sign of being ready to ease up. On the contrary, now in its third decade in business, the company is stronger than ever and poised to handle whatever changes the market throws at it.

Patricia Ames is president and senior analyst for BPO Media, which publishes The Imaging Channel and Workflow magazines. As a market analyst and industry consultant, Ames has worked for prominent consulting firms including KPMG and has more than 15 years experience in the imaging industry covering technology and business sectors. Ames has lived and worked in the United States, Southeast Asia and Europe and enjoys being a part of a global industry and community.