Sometimes, the best advertising a company can hope for is nothing it could ever actually create for itself. Rather, the most potent marketing tool in the world is inspiring consumers to use that company’s name as a verb — one that is synonymous with what that company does.
For example, Google Inc (NASDAQ:GOOG) knew it had made it when people started to say “Google it” as a succinct way of referring to a Web search.
But every now and then, your company’s name becoming shorthand for a routine function can turn against you.
Case in point: Xerox Corporation (NYSE:XRX). Back in the 1980s, before computers were common (or crucial) in corporate offices, photocopiers were the centerpiece of recording and sharing company information. That’s when the phrase “Xerox it” surfaced, slang for the act of photocopying.
The advents of PCs and cloud storage have significantly quelled the need for high-end photocopiers, and Xerox Corporation (NYSE:XRX) has fallen from relevancy. Investors have also noticed the demise of Xerox’s stature, dismissing the company as yesteryear’s investment.
That’s a mistake. Xerox Corporation (NYSE:XRX) has done a poor job of telling its story, but the company is far more relevant — and profitable — than the market is giving it credit for.
The New And Improved Xerox
Think Xerox is just a photocopier manufacturer? Guess again.
Mass-transit ticketing systems, digital printing presses, packaging printers, wide-format scanners and digital document management systems are all part of Xerox Corporation (NYSE:XRX)’s current (and relevant) menu of products. Xerox still makes photocopiers and personal printers, too, but those products are now a minority part of its business mix. Most of Xerox’s top line is now driven by services.
In the first quarter of this year, Xerox Corporation (NYSE:XRX) generated $2.92 billion in service sales. That’s 55% of the total revenue mix, up from 51% in the first quarter of 2012. Conversely, product sales and leasing revenue fell to $2.14 billion, or 40% of the company’s top line for the first quarter. That’s down from 43% in the first quarter of 2012.
A pessimist could note that last quarter’s total sales fell 3% on a year-over-year basis, or that revenue was down nearly 1% last year, to $22.4 million. Neither point paints a particularly encouraging picture. But what the numbers alone don’t explain is that Xerox has only recently made its full foray into digital document management and related services.
Take the company’s e-discovery business line as an example. The acquisition of Lateral Data last year greatly expanded Xerox Corporation (NYSE:XRX)’s capabilities in the e-discovery industry — a rapidly growing arena for the legal industry. E-discovery gives law firms the tools and framework needed to manage and share the massive amounts of digital data often used in today’s court cases. The e-discovery service and software market is projected by some to be worth $9.8 billion by 2017, up 96% from last year.
In early June, Xerox acquired e-learning outfit LearnSomething, which serves the pharmaceutical and packaged goods industry. LearnSomething’s software quickly and efficiently delivers information to remote workers. But, under the care of Xerox Corporation (NYSE:XRX), LearnSomething could become a much more potent tool.
And Xerox has many more new revenue-bearing tools on the way, if not already under its umbrella.