5 Reasons Billing by Seat Could Change Everything

As an Managed Print or Managed IT Services Dealer providing MPS you have noticed that the times are changing. There is an all-out war for the management of printers, pages and other network assets such as desktops and servers. Margins on traditional billing models are under pressure. What is a Managed Print or Managed IT Services provider to do? Change the game by billing by seat instead of by page or individual network element.

Here are the top 5 advantages to PSB over traditional Cost Per Page (CPP) billing:

#1: PROTECTION: Page volumes are declining

  • The debate on whether or not people are printing less is over. The only question that remains is by how much it is declining per year. Estimates vary from 2% to 5% per annum.
  • Declining pages in a CPP model lead to declining revenue.

 

#2: SIMPLIFICATION: Your business bills by PSB for Managed IT Services

  • Offering both MPS and Managed IT? It doesn’t make sense to bill your customers in 2 different ways. Your customer doesn’t like it, nor does your billing department.
  • PSB allows for revenue layering. Dealers can increase PSB levels by layering additional value-added-services on top of original contracted seat to increase revenues over time!

#3: ALIGNMENT: PSB aligns you better with your customers’ needs

  • Under a CPP model you want more pages to increase revenue. Your customer wants to print less pages.
  • Your customer wants to print color only when necessary but you want them to print more to make up for price pressure on monochrome profits.
  • PSB allows for increased/decreased printing to become irrelevant as a savings mechanism.

#4: PROFITABILITY: Adding solution software revenue is extremely profitable

  • Gross Profit levels for Managed Print under CPP are under downward pressure.
  • Adding software solutions that address workflow and print governance are highly profitable – upwards of 70% GP.

#5: STICKINESS: Customers are using software to streamline all kinds of workflows

  • Combining traditional Managed Print and adding print governance under a PSB contract allows for crazy glue like stickiness.
  • “Selling” solution software for a one time revenue gain gives 100% of the benefit and control to the customer. Why let that happen?
  • Layering solutions into a seat price means the customer has more reasons to stay with you as their provider. If they leave you, so does all the software!

Need help getting your head around how to build a profitable PSB practice? Print Audit has created a variety of tools to help implement PSB billing in your business. Of course you could come up with your own as well. Things you'll want to consider:

PSB Calculator: We have developed a calculator to help you ensure profitable PSB contracts.

PSB Assessment Tools: Conducting a thorough user and document based assessment will be critical as you build your PSB offering.

PSB Contract Modeling: We have sample contracts to ensure you understand how to protect yourself against the risk of increased color printing and additional users.

PSB Print Governance Tools: Print Audit has 15 years of user and document based print governance experience! Our toolsets are designed to ensure your PSB practice is fully within your control!___________________________________________________________

About the author: West McDonald is the VP of Business Development for Print Audit (www.printaudit.com) and the owner of FocusMPS (www.focusmps.com).

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