fLAT RATE

Xerox's MFP "All in Plan" Reveal

A few days ago I was alerted by a Print4Pay Hotel member about the new Xerox  "All in Plan".  I had some time on my hands and paid a visit to the Xerox site and gleaned everything that I could about this new program.

For me "all in" meant that the plan was similar to KonicaMinolta's flat rate program.  Pay a monthly payment that includes the MFP along with maintenance/supplies and print as many pages as you want.  Since Xerox is a competitor I owed it to myself to learn as much as I could as fast as I could.

What I thought was unlimited is not.  The brochure is carefully wordsmithed that states you'll have a fixed monthly price no matter what you print.  That "no matter what you print" appears several times in the brochure. Thus the "no matter what you print" is more about the types of coverage that is used to print the document and has nothing to do with unlimited prints.

The web site is an e-commerce site where clients are asked simple questions to determine the type of printer or copier that is the best fit for their printing habits.  After selecting "find a printer", you're navigated to the next page to answer a series of questions which include.

  • color or black print?
  • how many people will share the print device?
  • what is your print volume (heavy, average or less than average)
  • types of documents that you print (photos, brochure or text)
  • will you need to scan, copy or fax?
  • do you need 11x17?
  • then printing from smartphones or tablet

After answering all of these questions you are then asked if you are a business to proceed. The next page will give you the pricing, in my case the site gave me a choice of three A3 color MFP's with the price per month.  The next step is to create an account. It seems that only 3 color A3 devices are offered at this time.

Okay, I'm a business and I created an account.  One I got past that I was then awarded the lease contract and the maintenance/supply agreement. Of course I did not select the buy button!  But I had the documents for review.

Here's what I found out:

  • Program is run through XFS Financial
  • All Service is routed the XBS dealer that is associated with your zip code
  • According to your answers for the questions I listed above your lease has a benchmark.  That benchmark in my case allowed me 12k per month (I picked heavy user)
  • In the Ts & Cs there is a clause that states that if you are over the benchmark volume three months in row Xerox can raise your monthly price or mandate that you get an additional print device that for an additional monthly fee.  I'm guessing that monthly fee also includes maintenance and supplies
  • Toner and meter reads are automated
  • Fusers, drums, imaging kits are not on auto shipment and the client needs to make a call to Xerox
  • 36 month FMV lease term
  • 150-60 days LOI
  • Device always has to be connected to the internet/network
  • Payments are auto charged to credit card or debit card
  • Clients may need to contact Xerox so Xerox can remote in to install patches or firmware updates
  • Clients need to notify Xerox of printer location within 10 days if the device is moved

What Happens When?

  • Your coverage volume is to high, could there be an additional charge for that also
  • You don't get your maintenance kits in a timely manner
  • You don't like your service provider.  You can only use XBS

Summary

All in all it's not a bad plan but it does have some covenants that may need to be addressed somewhere down the road such as the coverage volume. There is no auto escalator that I read about.

The most critical is the benchmarking for the monthly volume. If you're off on your calculations you'll pay the price with an increased monthly fee or you'll have to get an additional print device.

After speaking with an XBS person today I was told that anyone that creates an account is assigned to a sales person. At least I'm happy to hear that.

The All in Plan appears to be the first salvo with an e-commerce sight that delivers the lease document and the maintenance agreement document electronically and offers the ability to digitally sign the document with out every speaking with a sales rep.  Yes, it's somewhat scary and is most likely the future in an industry that is contracting. 

However the future is not here yet. I will continue to prove my worth because at some point in time we are still needed to navigate the agreements and find the best fit for the clients. I can only think about all the issues that will be created with these types of agreements when the client does not know their printing habits when it comes to type of documents and whether they are a heavy or light user.  We all know that print volumes can change and locking client in for three years could cause that predictable expense to become a non-predictable expense.

Here's a link for the conversation threads on the forums for the plan, you can also download the lease and the maintenance agreement https://www.p4photel.com/topic...copiers-and-printers

Here's the link https://allinplan.services.xerox.com take it for a spin and see what you come up with.

-=Good Selling=-

6 Reasons Why Flat Rate Service Program Will Change the Copier Industry

I remember when plain paper copiers used rolls of paper and not sheets. I remember when the glass on the copiers had to move back and forth. I remember when copiers used liquid ink (toner) to produce an image. I remember when you used a dial to set how many copies you wanted to make.

Yup,  it's been a pretty incredible journey to see the industry evolve over the last 38 years!

Back in the early eighties their was only one plan for a copier maintenance agreement.  We included "x" amount of pages that either included all parts and labor except for drum and toner or "X" amount of pages that included the drum and no toner.  In most cases the only way we knew how many pages were used on the copiers was from a service call or a courtesy call.  Courtesy calls were used to keep techs busy when they had no calls.  Techs would stop in unannounced, clean the glass, the mirrors, the lens and the covers and also get a meter read. 

Even back then we had issues when clients went above and beyond the "x" amount of pages they were contracted for.  There wasn't a cost per page back then, or let me say at least  not for the dealers I worked for. If a client went over their contracted pages it was a hassle to get the extra dough out of them.  Bad business for the dealership and clients were not happy either.

At some point in the late eighties or early nineties someone came up with the brainstorm to include toner in the annual maintenance agreement price.  

Toner included? 

How can that be possible, it can't be done, how can they turn a profit, they'll be out of business in a few years. Those were some of the rumblings that we heard from other dealers and industry pundits. The toner included was the birth of the cost per page. Dealers charge clients a per page cost, multiply the annual volume and all consumables are included paper and staples. Dealers found a way to make some tidy profits.  

Thirty years later, I'm hearing the same type of rumbling when the likes of the KonicaMinolta program or a dealers Flat Rate is mentioned. 

Empirical analysis

In baseball we hear about sabermetrics,  which is the empirical analysis of baseball. Statistics that measure in game activity.  I'm no guru when it comes to all of the analytic software that's used in the copier industry, however, I do believe that someone has done the homework on thousands of copiers in the field and had come to conclusion that if we charge "x" amount per month for "x" model of MFP that we're going to make the margin of profit that we need. Even if a certain percentage of the MIF goes over the monthly volume.  Pages printed in the office is declining and not increasing. If you don't believe me just ask some of my friends at Print Audit. In fact, when the next recession hits, which it will, office printed pages could decline by another 6% (I remember this from a recent education event for BTA).

Reasons Why Cost Per Page Will Be an Obsolete Billing Model

  • Clients want a predictable expense that will not disrupt their budgets
  • Clients are tired of paying overage charges
  • Clients will get excited when you have something to offer that they're not expecting
  • No more counting pages for dealers, will which reduce labor costs with dealerships
  • Elimination of billing errors on cost per page invoices. (I've seen it, the MA calls for color at .07 and black at .012 and when it comes out of accounting the invoice bills color at .012 and black at .07. That's great if the black volume is high and color volume is low, but that happens when it's reversed.  Do you think the client is going to tell you about the error?)
  • Fosters a better business relationship for both client and dealer. (Nothing is more detrimental to the business relationship when a client finds out that they have been billed for 60K color pages per year and 60K black per year and they are only print half of that volume)



As with all contracts there are ways to minimize a dealers risk when offering a "Flat Rate" for unlimited pages. It's more about the program that each dealer or manufacturer will offer and how much risk they will entertain.  The "Flat Rate" (kudos to Ethos Technologies for the term) may not be right for every client and does not have to offered to certain vertical markets. 

The "Flat Rate" cost for unlimited pages is here to stay because clients want predictable expenses. In addition dealers have done their sabermetrics with their fleets and have come to the conclusion that it's a profitable model when done right.

On September 14th @ 4PM we'll be hosting a webinar centered around the KM unlimited click program.  Spots are filling fast and we can only take "x" amount of attendees. If you're interested send me an email and I will send you the details. apost@p4photel.com

-=Good Selling=- 

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