KM One Rate Program

Post KM Flat Rate Webinar Follow Ups

I'd like to thank the 60 or so peeps from dealers across the US that took the time to view the webinar today. We even had a rep from Norway in on the call, thanx again for your time and your interest in our webinar today.

For those of you that are Premium/VIP Print4Pay Hotel members (FYI, we have a $99 Lifetime Premium/VIP special running now). The three documents that I promised along with the link for the recording has been posted in our Premium/VIP forums.  https://www.p4photel.com/forum...iscussion-group-only . The link for the recording is only going to be good for six days. After that the recording will be posted in the "clips" section of our site. It will be marked as Premium/VIP access only.

For all non Premium members I will be emailing the link and the documents over the weekend. It's imperative that you access the link in as soon as you get the email from us.  I would also urge you to purchase a Premium/VIP membership for only $99 for a Lifetime, because we are planning to now host at least one webinar per month. Send me an email if you're interested. We only have 10 left!

A few minutes ago, we posted up our survey for Future P4P Hotel Webinars Survey. Please take the time to visit this survey and tell us what you would like to learn more about. We will then craft webinars to meet your needs.  These webinars will be free to Premium/VIP members.

I did hear back from a handful of peeps in reference to today's webinar. If you have any questions please hit us up in the reply section of this blog and we'll address right away for you.

Thanx again for your participation!

For anyone that did not have a chance to register and pay in time for the webinar. We'll make this available to everyone, there will be a cost of forty dollars. Shot me an email and we'll make it happen for you.

-=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=- 

The KM 1Rate Program & How to Sell Against It Webinar

In the last few weeks, I've had many inquires about the KM 1Rate program.  That's the program that give clients unlimited clicks for a monthly fee. Yes, I stated unlimited clicks.

With the help of P4P Hotel members I've been able to understand the terms and conditions of the program.  Once you understand those you can put together a strategy to point out the good, the bad and the ugly.

In the webinar we'll focus on those terms and conditions and the offer up a strategy to sell against it.

Tentative date for this webinar is scheduled on or around the 7th of September.  Cost is zero for P4P Hotel Premium/VIP members and $19.95 per person for non Premium/VIP or non members of the Print4Pay Hotel.

If you're interested please send me an email and I'll get you on the list. We're looking for fifty or so for the first one. apost@P4photel.com

-=Good Selling=-

Four Ways to Compete Against the KM Flat Rate Program

Recent talk tracks in our NJ sales office has been about the new KonicaMinolta unlimited click program. 

Just recently one of our reps thought that they couldn't compete with the One Rate program for three A3 MFP's.  Those three MFP's were doing a decent volume of color each month.  When we did some more digging with the clients color volume and the monthly cost for unlimited pages, we figured the revenue for Konica Minolta was two cents for every color page.

Just as the rep was ending the meeting, the DM stated, "I should just dump all of my HP's and move the volume to the KM's"!

Wow, it's kinda scary if you ask me, however with every program, the lessor will protect themselves with the T&C's of the lease.  Thus we'll inform you on how to give your sales people the best shot at picking apart the program below.

T's & C's of the Lease

1) The Evergreen Clause:  Notification for end of lease is a short 60 day window for the client.  Clients must send notification in writing between 90 days and one hundred fifty days before the end of any term of your decision to return, purchase or renew. The lease will renew for successive one month terms.

2) Maintenance & Supplies:  If your use of supplies exceeds the typical use pattern (as determined solely by Supplier) for these items by more than 10%, or should Supplier, in it's sole discretion, determine Supplies are being abused in any fashion, you agree to pay for such improper or excess use.

There's nothing in the contract that states what the cost would be for excess use.

3) Escalation Clause:  The escalation clause allows KM to raise the payment up to 10% each year. 

Here's the verbiage:

At the end of the first year of this agreement and once each successive twelve month period, we may increase your payment, and the per pay charge over the pages included (Overage) by a maximum of ten percent (10%) of the existing charge, or if less, the maximum amount permitted by applicable law. We may bill you a per charge for all pages for all pages produced between the date of you final invoice and the date when you satisfy your obligations under this Agreement and either purchase or return the equipment to us.

Okay, so I get the escalation (ten percent per year is a lot of bucks) but I'm not sure why there is verbiage about pages and overages. Maybe it's an oops and someone forgot to change that line from the older cost per page lease.  If anyone knows please use the reply thread.

4) Origination Fee:  $100 is added to the first invoice for an origination fee.

5) Termination Fee: We reserve the right to charge a fee upon termination of this agreement either by trade-up, buy-out or default. Any fee charged under this agreement may include a profit and is subject to applicable taxes.

Okay, I understand this part also, but how much is the termination fee?  It's very open ended.

6) Supplies:  Clients are expected to pay for shipping/handling of supplies. Which leaves us to how much is the cost to ship, and how many times would they ship each month. A mere $20 per shipment per month adds a whopping $1,200 on a 60 month lease. Could it be $30?  Seems no one is sure.

How to Compete Against unlimited clicks

1) You'll need to have a copy of the KM unlimited click program lease with you at all times.  In addition you'll want to highlight all of the terms that I've listed above.  

2) You'll need to read the lease several if not many times to become familiar with each and every one of the pitfalls.  Searching for each pitfall in front of the client means you're a rookie and you haven't done your home work.

3) Have a pen in hand and figure the escalation clause numbers with your client. As far as I'm concerned the verbiage of "we may", means "we will". Don't forget to include the shipping charges, or ask the client if the rep informed them how much the shipping charges will be. I'm betting dollars to doughnuts that most KM reps won't bother to read the lease they are selling.  Your knowledge of the KM lease can put you in the drivers seat.

4) Maintenance & Supplies, especially the line that talks about the additional charges if the client exceeds the typical use pattern by more than 10%. 

While we don't know what the KM pattern looks like, we can present the client with sample print documents that show the percentage of fill (toner) for each document.  The key is to also have the "What is Page Coverage Book" that we have posted in the Doc's & Pic's section of this site.

Your job is to show the client every page of the book and let them tell you what type of documents they print the most. In many cases the coverage will far exceed the industry standard which is 20% coverage for color and 5% for black. You then need the client to buy in that thier coverage could be more than the KM pattern. But how would they know if they don't have a copy of the KLM pattern. Point is they don't unless they can get one. The un-certainty what that document is will lead to the risk that they will use more fill (toner) that what KM allows.

Closing

The unlimited click program is going to be awesome for certain clients, and we're not going to be able to beat it.  But for heavy users there can be a lot of risk entering into agreement that is severely one-sided for the lessor.  

Keep in mind that any reductions or waivers require approval of the President of the Direct Channel.  Taking a sales persons statement that we'll waive that part may not the right statement.

Me? I'm doing exactly what I outlined. I'll have everything with me to give myself the best chance of winning.  Remember the old saying, "if you can't beat them, then join them".  It may come to fruition sooner than we think.

-=Good Selling=-

The Flat Rate Program "The Good, the Bad & the Ugly"

If you've been around as long as I have, then you're old!  No, really it's that you've seen or heard about some of the coolest marketing programs from our beloved copier manufacturers.

One program has recently has a ton of chatter on the Print4Pay forums lately.  That's the KonicaMinolta All inclusive unlimited click program.

I first heard of the program through one of my Linkedin connections and he was touting how awesome the program is for clients. In fact he's authored his success on the One Rate Program.  Sounds awesome and any program that sounds awesome means that I need to dig a little deeper and understand the offering.

With help from multiple Print4Pay Hotel members I was able to secure the details of the program.

Is it an awesome program for Direct Reps to talk about?  You bet your ass it is.  Unlimited clicks will get anyone's attention these days, especially those clients that are tired of getting billed for overages.

Thus, there is a lease cost for the copiers and a monthly cost for service and supplies.  The service and supply cost is different for each model.  You add the two monthly costs together and that's the total monthly cost with unlimited clicks.

Here's what's good for sales person to chat about:

  • Unlimited clicks. Yup unlimited, make as many as you want (program not available to Print4Pay accounts)
  • Never ever get a bill for overages clicks.  Which means you have a predictable expense 
  • Never have a bill for toner
  • Never feel that you've been robbed because you did not meet your minimum quarterly or annual meter volumes

Here's what's not so good for the sales person to chat about:

  • If a client use of supplies rises above the typical use pattern (determined by KMBS) the client would need to pay for improper or excess use
  • Parts replacement could be new or refurbished
  • KM may increase the payment at the end of the first year and every successive 12 month period by a maximum of up to 10%

I'm a huge fan of programs and this program offers what clients want.  Clients are tired of overage clicks and not being able to have a predictable expense.  Even if the escalation increase is 10% per year on the hardware and the maintenance/supply costs, there are many prospects that are just tired of the click cost.  

If you look at the client that has multiple copiers and has a lease payment of $1,000 per month, that second year monthly cost may rise to $1,100.  That's $1,200 additional dollars out of pocket.  The third increase could rise to $1,210 per month, fourth year at  $1,331 and the final year could be $1,464. That's a nice little money maker especially when clicks are declining in the office.

I have to tip my hat to KonicaMinolta. It's a really cool program and is something different for their reps to talk about. Unlimited clicks will gather someone's attention!  In addition, it begs the question of "why not do business with us today, because no one else will offer this great program".  Well, that's the way I would position it.  

As with any program there are pitfalls.  The possible increase of 10% per year, and the over consumption of toner could be a deal breaker. However, to this day, I've never seen an SMB account fired for using to much toner.

-=Good Selling=-

 
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