Curious if anyone out there has data about lease terms. What I'm looking for is the percentage of 36 month leases that are booked each year on average. Can anyone help?
We are also 90% of 60 month terms; I don't even quote other terms unless the customer specifically asks for it.
The percentage of leases vs. purchases is even higher I would say; 96% are leases. Very rare customers write a check for their equipment.
What do you sell your customer if there wasn’t a model generation refresh during that 36 month period?
That brings up a good point. Of course it depends on your payplan but I would have great difficulty making my G.P. numbers if I didn't have renewal revenue from my 36 month leases. Anymore, there just isn't a good reason in my mind (in most cases) for someone to change equipment after just 3 years. I lower their payment 60% and still make good commission...they're happy, I'm happy, and my company's happy. I get a sale every 3 years instead of 5 with a much higher revenue and G.P. toward my quota than I would have in a 60 month term.
Agree with @oldglory we shoulod push more shorter term leases, good for us and good for the client Especially for dealerships that have high escalation clauses in the maintenance/supply agreement. Lately manufacturers have not been refreshing the models like they did three years ago. On average it was every 24 months, now I'm seeing models hanging around 36 plus months.
I just got bit by Ricoh not refreshing models. Had a customer come to end of term on a particular model (MP C401sr) that has not refreshed now in over 4 years. It launched in May of 2014 and has never been refreshed. To me that's inexcusable. Because of the configuration I had nothing to offer the customer other than a brand new machine in the same model and configuration as the old machine or the option to take the Buyout to keep. The customer took the buyout. It really burns me to have a customer take a buyout for that stupid reason and now I'm worried that they will take the buyout when their other copier comes to end of term next year.
I feel your pain!! I have C8003's out on three year leases that are due soon and there is no upgrade path there also.
What worries me even more with Ricoh is the fact they are not manufacturing any of their A4 black devices anymore. I think this entire move to services is going to affect all of the refreshing, except for color MFP's and production.
Take a look from the first try up on the Ricoh and compare to the Kyocera. Except for the interface they are identical. Both have the same print speed of 62ppm. In addition the Ricoh product guide does not reveal the drum life. The MP 501 and 601's were also the Kyocera print engines.
There are small differences between each model. However you can see by the picture that these two devices are identical except for the interface of the Ricoh.
I believe this was one of the trade-offs that Ricoh made with Kyocera by giving them access to Ricoh production devices. For now the color A4 devices are still OEM'd by Ricoh.
I don't have BLI but take a look at the Kyocera on BLI, they were both also released at the same time.
I noticed that the new PC600 color printer also looks to be a Kyocera product. Those funky shaped waste toner bottles were the give away.
As for leases I always lead with 36 months, I agree with Art that I would much rather approach the customer at 30 months rather than 55. The only time I even show a 60 month is if I know the customer is shopping a competitor who pushes 60. It usually seems like its the larger dealers pushing 60 months, maybe for the escalation revenue in years 4&5?
I would say 80% of my customers lease and 90 percent of those are 36 months.
I've had a few occasions where I've had to upgrade a customer into the exact same model, usually if they like the machine it isn't a big deal. Or change direction to a used or A4 device.