I heard from an excellent source today that all of the new color (not sure ifd that means just the 03 series) mfp's from Ricoh support a tiered cost per page billing. I am assuming that this is for all of the Ricoh 03 series systems. 

 

The tiered billing would be  in direct response to Kyocera and Xerox systems.  I was also told that this was something that the direct channel would not use (yeah right), and @remote is going away.  My source will be emailing me a support document in the next few days or so that can verify this.

 

Has anyone else heard of this?

 

My thoughts....having a tiered billing approach would help me win net new business especially if I am up against Xerox and Kyocera (if that dealer or direct will be presenting the Kyotier). I should be able to gain additional margins by taking business away from my competitors especially when the account is only printing a small amount of color on each page.  I can also use the ricotier to protect existing accounts that are being hammered by Global/Xerox and or Kyocera.

 

The biggest question is if dealerships will embrace this technology and learn how to profit from it. Thus, it's just a matter of time before Konica Minolta, Sharp, Canon and Toshiba will adopt this model.  I'll admit in my market place there is a heavy Global presence, and the Kyocera presence is minimal (I have not heard of that dealer enabling Kyotier), I think one of the issues would be how to automatically collect and compute the meter reads and then conduct the billing. I'm sure for some Kyocera dealers that are technically challenged that they may have stayed away on purpose from enabling tiered billing.

 

With Ricoh convergence next week, I'm sure this will be a topic of discussion. If there are any P4P'ers going to convergence it would be awesome if they could report more on this.  I hope to have more info in a few days!

 

Art 

 

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Original Post

What was stated to me was that their facilities manager product would be able to collect the tiered color billing and then report on it.  All I heard was that @remote was going away. I was so surprised by the aspect of these new devices having the tiered that I did not even bother to ask about a replacement for @remote

I'm not sure about your source, but it's already in the Ricoh units, we found this about 4 months ago in the mpc305, the issue is getting it out of the system automatically for billing purposes. We use purpose software which can automatically cope with tiered billing.

Calums:

 

Thanx for this, I see you're in the UK and the info I related to was that the tiered info came from a document there. My source was from Print Audit, but I wanted to make sure this was the case.  We were talking about the latest upgrades to PA, and one of them was that their facility manager software is capable of taking those tiered color levels and putting them in a bucket so they could be billed.

 

When you mention purpose software, what are you referring to?

 

Thanx for the confirmation!!

 

Art

Hey Guys,

 

Few more questions.

 

Anyone have any details on if the color CPC tiers are dealer-editable or pre-set and what the setting are?

 

Similarly, are the CPCs set or dealer-editable?

 

How is the coverage calculated, through device firmware or print audit or both?


What devices is this available for?

O.K. I have found some information for you .

 


Ricoh has introduced the 3 billing level since the MPC 2051 meaning all models after this introduction has these features ( MPC3001 .......) .

Print Audit Facilities Manager can now detect and pick up these assignable threshold counters.

 

Ricoh Dealer that are Premier Members or are using Facilities Manager can now compete with Xeorx and Kyocera promoting this type of billing.

 

I have a brief set up how to for configuring the thresholds on Ricoh devices. If anyone is looking for it, please call the Print Audit office and ask to speak to someone in Sales.

Be aware on this, we have been using this for over a year and the pit falls are. The percentage coverage is based on overall coverage not per toner, the biggest thing is the cost you offer it at, if 30% is in 0-5, 30% in the 6-10 and the 60% is above. What we have found is that the 60% and above is not just 11% coverage but 20-30%, so your copy cost doesnt cover this cost and you could lose money on the high end copy cost. The two lower tiers make you money but your margins are lower as 60% mark up on a low copy cost doesnt cover the loses in the high end, so the net effect is you can loose money, unless you offer a high top end cost per copy. But then the question is if I was offering a low flat rate cost per copy, why would i opt for a tierd system that has a higher top end, but then I will make more money on the low end. Less hassle. The only thing i have seen done, is that the dealer goes in and adjusts the % to ensure all colour is in the high end and customer not aware.

I wanted to resurrect this old thread to see if there are any Ricoh Dealers out there making use of the tiered level coverage area data that the Ricoh color devices now provide.

We know that Xerox and Kyocera have had this capability longer than Ricoh but I'm not seeing it being utilized by anyone. Anyone running across it in their neck of the woods?

If you are a Ricoh Dealer utilizing this, I would like to find out more about the when, where's and hows.

I would also like to know what the default thresholds are set at and whether they are adjustable.

I think it's something dealers are secretly scared of marketing & offering.  They are afraid that it will result in lost revenue in margins, & they may be right.  There are a lot of trends (no-minimum contracts, rules-based printing to reduce color volume, educated buyers, among others) in the industry right now that are putting the easy margins at risk.  This is one of those topics that the few who figure out how to correctly position it as a differentiator will use to take their market by storm. Someone will be first to widely market it & leave the rest to react with "that's ridiculous" or "me too."

I have to respond to a municipal gov't RFP next week for 10 copiers and for the first time I am seeing a request to propose 3 Tier colour CPC pricing.

Less than 0.5% colour, 0.5 - 7.5% and 7.5% plus.

Ricoh Direct, Xerox Direct and a local Kyocera dealer are likely to respond.

It is probably fair to assume that 0.5% colour will be the same cpc as black and 0.5% - 7.5% plus will all be charged the same rate.

I calculate that those vendors who can offer 3 Tier cpc will only have to invoice  115,000 clicks over the term while those vendors who do not have this ability will have to charge 180,000 colour clicks or 65,000 more clicks or $16,000.00 more.  This obviously create a significant competitive advantage.

There is not a lot of opportunity to haggle with the buyer over the total cost of ownership.

Any idea how to work against this?  I am thinking about throwing in some free colour clicks.

 

 

All great questions.  I have not see any quotes from Ricoh direct or dealers offering tiered color rates.  Does not mean it's not out there, maybe just not in my next of the woods.  We do not offer it.

"It is probably fair to assume that 0.5% colour will be the same cpc as black and 0.5% - 7.5% plus will all be charged the same rate."  Black is a color right?  Curious to see how that works also.  If all color (including black) is lumped into one barrel, and the cost for .5 is .02 then that would be quite a money making.

Can anyone else help with this, I know there are a few Kyo dealers on the site that is selling tiered color

It's funny, I came here with the purpose of seeing how to overcome this when competing with vendors/manufacturers who offer this.  We don't want to go down this road and I'd be interested in some ways of overcoming this objection.  When meeting with a customer today I told them that tiered billing hasn't taken off and in my opinion it really wasn't worth it.  There response was, "why" to which I stated that we felt it was majoring in the minors and it was better to give the best possible color price and leave it at that.  I mentioned that there is more that goes into making color copies than just toner, things like drums, fusing, etc... that still receive plenty of wear regardless of page coverage.  Later I thought I should have said something like "you realize if we are going to service you well for years to come that it is important that we make some profit" and if we agree that our offer is fair they wouldn't have a problem with us making some profit.

I'd really appreciate any input into how others have or would handle this objection as I don't think our company wants to go down this road.

 

Thanks!

Not all copier vendors can offer 3 Tier pricing.  Besides the built in technology, a significant investment must be made in the back end accounting system to handle these extra line items on the invoice.  Furthermore, via service code it is possible to vary what that the toner coverage thresholds are making the entire process rather arbitrary and very hard to certify.

I would suggest that you be a little cautious if the successful vendor asks you to install proprietary software on your network to collect these meters and automatically report them.   This same software will likely sense your entire network and report considerable detail on all your network print devices.  Automatic meter read reporting via email is OK as it reveals only specific network information on the copiers your plan to install.

Plus throw in some free color copies.

When the competitor offers the customer apples change the proposal and offer the customer potatoes!  Be different and do not go down the road the competitor is leading the customer on.

I would tell the client if all you are going to do is print a small color logo on letterhead.  Then tiered billing is the way to go.  Anything else would mean that you are relying on the software to interpret the coverage and which tier that coverage falls into.  Thus, with tiered color you could never have a predictable expense.  We can give you that with our "all in" color billing model. You pay one price for color not matter what the coverage is.

Why limit yourself to the business model outlined by the manufacturers? I don't know enough about the variables available to the dealer when setting this up but tell me if this could be done...

What's the selling point of tiered billing? It is, "why should you pay $0.05-$0.08 for a page that has no color on it but a blue email address?" That's the rub. Why not set tier one at the lowest threshhold possible and bill it at the black rate. All others at the full color rate. Some customers might even be willing to pay an extra $0.01/page for color if it meant the didn't have to pay for color when there is the minimalist amount of color on a page.

It is important to note to the customer that the lowest Tier color pricing is really only applicable for when people print a document and are not aware that there might be a small amount of color in it.  This is what I call unintended color printing.  Most people plan to print in color when they need it (assuming the print driver is set to black by default) and must proactively choose color.  This is what I call intended color printing.  Unintended color printing will never come close to intended color printing in terms of page clicks. The whole idea of color printing tiers is a marketing tool to give one copier vendor a proposal edge over another.  It sounds great to the buyer but I doubt that it has much economic benefit on average.

In the end, I got the deal by a wide margin pitching a single tier vs 3 tier pricing.  I can only guess that the Kyocera dealer was over confident in the margins he thought that he could get.  I had to give away the hardware on a publicly posted tender with a low, low cpc. Definitely, the customer was the big winner, not me.

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