Ricoh Tier (ricotier) Color Page Cost?

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.

With Xerox, was it just on the solid ink stick products that they offered 3 Tier pricing or does this apply to their toner based MFPs as well?

Thanks,

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

Black cpc is a seperate meter for this RFP.  Black is not colour in this RFP.

Thanks,

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.

The Complexity of CPP and 3 tier go our the window when you start offering your services per user per month.

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.

I know this topic is still out there, we just lost a deal to Kyocera and the 3 tier pricing model, we have FMAudit as our MPS monitoring software, any new info on offering this with Ricoh product?

Thanks

I've heard it can be done with our Ricoh devices. Can anyone else help with this?