Wednesday, February 8, 2012

Selling Copiers & MFP's "Color Cost Page for 2 Cents"

The other day I had an email from Monte Jensen from KBA Docusys and a Print4Pay Hotel member on the west coast here in the U.S.  He was pretty excited because they were releasing a new Color Page model being billed for as low as 2 cents per page!  This is for their Kyocera line of Color MFPs. Of course this peaked my interest and I replied that I'd like to know more about how this is being done. 

What I got from Monte was that their Color Page was 2 cents based on 2% coverage!  I thought how the heck are they going to do that?  Last I knew,  the only manufacturer that was capable of doing that was Xerox and only with their ColorQube MFP series.  Monte was not clear on all of the details about how Kyocera was able to accomplish this and I hadn't heard that Kyocera was capable of this. 

So, I dug and dug and found out that Kyocera may had launched this coverage based CPC plan last year in Europe, and may have had some pilot programs here in the US.  Now, I knew it existed and needed more info.  I sent many emails last night and low and behold a Print4Pay Hotel member from Canada confirmed that Kyocera does indeed have a three tier system coverage based CPC plan.

Here's what I received:

The new series of Kyocera colour MFP's that was introduced last summer provides the means to set three tiers of counter for colour based upon the coverage of colour on the page. This permits setting three price levels based upon the amount of colour coverage. The settings can be adjusted by the dealer to fit their price model.

It means you don't have to pay a full colour page price when you print a small colour item, say a logo, if the contract is set up this way.

We just won a large contract and the ability to do three tier colour pricing was a big factor in the win.

My initial thoughts centered around "I wish I had this", and then I had remembered multiple customers that would benefit from a 2% color coverage based on 2 cents a page. 

I see this is a great talking point with customers, especially those customers that use very little color, such as using it for letter head, logo, and maybe highlighting something in a letter.  Basically any Kyocera Dealer or Kyocera Direct branch will be able to configure the allowable toner coverage and then set a price for each coverage tier.   I don't have any information on the pricing nor the coverage for the other tiers, but I think most may try and follow what was done on the ColorQube a few years ago.

All of this raises a few additional questions if this will now be the norm billing for maintenance and supplies for color MFP's:

  1. Would you now have to conduct a color coverage analysis of a users documents?  Would make sense right, to give them some sort of understanding of what type of color coverage they are using.
  2. Does the 2% coverage really mean 8% coverage?  With color we talk about 20% color coverage because there are four toner cartridges with the manufacturer stating yields for 5% coverage per color.
  3. Could we eventually have more than a three tier plan for cost per page coverage?
  4. Could customers pay more if they aren't in tune with their color page coverage?
  5. How much does it cost to administer a plan like this?
  6. Is there some documentation provided from Kyocera that will show customers what 2% color coverage is, or 4% or 8%?
I could probably think of ten more questions to add, but I can save that for a later date as I get more information.  I'm not saying this is a bad or a good thing.  Years ago in one of my blogs I made a statement that I thought this would be the norm sometime in the future.  Seems like the future is here.  Would love to hear from others on this!

-=Good Selling=-


Salesserviceguy said...

Although it might help the manufacturer sell more boxes, it sucks for dealer Gross Profits.

Why would a dealer want to sell Colour for $0.020 when they can get $0.06 - $0.120.

Anonymous said...

True in some cases but, in the case of commercial print applications, it helps to keep print for pay accounts profitable by setting limits for coverage tied to cost. Print for pay often kills profit by exceeding toner usage with full page color at discounted rates. Tiered billing enables servcing dealers to put top end limits on coverage.

Art Post said...

Thanx for the comments, indeed a good topic of discussion. Prin4Pay accounts, yup a good thing, however how many of these accounts would put up with this when competitors may not be able to offer it and will have a fixed price for unlimited coverage. Yea, nea sayers will say "we can raise them according to the t's & c's of the contract". Well thats correct, however don't expect them to buy again if someone else has all inclusive.

Thaqnx again for the responses!


Anonymous said...

Here the industry goes again for the race to the bottom. This may be an attractive selling point, but it's not a new concept by any means and is only going to serve in eroding margins further I fear.

James Taylor said...

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