Does anyone receive a monthly comp for service and supplies? And if so, how does your program work?
Art
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We are just implementing a new comp program and I will let you know the difference.
Previously we were paid $15.00 for each year for a maintenance agreement no matter what the volume. Doesn't seem very fair considering the average customer has a billing of about $75.00 per month on a service contract.
Previously we were paid $15.00 for each year for a maintenance agreement no matter what the volume. Doesn't seem very fair considering the average customer has a billing of about $75.00 per month on a service contract.
We get 5% of the CPC or svc agreement sold with machine
Mike,
Any comps for monthly cpc?
Any comps for monthly cpc?
we get 10% on service contracts.
Yeah 5%
This was one of the main topics of discussion at the ITEX Show in Las Vegas earlier this month:
On average, Dealerships can no longer profit from the sale of equipment. By the time salesreps salaries, commissions, bonuses, incentives, and benefits are covered as well as equipment shipping, set-up, and delivery, there is no profit in the sale of equipment. Nothing earth shattering here accept that salesreps are being incentivized to promote non-profitable activity.
The new paradigm is that salesreps should be incentivized to promote clicks since that is where the profit is.
Think about it...on that connected machine we sold last month, do most of us really care if print volume is actually being driven to our copier? Cell phone reps are incentivized, not by the phones they sell, but by the minutes that are billed. Why? Because the profit is in the minutes, not the phone. Gillette revolutionized the razor business by giving away the razor to sell the blades. Hewlette Packard is the same way.
The right program is one where the salesreps are paid to drive the profit which is clicks. If increasing the clicks on our installs 30% increased our commission 30%, we would work alot harder to drive volume, not just hardware. The unit sale would just be a means to an end which would be to increase our clicks. The "New World Order" would have as much as half of our income resulting from the clicks that were billed last month.
If there was an easy way to do this administratively, many companies would already be doing it.
On average, Dealerships can no longer profit from the sale of equipment. By the time salesreps salaries, commissions, bonuses, incentives, and benefits are covered as well as equipment shipping, set-up, and delivery, there is no profit in the sale of equipment. Nothing earth shattering here accept that salesreps are being incentivized to promote non-profitable activity.
The new paradigm is that salesreps should be incentivized to promote clicks since that is where the profit is.
Think about it...on that connected machine we sold last month, do most of us really care if print volume is actually being driven to our copier? Cell phone reps are incentivized, not by the phones they sell, but by the minutes that are billed. Why? Because the profit is in the minutes, not the phone. Gillette revolutionized the razor business by giving away the razor to sell the blades. Hewlette Packard is the same way.
The right program is one where the salesreps are paid to drive the profit which is clicks. If increasing the clicks on our installs 30% increased our commission 30%, we would work alot harder to drive volume, not just hardware. The unit sale would just be a means to an end which would be to increase our clicks. The "New World Order" would have as much as half of our income resulting from the clicks that were billed last month.
If there was an easy way to do this administratively, many companies would already be doing it.
The way I see it, in order to capture the "Holy Grail" of profits is that companies should only offer monthly cpc prorgams for copiers and printers.
With the new connected systems, a real time saver would be for the system to send and email to the dealer with the current meter read. This would save the monthly phone call or calls to get the current meter read. Companies like OMD would have to insert a patch or billing module for the sales persons monthly clicks, it could then be counted and paid via computer. I think it could work similar to the equitrac to track and total meters per salesperson.
On another hand we (salespeople) would be reduced to sellers of boxes. All machines would do the same, its just a question of who had the cheapest blades.
One company would have to start it and then the rest would have to follow or fold.
The cost of boxes to the end user would be lower dramatically, then the cost per click would be higher. I did some numbers:
.001 commission x 5,000,000 (clicks per month) = $5,000 per month (250 systems generating 20K per month)
If you took a user doing 250,000 pages a month and increased his cost by .001. It would cost them $250 more per month! One year would be $3,000 and 3 years would be $9,000.
Lets take a look at an average DMU (Dealer Mark Up) on High Volume = 15 - 20%. Lets use 17% for the 2105, RT, PRTSCN,100SHT FNDSH. this gives us a DMAP level 6 cost of 26,500, take the 17% MU and we have a MU of $4,500.
We would then have a base cost of $31,000 for the copier. The average sales cost of the 2105 with these options is $42,809. These numbers were derived from this web site for 11 105's quoted and or sold in the last six months. Therefore if the box was sold at base. The customer would save an estimated $12,000 dollars in sales cost. Over three years the customer would save three thousand dollars and the rep would make $250 x 36 = $9,000.
I would say that this is acceptable for this scenario. However all us of would concentrate on HV accounts. It is interesting. can someone else prove these numbers and lend some more insight?
Art
With the new connected systems, a real time saver would be for the system to send and email to the dealer with the current meter read. This would save the monthly phone call or calls to get the current meter read. Companies like OMD would have to insert a patch or billing module for the sales persons monthly clicks, it could then be counted and paid via computer. I think it could work similar to the equitrac to track and total meters per salesperson.
On another hand we (salespeople) would be reduced to sellers of boxes. All machines would do the same, its just a question of who had the cheapest blades.
One company would have to start it and then the rest would have to follow or fold.
The cost of boxes to the end user would be lower dramatically, then the cost per click would be higher. I did some numbers:
.001 commission x 5,000,000 (clicks per month) = $5,000 per month (250 systems generating 20K per month)
If you took a user doing 250,000 pages a month and increased his cost by .001. It would cost them $250 more per month! One year would be $3,000 and 3 years would be $9,000.
Lets take a look at an average DMU (Dealer Mark Up) on High Volume = 15 - 20%. Lets use 17% for the 2105, RT, PRTSCN,100SHT FNDSH. this gives us a DMAP level 6 cost of 26,500, take the 17% MU and we have a MU of $4,500.
We would then have a base cost of $31,000 for the copier. The average sales cost of the 2105 with these options is $42,809. These numbers were derived from this web site for 11 105's quoted and or sold in the last six months. Therefore if the box was sold at base. The customer would save an estimated $12,000 dollars in sales cost. Over three years the customer would save three thousand dollars and the rep would make $250 x 36 = $9,000.
I would say that this is acceptable for this scenario. However all us of would concentrate on HV accounts. It is interesting. can someone else prove these numbers and lend some more insight?
Art
I disagree that we would be reduced to "sellers of boxes", at least not any more than we already are. We would create new ways to provide value-add like docutivity studies, printer fleet cost management assistance, document storage and retrieval consults, etc. and we would do them so as to drive more clicks to our boxes. I still think there is a need for commission on profits or the rep would have no incentive to do anything but give it away.
You guys going to On-Demand need to check out the EFI booth. In a couple months they will be launching ROI Print Management which monitors print traffic. Based on Corporate standards set, every time a user sends a print job outside the standards, a pop-up screen says something like "This request would be more efficient and 31% less expensive if sent to the Ricoh Aficio 1060 (or whatever). Then the user has the option of ignoring the advice. Incentives could be given to the department with the best compliance record. Users can be assigned only "X" ignores in a month before the option to ignore is recinded, etc.
You could sell the service by guaranteeing savings while at the same time forcing clicks to your own devices.
I was pumped when I saw it and can't wait to find out more.
You guys going to On-Demand need to check out the EFI booth. In a couple months they will be launching ROI Print Management which monitors print traffic. Based on Corporate standards set, every time a user sends a print job outside the standards, a pop-up screen says something like "This request would be more efficient and 31% less expensive if sent to the Ricoh Aficio 1060 (or whatever). Then the user has the option of ignoring the advice. Incentives could be given to the department with the best compliance record. Users can be assigned only "X" ignores in a month before the option to ignore is recinded, etc.
You could sell the service by guaranteeing savings while at the same time forcing clicks to your own devices.
I was pumped when I saw it and can't wait to find out more.
Jim:
You have a good point, we could now sell all of the extras and cahrge for our services. However for the customers who don't care and just want the box (and we have those now), there would be a flat price for box.
Where would this leave the low volume users that run 1-5K per month?
I'll make sure I visit the EFI both and may give them a call about the program.
You have a good point, we could now sell all of the extras and cahrge for our services. However for the customers who don't care and just want the box (and we have those now), there would be a flat price for box.
Where would this leave the low volume users that run 1-5K per month?
I'll make sure I visit the EFI both and may give them a call about the program.
I don't give low volume users much time as it is. Most the time they are getting in the way of feeding my family, not helping.
Unlike some, I personally don't feel I have an obligation to them. I return calls and such, but I can't afford the time to deal with them. May sound cruel but that's business for me.
Unlike some, I personally don't feel I have an obligation to them. I return calls and such, but I can't afford the time to deal with them. May sound cruel but that's business for me.