“Scan Many, Print Few”
By Ronelle Ingram 23-Jan-03
Scanning is increasingly becoming an issue to be examined and manipulated by both the buying customer and selling dealership. Heavy users of the scanning function, can create havoc with the profit margins anticipated under traditional maintenance agreements.
As endusers continue to use traditional copiers as scanners, new servicing issues are emerging. Most copiers that scan have two separate meters. One meter that counts the scans and another meter to keep track of copies (prints).
The traditional sales pitch of “scan once, print many” is turning into “scan many, print few.” Many technologically advanced companies are using the scan function more than the copier’s printing ability.
I have learned to categorize the three most common types of buyers (eventual users) of the scan function.
1. The casual user who knows enough about scanning to have the subject included on their overall checklist. They do not currently have any particular need for high-end scanner usage.
2. Knowledgeable, IT type buyers who asked about scanning capabilities. Speeds, memory, ease of use, hard drive capacity and job memory to name a few. They bring up scanning early in their needs list. It is a vital part of the buying process. The buyers who openly asks about scanning in the proposal procedure will again address the scanning issue while negotiating CPC or service agreement pricing.
3. The shrewd buyer, who is a potential heavy user of the scanning process, uses entirely different tactics. They will casually ask to see a multi-page document scanned. Questions on storage capabilities, memory maximization, job storage, network and email abilities come up in casually directed conversation during the demo. Normally the sales rep positively agrees to each enquiry or side steps their questions deferring to the technical staff that can show them how everything is done. Late into the negotiations, when lease and service pricing had been established, the customer slips in “The scans are not counted as meter clicks toward the service agreement.” In most cases, the comment is spoken in the form of a statement, rather than a question.
It is this third type of purchaser that concerns me. Another sign that a high speed digital copy system is predominately used for scanning is the savvy IT purchaser who requests low per copy maintenance agreement pricing (no supplies). The issue of monthly or yearly minimums will be purposely ignored. CPC pricing or other all inclusive service agreements will be rejected.
Often, it is during the site survey (usually conducted by the technical staff over the telephone or by email) that the scanning function emerges into the equation. Once the tech starts communicating with the IT personnel, the scanning issue quickly moves to the forefront. The copying function is being reduced to a secondary position of need.
When negotiating the service portion of the agreement, the customer commonly asks for high volume copy pricing, with no monthly minimums. In the past, dealerships could slide on the insistence of requiring a minimum monthly usage with little fear of low volume usage on higher priced models.
As more and more companies understand the practical usages of fast scanning equipment, dealers must become aware of new usage patterns. High-end copiers may no longer generate hundreds or thousands of dollars of monthly click charge revenue.
During the past few years, I have always kept my ears open for service managers who have encountered negative scanning experiences. I talked with several service managers that are losing money on customers who scan more than they print.
An upstate New York dealer was required to do a complete automatic document feeder rebuild. Also needed were a scan motor, eight scanner cables and all the associated hardware. All this at 563,000 scans and 10, 485 copies. “We got caught on this one. We sold the service agreement at .005 no supplies, no minimum. So far, we have received less than $60 for service. The scanner rebuild alone cost over $500. We learned a lot from this customer. We now charge for both meter clicks and scan clicks.”
Another dealer for Minnesota related a similar situation. “630,000 scans, 110,000 copies. Not enough revenue to cover the cost of the scanner rebuilds. I wrote-off the cost of repairing the scanning system to training. Fool me once, your fault. Fool me twice, my fault. Fool me three times and we are out of business.”
Admittedly, the digitally connected equipment requires much less service than traditional analog copiers. Some savvy, price conscious customers are ahead of many dealers’ learning curve. Smart buyers know they can require more aggressively priced service agreements.
Many dealers have reduced the price of their traditional servicing agreements. It is now imperative that pricing accommodations are made to recoup the cost of servicing equipment that make more scans than prints. Also be aware of the cost associated with embedded CPU’s, memory, network cards, lost software and accompanying labor costs.
A simple way to protect your profits from the potential of copiers that scan more than print is to add one line to your traditional service agreement. “The customer will pay an additional .0025 cents per scan, when the scans exceed service agreement minimums or actual print usage.”
Scanning is becoming an increasing portion of our business. Now is the time to effectively prepare for the future. Have a written plan to recoup the long-term cost of servicing the scanner portion of our digital copiers. Better yet, structure your service agreements to generate revenue on each scan your customer makes.
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