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Cost-per-copy: Getting the Most Out of Your Program

15 Feb, 2005 By: Tony Van de Riet imageSource

Cost-per-copy: Getting the Most Out of Your Program

Most office imaging dealers
recognize the tremendous value of selling usage-based leasing solutions, such
as, a longtime favorite among the dealer community, cost-per-copy (CPC). The
benefits related to selling CPC are:

  • Offering your customers a
    business solution, not just a new piece of equipment
  • Securing your service
    contract for the term of the agreement
  • Leveraging excess copy
    charges to justify additional equipment placements
  • Capturing more income
    streams such as color, prints, scans, faxes, and service-only equipment

When done correctly, CPC is a
growth strategy that can help your dealership sell more equipment more

As mentioned, CPC is a
longstanding program and most office imaging dealers recognize the value of
offering this solution to customers. When asked the question, "Does your
dealership sell CPC?" The typical response is, "Sure we do!"

However, upon further
inspection, few dealerships are truly selling a usage-based solution. They are
not capitalizing on the advantages that a cost-per-copy selling strategy offers
and not effectively managing their operations costs.

Answer True or False to the
short quiz below to see if your dealership has any telltale signs that you are
under-utilizing cost-per-copy:

1. Your sales reps are allowed
to decide which leasing company finances CPC transactions.

2. Your company uses more than
two   leasing companies for financing CPC transactions.

3. I do not allow some of my
sales reps to lead with a CPC sales approach.

4. The majority of our CPC
agreements are written as a 36-month term.

5 Most of our CPC transactions
are structured with the service contract rolled into the equipment financing.

6. Most of our CPC agreements
are structured with a discounted excess CPC rate.

7. More than 10 percent of our
CPC meter reads are delinquent.

If you answered "True" to any of
these questions, you may want to take a closer look at how effectively
cost-per-copy is being used by your dealership. The following are six key steps
you can take to ensure your dealership offers an effective cost-per-copy

1. Develop a CPC culture driven
from the top down—Selling CPC starts at the top. Upper management must insist on
cost-per-copy as the go-to market strategy for the dealership. Hiring sales
managers that understand and push CPC and providing training and best practice
sharing sessions to new hires can reinforce this culture. Without their
manager’s support and an understanding of how to overcome customer objections,
sales reps will quickly follow the path of least resistance—cash sales or 36
month leases.

2. Incorporate CPC incentives
into sales reps’ compensation plans—Show me the money. There must be something
in it for the sales reps to embrace.  Sharing a piece of the excess copy rate
with them will help reduce sales turnover by building a click portfolio that
grows as the reps sell more CPC. Rewarding the sales reps for not discounting
the overages will significantly improve profits and facilitate easier equipment

3. Use the tools CPC offers—CPC
offers unique opportunities to enhance profit margins through market-accepted
concepts such as transitional billing (interim rent) and annual rate increases.
Many dealers do not take advantage of these tools on a consistent basis. Often
dealers allow sales reps to choose whether or not to apply the levers. Don’t let
your sales reps have an excuse not to use these levers. Instead, teach them how
to overcome customer objections.

4. Maintain an operations
focus—Inefficient meter management and slow cash application quickly erode the
benefits of increased sales and higher profits. It is essential to have a strong
office manager to establish consistent processes around the back end and manage
it as diligently as the front-end sales process.

Make sure your cost-per-copy
administration team is utilizing Web-based administration tools such as online
meter reporting and entry, service payment, and portfolio and delinquent service
payment reporting. These tools are offered through your leasing providers.

5. Centralize lease and CPC
administration—CPC requires consistent processes. Allowing sales reps to dictate
where leases are financed, complete worksheets and send in doc packages creates
variation and often loses attention to detail. Ideally, a centralized lease
administrator completes the final paper work package and works closely with the
person setting the account up in your business system.

6. Choose a leasing partner that
understands CPC—History shows that not all leasing companies understand the
complexities or invest in technology and resources to support CPC. Many leasing
companies change ownership, and with the transition goes your CPC servicing. A
key to cost-per-copy is keeping your accounts in sync with the leasing company.
Spreading your accounts between too many companies puts a strain on your
operation team’s ability to efficiently manage the accounts. 

Interview your leasing partners.
Make sure they have a focus on and commitment to CPC. How is the company
organizationally structured to manage cost-per-copy? Are they managing with your
best interests in mind? What are their Web capabilities? Are they demonstrating
a long-term commitment to CPC through investments? Do they offer all the
products and services you need to be successful?

Cost-per-copy is a sales
strategy that will help your business grow faster and more profitably. Now may
be a good time to reexamine your dealership’s sales and operations approach and
to reevaluate your CPC leasing providers to ensure that your company is well
positioned for long-term success.

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