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Southwest Copy: Increasing Profits through Print Management Programs

13 Nov, 2005 By: Darrell Amy imageSource

Southwest Copy: Increasing Profits through Print Management Programs

Print management is currently a
hot button topic in the industry simply because there is so much potential that
exists. Think about it: conservatively, we know that even in offices with
connected MFPs, 50 percent of output still goes through laser printers, meaning
you are missing out on a lot of possible profit.

New print management technologies, however, enable dealers to generate cost per
page agreements to cover all of a client’s output regardless of which device it
goes to. The end result is a true win-win situation—better customer service to
the client and increased revenue to the dealership.

Kevin Simpson, the sales manager for Southwest Copy in Albuquerque, New Mexico,
realized he had an opportunity to create a win-win situation for his dealership
when he approached a current client to talk about upgrading two Segment 5
copiers. Southwest Copy had recently adopted a new sales model to handle all of
its clients’ output.

“Our total print management program has created a whole new avenue of revenue,”
said Simpson, who discovered that customers in the program produce two to three
times the printer volume compared to copiers. “With the cost per copy on new
digital copiers going lower and lower we had to find a new way to generate
revenue and profits.”

The Client’s Issues

The client Simpson was working with was Assaigai Labs, a small business that
provides environmental services to organizations across the southwest. Assaigai
Labs leased two Segment 5 copiers and owned about 20 printers. The leases were
up for renewal on the two copiers.

“We have a lot of printers at stations in the lab,” remarked John Biava,
president of Assaigai Labs. “The small print jobs are printed out at the
workstations while the larger jobs are sent to more cost-effective network
printers and MFPs.”

With nearly two dozen laser printers, Biava had already explored ways to reduce
costs by purchasing recharged printer cartridges. However, the time involved in
procuring all of these items was a hassle, and some of the printers were aging
and required service attention.

Southwest Copy came in and suggested that they could take care of all of Biava’s
printer service and supplies as a part of the new lease. When he looked at his
company’s current actual costs of printing, the proposal from Southwest Copy was
very close. The biggest benefit that Biava saw was he no longer had to fool with
printer supplies or service.

“I thought this program would free up our people to concentrate on what we do
instead of worrying about printers,” he said.

As a part of the new agreement, Southwest Copy installed two new Segment 5
multifunction systems, a color multifunction system, and a cost per page
agreement that covers all of Assaigai Labs’ printers.

As Simpson began collecting meter information on the 20 laser printers, he
realized that the printer volume was almost three times the copier volume. While
the client had been making about 30,000 copies per month, they were making more
than 100,000 prints per month.

Under the print management program, Southwest Copy provides on-site service and
supplies for all of the printers and copiers at the lab, including two older
copiers that the lab already owned.

“It has freed up quite a bit of time,” Biava said. “When I need supplies or
service, I just call in and tell them what I need.”

Southwest’s Programs

The dealership offers two print management options: Service for Toner and
Compass Print Management.

The Service for Toner program provides unlimited service to clients that buy
print cartridges exclusively from Southwest Copy. Southwest Copy entered into an
agreement with NER Data Products (www.nerdata.com) to provide compatible toner
cartridges and parts.

Several months after Southwest Copy entered into the agreement, one of the
company’s hardware vendors, Toshiba America Business Solutions (www.copiers.toshiba.com),
chose NER Data Products to provide Toshiba branded printer cartridges. Southwest
now provides cartridges with the Toshiba label.

The second program, Compass Print Management, which is what is being provided to
Assaigai Labs, is a cost per page program that includes all of the print
cartridges and service for one cost per page.

To facilitate the development of cost per page proposals, Southwest Copy chose
Compass Sales Solutions (www.compasscontact.net), developers of a suite of sales
software applications to quickly create cost per page proposals. Southwest Copy
now calls all of its cost per page printer contracts “Compass Print Agreements.”

Southwest Copy trains its clients to print out meter read sheets from the
printers. The clients then enter the meter counts into iManager, a Web-based
customer interface for the dealership’s OMD system (www.omdcorp.com). Simpson is
currently exploring other options to gather printer meters remotely.

Southwest Copy owner Mike Contois offers valuable advice for other dealerships
considering a total print management program.

“The entire company should know what you are selling and what the goals and
expectations are for them,” he explained. “Also, use any resources that you may
have—leasing companies, copier vendors and especially a good software company—to
help your sales staff keep track of it all.”

The Positive Results

A critical part of the process has been providing the correct tools for sales
reps to do a complete sales analysis for customers. Contois recommends spending
the necessary time and money to get the program started because the payoff will
more than outweigh the upfront costs.

Southwest Copy has been gathering laser printer output for about 18 months. In
that time, the dealership has brought 900 printers into the program. The net
result has been an addition of about 2.3 million pages per month.

The average gross profit on these clicks is healthy. After deducting the cost of
parts and supplies, the dealership still realized great profit margins on the
agreements. Contois sees the click volume from printers growing much faster, and
over the next five years passing the dealership’s total copier volumes.

In addition, these programs have strengthened the dealership’s sales team. The
sales representatives’ compensation plans are tied to the volume of prints they
bring on board. Sales reps are paid a percentage of the monthly revenue from the
Toner for Service and Compass Print Management programs.

“This helps keep the sales reps engaged in the new direction of the dealership,”
Simpson pointed out. “Plus, a recurring revenue stream can be a compelling
reason for a sales representative to look at a sales position as a long-term
career opportunity.”

The big question: Should
you sell print management or document management?

It’s a question countless dealers are asking these days. Print management
provides the temptation of potentially growing your dealership’s core business
of meter clicks. Document management offers the allure of potentially high
profits and becoming an integral piece of your customer’s business.

So, which is it? Positioned correctly, both of these two solutions can become a
powerful alternative choice.

Try this on for size: Your dealership specializes in documents, and whether they
are paper-based or digital, documents are the key vehicles by which information
flows thorough your clients’ business processes. When you can streamline the
flow of this information, you can positively impact profits, competitive
advantage and regulatory compliance.

There are two ways you help your clients: Print optimization and workflow

A print optimization program will lower your clients’ total output costs by
directing the right output to the right device to ensure the highest
productivity and the lowest total cost of ownership. A workflow optimization
program evaluates the flow of information through your clients’ key business
processes and makes their businesses more efficient. When presenting these
possibilities, you can ask customers which of these two strategies do they feel
would be best for them to explore first?

If the client is a curmudgeon for hard costs, do the print analysis. If they are
concerned about the flow of information through their accounts payable process,
do a workflow optimization and sell them document management. When you get done
with a print analysis, go right back in and propose a workflow analysis or vice

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