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Stop doing these 3 things if you want to cut your service costs in half.

04 February 2015 | IT Admin


 

 

The enemy of great is good. We have been doing good things in our businesses for so long. They have prevented us from doing great things – like making more profits. Take a look at this actual customer fleet to understand the business logic.



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The graph plots devices based on their type, (color, mono, single function or MFP) as well as their age and volume. As you can see this fleet has a concentration of single function monochrome devices that are between 7 and 10 years old, with page volumes of less than 2,000 per month. Isn’t that a more helpful way to look at a fleet?

The traditional MPS strategy would have you manage device models that you are capable of repairing. This ignores the obvious issue that many of these devices are old and have very low page volumes. You will never recover the money you “invest” in repairs from these devices. In addition, they are single function monochrome printers that (based on an example of 200 pages per month) will generate less than $5 per month in revenue. If you consider monitoring fees, invoicing and tracking, that’s really not interesting business at all.

If you truly want to cut your service costs (and department!) in half, here are three things you need to stop doing right now.

1. Repairing old devices. Anything under 200 pages per month and older than 10 years old should be quarantined and designated as do not repair. These devices need to be replaced when they break down, or the customer can decide in cases where volumes are exceptionally low, to migrate pages. Your MPS Contract must reference these benchmarks and specify which devices do not qualify.

2. Replacing Single Function Mono Devices with Single Function Mono Devices. Stop doing this. Just stop! Replace Single Function Mono devices with color MFPs instead. This is a much easier sale in 2015 than it has ever been. Why repair any 10 year old mono device when you can get a new color MFP that is 5/50/500/5000? What does that mean?

• It costs less than 5 cents per page;
• It can print 50 pages per minute;
• Hardware costs are less than $500;
• It can print 5,000 pages per month.

If you are selling to IT, the one thing we know is that they like new toys. The new generation of desktop color MFPs has arrived. Embrace it!

3. Resisting Centralized Printing. Migrate customer fleets to central color MFPs. Page volumes are declining - but not uniformly. Some departments are seeing rapid decreases in monthly volumes, while others are showing a more gradual decline. The logic of having workgroup printers nearby users may no longer hold. Centralized printing can open the door for greater control over information and workflow. If anything, the scatter diagram above indicates that there is a definite need for rationalization. Seize the opportunity to centralize pages into a central print station. While you’re at it, install walk-up/pin code/swipe printing as well.

Repairing devices is good, but not great. If you think you can get to great incrementally, you are wrong. You need to get serious about cutting your service departments in half. MPS Toolbox can show you how. Click here to book a demo today.

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Are you going to be at ITEX from March 10 - 12, 2015?

Send us a message to book a one-on-one meeting with Norm McConkey to discuss how MPS Toolbox can help cut your service costs (and department!) in half.

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About the Author

Norm McConkey

Norm McConkey has been involved in the print, imaging, and software/tech business since 1993. Holding executive level positions in a number of emerging technology firms, he founded PrintFleet in 2003, and Tangent MTW in 2009. A founding member of the MPSA, an award winning author and presenter, Norm has spoken at various industry events around the world including the Lyra Imaging Symposium, Photizo confernece, ITEX Tradeshow, Regional BTA conferences, Remax Europe, and World Expo. He has been contracted to consult and build go to market and sales training programs with several OEM manufacturers such as Canon USA, and HP, and distributors such as Parts Now and Supplies Network, as well Resellers including Office Depot. Norm’s current project, MPSToolbox (www.mpstoolbox.com), is a software platform which helps technology dealers develop and maintain e-commerce websites.

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