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Re: Wrapping service into lease
95% of my leases have a separate service contract.
Some of my leases may include a "free" copy block which is built into the cost of the lease.
Most leases include the cost of the initial toner built into the lease and free copies are given but not usually more than 20,000 black and 5,000 colour. It is fairly easy to give away lots of black because black toner and developer is relatively cheap. 20,000 black at $0.010 is only $200.00 built into a lease but it looks good to the customer. It might be a whole years worth at 3,000 pages per month.
No leases are cpc machine included without a guaranteed monthly minimum.
No leases are written under the unlimited free prints plan, which is essentially a prepaid copy block with a lot of conditions.
A lot depends upon the competitive situation and if you are trying to break into a new account.Last edited by SalesServiceGuy; 11-22-2022, 03:21 AM. -
Re: Wrapping service into lease
There are far too many ways for this to go wrong. Don't combine machine lease with service. =^..^=If you'd like a serious answer to your request:
1) demonstrate that you've read the manual
2) demonstrate that you made some attempt to fix it.
3) if you're going to ask about jams include the jam code.
4) if you're going to ask about an error code include the error code.
5) You are the person onsite. Only you can make observations.
blackcat: Master Of The Obvious =^..^=Comment
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Re: Wrapping service into lease
A lot of dealers have gone out of business because they built an entire five years worth of cpc revenue into a lease. They rec'd all of that what should be monthly recurring revenue revenue in the first month and now are forced to chase new sales to keep revenue flowing into the business.Comment
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Re: Wrapping service into lease
In the end, you can always make the math work whether service is included in the lease or not. I'd say 95% of my leases include service. That way I get all of my money up front and the customer only pays a monthly charge for overages.Adversity temporarily visits a strong man but stays with the weak for a lifetime.Comment
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Adversity temporarily visits a strong man but stays with the weak for a lifetime.Comment
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Re: Wrapping service into lease
Just a little side note. For those that are in sales, you'll know what I'm talking about. One added benefit to including service in the lease is that it's difficult for the competition to discern the true cost-per-copy that you're charging. Thus it's harder for them to do a side-by-side comparison.
When I go on a sales call, one of the first things I do is ask them to pull out their service contract and I'd say about 90% pull it right out.Adversity temporarily visits a strong man but stays with the weak for a lifetime.Comment
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Re: Wrapping service into lease
You're gonna have to explain the downfall to me.
The bottom line is I'm charging the customer the same price whether it's monthly, yearly, or for the lifetime of the lease. And a LOT of big copier companies are doing it.Adversity temporarily visits a strong man but stays with the weak for a lifetime.Comment
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Re: Wrapping service into lease
For us, leasing is totally different from service.
You can lease a device for much longer than you can get service and vice versa if you own it.
They are two different "products" for us. We even have different "plans" of leasing and serviceComment
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Re: Wrapping service into lease
Some of the bigger companies do their own leasing. I suppose they can set the length of the lease to whatever but the standard lease options are
-12 months
-24 months
-36 months
-48 months
-60 months
A lot of smart people have said to never include service in the lease but I honestly don't understand the rational. In fact, I see it just the opposite.
The only argument (in my opinion) against doing this is that toner/supplies could increase over the life of the lease and the service contract becomes unprofitable. However, in most service contracts there's usually a clause that says the service contract will not increase above a certain level. Also, I've never had toner/supplies to increase to the point that it made a difference in profits. Not really.
Just to wrap this up, I think it's always better for the money to sit in my bank account than that of the customer. Anything could happen and you never collect that money. But if you get it upfront, no worries.Adversity temporarily visits a strong man but stays with the weak for a lifetime.Comment
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Re: Wrapping service into lease
We never did it until other dealer reps began planting the idea in a customers head. Then they started saying "But I don't want two bills". So after decades of paying for the service contact they decided one extra invoice a month is just way too overwhelming for them.
He are the reasons I give a customer why it isn't always a great idea. You are now paying a finance charge on your service. If you decide you want to upgrade early you get none of that money back you rolled into your lease. Once you add in X amount of pages into the lease there is no renegotiating. New HR person wants to cancel the service contacts on your equipment? No probblem but your company has already agreed and financed the next 4 years of service. Churches split, business slows, print flows change... I always needed that perfect example of how things could hit the fan. Then came Covid. I had all kinds of churches calling asking if we could lower their minimums. I graciously did. If they all had service in the lease then sorry folks, I warned you what might happen. Schools shut down for nearly an entire school year and they just kept paying for pages they never ran. Great for a dealer I guess.
We do have a few with service in the lease but we never suggest it.Comment
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Re: Wrapping service into lease
Thank you. You nailed it. The liability is on the customer, not the dealer, when service is included in the lease.
I also started doing this because other dealers were doing it and the customer liked paying one bill instead of 2. Personally, it's now my preferred way of doing the lease.Adversity temporarily visits a strong man but stays with the weak for a lifetime.Comment
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Re: Wrapping service into lease
We do our own leasing too although we are just a small company of 11 People in total.
You can lease a Machine for as low as 6 Months with an upfront Payment of 150$ and you'll pay off about 50% of the machine. For this lease however, you won't get a service contract and if anything breakes you hvae to pay the full amount of work hours and part costs to fix it.
Otherwise, you can rent it for up to 5 years usually, depending on how small or big you want the monthly payment to be. At the end you'll have paid the full machine costs and if you want to keep the Machine you'll not be charged extra (Except for Service ofcourse)
We have different Service Contracts too:
- Basic: 0.007$ per Copy/Print/Scan, Automatic Toner Delivery withing 3 Days when under 20%, 50% off Service Calls and Part Replacements
- Standard Business: 0.007$ per Copy/Print/Scan, Automatic Toner Delivery within 3 Days when under 20%, Free Service Calls, Free Parts replacement if Units break early, Same Day Tech Support
- Business+: 0.07$ per Copy/Print/Scan, Automatic Toner Delivery on same Day when under 20%, Free Service Calls, Free Parts Replacement if Units reach end of life or break early, 1 Hour Tech-Support Respond Time (We'll drop other Customers if needed)
No matter what plan you have, if you break the machine yourself, you'll have to pay Service Call and all the needed Parts.
This is how we rolled the past 20 years. Worked out perfectly so farComment
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