RJ Young service with unlimited pages

[BillyCarpenter]

Here's the back story. I have an existing customer who is a pastor at a local church. They have 4-color machines via RJ Young. They are in the process of replacing all 4. When they found out they have competition, they quoted a new contract that includes unlimited pages. That's all I know at this point. I have a meeting with them in the morning. My bullshit meter is on high alert. The devil is always in the details but UNLIMITED at a fixed price? I don't see it.


Anyone see this before?

[SalesServiceGuy]

Re: RJ Young service with unlimited pages

... there is no magic. RJ Young has essentially priced a prepaid copy block into their cost under the guise of what the industry calls an "All In" plan.

Somewhere in the fine print is a sentence that says if the customer exceeds X number of prints, there will be an additional charge.

RJ Young is still monitoring meter reads.

One of the benefits RJ Young will state is the customer only receives one fixed invoice for the rental of the device(s).

The customer is always safest to be invoiced for actuals.

Your repsonse should be to offer a lower rental cost with a lower Total Cost of Ownership.

RJ Young has much greater pricing power than you have and can accept negative GP to get a deal.

Do not get bent out of shape over any black cpc charges as they are relatively inexpensive. It is the colour click charge you have to pay attention to.

[mloudy]

Re: RJ Young service with unlimited pages

Wouldn't suprise me but a dealer will always get their money in the end. It is often buried deep in the details. We are seeing it more and more.

Don't ya love it when people allow the other dealer to requote and it is completely obvious they were handed your quote? The other dealer can drop their price by thousands and the customer doesn't stop to think, "How are they able to do that? Were they trying to rip me off on the first quote?".

[BillyCarpenter]

Re: RJ Young service with unlimited pages

That's for the replies, guys. Both of you make good points and I agree. I have the inside track because one of the other pastors is an existing customer who I've gotten to know very well over the years. I will be able to get a copy of the actual contract.

PS - The approach that I plan on taking is TCO (Total Cost of Ownership) as SSG suggested. Some of these copier companies play fast and loose on the service contract. That's ashamed and unnecessary.

[SalesServiceGuy]

Re: RJ Young service with unlimited pages

Wouldn't suprise me but a dealer will always get their money in the end. It is often buried deep in the details. We are seeing it more and more.

Don't ya love it when people allow the other dealer to requote and it is completely obvious they were handed your quote? The other dealer can drop their price by thousands and the customer doesn't stop to think, "How are they able to do that? Were they trying to rip me off on the first quote?".

... that is the name of the game to ask friendly customers for a copy of the competitve quote and for you to expect to requote if your quote is high.

In many cases, the phrase "you can't beat stupid" is used to refer to prices that seem too low.

Often the competitive quote excludes key details buried in the service contract that are only revealed after the deal is signed.

[BillyCarpenter]

Re: RJ Young service with unlimited pages

One of the many challenges when making a competitive proposal vs. the competition is to write the quote in a way that the customer can do a side by side comparison and they can make sense of it. This can be difficult. In the past I've explained it to them in detail but I can see their attention start to wane. So what I like to do is write my proposal very similar to the other company. That way we're talking apples to apples. We do this stuff every day so it's easy for us to understand. In the process I'm usually able to uncover hidden costs or things they weren't aware of.


Does that make any sense?

[SalesServiceGuy]

Re: RJ Young service with unlimited pages

One of the many challenges when making a competitive proposal vs. the competition is to write the quote in a way that the customer can do a side by side comparison and they can make sense of it. This can be difficult. In the past I've explained it to them in detail but I can see their attention start to wane. So what I like to do is write my proposal very similar to the other company. That way we're talking apples to apples. We do this stuff every day so it's easy for us to understand. In the process I'm usually able to uncover hidden costs or things they weren't aware of.


Does that make any sense?

... a paid subscription to BLI or Datamaster would make the side by side feature task much easier. Some OEMs provide free access. I usually just let the customer review this on their own with the key features I want to stress in highlighter.

Customers will start to gloss over any more than a few competitve points.

You should focus more on the Total Cost of Ownership calculation and any integrations you have to MS365.

I have won more than a few deals at higher cost because the competition did not talk about MS365 apps available on their copiers.

[SalesServiceGuy]

Re: RJ Young service with unlimited pages

... the greatest strength you have against RJ Young is because of their size, they have less flexibility than you have in what you can offer. If you pitch a straight up copier deal than you will probably loose.

The have middle Managers that they have to pay for and way higher fixed costs for vehicles and warehousing. While they almost certainly have a lower costs of goods than you have, by the time their sales rep gets his landed cost , it could be comparable to yours.

RJ Young because of their size has to use automation in their billing and service systems that are near impssoble to change for any deal. RJ Young almost certainly automatically escalates the cpc after the first year by up to 10%. You can fix the cpc for five years if you want.

Propose non standard things that require the competitive sales reps to get multiple approvals to make it hard for them. Maybe the Church needs a new dishwasher. Build the cost into your quote and blend it into the final number. Or maybe make a donation of some sort like an office chair or flat panel TV built into your cost.

RJ Young does sell Kyocera as one of their brands.

[SalesServiceGuy]

Re: RJ Young service with unlimited pages

Konica Minolta innovated the OneRate program. The RJ Young program is a spin off of the same.

https://konicaminolta.ca/wps/wcm/connect/bca/c04e2b97-ab07-4534-be96-0f642df8713c/OneRate_Brochure_2018.pdf?MOD=AJPERES&CVID=mmMFTRb

Kyocera does offer their similar Unlimited plan.

These plans are also known as Flat Rate plans or subscription plans. The downside is the sales rep has to place the customer in a bucket or tier of prepaid prints. If the customers prints decline over time, their One Rate price does not. If you invoice for actual meter reads and the customers print volumes go up or down they benefit.

Churches have to deal with declining attendees as people age with less contributions so they do not want to get stuck in a fixed cost program. There is also the probablility that a new virus like COVID could reappear forcing people to stay at home away from the Church.

[SalesServiceGuy]

Re: RJ Young service with unlimited pages

One program has recently lately. That's the KonicaMinolta All inclusive unlimited click program.
I first heard of the program through one of my Linkedin connections and he was touting how awesome the program is for clients. In fact he's authored his success on the One Rate Program. Sounds awesome and any program that sounds awesome means that I need to dig a little deeper and understand the offering.
Is it an awesome program for Direct Reps to talk about? You bet your ass it is. Unlimited clicks will get anyone's attention these days, especially those clients that are tired of getting billed for overages.
Thus, there is a lease cost for the copiers and a monthly cost for service and supplies. The service and supply cost is different for each model. You add the two monthly costs together and that's the total monthly cost with unlimited clicks.
Here's what's good for sales person to chat about:

• Unlimited clicks. Yup unlimited, make as many as you want (program not available to Print4Pay accounts)
• Never ever get a bill for overages clicks. Which means you have a predictable expense
• Never have a bill for toner
• Never feel that you've been robbed because you did not meet your minimum quarterly or annual meter volumes

Here's what's not so good for the sales person to chat about:

• If a client use of supplies rises above the typical use pattern (determined by KMBS) the client would need to pay for improper or excess use
• Parts replacement could be new or refurbished
• KM may increase the payment at the end of the first year and every successive 12 month period by a maximum of up to 10%

I'm a huge fan of programs and this program offers what clients want. Clients are tired of overage clicks and not being able to have a predictable expense. Even if the escalation increase is 10% per year on the hardware and the maintenance/supply costs, there are many prospects that are just tired of the click cost.
If you look at the client that has multiple copiers and has a lease payment of $1,000 per month, that second year monthly cost may rise to $1,100. That's $1,200 additional dollars out of pocket. The third increase could rise to $1,210 per month, fourth year at $1,331 and the final year could be $1,464. That's a nice little money maker especially when clicks are declining in the office.
I have to tip my hat to KonicaMinolta. It's a really cool program and is something different for their reps to talk about. Unlimited clicks will gather someone's attention! In addition, it begs the question of "why not do business with us today, because no one else will offer this great program". Well, that's the way I would position it.
As with any program there are pitfalls. The possible increase of 10% per year, and the over consumption of toner could be a deal breaker. However, to this day, I've never seen an SMB account fired for using to much toner.

[SalesServiceGuy]

Re: RJ Young service with unlimited pages

Recent talk tracks in our NJ sales office has been about the new KonicaMinolta unlimited click program.

Just recently one of our reps thought that they couldn't compete with the One Rate program for three A3 MFP's. Those three MFP's were doing a decent volume of color each month. When we did some more digging with the clients color volume and the monthly cost for unlimited pages, we figured the revenue for Konica Minolta was two cents for every color page.

Just as the rep was ending the meeting, the DM stated, "I should just dump all of my HP's and move the volume to the KM's"!

Wow, it's kinda scary if you ask me, however with every program, the lessor will protect themselves with the T&C's of the lease. Thus we'll inform you on how to give your sales people the best shot at picking apart the program below.

T's & C's of the Lease

1) The Evergreen Clause: Notification for end of lease is a short 60 day window for the client. Clients must send notification in writing between 90 days and one hundred fifty days before the end of any term of your decision to return, purchase or renew. The lease will renew for successive one month terms.

2) Maintenance & Supplies: If your use of supplies exceeds the typical use pattern (as determined solely by Supplier) for these items by more than 10%, or should Supplier, in it's sole discretion, determine Supplies are being abused in any fashion, you agree to pay for such improper or excess use.

There's nothing in the contract that states what the cost would be for excess use.

3) Escalation Clause: The escalation clause allows KM to raise the payment up to 10% each year.

Here's the verbiage:
At the end of the first year of this agreement and once each successive twelve month period, we may increase your payment, and the per pay charge over the pages included (Overage) by a maximum of ten percent (10%) of the existing charge, or if less, the maximum amount permitted by applicable law. We may bill you a per charge for all pages for all pages produced between the date of you final invoice and the date when you satisfy your obligations under this Agreement and either purchase or return the equipment to us.

Okay, so I get the escalation (ten percent per year is a lot of bucks) but I'm not sure why there is verbiage about pages and overages. Maybe it's an oops and someone forgot to change that line from the older cost per page lease. If anyone knows please use the reply thread.

4) Origination Fee: $100 is added to the first invoice for an origination fee.

5) Termination Fee: We reserve the right to charge a fee upon termination of this agreement either by trade-up, buy-out or default. Any fee charged under this agreement may include a profit and is subject to applicable taxes.

Okay, I understand this part also, but how much is the termination fee? It's very open ended.

6) Supplies: Clients are expected to pay for shipping/handling of supplies. Which leaves us to how much is the cost to ship, and how many times would they ship each month. A mere $20 per shipment per month adds a whopping $1,200 on a 60 month lease. Could it be $30? Seems no one is sure.

How to Compete Against unlimited clicks

1) You'll need to have a copy of the KM unlimited click program lease with you at all times. In addition you'll want to highlight all of the terms that I've listed above.

2) You'll need to read the lease several if not many times to become familiar with each and every one of the pitfalls. Searching for each pitfall in front of the client means you're a rookie and you haven't done your home work.

3) Have a pen in hand and figure the escalation clause numbers with your client. As far as I'm concerned the verbiage of "we may", means "we will". Don't forget to include the shipping charges, or ask the client if the rep informed them how much the shipping charges will be. I'm betting dollars to doughnuts that most KM reps won't bother to read the lease they are selling. Your knowledge of the KM lease can put you in the drivers seat.

4) Maintenance & Supplies, especially the line that talks about the additional charges if the client exceeds the typical use pattern by more than 10%.

While we don't know what the KM pattern looks like, we can present the client with sample print documents that show the percentage of fill (toner) for each document. The key is to also have the "What is Page Coverage Book" that we have posted in the Doc's & Pic's section of this site.

Your job is to show the client every page of the book and let them tell you what type of documents they print the most. In many cases the coverage will far exceed the industry standard which is 20% coverage for color and 5% for black. You then need the client to buy in that thier coverage could be more than the KM pattern. But how would they know if they don't have a copy of the KLM pattern. Point is they don't unless they can get one. The un-certainty what that document is will lead to the risk that they will use more fill (toner) that what KM allows.

Closing

The unlimited click program is going to be awesome for certain clients, and we're not going to be able to beat it. But for heavy users there can be a lot of risk entering into agreement that is severely one-sided for the lessor.

Keep in mind that any reductions or waivers require approval of the President of the Direct Channel. Taking a sales persons statement that we'll waive that part may not the right statement.

Me? I'm doing exactly what I outlined. I'll have everything with me to give myself the best chance of winning. Remember the old saying, "if you can't beat them, then join them". It may come to fruition sooner than we think.


Four Ways to Compete Against the KM Flat Rate Program

ART POST

VIP

7/11/1812:03 AM

[BillyCarpenter]

Re: RJ Young service with unlimited pages

That's a lot to take in. I should have a copy of the proposal tomorrow and I see I have a lot of homework to do on this one. Thanks for the info. I'll be following up in this thread tomorrow.

[mloudy]

Re: RJ Young service with unlimited pages

Churches have to deal with declining attendees as people age with less contributions so they do not want to get stuck in a fixed cost program. There is also the probablility that a new virus like COVID could reappear forcing people to stay at home away from the Church.

So this is where you may have a huge advantage on the service side. The equipment cost will not go away but if you can offer a MA that is flexible you have the upper hand. I would never agree to any fixed cpp more than a year anymore. Sure others dealers will but use common sense. Is anything the same price it was 5 years ago. The Transit Connects we buy for service techs were $27k in 2019. Same exact van is $37k now.

We never want to include service in a lease payment and always give our reasons why a customer shouldn't include it. It is great for the dealer but can be bad for the customer.

Enter Covid. So now all these customers like churches and schools were paying for pages they aren't running with no option to stop it becasue they have signed a 5 year lease or agreement. It really was the perfect storm for why we always encouraged customers to keep the service side out of a lease. There is also NO option to canel except for a complete buyout. I took lots of phone calls from churches during that time asking if we could stop the minimum billings for their Maintenance Contracts. As a small dealership I could make that decision in less than 30 seconds. When they called in they were transfered to me in a matter of a minute. Push this. For a church this is still fresh in their mind. Many have a fixed budget and giving fell dramatically for a year and has never fully recovered in most churches. For a larger dealership they would likely not budge on any minimums and if it is in the lease there is no option to stop. Image how long it would even take to get to talk to someone that could even answer that question. Unfortunately most ex-customers find these things out the hard way. Then they call us and ask if there is anything they can do to get out of their contract with the other dealer and come back to us. Ugh.

[SalesServiceGuy]

Re: RJ Young service with unlimited pages

... if you are the current vendor and the four copiers are on a FMV lease, it is the customer's responsibility to return the copiers at their effort and expense to a destination of the lessor's preference.

You have to play hardball on this one (phrased nicely) to maintain an advantage.

It is very unlikely that the RJ Young quote has built in extra money to return the copiers for a seemless customer experience. The Church could get a signicant unexpected cost to return the copiers.

[SalesServiceGuy]

Re: RJ Young service with unlimited pages

I would probe and ask if the RJ Young sales rep actually asked for the historical print volumes or is he just going with the One Rate program that assigns a print volume to a speed range.

Lots of customers have faster copiers than they need.