1. Presented By: Steve Huff & Matt Baker
Myth or Reality
Presented By:
Steve Huff
&
Matt Baker

2. No Matter How You Put It, the question remains the same…..

3. About You - From the 24 survey responses that we received

4. 1. You Can’t Make Money on Color Production Equipment

5. What We’ve Learned Placement is big variable CRD vs Print for Pay
Knowledgeable key operators
Media has an effect
Toner fill plays a big role
Needs Color Volume
Minimal B/W Volume
Specialists

7. 2. You can’t create an incentive plan that all of your Technicians will be Happy WithMB

8. What We’ve Learned Some People are indeed Eeyore
Fairness is in the eye of the beholder
Good Techs Rise to the Top regardless of the Incentive Plan
Don’t Worry About Pleasing Everyone, make a plan that incents your folks to focus on what you want them to focus on
Our Focus; Taking Care of the Customer, and Cost Control

10. 3. Running Charge Calls is more Profitable then Servicing Equipment Under Contract

11. What We’ve Learned Contracts better for all
Low volume placements might not take contract
Stream of revenue is preferable
High volume customer on charge = unhappy
Too much paperwork and collection time
Hourly rates range from $75- $150

13. 4. Samsung Has Found the Magic BulletMB

14. What We’ve Learned Cosmos & Polaris underwhelmed
Samsung Cost Calculators where too ambitious
Supply Cost is HIGH
Warranty Process is Troublesome
MX4 & MX7 look promising
Samsung has had GREAT Success with consumer products, They are a very strong brand
Don’t underestimate them

16. 5. Warranty Claims Are Worth the Time to File Them

17. What We’ve Learned It’s a cost/benefit question
15 minutes for a $3 part? Nope.
Alarming trend toward consumer-like admin intensive warranties
Set a minimum $$$ to file for warranty
Better if Techs participate in the savings
Manufacturers are assuming 100% warranties claimed in cost calculations

19. 6. Travel Time isn’t as costly as sending an inexperienced TechMB

20. What We’ve Learned Travel time is #3 on our cost list
1.Parts costs (about 17% of revenues)
2. Travel time (27.5% (.80)(.33) = about 7% of revenues)
So, again it depends:
High volume long distance requires experienced Tech
High volume short distance still requires experience
Low volume long distance dictates less experience, but more parts
Low volume short distance allows a more inexpensive gamble on experience and parts

22. 7. Company Cars Save You Money

23. What We’ve Learned It depends: mileage reimbursement vs. vehicle price
We are at 3.2% of revenues, .31 per business mile
Buy and hold – but this is admin intense
Lease with outside vendor
Big vehicle: low gas mileage but parts rich
Smaller vehicle: higher gas mileage but parts poor
Always have a functional vehicle
Consider the branding value of uniform, wrapped vehicles

25. 8. Warehouse Space is Cheaper than Parts

26. What We’ve Learned Warehouse space costs is not usually the issue
The efficiency killer: Techs return for parts
The key variables:
Minimizing incomplete calls for parts
Balancing this with obsolete parts write offs
Distance to parts distribution center

28. 9. It’s Always Worthwhile to Match the Competitors PriceMB

29. What We’ve Learned Analyze Your Costs Proceed with Caution
Ultimately it’s a Leadership Decision whether your companies focus is Top Line or Bottom Line

31. 10. Sales & Service Can Get Along in the Same Organization

32. What We’ve Learned It can and does happen Each group needs the other
Reach Out
Must start from the top
Joint events
Aligned goals
It is required to succeed

34. 11. It’s Always Better to Sell a Color DeviceMB

35. What We’ve Learned Color Copier – Doesn’t Equal - Color Copies
Color Toner is Expensive, especially when it’s just sitting on a customers shelf
Ironically the MFG (Ricoh) does a good jobbing placing b/w MIF

37. 12. It’s Better When Technicians Dispatch ThemselvesMB

38. What We’ve Learned
It does improve Employee Satisfaction, especially now that it can easily be done by a handheld device
Techs are unhappy now when they do have to call in to clear
But, Techs may not be fully aware of Customer Demands
Make Sure to Communicate the “URGENCY” to the tech
Tech Call Ahead/Response is Vital

40. 13. Customers Prefer a Live Operator to a Phone Tree

41. What We’ve Learned We think so Most competitors have a phone tree
It’s a differentiator for us
Cost control is moving us away from this
The smaller the phone tree the better
Trend toward ing, texting, or website supply and service call requests

43. 14. All Manufacturers Provide an Equal Level of Dealer SupportMB

44. What We’ve Learned
Each Manufacturer seems to excel at something, but they definitely aren’t on the same level
Sometimes it’s as much about the individual assigned to your dealership than the MFG

46. 15. We will only be selling A4 devices by the year 2025.MB

47. What We’ve Learned We Shall See
Lexmark & Samsung are making the A4 Push, expanding into faster segments
Ricoh & Canon have A4 product offerings but they aren’t their front line device
More bids are allowing A4
With a high % of output being A4, this does seem to be inevitable

49. 16. Desktop Printing will be replaced by Smartphone Style APP’s

50. What We’ve Learned Possibly…….
Size and power of Smartphones and tablets
Millennials tend to prefer using these devices
Proliferation and acceptance of apps

52. 17. Copies Between Calls (CBC’s) Always Improve with New ModelsMB

53. Service Population AMV Total Population Pages
What We’ve Learned
Example from BEI
Model
Service Population
Nat Cpc
Service Population AMV
Total Population Pages
Cpc Labor
Cpc Parts
Avg MT
MCBV
MTBV
PRO8100EX
364
89,895
190,536,246
1.6
55,905 19
PRO907EX
5,081
74,417
2,276,704,904
0.0014
1.3
77,701 32
It depends on the generation of the machine
Updated generations are typically better
New generations tend to be worse
There is an overall trend toward cheaper manufacturing costs

55. 18. Improved Machine Performance offsets the increase in time needed to support New Functionality

56. What We’ve Learned These are RJY numbers. Now vs 4 years ago.
Slightly less calls
Slightly more time per call
Total time per machine per year down slightly
Answer: for black, better machine performance is offsetting added machine functionality
Information from BEI segment stats

57. What We’ve Learned These are RJY numbers. Now vs 4 years ago.
Significantly fewer calls
But more much more time per call
Total time per machine per year down
Answer: for color, better machine performance is offsetting additional machine functionality time.
Information from BEI segment stats

59. 19. Today’s Hardware Tech will be Unemployed in 10 Years if they don’t learn Connectivity or IT Support MB

60. What We’ve Learned Specialization is Good Clicks appear to be Flat
Dealers and MFG are looking at MNS & MPS
The better question might be this: will DEALERS be out of business if they are MFP only in 10 years?

62. 20. You should require your Techs to be A+ & Net+ Certified

63. What We’ve Learned Some direct service teams require it Used to be A+
Net+ seems to be more relevant now
Consider Tech marketability vs. company benefit
We have not required it
Does it have any marketing benefit?

65. 21. Bonuses Should be 20% or less of a Technicians Total CompensationMB

66. What We’ve Learned 20% or Less works for us
Techs are more interested in the steady paycheck
Are bonuses stimulators or motivators?
Bonuses do motivate
Is it the money or the prestige?

68. 22. The Best Technicians are Motivated by an Incentive Plan that Publicizes the Results

69. What We’ve Learned Is competition between Techs good?
Should techs be competing against each other or only against their own performance?
At RJY, the best Techs are motivated by the ranking

71. 23. When Going Up Against the MFG in a Bid, you can rely on the fact that they follow their own Lowest SMP Guidelines to set their rates MB

72. What We’ve Learned
MFG definitely price well below their own published Rates
They often go lower than dealer cost
Is labor really a sunk cost?
Marginal profit dollars or profit %?

74. 24. Sales Should Make Service “Whole” when SMP rates have to be discounted to make the Sale

75. What We’ve Learned This is common at many dealers
“Equality of sacrifice”
Dictated by how departments measured
Sales (revenue dollars or margins or both?)
Service (profit %, or profit dollars, or other?)
Who decides this?
President
General Manager or COO
Automate it in the pricing tables
Other?

77. 25. Customers Expect The Technician to Arrive in Less than 4 HoursMB

78. What We’ve Learned
Large Customers request a Guaranteed Response Time or Up Time
Customer expects what they’ve had, so you must be able to maintain it
Four hours seems commonplace

80. 26. The Johnson Model Ratios are Out-of-Touch with the Current Changes to the Industry

81. What We’ve Learned Was a great model when developed Simple to use
The best dealers are besting the model
Labor costs/revenue appear to be dropping
Costs appear to be shifting to supplies (user replaceable units)
The model is too dependent on revenue per copy (who controls this?)
Are costs per page (by segment) a better measure?
Other models are in development

83. 27. Industry Standards Make it Easy to Compare Results with Other Dealers

84. What We’ve Learned In general yes It gives us common measurements
Difficult to get to apples and apples
Are all revenues and costs in the right bucket?
Does this create misleading results?
Should service be measured by revenues?

86. 28. All Printers will Need 3D Capability in the Near FutureMB

87. What We’ve Learned
We Shall See, but my opinion is No

88. 29. The Burden Rate of $60 per hour is too low

89. What We’ve Learned Has been at $60 for years
Calculate it for your organization
All service related operating costs divided into total Tech field hours

91. 30. Aftermarket Supplies Always Save You Money in the Long Run

92. What We’ve Learned Our sponsors say so!
Must measure costs vs. yields vs. failure rate
In general, we say yes
Must get Tech buy-in
Make supply costs or profits a small part of a Tech incentive plan
Sometimes bound by manufacturer agreements

94. 31. Copier Dealers Need to do MNS to protect their Clicks
MB -

95. Trusted Providers Customer Positioning Credibility Doctor Accountant
Banker
Credibility
Managed Services Provider
Traditional Copier Dealer 95

96. What We’ve Learned The Pyramid of Trust, IT is on the top
IT Companies are selling Printers/MFP’s and vice versa
Software makes it a Partnership