Oh yeah, we're going there.
It started long ago. In the beginning, making copies of business documents - memo's, invoices, reports - was slow and tedious.
So we built devices to perform these duties.
Thousands of moving parts, heat, static electricity and heavy handed employees contributed to a dynamic and precarious environment - they required a good amount of attention.
To put it bluntly, our machines broke down so often we needed a way to pay for technicians.
To support the machines in field the 'industry' hatched a plan:
"Why don't we sell service with the machines? We'll make it impossible for anyone else to supply our devices, so we'll combine service and supplies into a billable line item, determined by how many pages come out of our devices...and will call these 'clicks' after the noise a meter makes with every copy and call the billing model Cost Per Copy..."
Oh sure, there were other schemes - blending copy charges over a number of seemingly different devices, low-balling volume commitments, inflicting punitive overage charges, combining service and equipment costs into a lease payment thus trapping a company into a 60 month internment. Re-financing a client over and over, rolling in so much 'air' that after 10 years, the mark ends up owing $80k for a device worth nothing, nada, zip, zilch - it happened.
Not everyone engaged in nefarious deeds. The CPC model fed families, employed hundreds of thousands and supported the largest business expansion in history.
But is it time to think a different way? More importantly, do our customers and prospects already think this way?
The dealer supported, recurring revenue/billing, cost-per-copy/print models are in jeopardy and I will tell you why:
- Clients don't make copies as often
- A4's are cheaper
- Direct channel
- It doesn't take a genius to install a toner cartridge
A3 sales people:
"look at it...it's too small, made out of plastic, and expensive to operate..."
A4 sales people:
"our machines don't break down as often because when you replace the toner cartridge, you're replacing 80% of the moving parts in the device. That's also why our toner is more expensive."
The kick in the head today is that many A3 Die-Hards are now talking the A4 track.
For decades, the copier sales people ate the printer-dudes' lunch, kicked their books in the mud and took their girl to the prom. Not anymore. What once was nerdy is cool, again.
As demand falls, so to, do device prices and for us, replacement cost is on par with service calls - it is just as economic to buy a new machine as it would be log a service call.
Indicators are everywhere, the path is set. One day, companies will purchase (or lease) machines without an attached service agreement. The first to bring such a scheme to market will herald the beginning of the end, and be instrumental in writing the last chapter.
Where will you be?
Get rid of CPC? You'd have to be crazy, wouldn't you?