Guest blog: 3 Tiered Billing – Managed Print Services Cost per Page

This blog has been written by Midshire Sales Executive Andrew Barnett. Andrew shares his views on tiered billing – a type of managed print services cost per page.

Over recent weeks I have seen that a number of businesses are beginning to offer a 3 Tier Billing system for photocopier managed print services cost per page, they offer and this has really got me thinking.

I wanted to look into what this actually is. In theory it sounds like a great idea, in fact one of those moments when you think, why haven’t we thought of this? But is there much more to it than meets the eye?

I have been made aware of a managed print services cost per page being as little as 2 pence per print. Well this sounds amazing but in my experience when something sounds too good to be true it almost always is.

So where’s the catch?
Well the catch is not hard to find. This is the price that will be charged providing the colour usage is between 0 and 2% of a page. Once you go over 2% your price goes up to 3 pence per page until you reach 8.75% of a page and as you may have guessed when you go over 8.75% that’s right, your price goes up again to the final tier of 3.8 pence per page.

Well what seemed to be a really good idea is now starting to pose some questions. Like what is 2% of a page? And who decides what percentage has been used?

It is fair to say that this tiered pricing is troubling me because the more I look at it the more I’m starting to feel it’s potentially out of control. I did look at this option some years ago when the Xerox Color Qube product was released and although I found it an interesting concept, it never really caught on.

I think this is probably down to the lack of information and the sheer volume of unanswered questions it leaves in its wake. However I must admit although I do find this interesting, with all this sketchy information I am not sure I am a fan. One of the reasons I feel so uncertain is that I looked at some examples of page coverage, which can be found by simply typing “page coverage examples” into Google and they all seem so very different.

Let me explain – I looked at one example that said its managed print services cost per page has a 15% colour coverage but when I compare this to the dealers (who is selling 3 tier billing) examples it seemed to fit much closer to what they were saying was under an 8.75% coverage.

Well after looking at a number of examples the only thing I knew for sure was that I had no idea of how anyone was calculating these figures. I did however find a software, called APFill which starts to explain:

“APFill Ink Coverage Calculator is a unique tool for print shops and home users. Now you can optimize pages you print to spend less ink, toner and money. Ink and toner usage is usually described by printer manufacturers as so many pages of A4 using 5% coverage. APFill Ink Coverage Calculator helps you calculate ink and toner coverage on the page (total ink density or total area coverage) before printing.

When you use APFill Ink Coverage you can estimate your cost more accurately. APFill will help you to estimate price based on paper density, paper format and original color density, so you can optimize pages you print and spend less ink, toner and money”. So how well does this work?

Testing this theory
To find out I downloaded the free trial of this software and put it to work testing some of the marketing material that I had come across from a dealer who is offering 3 Tier Billing. The software is great to use and seems simple enough but maybe added even more questions. The examples I had that were advertising being under certain levels all came out significantly higher. In fact I didn’t manage to find any examples that were actually correct. For now I am going to put this down to my inexperience with the software but it certainly has confirmed my thinking that this is a minefield.

Setting customers up to fail
I agree in theory, tiered billing is a great idea but I really cannot see a way in which the theory can meet the reality and certainly setting limits as low as 2% seems to be a way of setting customers up to fail.

As a sales professional I was left with possibly the biggest question; How can this be sold honestly? Does it mean that a salesperson needs to carry some kind of equipment that will scan documents for customers to say this is a certain percentage to show them what tiers they will be using? What stops someone from saying something is 5% when it is actually 15% (like all of the examples that I found)? How will anyone know the true coverage just by looking at it?

For me there are still far too many unanswered questions and I really don’t think we’re ready for the learning curve that will come from this.

‘The last company I spoke to said this will be 5% but you’re telling me it will be 10%, does that mean they’re half the cost you are?’

In reality it’s a way of adding smoke and mirrors so that a customer has no idea of what they are paying for or what it will end up costing them. This kind of practise for a country that is desperately trying to fight its way out of recession does not strike me a great route forward.

I really don’t think this is right for our industry. Please use the links below for further opinion on three tiered pricing:

The Connected Copier

The Leppert

Midshire Business Systems prides itself on excellent customer service, and therefore believe in clear and concise pricing. It is this type of transparent pricing that keeps our customers loyal.  To arrange for a no obligation print audit from Midshire please click here.