Printer/Copier Click Charge vs. Seat Based Pricing for Managed Print
On January 4, GreatAmerica Financial Services, the largest independent small ticket national commercial equipment finance company, announced that it has partnered with Print Audit® to present the market’s first Seat Based Billing (SBB) financing options for managed print.
Office equipment and imaging dealers now have the option to finance managed print agreements under a Seat-based model. Apparently Print Audit formed the Seat Based Billing Council, a group of over 29 dealers and partners, to design this SBB model for managed print.
SBB are already commonly used in other adjacent markets such as Managed IT Services. SBB has unique benefits and considerations that are different from the traditional CPP (Cost Per Page) model, especially in tough financial climates that we are witnessing in the imaging industry such as the following:
An SBB model protects against declining printer shipments and print volumes. The debate is over regarding whether or not printer shipments, printer installed base, and page volumes are declining. With a CPP (Cost or click per page model, under these conditions, MPS revenues are destined to decline and this is now been verified from actual data. Since an SBB model is seat based and not based on pages, revenue is not effected by declining page volumes
- Simplification and Consistency
Managed IT Services are already using SBB models today so using the same business model for MPS makes everything much more consistent and less confusing. With a SBB model, it is much easier to additional layered services.
- An SBB better aligns providers with customers’ real needs
With a CPP model, service providers using an CPP model want more pages to be printed to increase their revenue while MPS customers really want to reduce printing costs by printing less. MPS customers want to print less color while service providers using a CPP model encourage more color printing to increase margins.
- Increased Margins with SBB model
Because the CPP model is based on the # of printers in an enterprise and to the number of pages printed, there is a continued decline in print service revenues.
- More stickiness with SBB
Under an SBB model, when layered workflow software is added into the same SBB contract, as users get familiar with the software as part of their day to day work and will be reluctant to change to something else.