We have talked about Flat Rate billing in various forms for several years now. Dealers have often been reluctant to adopt it. Many have questions about why and how. The time is now for you to find answers to those questions. The time is here for successful dealers to learn and implement Flat Rate billing. Flat Rate is still not for everybody, and that’s okay.
What is Flat Rate Billing?
There is no single Flat Rate offering. Flat Rate managed print, at its simplest, is a sales and billing program that bills customers a flat rate for the output every month. This program makes it easy for the customers and the dealer as well. More complex and sticky Flat Rate models do more to manage-out unnecessary and wasteful printing and some even layer in workflow solutions that have nothing to do with print. The critical factor is that you generate a fixed monthly bill for the client that is not dependent on the number of pages created.
What do your customers want when whey they lease or buy a printer or MFD from you? Do they want a printer for MFD? No. They want the ability to print, copy, and scan to make their work lives easier so they can focus on serving their customers better.
Do your customers really care about the brand of equipment you offer? Not so much. Sorry to say, but printers aren’t status/identity devices like cars and smartphones. Nobody was ever jealous because somebody they know has the trendiest new shiny printer.
Why Flat Rate Is Better For Clients
If you properly implement a Flat Rate billing model, it will make your customer’s work-life better and give them more time to focus on their own growth. It will eliminate the most irritating parts of your relationship with your client under existing managed print models like Cost Per Page:
- No more counting: A flat-rate program will mean the end to meter readings (at least for billing). The administrative burden for their accounts payable teams will be dramatically reduced.
- Predictable spend: A flat-rate program executed well will mean an end to overages. Everybody likes predictable spend and Flat Rate models give them that peace of mind.
- More capital for their business: Properly executed, a flat-rate program could mean the end of the printer & MFD sales process for the client. Many offer “XaaS” options that get rid of purchasing decisions altogether.
- Dealer/customer alignment: Under a traditionally managed print offering, dealers want customers to print more and customers want to print less. Flat Rate models are different in that everything that was a revenue item (More color, yay! Bigger device, yay!) becomes a cost (More color, boo! Bigger device, boo!). Both the dealer and the customer want the same thing: The most efficient way to deliver cost-effective print services for a flat monthly rate.
Flat Rate models in other industries like wireless communication, entertainment, even travel options (Uber anyone?) have grown in popularity by leaps and bounds, and now, customers can access their print services in ways they prefer to buy.
Why Flat Rate Is Better For You
I know you think that a flat-rate program will mean you will lose lots of revenue. All of those overages, people will print non-stop. This simply is not true. If you create the plan correctly and sell it properly, it will mean more revenue and more profit to you even though your customer may spend less. In fact, there are a ton of reasons those providing Flat-rate today are loving life:
- No more counting: Every time you have to send a technician to get a meter reading, you spend about $100. I would venture a guess that every time you have to call a customer to get a meter reading, it costs you about $25. Every time a bad meter goes undetected and an incorrect invoice goes out, and the cost is significantly higher.
- More profitable than Cost Per Page: Flat-rate billing is also a tool to stop the race to the bottom on click price. How many times does a sales rep come in and say we need to go below book price on service to get the deal? How much revenue have you lost because of discounted service pricing?
- Predictable revenue stream: The Covid pandemic clearly showed the value of flat-rate billing. While most dealers saw page volumes and, therefore, service revenue plummet, dealers on a flat-rate program saw no change in service revenue, but their service profit increased because of the lower volume. When it’s not about pages it can make all the difference in contract health.
Is Flat Rate Appropriate For Every Client?
Some customers may not be good candidates for a Flat Rate program, and that’s okay! Nobody on the Flat Rate team is saying you should ax your current Cost Per Page offering. Many times, churches, schools, and government agencies are all examples of potential clients you will want to keep on your current program due to unpredictable and inconsistent print behavior.
That is not a hard and fast rule, however. If you gather enough data, if you have a history with an organization and analyze their usage, you may find that it is relatively consistent, then they may be a candidate. In this situation, if they are going to bid, and you can influence the process so that they specify a Flat Rate managed print model, then you could have the inside edge on keeping the customer.
Why Doesn’t Everyone Sell A Flat Rate Program?
Fear, uncertainty, and doubt hold many dealers back. For others, they are simply in a rut. They believe that we have always sold on a per-copy basis, and most dealers sell on a per-copy basis. For other dealers they are simply looking to exit the business and developing new models for managed print simply isn’t on their radar.
Odds are if you’re reading this blog or following all activity around Flat Rate, you’re not “everyone”. If you’re a progressive dealer, Flat Rate is an exciting new frontier to help you evolve and grow your business. Just like investing, by the time “everybody” is onto the idea, it’s too late. For those looking for a land grab, to do the hard work of establishing a new way to provide print services, for the FEW, the future is looking very bright indeed.
If you are one of the few, The CPC model no longer serves its purpose and the race to the bottom is no longer an option. It is time for a new model, and it is here. The early adopters, the change-makers, are the ones that stand to reap the most benefit. Perhaps it’s you.
Change is Hard, How Do I Make it Easier?
When someone wants to climb Mt. Everest, they don’t just grab a bunch of random items and head toward the top. So too, it will make your life easier and better if you find a guide. You can do it on your own, but the question is, how many mistakes will you make? How much will those mistakes cost you?
Climbing mountains isn’t for everybody, and Flat Rate isn’t either. But if it’s for you, the Flat Rate Academy can be your guide. We provide the map, the packing list, and lead the way. With the help you get, you can go further, farther, and faster and start to dominate your competition while they struggle to patch up the old sales model. Some resources to get you started:
- The Flat Rate website: The Flat Rate website is a resource for customers and dealers alike. It will list key benefits of Flat Rate managed print and showcase Flat Rate Certified dealers as well as Flat Rate Affiliate members who support the model.
- The Flat Rate Acadamy 10 Day Live Stream Challenge: You’ll be able to join the fun starting Monday, April 19th through April 30th. Visit https://www.flatrate.world/10-day-challenge for the details and to register.
- The Flat Rate Acadamy community: You can join our private community to learn and grow with others looking to the future of managed print. You can access the group HERE.
- Flat Rate Mentoring: We have a proven program for dealers and ecosystem partners looking to start a Flat Rate offering quickly without making common mistakes. Simply contact us at [email protected] to learn more.
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