As an MPS Dealer you have noticed that the times are changing. There is an all-out war for pages. Margins on CPP are under pressure. What is a Managed Print provider to do? Change the game by billing by seat instead of by page.Last week at the ITEX show, David Ramos and I debated on the benefits of CPP vs. Seat Based Billing. This blog summarizes the arguments that I presented in favor of Seat Based Billing.
Here are the top 5 advantages to SBB over traditional CPP billing:
PROTECTION: Page volumes are declining
- The debate on whether or not people are printing less is over. The only question that remains is by how much it is declining per year. Estimates vary from 2% to 5% per annum.
- Declining pages in a CPP model lead to declining revenue.
SIMPLIFICATION: Your business bills by SBB for Managed IT Services
- Offering both MPS and Managed IT? It doesn’t make sense to bill your customers in 2 different ways. Your customer doesn’t like it, nor does your billing department.
- SBB allows for revenue layering. Dealers can increase PSB levels by layering additional value-added-services on top of original contracted seat to increase revenues over time!
ALIGNMENT: SBB aligns you better with your customers’ needs
- Under a CPP model you want more pages to increase revenue. Your customer wants to print less pages.
- Your customer wants to print color only when necessary but you want them to print more to make up for price pressure on monochrome profits.
- SBB allows for increased/decreased printing to become irrelevant as a savings mechanism.
PROFITABILITY: Adding solution software revenue is extremely profitable
- Gross Profit levels for Managed Print under CPP are under downward pressure.
- Adding software solutions that address workflow and print governance are highly profitable – upwards of 70% GP.
STICKINESS: Customers are using software to streamline all kinds of workflows
- Combining traditional Managed Print and adding print governance under a SBB contract allows for crazy glue like stickiness.
- “Selling” solution software for a one time revenue gain gives 100% of the benefit and control to the customer. Why let that happen?
- Layering solutions into a seat price means the customer has more reasons to stay with you as their provider. If they leave you, so does all the software!
Need help getting your head around how to build a profitable SBB practice? We have created a variety of tools to help implement PSB billing in your business. These include:
SBB Calculator: We have developed a calculator to help you ensure profitable SBB contracts.
SBB Assessment Tools: Conducting a thorough user and document based assessment will be critical as you build your SBB offering.
SBB Contract Modeling: We have sample contracts to ensure you understand how to protect yourself against the risk of increased color printing and additional users.
SBB Print Governance Tools: Print Audit has 15 years of user and document based print governance experience! Our toolsets are designed to ensure your SBB practice is fully within your control!
For more information about Seat Based Billing or to gain access to the tools mentioned above, please contact us at 877-412-8348 or 403-685-4932.