Print Management Insider Blog

5 Signs Your MPS Program is Stuck in 2006: Sign #5 - You think CPP is still the best way to charge for MPS

Posted by West McDonald on Nov 6, 2014, 11:23:46 AM
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Welcome back to “5 Signs Your MPS Program is Stuck in 2006”. In last week’s entry we looked at sign #4 which you can find HERE.  This week, let’s look at the 5th and final sign your MPS business is stuck in 2006:

This installment is very important. It is “The future of your MPS practice” type of important. Here are the facts:

    • We live in an age of declining pages (or flat growth at best).
      • There is NO argument here, just a question of by how much decline we’ll see in the next 5 years.
      • Millennials are entering the workforce and they print far less than the people they are replacing.
      • The Cloud is offering new ways for people to approach workflow and mostly these workflows get rid of paper-based processes.
    • CPP could kill you in the coming years. Well, not YOU the person, but your MPS practice.
      • As volumes decrease so do CPP revenues.
      • CPP competition is tough and margins are getting tighter every day.
      • If volumes decline by 20% to 30% in the coming 5 years that could put a lot of MPS companies out of business.
    • CPP is just a billing mechanism, nothing more. Nothing personal.
    • You can help your customer to print less, make less revenue, and still come out with more gross profit. True story.

I’ve had people call this counter-intuitive. I would agree that trying to make less revenue and make more gross profit is close to impossible under a CPP program. But CPP isn’t the only way to bill for managed print. Some MPS providers sell “all inclusive” cartridges. And more progressive MPS shops are exploring flat-rate or per-user billing models.

Why is per-user a better way to bill for MPS in this hybrid world of screen-based workflows and the printed page? Because it aligns both customer and provider needs. The customer wants to pay less for print and the provider wants to make sure that revenues are predictable and stable. Print Audit has built a sales model that allows for a 20% to 30% reduction in customer print spend while at the same time INCREASING total gross profit by 5% to 6%.

How does this alignment occur? How can you make less MPS revenue and still increase profits? What is the secret? You’ll have to contact Print Audit to find that out. We’ll be waiting for your call.

Click here to download the free e-Book that contains all 5 signs your MPS business is stuck in 2006!

Topics: 2006, Billing, business, business strategy, Cost Per Page, CPP, Future, managed print, Managed Print Services, MPS, Office Equipment Dealers, Past, print audit, print management, print tracking, printers, printing, sales, strategy, success, Tablet

West McDonald

Written by West McDonald

West McDonald is Vice President of Business Development for Print Audit.

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