The Ricoh acquisition of IKON wasn’t kind to Canon. The company took a pounding as a result, losing some serious business. Canon isn’t sitting back and waiting to see what’s going to happen next with the Canon equipment that was originally placed by IKON, knowing full well that there’s a good chance that if they don’t do anything, that Canon equipment is going to be replaced by another brand (Guess which one?). That’s why Canon and Canon Financial Services (CFS) has unleashed the Canonball program that’s running through the first six months of 2013.
If you’re a Canon dealer, this isn’t news to you. If not, it’s a perfect example, of a company drawing a line in the sand, taking the bull by the horns, oh well, you know what I mean. The Canonball program is described by Canon as “an aggressive IKON Canon placement take out program”. And aggressive it is.
The program targets customers who have Canon equipment on an existing active lease originally placed by IKON. It doesn’t matter who the customer’s lease is financed by. What Canon’s financing arm, CFS, is doing is offering credits to offset the customer’s remaining IKON lease payments when placing new Canon equipment on CFS leases. It’s not a bad approach and provides for up to nine payments for leases within term (Non-Renewal status) and up to three payments for leases beyond term (Renewal status), however all new transactions must be financed through CFS.
It’s all about taking out IKON and taking back their market share.
Besides targeting existing IKON customers, the program targets Canon copiers, MPS, and printers on an IKON contract on lease.
Replacement terms are generous and reasonable with dealers receiving credit based on one installed model for each displaced model. The new model must be one segment lower, the same segment or two segments above the displaced model. Lease terms are also generous in that it can be either a CFS or non-CFS lease, and also includes cost-per-copy agreements.
Existing leases receive credit for remaining lease payments up to 9 months or 10 percent of the main engine MSRP, whichever is lower. For leases at the end of the term, there’s a credit for remaining lease payments up to the three months or 10 percent of the main engine MSRP (whichever is lower) based on the return/buyout quote. A return/buyout quote provided for leases at lease end will be divided by monthly payment to determine the number of months required to buyout. If the quote isn’t included only a one-month credit is offered.
To keep things simple, CFS will send a check directly to the end user for non-CFS leases, apparently with no exceptions. For CFS original leases, CFS retains payments, applying those to the original lease date guidelines.
There is one stipulation, however; any transaction submitted to CFS for funding or purchase order issuance prior to January 16, 2013 is not eligible. Outside of that, the program is valid for all eligible equipment orders signed between January 16th 2013 and PO issued by June 30, 2013.
The transaction must be completed, including customer acceptance of equipment and complete dealer invoice with serial numbers, and received by CFS no later than July 15, 2013.
One dealer tells me that the Canonball program has been very successful in the past. “We were able to get a number of big accounts,” he says. “The only problem now is the credit goes to the customer in the form of a check; this makes it hard to work into the deal. Now a customer has to pay off the lease instead of the Canon Dealership closing out the old lease.”
Granted, programs like this are introduced all the time, but this time Canon is approaching one of their primary competitors with a vengeance. And this time, it seems to be personal.
