Cost Per Image, Cost Per Page, Cost Per Copy, Cost Per Print, whatever you call it, it all started with the copier industry.
The question above was posed by Greg Walters with a recent thread that was posted on LinkedIn. I stated the reply of “I do, I do”, I was that eager kid in the classroom that was begging to give the answer, however after I hit the “comment” button I realized that maybe I don’t know Cost Per Copy billing got started.
My first recollection of a copier billing model that preceded the Cost per Page billing model was one that was used by Duplifax in the early eighties. Duplifax was an Authorized Canon dealer located in Central New Jersey and they adopted a billing model that included something like three cartons of toner for “x” price. But the kicker was that service, maintenance and parts were included for the life of the three toner cartridges (toner kit)! This billing model was a game changer for those of us having to sell against Duplifax or trying to upgrade a Duplifax Canon box.
As sales people we were astounded that maintenance, parts and service was included when the customer purchased the toner. The thought of including toner in a maintenance agreement in the mid eighties was unthinkable for most dealers yet Duplifax turned it around and included the maintenance with the purchase of the toner. Once the toner ran out so did the maintenance agreement. After time we figured out that Duplifax was marking up the toner cartridges by 200-300 percent depending on what Canon model the customer had. Thus when three toner cartridges had a retail value of $90, Duplifax resold the package around $375.
It was soon thereafter that some customers realized that they could get more bang for the buck by buying toner from another source at the regular price and using that toner to extend the life of their Toner Kit. This unscrupulous act then forced Duplifax to start obtaining meter reads from the customer to make sure they were not substituting “extra” toners into their toner kit agreement.
Then there was the regular billing model for maintenance in the early eighties and that model sold a maintenance agreement that did not include toner, and included “x” amount of pages. There were no overage charges or let me rephrase that, for the dealer I worked for, and the dealers that I had to sell against you would sell a contract for $400 and it included 30,000 pages (again no toner, fuser oil and paper).
These types of maintenance agreements led to a major problem, because in the early eighties there was no billing softwarethere was no person calling for monthly meter reads, the only time we found out a customer was over the metered amount was when a service tech went to do a courtesy call (remember those) and or a repair call and the meter was logged. Can you imagine how hard it was to tell the customer that even though the customer had expired you had to buy a new contract and that new contract was only good for 15,000 pages because they went over their allotted amount by 15,000?
Thus these two distinct billing models had their issues. It’s my recollection, and I could be way off, however I believe some of the early adopters of the cost per page billing were the direct operations of Xerox, and Minolta Business Systems due to the fact that they had the bucks to invest in early software billing programs that enabled them to offer the cost per page model.
Please, if anyone has anything else to had we would love to hear from you,
Good selling.
