{"id":3139,"date":"2012-07-11T15:09:08","date_gmt":"2012-07-11T15:09:08","guid":{"rendered":"http:\/\/www.theweekinimaging.com\/?p=2574"},"modified":"2012-07-11T15:09:08","modified_gmt":"2012-07-11T15:09:08","slug":"the-second-biggest-threat-to-the-office-technology-industry-what-no-supplymaintenance-agreement","status":"publish","type":"post","link":"https:\/\/www.enxmag.com\/twii\/feature-articles\/2012\/07\/the-second-biggest-threat-to-the-office-technology-industry-what-no-supplymaintenance-agreement\/","title":{"rendered":"The Second Biggest Threat to the Office Technology Industry: What No Supply\/Maintenance Agreement?"},"content":{"rendered":"
\"\"<\/a>

Andrew Ritschel<\/p><\/div>\n

Last week Andrew Ritschel, president of Electronic Office Systems (EOS) in Fairfield, New Jersey, shared his thoughts on the three biggest threats to the independent dealer. As a point of clarification, he e-mailed me to say that these threats affect not only independent dealers but manufacturer\u2019s direct branches as well.<\/p>\n

To recap, the three threats include manufacturer\u2019s irresponsible down-the-street pricing, customers declining to take supply\/maintenance agreements on their equipment, and insanity when pricing MPS.<\/p>\n

Most readers have read about pricing woes plenty of times by now so we\u2019re not going to beat that dead horse right now. Instead we\u2019re going to delve more deeply into threats #2 and #3 during the next two weeks.<\/p>\n

As Ritschel said last week, customers who decline a supply\/maintenance agreement on their equipment is one of the greatest threats affecting the industry even though many dealers may not recognize it as a threat just yet. The reason customers are foregoing the supply\/maintenance agreement is because the equipment is more reliable than it\u2019s ever been.<\/p>\n

\u201cPeople are looking to save money so when those supply\/maintenance agreement invoices come up, if they\u2019re not tucked away in pass through leases as part of a lease payment, they\u2019re apt to say \u2018We\u2019ll do without,\u2019\u201d says Ritschel. \u201cA maintenance agreement is basically our cash flow and our profitability. [Not having one] unties them from us for supplies and allows them to go onto the Internet and start buying supplies at whatever ungodly price suppliers are selling the supplies for, possibly buying generic brand supplies and using them with the equipment that we<\/em> place that eventually we<\/em> might have to service.\u201d<\/p>\n

EOS is now asking its reps to work pass-through leases into proposals. \u201cHere\u2019s the retail price of the equipment, here\u2019s the discounted price of the equipment, here\u2019s your lease pricing, here\u2019s your maintenance contract pricing,\u201d explains Ritschel.<\/p>\n

In his opinion, it\u2019s a matter of survival.<\/p>\n

\u201cIf all of our customers just bought the equipment at the discounted purchase price or leased it at the discounted purchase price we\u2019d be out of business very quickly,\u201d maintains Ritschel. \u201cWe, like everybody else are putting the equipment out there to capture the service and supply business. The amount of profit we would need to make if we weren\u2019t selling maintenance agreements and supplies would have to be much greater than what we\u2019re making right now.\u201d<\/p>\n

Ritschel is a member of Kyocera\u2019s Dealer Council and recently asked Kyocera engineers who were visiting from Japan to incorporate some sort of \u2018idiot\u2019 light on the machine that dealers can program to remind them they need to schedule a service call for cleaning once every four months or once every six months as opposed to basing the service on the number of clicks.<\/p>\n

\u201cI told the engineers it\u2019s because they feel the equipment is so reliable that we need to send a technician in periodically just so they think the machines are calling for service,\u201d recalls Ritschel. \u201cThey said, \u2018Why would you want to do that, they\u2019ll just perceive that the Kyocera equipment is so good it doesn\u2019t need service anymore.\u2019\u201d I said it\u2019s not that they\u2019re going to perceive the Kyocera equipment is that good, they\u2019re going to perceive that all equipment has gotten to the point where it doesn\u2019t need service contracts anymore.\u201d<\/p>\n

It comes down to positioning.<\/p>\n

\u201cCustomers don\u2019t understand the contract is not just an insurance policy,\u201d states Ritschel. \u201cYes it is an insurance policy and yes it does cover the cost of your supplies, but it\u2019s also the systematic payment of parts that are very expensive and consumables that need to be replaced in the machine, and you\u2019re prepaying them down in small bits and bytes so when that expensive fusing section or expensive transport section needs to be replaced it\u2019s not a massive $800 or $1,500 cost. When customers get that bill because they don\u2019t have a maintenance agreement they hate you, hate the machine, and they hate the manufacturer.\u201d<\/p>\n

There\u2019s another danger he sees in not having a maintenance agreement.<\/p>\n

\u201cThey\u2019ll put up with things that aggravate them, little nit picking things they\u2019re not happy with but don\u2019t want to call about because they don\u2019t want to incur the cost of a service call,\u201d notes Ritschel. \u201cA lot of times those little aggravations are signs they need to get something resolved before it becomes a much bigger problem.\u201d<\/p>\n

What he\u2019s seen is that if somebody doesn\u2019t have a maintenance agreement and they have a service call and the issue is resolved, if another issue pops up one month, two months, or three months later, they try to tie that call to the last call blaming that next call, saying \u2018We never had that problem before you came out and serviced it last time.\u2019<\/p>\n

\u201cThey always try to blame the new call to the previous call in an effort to get a freebie,\u201d laments Ritschel.<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Last week Andrew Ritschel, president of Electronic Office Systems (EOS) in Fairfield, New Jersey, shared his thoughts on the three biggest threats to the independent dealer. As a point of clarification, he e-mailed me to say that these threats affect not only independent dealers but manufacturer\u2019s direct branches as well. To recap, the three threats include manufacturer\u2019s irresponsible down-the-street pricing, customers declining to take supply\/maintenance agreements on their equipment, and insanity when pricing MPS. Most readers have read about pricing woes plenty of times by now so we\u2019re not going to beat that dead horse right now. Instead we\u2019re going to delve more deeply into threats #2 and #3 during the next two weeks. As Ritschel said last week, customers who decline a supply\/maintenance agreement on their equipment is one of the greatest threats affecting the industry even though many dealers may not recognize it as a threat just yet. The reason customers are foregoing the supply\/maintenance agreement is because the equipment is more reliable than it\u2019s ever been. \u201cPeople are looking to save money so when those supply\/maintenance agreement invoices come up, if they\u2019re not tucked away in pass through leases as part of a lease payment, they\u2019re apt to say \u2018We\u2019ll do without,\u2019\u201d says Ritschel. \u201cA maintenance agreement is basically our cash flow and our profitability. [Not having one] unties them from us for supplies and allows them to go onto the Internet and start buying supplies at whatever ungodly price suppliers are selling the supplies for, possibly buying generic brand supplies and using them with the equipment that we place that eventually we might have to service.\u201d EOS is now asking its reps to work pass-through leases into proposals. \u201cHere\u2019s the retail price of the equipment, here\u2019s the discounted price of the equipment, here\u2019s your lease pricing, here\u2019s your maintenance contract pricing,\u201d explains Ritschel. In his opinion, it\u2019s a matter of survival. \u201cIf all of our customers just bought the equipment at the discounted purchase price or leased it at the discounted purchase price we\u2019d be out of business very quickly,\u201d maintains Ritschel. \u201cWe, like everybody else are putting the equipment out there to capture the service and supply business. The amount of profit we would need to make if we weren\u2019t selling maintenance agreements and supplies would have to be much greater than what we\u2019re making right now.\u201d Ritschel is a member of Kyocera\u2019s Dealer Council and recently asked Kyocera engineers who were visiting from Japan to incorporate some sort of \u2018idiot\u2019 light on the machine that dealers can program to remind them they need to schedule a service call for cleaning once every four months or once every six months as opposed to basing the service on the number of clicks. \u201cI told the engineers it\u2019s because they feel the equipment is so reliable that we need to send a technician in periodically just so they think the machines are calling for service,\u201d recalls Ritschel. \u201cThey said, \u2018Why would you want to do that, they\u2019ll just perceive that the Kyocera equipment is so good it doesn\u2019t need service anymore.\u2019\u201d I said it\u2019s not that they\u2019re going to perceive the Kyocera equipment is that good, they\u2019re going to perceive that all equipment has gotten to the point where it doesn\u2019t need service contracts anymore.\u201d It comes down to positioning. \u201cCustomers don\u2019t understand the contract is not just an insurance policy,\u201d states Ritschel. \u201cYes it is an insurance policy and yes it does cover the cost of your supplies, but it\u2019s also the systematic payment of parts that are very expensive and consumables that need to be replaced in the machine, and you\u2019re prepaying them down in small bits and bytes so when that expensive fusing section or expensive transport section needs to be replaced it\u2019s not a massive $800 or $1,500 cost. When customers get that bill because they don\u2019t have a maintenance agreement they hate you, hate the machine, and they hate the manufacturer.\u201d There\u2019s another danger he sees in not having a maintenance agreement. \u201cThey\u2019ll put up with things that aggravate them, little nit picking things they\u2019re not happy with but don\u2019t want to call about because they don\u2019t want to incur the cost of a service call,\u201d notes Ritschel. \u201cA lot of times those little aggravations are signs they need to get something resolved before it becomes a much bigger problem.\u201d What he\u2019s seen is that if somebody doesn\u2019t have a maintenance agreement and they have a service call and the issue is resolved, if another issue pops up one month, two months, or three months later, they try to tie that call to the last call blaming that next call, saying \u2018We never had that problem before you came out and serviced it last time.\u2019 \u201cThey always try to blame the new call to the previous call in an effort to get a freebie,\u201d laments Ritschel.  <\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[82],"tags":[],"_links":{"self":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/3139"}],"collection":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/comments?post=3139"}],"version-history":[{"count":0,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/3139\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/media?parent=3139"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/categories?post=3139"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/tags?post=3139"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}