By Gene Marks, SMB owner and New York Times contributor
Just this month Xerox launched a new plan specifically targeted at small businesses – like yours and mine. The plan, called the Small Office Savings Plan, is innovative. The idea is this: rather than paying a la cart for printer supplies and services why not just pay a monthly fee? Oh, and they’ll throw in a free printer too.
Does this make sense for your business? For mine? It does. But you may be surprised why.
At first, we think: OK, we’ll sign up for a monthly plan and in due time we’ll wind up saving money. And yes, depending on your printing volumes you’ll save some money. And you’ll get that free printer. But that’s not really the reason why we’d do this. There’s another reason.
But first…the math. And the money.
Let’s say you print about 500 pages a month, or about 50 pages per employee if you’ve got just ten people like me. That’s about a dozen pages per person per week which, considering our client mailings, proposals, quotes, contracts, spreadsheets and other things we do is about right for my company (so much for the paperless office). At that pace, I’d be a great candidate for the Phaser 6500 color laser printer (which sells for about $400). If I sign up for the two year Small Office Savings Plan I’d pay about $59 per month which I can use for cartridges and services. Given my 500 pages per month, over a year’s time I would use up about 3 monochrome (that’s black & white) and 13 color cartridges for a cost of $1,221. Or $51 a month. And that negligible difference is more than offset because service is included if it’s needed (Xerox charges extra for service plans) and don’t forget…I get a free printer which I can keep forever.
Make sense? If I’m printing a little less or a little more than 500 pages a month then the cost is a little different. But it’s a negligible difference. Xerox has different plans for higher capacity printers if you do more printing than me. But the end result is still the same. If you’re matched with the right plan based on your printing volume, the cost of your monthly plan should be about the same as your cost of supplies if you just bought them as needed. But of course, don’t forget the free printer.
So with the printer and added available service you may save a few bucks. But really, money is not the primary driver behind this plan. There are other, more important reasons why you and I would do this. It has to do with psychology. And cash flow. And relationships.
It’s psychology because you don’t have to think about the expense of a printer cartridge every time you need one. And you know you do. I do. And I don’t like to think about it.
It’s cash flow because you can now avoid the unexpected fluctuations of shelling out hundreds for new cartridges one month after going for a period without paying anything. A flat monthly amount is easier to project and budget – there are no surprises.
And there’s your relationship. With Xerox. With your office supply partner. These are companies and people that are big part of your business. Entering into a long (not that two years is that long) agreement has an intangible effect. It says that you are a long term customer. That you’ll be sticking around. That you have value. When my clients commit to long term contracts with me there’s an extra level of service, a gratefulness and appreciation that we feel. It’s intangible. But it’s there.
This is why I predict that many small companies will enjoy this new program. Sure it’s about money. But it does go beyond that.