News About Generic Photoreceptor Belts

By Raymond Cote

How to price your services

By Raymond Cote

When I retired from Xerox as a field service engineer, the last thought in my mind was servicing a copier of any type. It was supposed to be all fishing and playing with my grandchildren. The fishing part was cool, and lasted almost the whole summer. The grandchildren are still my number-one priority, and when they go home at 6 o’clock it’s just the wife and Barney, my Bichon Frise—all 12 pounds of him. Here was an excellent opportunity to do some serious home improvements on our frame house. Preparations were made for painting and plastering and general repairs as needed. When the project was completed, the call of the wild returned and I again went back to the old boat and did some more fishing. Now, don’t get me wrong—fishing is a great way to spend the day, and from where I was in Long Island Sound I could see the commuters on the highway in their infernal traffic jam trying to get into the city or go home from work. It was reassuring to me that at long last I was doing something that made me happy. Or was I?

Near the end of that first summer I got a call from a friend that owned a copy shop, and my first reaction was to politely refer him to the toll-free service line for his dilemma. Somehow—or should I say, “somewhere”—inside of me was this little kid trying to say, “Just do it and have a good time at it.” The little voice—and there are always little voices—said “Go do the call and see where that leads.” Before I knew it I was driving along with a handful of tools that I used for the repair of my car—of which only two items would really be of any use on a copier—the screwdriver and the pliers. But it looked good carrying all these tools in a larger-than-average toolbox. It looked professional, I suppose, and it was as heavy as hell!

As I was driving to my destination, all I could think about was: What the heck should I charge him? The problem with the copier was already resolved (in my mind) and I was not concerned about it. The nagging question was the service call charge. When I arrived, I discovered the problem was even simpler than I ever thought—but I could not tell the customer that. To drag the call out, I made sure that all High Frequency Service Items were replaced—and all the parts for the repair were all behind the machine waiting for me. Finally, after an hour of putzing around, I returned the copier to the customer for a few test copy runs. When the customer was happy with the results, he folded some bills in his hand and handed them to me. When I examined the bills, there was $150 in all!

“Wow!” was my first thought—I’m back in business, I’m alive again. I didn’t give up on the grandchildren or my favorite sport, fishing—they were on a back burner, not to be ignored or forgotten. What impressed me was the fact that I was once again productive.

Less than a year after my retirement, I found a new wave of excitement in doing something that actually helped someone out. And the little voices were now directing me to the next phase in my life. I had an uncle once say to me: It’s okay to talk to yourself, so don’t ever feel embarrassed if you find yourself doing that. Where you should draw the line is answering yourself out loud! It was good advice and I would like to pass it along to you. As I re-entered the independent service industry, my pricing structure was about as unstable as the roller coaster ride at Coney Island. I was charging different prices to almost everyone. As I met other independent service providers (ISO) I would always bring up fees and charges for services. Finally, after many interviews with other ISOs, a pricing structure was established for Time and Material calls.

Most of my customers are on a Time and Material (T&M) price system and that seems to work fine for me. However, there are those customers that want to be able to project maintenance costs on their copier for the foreseeable future. Time and Material (T&M) is fine for us independents, but for some copy shops and printers they need something a little more stable. The service agreement sort of evens out the peaks and valleys in parts consumption—for, as everyone knows, the cost of some components can be extremely high.

In my experience with service contracts, I would sometimes run into a brick wall trying to evaluate and collect data. It seems that most customers are either unwilling or don’t truly know what the other company charged them for a similar service contract. My opening remark about Full Service Maintenance Agreement (FSMA) contracts would be simple: “My company will give you an across-the-board savings of 25% over the manufacturer’s contract.” That usually works for me. Even at a 25% savings, there is still a lot of money to be made in this business.

Someone once told me that there were about a thousand different copiers in the field—and that includes service agreements as well. Where do you start? What do you look at first? The little voices in your head, of course! Go ahead and stand in front of that mirror and talk to the voices—they will tell you what you need to know. There is probably a formula somewhere to do just about everything in life. With Xerox high volume copiers and printers, it’s really simple: The mechanics have already been done and the formulas have been written by Xerox, so why not use the information?

Here is the secret that Xerox doesn’t want you or anyone to know: On average, it costs about $1,000 per million copies to maintain a Xerox 5090 or Docutech NP-135 printer. That’s correct—do the math and you will discover that the price per copy is $ 00.001 (a mil, one-tenth of a penny). On average, the cost of labor is about $ 00.003 (3 mils) per copy. Your actual cost for labor could be higher or even lower. This works when you have a trained key operator on site that you can talk to over the phone and give guidance to on minor problems. Call avoidance is critical and is especially helpful in reducing customer visits. Scheduled maintenance is critical in keeping the planned customer visits down to a manageable level. Supplies will add another $ 00.00122 (122 mils) to the cost of doing