How to Avoid Toner-Coverage ‘Gotchas’

Every managed services contract has its challenges. For managed print, one of the biggest is toner coverage. This area of the business can be a huge “gotcha” for service providers if it doesn’t get the proper attention.

“Toner coverage can make or break a managed print account,” says Jim Hotze, owner of Patriot Group Ltd., a Bellaire, Texas, provider of printers, copiers, other equipment, document management software, and services.

He notes that many toner manufacturers base their black toner cartridge yields on the ISO IEC_19752 test page with 5 percent coverage. “I do not believe that they chose this 5 percent based on any study of real-world usage,” Hotze says. “Our experience has found that in real-world commercial activity, the coverage averages from 7 percent to 12 percent.”

Get Accurate Data

So there are two things Patriot Group does to gauge a prospect’s toner coverage before quoting a managed print services engagement. First, when talking with a prospective managed print services client, “we typically are allowed to have a walk-through of their facilities to inspect their current printer fleet,” Hotze explains. “At the same time we are taking this walk-through, we observe their typical prints. We engage the end user on what type of printing they are doing and ask them how the printer they use is doing a good job for them. You can get a lot of information this way.”

Second, Patriot Group asks the client to use its toner usage labels, which allow the customer and Patriot Group to know exactly what the page coverage is and what the costs are. The label, similar in size to a manila file folder label, is placed on the toner cartridge before it’s installed. The label contains a space to write the beginning page count. When the cartridge comes to end of life, the ending page count is recorded on the label. When the cartridge is returned to Patriot Group for recycling, the company can calculate the page coverage.

Most of its clients have no idea how much they are paying per print and are very interested in determining that by using this simple method, Hotze says.

Hotze says that his company’s research has found that lawyers and CPAs typically are at the high side of the 7 percent to 12 percent range, while most general businesses are in the 7 percent to 8 percent range.

“There are also ranges of coverage in different departments within a business,” he adds. “We try to get a toner label study done and if we do not have the time, we use the walk-through to gain the information we need to estimate a particular customer’s toner coverage.”

Special Considerations For Color

Hotze says service providers can lose a lot of money with toner usage for color printing. “Many years ago, when we did our first MPS contract on a color printer, we assumed that no one would be printing more than 45 percent coverage,” he says. “Lo and behold, they ended up averaging 140 percent. Those PowerPoint slides with solid blue backgrounds killed us.”

This was just about the time Xerox introduced the PagePack™ program, Hotze says. “We bought a new PagePack version of the printer the MPS contract covered,” he says. “PagePack is like an insurance policy. It limits your exposure to high toner usage of clients, and in the color arena that risk can be very high. We now do not even consider offering an in-house MPS color contract when we can use PagePack.”

One great opportunity Patriot Group has found is in marketing departments of companies that have high color toner coverage applications. “These applications are printing brochures, proposals or PowerPoint presentations,” Hotze says. “We know that we can save them money selling them a Xerox PagePack printer and contract. The trick is to be able to show them how much they are currently spending on a specific job.”

For this, Patriot Group uses a software package called APFILL, which Hotze says rasters a PDF file and reports the color coverage for each page in a job. “With that information, you can factually show the prospect the cost per print job they [gave] you to analyze,” he says. “You can then base the price that you are charging for PagePack pages on a healthy savings for the prospect and an assured high profit for your dealership. By [receiving] a detailed and fact-based cost analysis, the customer can easily justify a printer purchase and a margin-rich PagePack contract.”

The Green Defense

Hotze notes that there’s a problem all managed print service providers have: a customer removing the toner cartridge before it’s empty. “Since the customer is no longer ‘paying’ for toner, they have less motivation to run the toner cartridge dry,” he says.

The only defense against this that Patriot Group has found is to appeal to the current interest in the environment and conservation.

“We put labels on our MPS toner before they are shipped suggesting to the customer not to be wasteful and not to replace the cartridge until the printer indicates that the current toner cartridge is empty,” Hotze says. “By doing this, they will reduce the amount of wastage and fully use the contents of the installed cartridge. For most of our clients, this gentle reminder works. We have found our customers are responsible people and react positively to this message.”