Managed Print Contracts – what to look out for.
CSR Digital’s, James Rowden takes us through what a managed print contract is, what to look out for, and why.
With the need to drive down office costs, companies are increasingly leaning towards Managed Print Companies to help them bring their office spend back under control. In theory, the offering sounds very attractive, full support for devices when things go wrong, full supply automation for any consumables requirements ongoing reducing stock requirements on premise, whilst reducing your costs to print! This all sounds great, and with your due diligence, the right Managed Print Company will be as good as they say they will be, but there are caveats to watch out for, some of which the Salesperson may not wish to go through with you.
It must be said, contracts in general are not to everyone’s taste; especially Small business owners, whom will have very little time to spend on activities designed to save them money, as it’s inevitable their time will naturally be focused on spending it where they can earn money. Larger organisations will have the resource internally to fully review contracts, whereas the smaller company simply won’t have.
Last year the Federation of Small Businesses (FSB) expressed that more than half of small businesses have been ‘hit’ by unfair contract terms for managed print. Fifty-two per cent surveyed said they had signed up to unclear inflexible contracts with Managed Print Companies. It’s estimated £4 billion over the last three years. And to top this off, two in five feel powerless to do anything about these terms as these companies feel many suppliers are too big be to challenged.
Given what we do as a business, a family run Managed Print provider in Milton Keynes, we’re regularly speaking with local companies across Milton Keynes so naturally, we hear about the most common “stings” companies have be caught with, and some of these unfair contracts are binding for many years, costing excess thousands before the customer can be free from their provider.
Below are some key questions to be asking your potential provider, before signing on the dotted line.
How many years does a managed print contract tie me in for vs. cover for the devices?
I have seen, on more than a couple of occasions, that business have not fully understood the difference between a rental contract and a service contract. A service contract is between you, the customer, and your supplier. The rental agreement is between you, the customer, and the finance house for the hardware. In theory, you’re almost always better off to make sure your service agreement covers you for the number of years your rental agreement is in place for. In the small print of the rental agreement, to ensure you do not fall foul of their terms, it will stipulate you are required to ensure your device is fully supported by a reputable service provider anyway. Finding a company that will take on service of legacy printers is not easy, and most of the time, not cost effective.
Are my prices fixed? What’s the Increase?
It is understandable, just like a car, it is reasonable to expect the costs of running a car to increase as the age and mileage of the car increases. Printers, just like cars, require the same attention of their serviceable life, to ensure they’re kept in sound working order. So it stands to reason you will need to expect an incremental increase year on year to maintain your office printers. That said, a contract is there to protect you, the customer, as much as it’s there to protect the supplier. Make sure you read the small print for the upper limits of this agreement. A sensible increase year on year should not exceed 10%, as realistically, supplier costs are not likely to increase beyond this. Even with Brexit and current global market influencer’s, costs 2015 – 2016 & 2016 to the present have only increased around 8-10 percent. So a contract which allows for upto 15% year on year is, in my opinion, highly unfair, and unnecessary.
Do I have a minimum bill that you haven’t mentioned?
Also make sure you read the small print! Within contracts, it is fair to expect a supplier to need to cover their costs to support you. This should only mean a monthly minimum of £15 – 20 a month to cover them annually to the odd service visit required. I have seen minimum bills put in place way in excess of this per device, meaning a customer rarely hits their minimum volumes, which means the customer ends up paying for prints they haven’t even used! Where is the value in that?
Does a 4 hour response mean, they simply turn up within 4 hours to say they will be with you in days with the necessary part?
This tends to be more common place with larger suppliers where the bottom line tends to be king, more so than with smaller independent suppliers. One of the more common complaints when speaking with local businesses tends to be that the customer will see a service engineers within 4 hours, to only to told they will need to order up a part they do not have with them! The supplier has met the obligation to attend within the 4 hour response, but ultimately, the service signed up for, is not there!
Have you fully read the contract?
Ultimately, you need to take the time to fully read through the contract. If you’re not sure, it never a bad idea to contact another provider and ask them to run you through their procedure. You are far more likely to hear sound advice with the pro’s and con’s to look out for; as after all, it’s in their interest to help you! You may just decide they’re more trustworthy.
For your sanity, and the company wallet, it’s important to run these questions by your ‘would be’ supplier before signing. Taking your time to scrutinise the small print could save your business thousands avoiding lock-in with the wrong supplier.
If you are thinking about managed print services, take a look at what we offer at CSR Digital, if you have any questions that you would like to ask us, feel free to contact us for more information on 01908 30 50 83, 9 – 5pm Monday to Friday, or contact us at firstname.lastname@example.org
From the team at CSR Digital.