It’s no secret that printing vendors make the vast majority of their profits from post-sale products such as ink, toner and paper. However, more often than not, vendors sell printers to people who simply don’t print at robust enough Average Monthly Page Volumes (AMPV) to drive supplies sales enough to make the relationship profitable for the vendor.
As consolidation rumours continue to run rampant throughout the industry, and as most vendors struggle to maintain their market share and value, research firm Current Analysis has completed a study designed to find out more about the printing habits of the industry’s great unknown: SoHo and SME users.
While these customers present a large and growing opportunity, the segment has been blighted over the past three years by price cuts of over 50 percent for some SKUs in low to mid-range printer categories. Many industry vendors admit that these hardware-pricing challenges are very damaging indeed.
In this new competitive environment, it is no longer good enough to sell a printer to anyone, regardless of their requirements. In today’s market, vendors must match the right printer to the right customer.
The Current Analysis study shows that there are specific higher-usage customers, and that there are a number of variables that alter usage patterns.
The Washington DC-based research firm surveyed over 500 users of monochrome and colour single-function page printers to discover who prints and who doesn’t.
They relied on data direct from the printer’s on-board status reports to create an accurate picture of usage history and followed up with a survey to try to determine the variables that affect customers’ usage behaviour.
Printers were broken into four categories: Colour Low for products priced under $500, Colour High for those products priced at $500 and above, Monochrome Low for products priced less than $250, and Monochrome High for products at $250.
The research team discovered that usage trends differ significantly depending on a wide range of variables, including where the printer was purchased, where the printer is located, which specifications alter usage, how many people utilise the printer, how different applications affect usage, how consumables buying trends are affected by usage, and more.
Current Analysis claim their results shed light on the most important topic confounding printer vendors today: Which is the correct target audience for page printer products?
While the study found that many different characteristics drive higher usage patterns, one of the most powerful is the location of the printer (office versus home environments).
Respondents were asked to first identify the brand and model of the printer they use. Answers ranged from colour page printer products from Hewlett-Packard (HP), Dell and others, to monochrome products sold by leading suppliers such as Lexmark, HP, and Brother.
The researchers admitted they expected to find that the location of the printer was a major driver of increased usage, but the study findings showed an even wider difference in usage by location than was previously anticipated.
Respondents who reported that they used a colour page printer stated that it is located in a home office, as opposed to a business office, printed 73 percent fewer pages per month on average than respondents who indicated that the printer is based in a business setting. Monochrome respondents reported 70 percent less usage on average in home environments than in business environments.
The office/home disparity gets even larger when looking at the difference between products in the low categorisations, versus those in the high categorisations. The greatest disparity was revealed in the Monochrome Low section. Monochrome printers purchased for less than $250 printed 918 more pages per month on average when placed in an office than they did when located in a home office environment.
When examining this behaviour trend over one year’s time, it was reported that placing a low-end monochrome printer in a business environment can increase usage by over 11,000 pages. From a consumables perspective, the average toner yield in a monochrome low printer is 4,150 pages with pricing averaging $91. Therefore, a low-end monochrome printer in a business setting will average 2.6 times more in dollars spent on toner purchases than will a low-end monochrome printer in a home environment, or an additional $200 or more in toner sales in the first year of ownership.
With discrepancies as much as 300 percent when simply looking at the differences between user volumes within an office environment and a home environment, it is easy to see why identifying and then specifically targeting users with high-usage profiles can translate into millions of dollars per year for vendors.
The report concludes that vendors that are able to utilise distribution, pricing and promotion strategies to target only the most profitable end users, while at the same time cutting manufacturing costs on unneeded specifications, are clearly the ones most able to increase the effectiveness, and profitability, of each SKU in the marketplace.