Mach FTD - Relax presentation from Domino UK
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Transcript of Mach FTD - Relax presentation from Domino UK
Printing solutions from a completely new perspective
The Origins of Relax
Industrial Service Contracts in NetherlandsPay per code contracts in Spain and FranceRelax type contracts in Mexico95% of business with Relax deals in Norway80% of business with Relax type deals in Chile
The Origins of Relax
Set up the business differently than the competitors (Norway)Customers want to outsource coding equipmentCustomers asking for a complete solution by DominoCustomers asking for one contact only for their coding equipment
Content of a Relax contract
Machine (A-Series Classic and plus, Macrojet/CaseCoder, JetArray, Bitjet+, K-Series, C-Series plus (Med/Hi Res), S-Series plus, DSL plus, M-Series, V-Series and now G-Series)Accessories/ApplicationsServiceConsumables delivery (Spares, filters, inks, ribbons, labels, printheads etc.)
Monthly rate for customer
A-Series (Classic and plus)Excl. Opaque/FoodgradeS-Series plusC-Series plusCP(Bitjet+, DOD)Print & ApplyTTOTIJ (G-Series and L-Series)
Financing the machines will be done locally through normal working capital
Machines will be on local fixed assets i.e. Domino retains ownership
Regular maintenance visits based on customer needs/running hoursAll spare parts includedTravel time of engineer includedOn site time of engineer includedQualified emergency calls includedFree software updatesBack up machines possible
Low risk inks (cartridge, reservoir, make-up, wash)Laser tubes, filtersRibbons, printheads and labelsMonthly delivery plan agreed with customer and handled automatically with system (if possible)Delivery amendments possibleHalf-year reviews on consumption
Any accessories/applications can be added into the contract including:NetworkTraversing headDPXsBrackets, touchscreensbutNo complicated specials
Mandatory if the customer is newMandatory if the technology is new to the customerTraining offered according to local offer including:Operator trainingUser trainingOne off training or regularly throughout contract
Duration:3-5 yearsPayment:MonthlyInstallation/trainingBuilt into monthly charges
At the End of a Contract
Ideally:Contract is prolongedmachines are exchanged for new ones, orkeep existing machines and just supply aftermarketEither way requires new calculation of the contractOptional:Sale at market pricesContract ends, machines are taken backCustomer purchases new machines using capital route
The Concept Customer Advantages
Cash is not used on capital expenditureDomino provide finance at a competitive rateTotal peace of mindEverything is covered = service, machine, consumables, training (bundles all product parts)On time delivery of aftermarketSave costs for raising purchase ordersAccounted for as a running costPossibility to get new machines without budget processTax advantage (potentially off balance sheet)
The Concept Customer Advantages
Free/regular scheduled consumables delivery without extra purchase orderRegular consumablesLow effort and low administration costsCustomers engineers can focus on other areas of the production
Main Interest of Customers in Relax
Cash is not spent on capital expenditureThird party finance providers rates may be prohibitiveOutsourcing coding equipmentReplacement of leasing (one face to the customer)
The Concept Advantage for Domino
Customer is brick walled for length of contractImproved customer intimacyOne concept approach through out DominoDifficult for a competitor to undercut priceScheduled service visits improves efficiency of serviceKnowledge of exact equipment time scalesBundles additional after market products into the transaction (training, service, ink contract)
Large customer sites, MNCsCompetitor sites esp. with high ink usageCustomers with high ink usage especially where technology does not provider refiller protection (C-Series)Customers with old equipmentWin back customersStable customers (regular payments record). Not to be used as a last resort when customer has no cash and no source of third party finance due to poor credit references
High pressured accounts24/7 competitor accountsCompanies with operational budgetsCustomers where Group policy prevents buying DominoLow margin products (e.g. dairy, sugar)
Schedules and ships regularly consumablesReports on profitability by generating reports on revenue (paid monthly rate by customer) and costs (service engineer on site time, spares etc.)Possibly invoice or credit note for customerAnnual reviews to adjust the monthly rate
Printer specificationCustomer/production specificationCredit worthiness of customerGives a monthly rateCalculates the consumablesDiscount checkAutomatic quotation
For more details
For local strategies and coverage for Relax contact your local sales management team.For further Relax details including the latest calculator contact Mark Holland (firstname.lastname@example.org)
Several countries around the world had some business with Relax type contracts. Mostly they were one off contracts that were set up for one customer individually. This made it difficult for salesmen to offer it as a standard option to customers. It took a long time to calculate and fix the contractual issues. So Relax contracts were only offered if the customer specifically asked for it.
There were two countries which had developed Relax as a competitive advantage: Norway and Chile. To differentiate themselves against standard offers by competitors both countries started to sell Relax type contracts and have become extremely successful, profitable with it being the leader for coding and marking in their country.Today Domino sees that the market requirements for Relax type contracts are growing and there are good reasons why you should be able to offer Relax. Relax can clearly be a way of differentiating your offers from competitors. Norway has done this successfully. Their position in the market was very weak and they need something to differentiate against the strong competitors. So they created a Relax type contract and took that into the market. It was so convincing for customers that Norway does 95% of their business with contracts today. It has made them the market leader.
There are additional reasons to offer Relax. Some customers dont want to look after their coding equipment. With Relax Domino takes a lot of the responsibility away. Customers asked Domino to provide a complete solution out of one hand including the financing of the machine, service and ink deliveries. Relax includes all this.
Domino can offer now a product with the name of Relax.Relax has to be seen as a fixed product as it is defined here. Any variations of this shall not be called Relax. There may be though variations in terms and conditions to suit laws and regulations of the country.
The Relax contract contains the following services:
Machine (A-Series, S-Series Laser, OCC, CP, PALM, TTO): This means that the machine is financed and owned by Domino (subsidiary or distributor)Accessories: brackets, shaft encoder, photo cell, stand etc.Applications: traversing head, special softwareService: all service performances (will be covered more detailed on slide 7)Consumables: ink cartridge, ink reservoir, make-up, wash, filters, spares
All the costs for this are calculated and brought together in a monthly rate, which the customer has to pay.The product range that can be offered may vary throughout the countries depending on their strategy or market requirements. The range mentioned here is based on the calculators which have been developed.
Difficult inks like opaque and foodgrade have been excluded because the service effort to maintain these machines is much higher and irregular. That makes it difficult to calculate reliably.The financing of the machine is in the hands of Domino (subsidiary or distributor). This means that the distributor/subsidiary has to find the solution of financing the machine. The Domino UK head office is happy to give assistance on this if guidance is needed. Covering the financial part means in most countries that the machines will be on the local assets (this may vary from country to country).
Financing the machine does not mean that this part can be covered by a leasing contract. The customer should have only one point of contact for a Relax contract: Domino.The listed service points are all covered in a Relax deal. This means not only regular maintenance visits are included but also unexpected break downs. Of course the break down is only covered if the machine was handled properly. So a qualified emergency call means that if the machine breaks down or has a problem the customer has to call the hotline or the service engineer first. It may well be that the help-desk can solve the problem by the telephone. If not the help-desk or service engineer will decide and plan a service call at the site of the customer. Break downs resulting in misuse of the machine, using non Domino service, spare parts or inks, destruction, force majeure (flooding, earth quick, lightning etc.) are not covered by Relax. Any repairs resulting from the mentioned reasons will have to be paid extra.
The travel time to the site, the on site time of the engineer is included and is taken into consideration in the calculation of the monthly rate (see calculator).
The back up machines are only offered if the customer needs