Shop Talk: CEOs search for the right technology
Digital color copiers enable you to produce everything from coupons and posters to brochures in-house
For fans of the Utah Grizzlies, most of the action takes place on the ice. For the managers of the minor-league hockey team, however, it's the scores outside the rink that really get the blood pumping.
Those scores could make a quantum leap during the next 15 years because the Grizzlies' arena, the E Center, in West Valley City, Utah, has been selected as the site of the 2002 Winter Olympics men's ice-hockey event. How the $10-million company chooses to exploit that coup -- through sponsorships and especially through selling the naming rights for the arena -- could boost revenues by as much as 7%.
Faced with the arena's impending celebrity status, Grizzlies president Tim Mouser knew one thing for certain: the company's marketing materials -- including coupons that are distributed at games, statistics sheets for autograph signings, and presentations for sponsors -- needed to be produced both more efficiently and more economically. It was time to move from outsourcing color jobs to producing them in-house with a digital color copier.
Although color copiers that use top-quality laser imaging start at about $14,000 (compared with the less sophisticated ink-jet copiers that cost less than $1,000), more and more small businesses are buying the digital copiers in lieu of relying on outside print shops to do their color work. The machines can produce everything from small coupons and letter-size flyers to full-color double-sided brochures and full-bleed 11-by-17-inch posters. And when the copiers are loaded with any number of optional features, they can double as either a printer or a scanner.
For example, with the addition of a print controller -- which turns a color copier into a color printer -- the machine can produce everything from color proofs of an original design to endless copies of the final product. Once you've launched a program like Adobe Photoshop on your PC, the print controller also lets you use the copier as a scanner. Add a color editor into the mix, and you gain desktop control of tones while the image is sitting on the platen glass. For many businesses, those applications make a color copier worth its hefty price.
The six-year-old Grizzlies team got its first splash of in-house color with a Xerox DocuColor 5750, a $19,995 machine that an office-equipment dealer had dropped off in September 1999 for a two-month free test-drive. Up to that point, the company's three-person graphics department had been driving 90 miles round-trip to the print house it preferred just to get color proofs -- a hefty order even when a job didn't require same-day turnaround for last-minute tweaking. "There was never enough time," says Mouser, one of several Grizzlies executives who collectively take on at least 20 presentations a week.
The marketing materials for the naming-rights sale brought the time and cost discrepancies into clear focus. For each company that's bidding for the naming rights, the Grizzlies create a 50-page presentation that includes images of the bidding company's logo on such structures as the arena's walls, marquees, roof, floor, and dasher boards (the boards that the hockey players crash into), on street signs surrounding the arena, and in the ice. Each packet produced in-house, Mouser calculates, would cost the Grizzlies about $7; each one outsourced, he says, costs roughly $450. "The whole organization ultimately realized that a color copier is not necessarily a luxury -- it's a tool of profitability," he says.
Though Mouser was happy with the efficiency of the Xerox DocuColor 5750, he wanted to see how a couple of other models -- a Minolta CF910 and a Sharp AR-C150 -- measured up. After all, spending $30,000 to $40,000 on a single item for a 30-employee organization is not something a company president does lightly. Having already established contact with Xerox, Mouser undertook a decidedly unscientific search for dealers that handled Minolta and Sharp products. He found a Minolta dealer through a primitive medium by today's standards: the phone book. And a Sharp dealer essentially fell into the company's lap. "I drive by their place every day on the way to work," says Devin Allen, director of marketing and sales.
The features of the Minolta CF910 (list price, $20,495) impressed the team during a one-month in-house test-drive of the machine. With its ability to print on 12-by-18-inch paper to produce an 11-by-17-inch, full-bleed image with crop marks -- dimensions that the Grizzlies needed to customize posters for its game sponsors -- the Minolta clearly had the technology that the company required. But it fell a bit short in the resolution department: to achieve the quality Mouser was looking for, a copier needed to have a resolution of 600 dots per inch (dpi); the Minolta came in at just 400 dpi.
Moreover, though the Minolta did have a module -- called a Fiery Z4 print controller -- that allowed users to turn the copier into a network printer, it cost $19,950. The option was important, because with the increase in volume of graphics-heavy, customized presentations, the Grizzlies would need the machine as a printer as much as a copier. The team could use it to design a layout, refine the color choices, and print out a final version, all with the click of a mouse. Handling the work in-house would cost the Grizzlies 12¢ to 24¢ a page, compared with $14 to $20 a page for the color press check alone.
Next Mouser revisited the Xerox DocuColor 5750, which was still on loan. The Xerox was a strong contender from the beginning since the Grizzlies already had a taste of what the machine could do. That machine, too, could handle the full-bleed, 11-by-17 image that the Grizzlies needed for its sponsors' designs. But the Xerox missed the mark with its 400-dpi resolution; like the Minolta, that was about 200 dpi short of the Grizzlies' goal. And even with the Fiery X2 print controller (list price $10,495), the machine was a little below par for the color quality the Grizzlies wanted.
Mouser moved on to the Sharp AR-C150 (list price, $22,995), which he viewed at the dealer's site for several hours at a time over a two-week period. Like the others, the copier could produce 11-by-17, full-bleed printouts, also by printing on 12-by-18 paper. And it had a print controller, called a Fiery AR-PE1, whose price of $14,995 was well below that of the Minolta. But particularly pleasing to Mouser was the Sharp's 600-dpi resolution and its speed of 25 copies a minute for black-and-white, letter-size sheets and 15 copies a minute for color -- well ahead of the competition.
"The whole organization ultimately realized that a color copier is not necessarily a luxury -- it's a tool of profitability," says Tim Mouser, president of hockey team Utah Grizzlies.
After two months of searching, the time finally came to review the choices. Here's how the cards fell: After Mouser tacked all the options he wanted onto the standard $20,495 price tag, the Minolta exceeded the Grizzlies' budget by about $10,000, knocking it out in round one of the purchasing process. And while Mouser and company considered the Xerox to be an excellent machine despite its lower resolution, the salesperson they had been working with left the supplier midway through the comparison stage. Though his departure wasn't a determining factor, it definitely didn't help boost Xerox's position in the race. The Sharp AR-C150 had triumphed.
Mouser purchased the Sharp color copier outright in February for about $40,000, passing on the option to lease for 36 months at $782 a month or for 60 months at $552 a month. To the standard copier, he added a reversing automatic document feeder (which allows both sides of a two-sided document to be copied automatically) for $1,400 and a duplex module (which enables the machine to automatically copy both sides on the same sheet) for $1,100. And, of course, he opted for the Fiery AR-PE1 print controller.
For the service plan, Mouser opted for a guaranteed maintenance service agreement, which meant that the company would pay 12¢ per color print and 4¢ per black-and-white print monthly. A counter on the copier determines the invoice. In return, when the copier needs to be serviced, Mouser doesn't have to pay any additional charges.
Mouser figures that the copier will save the Grizzlies a whopping $15,000 a year. And if the customized designs and quick turnaround help it attract sales, the copier will have paid for itself after signing on just three or four new sponsors. "As they say, a picture is worth a thousand words," adds Allen. "I can describe something all day long, but if a company can see players standing in front of its logo, the value of the product that we're trying to sell is really enforced."
Last year Sherri Leopard was debuting a new service for one of her biggest clients, a division of IBM, when she realized that her color printer would have to go. The Tektonix Phaser 340 that she'd relied on for 4 of the 16 years that her marketing-consulting firm, Leopard Communications Inc., had been in business just wasn't fast or sophisticated enough to produce the "brand toolkit" that her consulting team had developed for the E-business folks at Big Blue. And the project -- 30 copies of a 132-page document stuffed with color-logo comparisons and positioning statements -- would have cost a small fortune to send to a print house. Convinced that the future growth of her $12-million company, based in Boulder, Colo., depended in part on her ability to offer brand toolkits to customers, she asked the company's director of operations, Wayde Austad, to search for a solution.
Austad's wish list was short: The new machine would have the capability to digitally transform brand -toolkit files from designers' computers, and it would be able to print more than the six pages a minute that the old color printer cranked out. And though the company would continue to outsource the printing of its customers' marketing materials, stationery, and business cards, Austad needed a machine that could produce sharp color proofs, complete with vivid ink tones, for customers to review. In the past, customers didn't see the final version of Leopard's work until proofs came back from the printer, and by then even tiny changes cost some $400 a page -- an expense that Leopard either absorbed or split with the customer, depending on the nature of the revision.
Austad's first move was to call friends in the service-printing industry and a few of the outside color print houses that Leopard used. Each recommended a different brand, with a different supporting argument: Kodak offered top-notch color quality, Ricoh assured reliability, Xerox provided solid service. Someone fired off the Canon name as well.
Austad had wanted to bring the color printers in-house to try them out, but he quickly learned that with his company's relatively small output -- about 3,000 color printouts a month -- vendors were reluctant to loan out the expensive machines. So he downloaded a bunch of images onto disks and drove 25 or so miles to the dealers' Denver showrooms.
Austad's first stop was Xerox. When he explained what he was after, the sales rep showed him the DocuColor 12, a higher-end version of the DocuColor 5750 used by the Grizzlies, as noted earlier. The DocuColor 12 (list price, $31,495) spit out 12 color pages a minute -- twice the speed of the old Tektonix printer. "That's a big difference when you're trying to make 350 printouts in time for FedEx and you have 10 designers sending print jobs at the same time," says Austad. The Xerox satisfied on color quality as well. Its resolution of 600 dpi was twice that of the old machine. Moreover, the DocuColor 12 had trays for standard letter, legal, and 11-by-17-inch sheets of paper, and 12-by-18-inch sheets could be fed through manually. In addition, the DocuColor's feeder was specially designed to grip glossy or extra-thick paper. Taken together, the features made printouts that closely resembled an offset printer's final output -- just what Austad was looking for.
Austad was also impressed with the service he had received from Xerox. "The rep was very attentive and very patient," Austad recalls. "I would point something out, and he would explain it honestly." He was particularly grateful for the rep's explanation of the difference between the two print controllers -- the Splash G620DFE (list price, $26,000) and the Fiery EFI XP12DFE (list price, $19,500) -- that the machine could use. Austad had used Fiery at a previous job, but the Splash, it turned out, was better suited to producing the brand toolkit because instead of transforming a digital file repeatedly -- a time-consuming process -- it transforms a file once, saves it, and prints multiple copies.
So far, so good. Still, Austad thought, it would be too easy to buy the first machine he tried. To lay his doubts to rest, he set off to check out the competition, using the Xerox as a benchmark.
Austad knew he was on the right track with the DocuColor: the next step up was printers that whipped out 40 pages a minute, at almost triple the price. "There's no cost justification in that for me," Austad says. So when he went to the Ricoh showroom, he asked to see a model in the same class as the DocuColor. The sales rep introduced him to the Aficio Color 6010. With a resolution of 600 dpi, a copying speed of 10.5 color pages per minute, the ability to handle thick paper stock, and a price tag of $28,950, plus an additional $18,995 for the Fiery print controller (here called an E-800) that went with it, the Ricoh was a close cousin to the Xerox. But one factor put the Ricoh out of the running altogether: the Aficio Color 6010 couldn't handle the 12-by-18-inch originals. "We really need that size for double-page magazine spreads," says Austad. "The clients need to know how their ads will look."
Next up was Canon's Color Laser Copier 1150 (list price, $33,500). This machine offered 400 dpi with automatic image refinement (AIR) technology, which increases image resolution to the visual equivalence of 800 dpi, but its copying speed, at 11 color pages a minute, fell short of the Xerox model's. The print controller available that met Austad's needs was a Fiery: the ColorPASS Z60, which cost $19,500.
But as Austad fed the machine pieces of a heavy-stock paper, the 1150 repeatedly jammed. When he asked the Canon salesman about the problem, the salesman blamed it on the fact that the sales-floor demo got so much use. Austad saw a red flag. "I figure your demo ought to run a lot smoother than your live product," he says. The salesman then waved away Austad's concern about the paper jams, claiming, "They all have the same mechanism." (Not true: the Xerox's gripper feeder, for example, is designed for heavier paper.) Austad says that the salesman's surliness really turned him off. That, and the Canon machine's apparent inability to handle thick or glossy paper, left Xerox alone at the top of Austad's list.
It was at the Kodak dealer that Austad found something really different: the ColorEdge 1550 Plus. It uses what's known as dye sublimation technology. Instead of laying flakes of toner on top of a piece of paper like the other models that Austad saw, the ColorEdge actually dyes the paper. Though the resolution was lower than what Austad wanted -- 400 dpi instead of 600 dpi -- the dyed color images looked more like photographs. Austad considered the ColorEdge because the sharp images -- which come at a price of about $8 apiece -- would give clients the best possible idea of their final product, and any necessary changes could be made in-house before the digital file was sent to the printer, thereby cutting back on the expensive changes to printer's proofs. But the ColorEdge wouldn't do anything for the company's mission-critical brand toolkit or other high-volume, high-speed projects. Satisfied that he'd explored the options, Austad concluded that the Xerox was the machine for Leopard.
Sherri Leopard's investment will pay off because her employees are working faster and her clients are more comfortable with her designs.
One final incentive for going with the Xerox was the cost of "consumables" like toner and cleaner. Austad calculated the cost of consumables for each of the models he'd looked at based on an 11-by-17-inch page with 80% coverage. Consumables for the Xerox machine, he found, would cost him several cents a page less than one competitor's and half as much as another's. (Austad demurs when asked to name names.) In December, two months after CEO Sherri Leopard had sent him shopping, Austad signed on with Xerox.
The company happened to be the manufacturer of the black-and-white copier that had served Leopard for years. Austad told the Xerox rep about his comparison shopping, and the rep made a deal: Xerox would wipe out the remaining three years on Leopard's five-year lease on the black-and-white copier and set up a new five-year lease for the color machine. Payments would be set at $1,700 a month, which was only $250 more than the old lease and a very competitive price, says Austad. And Austad negotiated a service agreement whereby the company would pay 12¢ per color copy -- about half the usual Xerox price -- and receive free maintenance for the machine. (Since then, Xerox has lowered its color click charge to 10¢ a sheet.)
For the first few months after the Xerox machine arrived, Austad tracked how much time workers spent on projects. Because the new machine prints and copies projects like the brand toolkits much faster, he says, employees spend less time waiting around. He estimates the company now saves a few grand a month on employee productivity alone. Thanks to the Xerox, the company reduced its outsourcing by 77.6% for the first six months of the year, a figure that amazes Austad. He adds that the color-proof changes -- the ones that used to cost $400 a page -- are way down, too.
The business's investment in the new machine will pay off, Leopard says, because her employees are working faster and her clients are more comfortable with the designs they're paying for. "This machine helps us be a better partner, which helps us grow along with our clients," she says.
Mie-Yun Lee is editorial director of BuyerZone.com (www.buyerzone.com), an Internet buying service that features expert purchasing advice and tools for small and midsize businesses. You can use its tools to explore color copiers for your company at www.buyerzone.com/office_equipment/copiers-color/index.html. Jill Hecht Maxwell is a reporter at Inc. Technology. Doreen Vianzon contributed to this story.
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