I’ve had the opportunity to speak and visit with many prospective and current industrial water customers about the technical merits of LuminUltra’s 2nd generation ATP technology, and invariably the conversation always apexes to one critical question – ‘How much does your test cost?’
While price is a very important component in the evaluation and purchase process of microbial monitoring tools, it is not necessarily the most important question. In order to properly evaluate the spend advantages over a current microbial test method, one must first determine what the true overall spend is to conduct the test method. A common term used to determine this is ‘dollarization value’: the determination of the true cost when comparing two products. For example, you are at the hardware store looking to purchase light bulbs. There are the incandescent lightbulbs that cost $0.80/bulb and last ~1200 hours. The newer CFL bulbs cost $2.83/bulb and last 8,000 hours. When crunching the numbers, you determine on an annual basis that you would require seven (7) incandescent bulbs annually costing $5.84 as compared to one (1) CFL bulb with a cost of $2.83 annually. So now you have determined the dollarization value, an annual savings of $3.01 per year using the CFL bulb or $120 per year based on a house with 40 sockets. This dollarization value clearly favours the more expensive per unit CFL bulb. If we were looking at all the factors that contribute to the dollarization value determination, we’d also need to consider projected energy savings of each bulb and the expense of a technician’s time (your time) for installation.
Let’s take the dollarization value model and apply it to extracting the value of 2nd Generation ATP monitoring as compared to typical culture based microbial tests. Certainly there are technical components that are required to be addressed but once that hurdle is satisfied then the process of determining the dollarization value begins!
There is a perception in industry that LuminUltra’s 2nd Generation ATP test is more expensive than traditional culture methods. While this may be accurate when looking only at the purchase cost of the test, it does not take into account other tangible variables such as labour, time to obtain results, and data transfer time. These factors strongly influence the overall dollarization value of the comparative test methods. The benefits of using LuminUltra’s Microbial Monitoring Solutions are well known and mostly accepted by potential and current customers. A few of the key benefits our customers have cited include: a more rapid result (in-field results that can be used to make same-shift application decisions), a more precise result (measuring 100% of the microbial population and not merely a fraction as in culture based tests) and a field ready test method as compared to traditional microbial monitoring methods. But let’s dig into this a bit deeper and apply the dollarization process and see how it compares.
So we now compare LuminUltra’s 2nd Generation ATP versus traditional culture based test methods to determine its dollarization value. As can be seen in the table below, the dollarization value creation heavily favours LuminUltra’s 2nd Generation ATP test over the labour laden, slow and incomplete microbial detection of culture based tests to the tune of an estimated savings of $26.95 per test result!
|Cost Parameter||2nd Generation ATP||Culture Based Methods|
|Cost Per Test/Sample |
(All Materials and Reagents)
|Total Labour Cost To Complete Test* |
(e.g. sample collection, testing,
data collation and presentation)
|Dollarization Summary Comparison/test||$35.55||$62.50|
|Test Dollarization Value/test||-$26.95||$26.95|
- Equal conditions for both methods: Time to collect samples, technician wages
- Unique time requirements:
- Culture Methods: Time to prepare dilutions and inoculate plates = 30 minutes; Time to count colonies, transcribe data, generate report: 60 minutes
- 2nd Generation ATP: Time to analyze samples: 5 minutes; Generate data and present findings: 10 minutes
LuminUltra has six 2nd Generation ATP test kits customized for various applications such as process and cooling waters, wastewater, oil and gas and every application in between. Dollarization value may vary slightly between the various applications, but the end result is that the perception of 2nd Generation ATP testing as being more expensive than culture based tests is just that – a perception and not reality!
The tangible benefits of LuminUltra’s 2nd Generation ATP tests – rapid, precise, complete and field ready – are value added benefits that go a long way in growing and maintaining your customer base.
Our presentation on this topic was well-received at AWT 2016, San Diego. In case you didn’t get an opportunity to attend the presentation and want to learn more about finding the dollarization value for your application, please check out the slide deck below.
Generating ROI with Microbial Control : Determining your ROI using 2nd Generation ATP Monitoring