Opinion: Strategies for Driving OEM Service, Aftermarket Growth
After years of focusing on supply chain and operational initiatives, equipment makers are now turning their sights to aftermarket and service revenue growth. This is a welcome shift, as tending to existing customers’ needs is critical for a healthy growth strategy for any company.
It also is no surprise, since service and aftermarket revenue is more profitable than sales of original equipment, and also since cross-selling and upselling are generally easier than finding new customers.
Joshi
This may sound obvious, but without a solid understanding of customer needs and behaviors, revenue generation initiatives are doomed for failure. To help OEMs with theirs, here are four best practices for sales, marketing and manufacturing leaders to follow:
• Know your customers: OEMs must understand how customers are utilizing their products and services. Awareness of customer adoption and usage will allow for improved account management opportunities. Developing customer knowledge during the asset life cycle can inform creation of new, innovative products and services that can be valuable to customers.
• Map everything: For most manufacturers, customer data is siloed, dispersed and sometimes simply not accessible to service, sales and marketing teams. In most cases data is shared via spreadsheets that can never be updated or shared in real time. Also, manual processes tend to drive manual errors and accidental data deletion. IT departments at large organizations and big consulting firms provide an alternative to the status quo when it comes to cleansing and organizing old data. The downside (other than time and cost) is that once the project is completed, new data rarely flows into the new architecture. After only a few months, you’re back where you started.
• Proactive selling: Don’t wait for the phone to ring, but don’t just make random courtesy calls. Proactive selling is key to engage with customers, uncover business opportunities and beat your competitors. The purchasing behavior of B2B customers is changing; they expect the same level of service and engagement that they enjoy as consumers every day. Don’t wait for the phone to ring.
• Call with knowledge: Related to the above, the key to successful aftermarket campaigns is the ability to identify whom to call, when and with what proposition. And stop making courtesy calls; they simply do not work.
As noted in a recent Forbes article, some of the biggest challenges in the transformation from analog to digital operations on the production floor have to deal with data: complex legacy systems, many with proprietary applications; huge volumes of data generated by existing equipment and few resources dedicated to deriving insights from the huge volumes of data.
For many manufacturing execs, the first thing that comes to mind when thinking about digitization is the Internet of Things. In a perfect world, all machines on the factory floor are connected and are constantly streaming data into systems capable of generating insights and reacting to any anomaly or predetermined trigger. The reality is very different. Few machines are connected, and even fewer are streaming data. This is especially true with distribution sales and service models where the machines are being deployed and serviced by partners rather than the manufacturers themselves.
Overcoming the Challenge
The answer to these challenges lies at the intersection of people, processes and tools. While the motivations have existed for a while, even if they had the right set of people in place, organizations simply did not have the tools to effectively sell to their installed base. With the advent of big data and the emergence of AI, the tools for a true system of intelligence are now beginning to take shape. We’re talking about systems of intelligence that enable manufacturers to effectively identify who their customers are, connect with them in meaningful ways and to engage with them through the entire life cycle of the asset. We’re talking about end-user applications that provide actionable insights to sales, marketing and service functions and directly drive customer engagement and ultimately, top-line revenue growth.
Customer relationship management platforms currently offer out-of-the-box solutions for service and sales data collection and visualization, while also providing companies with the tools they need to manage inbound service requests. IoT vendors have been trying for a while to solve this problem, but struggle with yearlong deployments and data streaming permission, as well as change management issues.
The sophistication of such tools and the underlying big data and AI technologies powering them is now at a point where integrating and deploying these systems of intelligence can happen in a few weeks or months. Manufacturers and their distributors no longer have to be captive to multiyear million-dollar engagements, and can test and launch aftermarket engagement campaigns with minimum to no business disruption at all.
Vivek Joshi is the CEO and founder of Entytle, a Palo Alto-based company that helps B2B manufacturers increase customer loyalty and lifetime value. Entytle Insyghts, the first AI-driven platform for aftermarket engagement, assembles data from multiple systems and processes that data to identify usage patterns and customer segments, deliver opportunities and drive revenue from installed base.
