After years of focusing on supply chain and operational initiatives, OEMs are now turning their sights to aftermarket growth. In fact, a recent survey from The Service Council (TSC) survey shows that for 46% of service leaders, service revenue will be the top initiative for 2018. This shift is a welcome change as tending to existing customers’ needs is critical for a healthy growth strategy for any company. It is also not a surprise since service and aftermarket revenue is much more profitable than the sale of original equipment. Further, it should be much easier to drive cross-sell and up-sell rather than find new customers in an increasingly competitive market.
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What’s even more heartening is that approximately 31% of the survey respondents also indicated that installed base management is a top initiative for their companies. Now this may sound obvious, but without a solid understanding of customers and their behavior and needs, revenue generation initiatives are doomed for failure. Here are the four best practices to overall help service sales, marketing, and manufacturing leaders drive double digit growth in 2018:
- Know your customers: In addition to actual coverage and renewal, OEMs must understand how customers are utilizing their products and services. Awareness of customer adoption and usage will allow for improved account management opportunities. This customer intimacy during the asset lifecycle will further create the makings of new innovative products and services in the future. It might also yield ideas for net new services that can be valuable to customers.
- Map everything: Installed base visibility is key to running successful aftermarket campaigns. Unfortunately for most manufacturers, customer data is siloed, dispersed and sometimes simply not accessible to service, sales and marketing teams. How many of you have access to the enterprise resource management (ERP)? How many to the customer relationship management (CRM)? In most cases, data is shared via spreadsheets which can never be updated and 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.
- Don’t wait for the phone to ring: 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, but also don’t make random courtesy calls.
- Call with knowledge (CWK): Speaking of courtesy calls, they simply do not work. The key to successful aftermarket campaigns is the ability to identify who to call, when, and with what proposition. Customer data and installed base visibility are the foundation of CWK.
None of this growth is possible without investing in people, process and tools and in this regard, more than 60% of service organizations are planning for budget increases to support growth. For most of these companies, the cost investment comes in the form of better account management and in sales and marketing initiatives to increase service product reach.
Data science & AI to the rescue
Some of the biggest challenges in the transformation from analog to digital operations on the production floor have to deal with data, a recent Forbes article pointed out. 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.