How-To Increase Aftermarket Parts Sales
by Derek Schroeder
Today, OEMs understand the role of aftermarket sales in their businesses and their impact on their general financial health. This is unlike a few decades ago when the aftermarket was seen as an afterthought. OEM aftermarket sales are less cyclical and generate more profits than the sales of original equipment.
Spare parts sales, according to Industry Week, contribute 40% to 60% of a manufacturer’s total revenue. According to HBR, aftermarket sales contribute 8% of America’s annual GDP (gross domestic product) and both consumers and businesses spend about $1 trillion annually on products (assets) they already own.
However, the challenge lies in the ability of OEM manufacturers to come up with OEM aftermarket sales plan that can see more customers and dealers purchase OEM parts to increase their profit margins. Here’s how you can promote customer retention, drive business growth and gain a competitive edge in your niche market by creating an aftermarket strategy that will increase your parts sales.
3 Ways OEM Manufacturers Can Increase Aftermarket Parts Sales
- Create a Base of Loyal Customers – A successful business is all about loyalty. Your success in the aftermarket will totally rely on how you cater to your existing customer base. You can build customer loyalty by offering exceptional customer service and put more emphasis on the values your OEM business shares with customers. Create durable original equipment because every time a customer has to replace equipment, you risk losing them to a competitor. However, customer intimacy with brands increases with increased reliability of equipment. When manufacturing businesses organize few service events, they create few opportunities to develop strong customer relationships and brand loyalty. OEMs must find balance between over-durable and unreliable equipment in their aftermarket strategy for increased aftermarket sales. Provision of discounted equipment upgrades and extended service warranties are other great ways of improving brand loyalty and thus increasing sales.
- Lock in Your Existing Customer Base – Since customers can access great prices through third-party suppliers of aftermarket parts, OEMs must give customers reasons to opt for their parts. The best way to do this is giving your customers no other option for parts, but yours. Lock in your existing customer base by offering them greater quality assurance, patented part designs, better service experience, warranties or convenient kit replacements and expertise at the services you offer. By doing these, you give them something they can’t access elsewhere. For instance, when a customer purchases a patented stapler, they have to continue buying boxes of compatible staples in order to realize the value of the equipment. This sees increasing sales of the staples.
- Adopt the Use of Proper Tech Tools – OEM manufacturers should adopt the use of fast and agile technology that is designed specifically for use in the equipment industry. The technology must span the equipment’s entire life-cycle in a single integrated solution, running from manufacturer to aftermarket service.
Customers can access a myriad of specialized tech tools offered by GenAlpha in the aftermarket. This will empower them to make decisions in real-time based on correct information, in addition to making fast and convenient orders through the internet.
As a result, customers enjoy unprecedented value and the expert technical support you offer improves, thus increasing aftermarket sales by facilitating repeat business.