OEMs: Shifting Your Aftermarket Strategy from Reactive to Proactive
by Derek Schroeder
Original equipment manufacturers (OEMs) make various efforts in an effort to reach a wider segment of the market and grow their businesses for increased aftermarket revenue. Even so, the manufacturers encounter a number of OEM aftermarket challenges that they must overcome to achieve aftermarket success. These challenges cost original equipment manufacturers time and money.
Here are 5 ways you can shift your aftermarket strategy from a reactive state to a more proactive one:
- Provision of Customer Service
Customer service plays a great role in the success of businesses. However, many manufacturers of original equipment struggle to offer their customers exceptional support services. Whether you are dealing with an existing customer base loyal to your brand or new prospects, it is important to offer them effective customer service. As an OEM, focus on creating good relationships with your customers and keep them engaged through effective customer support services to see them return for repeat business.
- Creating a Base of Loyal Customers
OEMs struggle to create a base of loyal customers who are core to the success of their aftermarket businesses. It is easier and more cost-effective for a business to work with existing customers than acquire new ones. You need to lock in the customers that purchase from your business so that they do not switch to your competitors, but become loyal to your brand. You can build brand loyalty by enhancing your equipment’s uptime, quality and durability; use a loyalty program, facilitate customer retention, minimize manual process errors and provide real-time service operation information.
- Management and Optimization of Inventory
This is a major challenge for OEMs. Due to the unpredictability of equipment breakdowns, manufacturers find it hard to balance supply and demand of parts. Moreover, according to an article published on HBR, the aftermarket is unpredictable and very inconsistent. This explains why manufacturers end up with a highly obsolete inventory while trying to ensure a sufficient supply of equipment parts needed by their customers.Shift away from gauging parts demand based on the historical performance of your aftermarket sales. You should shift your aftermarket strategy from reactive to proactive. Take advantage of real-time customer data on their metrics and buying behaviors and their need for your equipment. This will enhance the preciseness of your forecast as a way of overcoming this challenge.
- Deployment of Technology and Pricing Strategies
The availability of your equipment parts, provision of exceptional customer service and attractive pricing are the cornerstones of your aftermarket growth and success. It is only by leveraging technology and pricing strategies that you can achieve these to know whether or not your customers’ needs are met. However, this is a challenge many OEM manufacturers face.Your aftermarket prices should reflect any extra costs incurred in managing inventory, for instance creating a buffer inventory to ensure that your customers’ equipment and businesses at large are always up and running due to increased uptime. Exploit the aftermarket by deploying prices for value as a way to overcome OEM aftermarket challenges of this kind. Other non-critical parts can be valued at market prices and supply.
- Responsiveness and Efficiency
Provision of efficient parts and customer services in a responsive manner is another one of the aftermarket challenges for OEMs. This is key to your aftermarket success. You can improve the responsiveness and efficiency of your business by understanding your target market, valuing them and leveraging data to satisfy their need for highly available parts and customer service.
Ready to take your aftermarket strategy to greater heights? We can help. Get in touch for an aftermarket strategy session.