What priority does your business place on aftermarket parts sales?
Aftermarket parts sales for equipment manufacturers can generate up to 50% of total revenue and the same percentage, if not more, of gross margin. If your organization maintains third-party vendors and gives them access to the aftermarket revenue, it’s time to rethink your structure to ensure that your firm is reaping the benefits.
What’s Your Strategy for Differentiation?
So, how do you woo owners of your equipment away from independent parts vendors? There are a few different strategies.
For example, independent parts vendors offer heavily discounted prices to customers. However, as an OEM, undercutting vendor prices isn’t an ideal strategy because it serves only to commoditize your aftermarket products.
A better approach is to focus on service and relationship differentiation, preferably positioning your business as a one-stop shop for equipment or machinery buyers. That means supporting your customers for the duration of your product’s lifecycle.
To do this, you must consider how to:
Provide exemplary after-sales service, with a proactive approach to preventative maintenance and parts replacement
Accurately represent and disseminate product supersession
Leverage social, mobile, analytics, and cloud technologies to listen to your customers, be accessible to them, and personalize their experiences to encourage loyalty
Provide convenience by letting your customers shop easily through various channels
ECommerce for OEMs and Customers
Manufacturers’ customers are quickly becoming important proponents of eCommerce and multichannel purchasing. These buyers want the ease of being able to access aftermarket parts and services online through eCommerce platforms.
These customers also want to browse your inventory, place orders, and make service appointments from smartphones and tablets as well as through traditional channels such as a call center or field sales representatives.
Commercial buyers expect to enjoy enriched experiences too, which your company can provide by adopting initiatives similar to those in retail, such as:
Customer loyalty programs
A shift from product-focused to customer-focused sales strategies
Simplified ordering and fulfillment processes
High availability (achievable through accurate demand forecasting and effective inventory management)
Segmented service contracts, differentiated by factors such as price, response times, and level of cover
Success in aftermarket sales growth will depend on your ability to make it easy for customers to buy from you and to differentiate your offerings from those of independent dealers. Firms are rapidly adopting eCommerce for OEMs due to the demand for technological capabilities that support their bottom line.
The Benefits of eCommerce for Manufacturers
The key benefits of eCommerce for manufacturers include the ability to:
Provide buyers with comprehensive electronic parts catalogs and enable them to order parts online with less hassle. According to research conducted by Forrester, US B2B eCommerce will reach $1.8 trillion and account for 17% of all B2B sales in the US by 2023.
Reduce the overall cost to serve customers. When an OEM enables eCommerce, both internal and external users benefit from improved availability of information, reduced processing errors, faster response times, and ultimately provide a better level of customer support. This enables B2B organizations to lower their cost per transaction.
Apply analytics technology to access historical and near-real-time data relating to customer behavior. This enables you to learn about your customers and as a result, offer personalized buying experiences. Personalization is set to become an essential facet of any marketing, sales, and servicing activity in the B2B environment, including customer care in the aftermarket. In 2019 respondents of a Mckinsey & Company survey said that suppliers that provide an outstanding digital experience are twice as likely to be chosen as their primary supplier.
In addition to the benefits above, eCommerce for OEMs is built with technology that integrates easily with your other business information systems, such as ERP. This means you only need to enter data into one system, helping to streamline processes and reduce errors.
Equip360 eCommerce for OEMs
Choosing the right eCommerce solution is critical. Equip360 eCommerce from GenAlpha is built to support manufacturers’ aftermarket sales growth. Equip provides the features and functions you need to compete effectively and secure customer loyalty.
Schedule an Equip360 eCommerce demo to see how you can generate more profits through aftermarket sales.