In the ever-evolving landscape of business, staying ahead means capitalizing on untapped opportunities. One such opportunity that often remains overlooked is the potential of aftermarket genuine parts and service sales. Not only can this strategy increase revenue and foster loyalty among your existing installed base, but it can also substantially enhance profitability. In this blog post, we’ll outline a clear roadmap for crafting a compelling business case to convince your senior management of the benefits of this approach.
1. Know Your Installed Base First
Before embarking on any journey, understanding your starting point is crucial. Take the time to comprehensively assess your existing installed base. How big is your installed base? What is your parts and service attachment rate? How many customers have at least bought 1 part in last year? Gather data on their needs, preferences, and pain points. By having a deep knowledge of your installed base (from active assets in the field), you can tailor your aftermarket offerings to precisely match their requirements, thus increasing the likelihood of sales and loyalty. Industrility’s QR Code and registration app can help you accelerate the installed base mapping.
2. Build a Solid Budget Plan for the CFO
Finance is often the gatekeeper when it comes to new initiatives. To get the green light, collaborate closely with your CFO to create a robust budget plan that includes inventory planning and people cost. Highlight the potential returns on investment, cost savings, and long-term benefits of investing in aftermarket parts and services. Demonstrating a digital-first clear and realistic financial projection strategy will go a long way in securing the necessary resources. Industrility’s Customer-facing MyOEM platform helps manufacturers provide customer-facing asset-centric one-stop shop. For the CFO, sometimes the cost of printing and shipping the operational manuals to its customers is higher than the investing in digital platform like Industrility.
3. Highlight the “Downstream Impact” to Other Aftermarket and Annuity Programs
Downstream impact (DSI) is a term Amazon uses to quantitatively assess financial impact due to other cross-team programs. Remember that the impact of your aftersales strategy extends beyond parts and services sales alone. Emphasize the positive “downstream impact” it can have on other aftermarket and annuity programs such as warranty, service, optimizations, audit inspections. For instance, improved customer satisfaction can lead to increased subscription renewals and referrals. A holistic approach can create a ripple effect throughout your revenue streams.
4. Focus on Customer Value and User Experience to Influence the Buying Behavior
While profitability is essential, don’t lose sight of the bigger picture – customer value and user experience. Showcase how aftermarket genuine parts and services enhance the overall customer experience. Highlight the shift in buying behavior towards quality and reliability. Emphasize that this approach is a long-term investment in building trust and lasting customer relationships, which often outperforms short-term gains reflected on the balance sheet. Industrility’s parts app makes it easy for customers to buy parts for their machines in 2 clicks in a self-service way, taking away all mayhem of phone calls and excel sheets away.
5. Implement Dynamic Parts Pricing
To maximize profitability, consider implementing dynamic parts pricing. This strategy adapts pricing based on demand, market conditions, and customer profiles. By optimizing pricing, you can capture more revenue while ensuring customers perceive value in what they purchase. Giving customers and distributors the necessary tools that provide quick pricing matters. Industrility’s ecommerce app can provide personalized discount levels to each distributor so they can attract customers to buy parts directly.
In conclusion, aftermarket genuine parts and service sales have the potential to be a game-changer for your business. To convince your senior management of its merits, it’s crucial to know your installed base, build a robust budget plan, highlight the downstream impacts, focus on customer value and user experience, and implement dynamic pricing strategies. At Industrility, we offer cutting-edge parts and maintenance apps to help you unlock the full potential of aftermarket sales.
Contact us today to take your business to new heights.