Since businesses began offering solutions rather than products, they have acknowledged that selling spare parts and after-sales services might be a great source of profits. Ipso facto, why do many companies continue to treat aftermarket services as an afterthought?
One major cause is that after-sales support is extremely hard to manage. The manufacturers of original equipments(OEMs) often subject their customers to unnecessary delays when problems arise, and many OEMs outsource customer service. Consequently, consumers are discontented with the extent of service they receive, and corporations don’t enjoy the aftermarket’s potential. Only enterprises that provide sales and services efficiently and effectively, such as AEM performance electronics, can truly benefit.
Focusing on after-sales services pays off in several ways. For example, it’s cheaper for businesses to extend parts and service-related products sales than to seek out new customers. And when companies(like aem) provide aftermarket support, they gain a unique insight into their customers, that’s difficult for rivals to accumulate.
On the other hand, aftermarket services business becoming indispensable for manufacturers. The share of sales returns from new product sales for producers has been declining over the past decade. Revenue from new product sales is usually less than those on aftermarket services in international markets. In addition to that, demand for brand new industrial equipment may decline as companies specialise in preserving cash and reducing capital spending to manage the short- and medium-term business impact of the COVID-19 pandemic. Still, let us take a look at the challenges of aftermarket:
- Challenges Manufacturers face in delivering aftermarket services
Here are some general challenges (figure 8) manufacturers face in delivering aftermarket services efficiently:
1. Macro-economic forces: Approximating customers’ equipment spending decisions in response to COVID-19 and the consequent effect on aftermarket services seems improbable at this time, given the pandemic’s ever-evolving nature.
2. Ever-Increasing competition: The level of competition keeps growing in the industry as manufacturers continue to operate in a sophisticated environment with multiple stakeholders, including suppliers, partners and others.
3. Talent shortage: Manufacturers are facing a grave shortage of talent. As technology keeps advancing and equipment keeps gaining additional traits, the refurbish and repair procedure becomes more and more complicated.
4. Fresh Entry of players into the market: As utility-based business models are strangers to many OEMs, they come with imperative complimentary risks. As a consequence, new players from other industries are emerging to capitalise on these opportunities.
5. Delivering qualitative service: Lack of experience in crafting service packages and limited visibility in the supply chain are critical factors.
6. Lack of a service-oriented culture: Lack of a concentrated service organisation and resistance to transformation prove to be pertinent issues affecting numerous manufacturers.
In Spite of all the challenges of aftermarket, this is the golden era of aftermarket sales and services to thrive and prosper to the pinnacle. Largely, executives promptly swear by the services-focused perception of the world, but in private, they confess to one troubling concern: Most of the companies either don’t know how to provide after-sales services effectively and efficiently or don’t care how to provide them. Top-level management all over the world perceives aftermarket sales and services as a sheer afterthought.
Despite all the harsh realities mentioned above, disregarding the promise made by after-sales services is unwise, at the least. Since the beginning of the 1990s, enterprises in North America, Europe, and Japan have stopped pushing products and are delivering the consumer’s value by using those products. They changed track because demand crashed, competition exploded, and profit margins went down the drain. When businesses and enterprises started offering solutions instead of products, it became justified that selling supplementary parts and after-sales amenities—carrying out repairs; positioning upgrades; renovating equipment; conducting inspections and day-to-day maintenance; offering practical support, consultation, and training; and setting-out finances—could be a bumper source of revenues and profits as well.