Tag Parts Sales Strategy

Tag Parts Sales Strategy

Digitize to Win: 3 Strategies for Manufacturers

Julia Marvin June 9, 2017 Tags: , , , , , , , , , ,
featured image

Technology is changing the world, and it’s also changing manufacturing

Incorporating digital best practices, such as working from relational databases, providing real-time information to employees and customers and improving the customer experience through online sales is what will separate the manufacturing winners from the losers over the next decade.

What’s Changed in Manufacturing

The internet has changed how customers interact with companies. We now live in a digital economy, where the ability to purchase almost anything is at the tip of your fingers with one click of a button.

Online shopping used to be thought of as only something that companies selling directly to consumers needed to factor in. However, the digital economy has so deeply permeated our behaviors that this isn’t limited just to B2C customers anymore. Things are starting to change for B2B commerce too, and companies that are smart enough to get on board will be the ones to reap the most successes.

Here are a couple of statistics to back up this change in purchasing preferences. A recent study showed that:man looks up parts information on computer

  • 93% of B2B customers prefer to buy online when they’ve decided what to buy.
  • 74% feel buying from a website is more convenient than buying from a sales representative.
  • 56% expect to make half or more of their work purchases online this year.

This shows just how critical incorporating digitization into B2B and manufacturing is. B2B buyers want to be able to purchase products and get the information they need anytime, anywhere. They want their experience to be effortless and easy. And companies that don’t do this are going to facing a much shorter life expectancy.

Optimizing Operations

How much time do your employees spend searching for information, making changes or fixing errors from inaccurate information?

Outside of some of the biggest companies, manufacturing today remains largely a “pencil and paper industry”. This type of mentality has a huge impact on how productive your business can be. It leads to departments working in silos, not sharing changes and updates and tribal knowledge that could be useful for everyone staying isolated.

This is obviously very inefficient. You have departments all over, working on different documents and outdated information, which can lead to the loss of time, and, as people leave, the loss of tribal knowledge.

Take care of this disconnect and optimize your internal operations. Start tablet looking at a shipping facilityby getting everyone using the same database to store their documents, manuals and notes. Using this type of relational database in the cloud (meaning it can be accessed from anywhere) allows everyone to be connected and working from the same information.

This not only will have an impact for your engineers, but will also allow your field techs and customer service reps to access up-to-date parts information.

Think of all of the time your people will save by having instant access to real-time information and breaking down communication silos. This alone can save hundreds of thousands of dollars for your company.

End users are more empowered than ever.

When making purchases, they want something that is high quality, low cost, delivered quickly and information they can get instantly.

Manufacturers in the past have relied on dealer networks or conducting business over the phone. While there will still be businesses where this works, more and more customers want to be able to get their information and ordering done online.

A recent study found that customers that have to speak to a sales rep to make a purchase are 4x as likely to go somewhere else the next time they need to buy something. We need get in a mindset of being customer-focused. If you can do that, you can gain loyalty, which will help sustain your business and sell more aftermarket parts.

One major source of revenue many manufacturers are missing out on is providing easy access to selling aftermarket parts.

an assortment of spare parts on a gray backgroundStudies have shown that about $1 trillion dollars a year are spent on parts for machinery people already own. What may surprise you is that OEMs capture less than 50% of this market currently. It’s will-fitters and other dealers that are taking advantage of this high profit margin segment, which is too bad.

There is no one in a better position to sell your parts than you.  You have a distinct advantage when it comes to enhancing the buyer experience. You have access to exclusive customer data, comprehensive product knowledge and more precise parts information.

Parts sales is a market that is sitting there for the taking and can provide a long-term steady stream of revenue after an initial sale of equipment. While there will always be some people who only want a bargain, shoppers have proven that they will pay for convenience and quality, which OEMs can provide.

In Summary
The companies that are going to thrive and overtake their competition are the ones that recognize the opportunities available and incorporate technology into their operations and sales. By creating a strategy early, you will be able get a jump on the market and leave everyone else in the dust.

Read about these strategies in action in our customer success stories. 

The Top 3 Business Trends for Manufacturers in 2017

Digabit Inc December 16, 2016 Tags: , , , , , , , , , ,
featured image

The new year is fast approaching, which means it’s the perfect time to look ahead and start gearing up for 2017. We’re predicting that next year will continue to bring fundamental shifts to manufacturing business operations, thanks to technology.

Here are the top three business trends manufacturers should address to improve profits, drive customer retention and stay ahead of the competition in 2017.

1. The relative value of the aftermarket

Manufacturers of industrial-grade equipment have a continual revenue stream problem—it can be years or even decades before customers need to replace a full piece of machinery, and profit margins are tight on these capital equipment sales. On the other hand, selling aftermarket parts is a high-margin, long-term revenue stream.

drill machine parts

Economic studies show that spare parts and aftermarket sales comprise almost 8% of the GDP, meaning about $1 trillion is spent a year on assets that are already owned. Big money is made through ongoing sales of replacement parts and service products. Who is best positioned to sell these products, if not the OEM?

What may surprise you is that OEMs traditionally capture less than 50% of aftermarket part sales. Instead, most of this market share is captured by third party resellers, will-fitters and other suppliers.

This is a huge missed opportunity. By taking steps to increase these aftermarket sales using technology and other resources, companies can see their profits grow exponentially this upcoming year.

2. It’s time to move more sales online

The internet’s broad use by consumers and businesses has dramatically changed how people gather information and make purchases. And the expectation of equipment owners to be able to research and buy parts online is only going to continue to grow in the future.
an with credit card online shopping

Manufacturers have a unique opportunity over the next few years to streamline aftermarket sales with online parts catalogs and flexible purchasing options.

Brand loyalty may be dying in the consumer retail arena, but OEMs have a distinct advantage when it comes to enhancing the buyer experience. With access to exclusive customer data, comprehensive product knowledge, and more precise parts information, manufacturers have a head start on making a “sticky” online sales platform.

While bargain hunters will always exist, modern shoppers have proven that they will pay for convenience and quality, elements that OEMs are uniquely poised to provide.

Providing online parts sales and information is one of the quickest paths to increase revenue and customer satisfaction. The digital shift means that buyers expect real time information with immediate access. Soon (and by “soon” we mean now), a bulky paper catalog accompanied by a parts desk phone number isn’t going to cut it.

3. Internet of Things (IoT)

IoT drawing

Where do people, data and intelligent machines intersect and how is it going to change the world? According to IDC, IoT spending is expected to skyrocket in the next few years, from $656 billion in 2014, to $1.7 trillion in 2020.

And there’s a good reason for it. IoT can make services more responsive, convenient and efficient for consumers. This is true for industrial IoT (IIoT) as well. Most new heavy equipment includes telematics capabilities, with sensors installed on key systems, whether operators choose to use them or not.

Some companies are using these systems to shift asset maintenance from a preventative to predictive model. Downtime is one of the costliest variables in equipment lifecycle costs, and IoT can play a key role in diminishing it.

Instead of guessing the condition of equipment and replacing parts on a predetermined schedule, maintenance can instead be triggered by real-time conditions monitored by sensors installed in the machine. This may seem like a small change, but significant dollars can be saved by not replacing parts that don’t need it, and by optimizing downtime and reducing unplanned work stoppages.

For manufacturers, think of the benefits gained from this type of data, and how customers can be encouraged to buy aftermarket parts from an OEM. With IoT and accurate data, you can predict a customer’s needs and have parts and supplies ready and in stock. And by integrating this data into your online parts catalog, you could send the customer a reminder email with a suggested shopping cart that includes the needed parts.

This is an exciting time to be in the manufacturing business and use technology to increase customer satisfaction and revenue. By integrating streamlined aftermarket parts sales, data and online capabilities into your overall strategy, your business can jump to the next level in 2017.

Podcast: The eCommerce Opportunity

Eric Neyer July 22, 2016 Tags: , , , , , , , , , ,
featured image

In March of 2016 Alan Sage was the featured guest on top marketing consultant Bruce McDuffee’s weekly podcast show, Manufacturing Marketing Matters.

As always, Bruce asks insightful questions and provides his own expert perspective. And Alan shares his predictions on the future of online and aftermarket sales for manufacturers who traditionally relied on dealer/distributor networks to generate orders and revenues from part sales and service.

Alan and Bruce discuss the increasing difficulty for manufacturers to maintain or increase revenues in light of global economic volatility, the proliferation of 3rd party suppliers, and greater competition from non-domestic manufacturers. The competition for aftermarket part sales has become even more challenging, with resellers on eBay, Ali Baba and other online channels vying for the same market share.

The solution is to create an effortless buying experience for online users, akin to the Amazon.com experience that private consumers have come to expect. That is, the ability to buy anywhere, any time, and have confidence that you’ll receive the right parts in a cash-register-ecommercetimely fashion.

Listen to the entire show and learn more about Alan’s actionable takeaways:

  • Manufacturers’ proprietary information (this includes parts catalogs) gives them a competitive advantage over non-OEM aftermarket providers, so figure out how to leverage this information.
  • Customers will pay more for convenience and reliability, so don’t make the mistake of trying to compete only on price when you can truly add value to a transaction.

Bruce McDuffee has proven to be an innovative voice in the world of marketing for manufacturers, applying concepts from B2C and other arenas to the unique challenges and needs of manufacturers. From content marketing to eCommerce to search engine optimization, Bruce stays on top of the latest.

If you’re a manufacturer wondering about the trend toward more transparent online B2B sales, or a marketer looking for advice on best practices for manufacturers, you’ll get something of value from this exchange of ideas.

Check out the podcast on manufacturing eCommerce today.

5 Ways Documoto Beats Retail for Online Sales

Eric Neyer May 13, 2016 Tags: , , , ,
featured image

Digabit’s customers make heavy equipment and complex machinery, and the Documoto SaaS helps them get product information online in the form of parts catalogs and other technical support documentation. After identifying the parts they need, dealers and other end users can order parts directly from the OEM using Documoto’s integrated shopping cart.

Why should manufacturing companies use a purpose-built solution like Documoto to display and sell parts, rather than more commonly known platforms like Amazon or similar retail-oriented sales platforms?

1. Responsive Design

Dealers, service technicians and customers are increasingly using mobile devices to do everything online, from looking up and ordering parts to viewing repair procedure videos. Over 50% of Internet traffic now originates on mobile, and the trend is likely to continue. An online storefront for manufacturers must not only adapt to smaller screens, it must display interactive illustrations and the complicated relationships between parts and machines. Documoto’s user interface is built on HTML5 and designed to provide a superior user experience whether on desktop or tablet.

2. Permissions

When users visit and order from retail websites, a consumer is a consumer is a consumer. There may be automated personalization of product offerings or the like, but fundamentally all users are treated the same. Manufacturers, on the other hand, have more complicated distribution networks that require access and permission controls that determine what content a visitor can see, what pricing structure to display, and so on. In this regard, eCommerce sites built for consumers are basically “one-size-fits-all.” Documoto has powerful administrative controls that let manufacturers define user groups and organizations, and limit information access according to user role.

3. Search

Imagine you have built hundreds of different models of machines over the last several decades. Each machine has several thousand parts, some unique and some shared between models. Large manufactures literally must manage millions of both obsolete and currently produced parts. It’s easy to see the importance of a powerful search tool like SOLR, the leading open source search engine that is built into Documoto. B2B buyers may need to search by model number, serial number, keyword, or part number in order to find that one specific component, and retail sites just can’t do it.

4. Detailed, Accurate Product Content

Retail sites designed around B2C needs are limited in the types of images and information they can display. In general, they cannot properly show complex illustrations and accompanying parts lists, or associate and display a wide variety of non-native document types. Documoto lets manufacturers show essential product data along with parts information. Images, 3D animations, repair videos, essentially anything that a customer or service tech might need to complete their desired tasks. Giving buyers highly detailed product data greatly reduces ordering errors and makes them want to come back again. And the ability to create direct integrations between Documoto and CAD or ERP offers the capability for real-time updates when part numbers, prices or other data is updated by the manufacturer.

5. Alternate Payment Options

The majority of manufacturers still don’t sell directly to consumers or end users, but have dealers, distributors or other affiliates who are responsible for service and parts delivery. Many of these B2B relationships still require purchase orders, requests for quotes, or other custom-tailored ordering and invoicing processes. For consumer sites, flexible payment options mean credit cards, online check drafts and perhaps PayPal. There’s no need to look for an RFQ or P.O. radio button, because it isn’t there. Documoto allows manufacturers to customize shopping cart payment options based on their existing business processes, minimizing disruption and maximizing efficiency.

If you’re a manufacturer who needs to upgrade your online presence, sell more parts, and keep customers coming back for more, check out the Documoto suite of tools today. If you want to see Digabit’s industry-leading solution in action, request a no-obligation demo for the full story.

Best Practices: Executing an After Sale Web Library and eCommerce Platform

Digabit Inc June 19, 2015 Tags: , , ,
featured image

The market for Equipment Manufacturer’s (EMs) and OEM products is constantly evolving due to newer industry regulations and technologies. Many companies have difficulty adapting to these changes, while others look forward to meeting any challenges head on. EMs and OEMs can maximize their productivity, drive the top line and stay competitive by embracing technologies such as Documoto.

Documoto is a powerful publishing platform with a Cloud Library and available Cloud Storefront for managing your company’s product offerings, parts catalogs, and vital documentation. With a streamlined and automated approach, your dealers and customers with be able to stay up-to-date with the latest content on maintaining your equipment.

Using the expertise of Digabit’s Professional Services team, we simplify your content migration process by bringing together all of your PDFs, parts catalogs, images, and more into a unified publishing solution. Documoto enables EMs and OEMs to radically shift the content creation and updating paradigm by inverting the perception of a cost center to monetizing both legacy and new content, allowing your customers to easily browse and order parts instantly.

To get the most out of your Documoto implementation, here are four best practices you should embrace that will save time and reduce excessive costs:

1. Integrate with EAM/ERP

By integrating Documoto into an existing eCommerce solution, your customers and dealers will be able to locate and order products with greater speed and accuracy. This modernizes the parts ordering process and translates to getting products quickly, decreasing equipment downtime.

Though integrating Documoto into your existing system adds far more efficiency, the approach is not intended to overhaul the platform you’ve grown accustomed to. With our inline approach, the order is exported directly into your existing EAM/ERP system continuing to leverage the purchase forms you’ve already set up.

Documoto users have realized substantial efficiency with the entire ordering process. ERP integration is not mandatory, but can be included as an add-on feature that yields great value. The benefit of integrating with your ERP solution is to continuously keep price and availability up-to-date with both systems bi-directionally.

2. Assign User Privileges and Access Control

Documoto allows you to retain total control over every bit of content in your system. By assigning user privileges, you will be able to give your managerial staff access while overseeing every level of your parts-ordering process and system.

Assigning user privileges and access controls to specific documents based on the user’s role allows you to achieve optimal efficiency while maintaining a high degree of control and security. With the use of single sign-on, a user will only be prompted to log in once to access all parts on the platform offering an unparalleled seamless user experience.

3. Manage Parts Evolution

With Documoto, you will be able to instantly update information on after sale parts, eliminating outdated data immediately and allowing you to preserve accurate records of every part in your catalog(s). Along with updating part information, you can add tags to the part(s), making them easily searchable based on defined criteria.

Documoto also offers supersessions with Engineering Change Orders (ECOs), notices and requests while easily updating the data in all instances of the parts manuals. By taking advantage of these features, you can maintain a parts catalog that is both continuously up-to-date and quickly searchable, thereby driving customer satisfaction and topline growth.

4. Track User Data

Your data is by far one of your company’s most powerful assets. However, with a traditional parts catalog, it is impossible to realize the full value of customer interaction and utilize data to its full capacity and potential.

With Documoto, you will be able to track various user interactions such as: when users last logged in, their identities, browsing patterns, materials read and much more. This valuable data will allow you to fine-tune your approach and make powerful information-driven decisions moving forward in the virtual world.

There is also the added benefit of user adoptability analytics, which will allow you to make more informed decisions about how customers and dealers leverage Documoto and what to changes should be instituted.

Adopting new technologies always involves a degree of adjustment. These four best practices allow you to see substantial benefits in record time. Contact the Digabit staff with any questions about this innovative process.

 Watch the Documoto overview video

Myths Distilled About Winning in the Aftermarket (Part Two)

Digabit Inc April 30, 2015 Tags: , ,
featured image

It’s no secret that equipment manufacturers struggle to compete with third-party suppliers in the aftermarket. Today, we’re finishing up our look at ten common misconceptions that hold OEMs back from parts sales success.

If you missed the first five myths where we talked about pricing, employees, fill rates and more, catch up here.

Myth #6: You can apply the same software, tools and resources used for original equipment production to the aftermarket

Most manufacturers blindly apply ERP thinking to tackle the complexity of part and service networks, but these processes and tools don’t account for the erratic nature of the spare parts business. Managing thousands of SKUs, distributing parts information to dealers and customers, drawing up forecasts to mitigate risk, and responding to parts orders with rapid speed all require software specific to aftermarket service and support. Otherwise, you’ll be facing mismatches between supply and demand, which in turn affects customer service and profit potential.

Myth #7: Parts demand is impossible to predict

Maintaining an efficient inventory of spare parts is one of the biggest challenges of the aftermarket. Unlike original equipment, after-sales services can’t be produced in advance of demand. You’ll never know exactly which parts you’ll need until a breakdown or maintenance issue occurs. But new technology like predictive analytics makes it a lot easier to predict service events. By using demand histories that look at the frequency of specific repair types in the past, manufacturers can generate more accurate probability-based forecasts of parts requirements.

Myth #8: Most of your parts sales will happen over the phone or in-person

While brick-and-mortar parts sales are up 1.5%, online sales are projected to grow 14% for the next several years, according to research by Hedges & Company. Additionally, over two-thirds of consumers in the US use the internet for price comparison and location searches before buying spare parts. This research indicates that the aftermarket focus is shifting from in-person and over the phone assistance to online support. Many of our customers have certainly experienced this shift. Takeuchi, for instance, receives 98% of their parts sales electronically thanks to Documoto’s E-Commerce features. Check out this infographic featuring the stories of Takeuchi and other manufacturers.

Myth #9: New technology like IoT and telematics won’t affect the aftermarket

We’ve talked a lot about how new technologies are driving growth for manufacturers, but it can be hard to see how parts sales benefit from these improvements. The truth is that IoT does more than just increase demand for original equipment, it creates a customer-manufacturer communication channel that can drastically impact the aftermarket. By incorporating sensors and telematics systems into products, OEMs can automatically notify customers when they’re due for service or in need of repairs while, at the same time, recommending nearby dealers and service packages. These convenience features give OEMs an obvious advantage over other aftermarket suppliers.

Myth #10: The complexity of aftersales rules out customization

The vast majority of OEMs and dealers think that maintenance and repair issues are too diverse and varied to tailor aftermarket services to individual customers. This limiting belief might be keeping you from another possibility – customizing your aftersales approach for specific customer types. Segmenting your installed base into five or six broader groups allows you to assess key differences like values and service behaviors and react accordingly. While one group might want top services and VIP treatment, another group might want thorough explanations for the service and price. By knowing what your original equipment customers expect and desire from aftersales service, you can develop new service products and frame existing packages to give these different customer groups a more tailored experience… and increase loyalty and retention rates as a result.

If you’d like more insights on parts sales strategy, dealer relationships and recent manufacturing technologies, be sure to subscribe to our mailing list.

 Watch the Documoto overview video

Streamlining Customer-Centric Data for More Efficient Sales and Marketing

Digabit Inc April 16, 2015 Tags: , , ,
featured image

In a world of Big Data, manufacturers of every size must come to terms with how to best market their products. No longer can companies rely on outdated business models or traditional sales methods. Rather, manufacturers must forge a new type of relationship with customers that maximizes each transaction and adds value to each product.

In many ways, the manufacturing industry is undergoing a revolutionary change in real time, with both the roles and pain points of manufacturers and consumers shifting. A report from Accenture noted the companies that succeed are those that best understand this new relationship.

“Today’s customers are constantly moving, always connected and more informed than ever before; the purchase experience is now dynamic, accessible and continuous,” the report stated. “By the time buyers meet sales representatives for the first time, they are often more than 50 percent through the buying process. To keep pace, companies must move their marketing, sales and service functions from an analog front-office to a digital one. They also need to understand the myriad of ways in which customers want to interact with their organization.”

To fully optimize data for its intended purposes, manufacturers must realize marketing goes beyond just identifying patterns or navigating a sea of customers. Instead, sales and marketing departments can actually meet buyers on the customers’ terms and increase the chances of closing a sale by integrating data-driven, customer-centric solutions.

Target buyer personas

One of the most meaningful avenues for marketing teams to exploit is that of buyer personas. Using data, manufacturers can shape and narrow down the ideal customer base that they gear products toward. This process enables each product to more quickly attract its associated target buyer, which makes parts ordering and transactions more efficient for both customers and manufacturers.

By analyzing gathered customer data, IT teams can optimize the information and create appropriate market segments among buyers. Research and advisory firm Gartner indicated data pertaining to buyer behaviors can be aggregated and repurposed to create upselling opportunities. This helps manufacturers understand exactly what each specific customer needs before he or she may realize it. With this strategy in place, cross-selling and parts bundling can become key tenets of sales models.

Limit trial and error

By utilizing the data at hand, manufacturers can have a much more seamless flow of products throughout the supply chain. Since every part is manufactured with a particular customer in mind, data allows manufacturers to connect products with end-users with less interruption and fewer mistakes. However, planning the rollout of these new products is never easy.

Before investing too much time and money in a project, manufacturers can collect and analyze data when trying new strategies or product demonstrations to determine how successful certain ideas will be. Internal or limited trials of products can provide key insights into future sales and performance potential of products. This insight can be expanded upon to include how fast a certain product can be manufactured, assembled and shipped to a warehouse. By nailing down the logistical issues of product performance and delivery, manufacturers can avoid sales mistakes.

This reduces trial and error and excessive back and forth between internal departments while also fine-tuning products more thoroughly before they ever reach customers. Consumers are rewarded with products closely tailored to their demands, and manufacturers benefit from more comprehensive and effective planning processes, leading to real-world operational savings.

Close inefficiency gaps

Throughout manufacturing, parts ordering and shipment processes, there will inherently be inefficiencies along the way, which creates gaps in service. Whether it’s a disruption in distribution or a miscommunication between dealers, data can help close these gaps and overcome technical challenges every step of the way.

With access to the same information in real time through a cloud-storage system, suppliers, operators, sales teams, dealers and customers can all work cohesively together. This heightened collaboration capability enables orders to be fulfilled faster, with all channels of operation moving in tandem.

Drive results

More lines of communication and targeted, structured marketing plans ensure manufacturers can make every decision the right decision. Forbes reported data also allows manufacturers to produce custom and built-to-order equipment without deviating too far from standard operating procedures. Although these specialized orders require more time and innovation, which can delay normal operations, negative impacts on production can be minimized through advanced analytics, efficient scheduling and streamlined delivery.

According to the Harvard Business Review, by implementing consumer data into everyday marketing strategies, manufacturers can reduce churn rates and retain their most loyal customers, thus solidifying future revenues.

“Looking at churn rates by customer segment illuminates which types of customers are at risk and which may require an intervention,” said Jill Avery, senior lecturer at Harvard Business School. “It’s a nice, simple metric that tells us a lot about when and how to interact with customers.”

By consolidating the vast amount of industry information into actionable, forward-thinking metrics, manufacturers can generate a clearer picture of how to achieve their business goals. And by employing analytics as a company-wide marketing plan, manufacturers can position themselves to be stronger competitors in the marketplace, better able to meet the demands of today’s ever-changing customer base. Not only can manufacturers deflect risks and potential financial pitfalls through efficient data use, but they can also propel their companies into a new realm of economic success.

 Webinar - 10 easy ways to bring parts books into the 21st century

Myths Distilled About Winning in the Aftermarket (Part One)

Digabit Inc April 3, 2015 Tags: , ,
featured image

Although OEMs have been working in recent years to regain market share in the parts sales business, independent third-party suppliers still rule the aftermarket domain.

Part of the reason is that customers believe aftermarket parts are cheaper than OEM parts and of the same quality. This perception extends to service providers as well – customers rarely return to dealers for non-warranty service because they view independent service providers as less expensive and less likely to offer unneeded repairs.

Even though these generalizations aren’t always true, they’re widespread enough to hinder OEMs from gaining a significant foothold in the lucrative parts and service business. Manufacturers should endeavor to change these customer-held beliefs over time, but in the meantime, it’s much faster and easier to dispel the fallacies your own employees and internal departments have about the aftermarket.

Let’s take a look at the common misconceptions about success with parts sales:

Myth #1: You should keep your best people on the primary product

The basis of this myth lies at the heart of the OEM identity. After all, you manufacture original equipment, and that’s what you do best. But when you keep all your top people on the primary product, your aftermarket business stands no chance against third-party suppliers for whom the aftermarket is their primary product. OEMs need a business model that focuses on parts sales. The market segment is too competitive for a part-time focus to be successful.

Myth #2: Your customers will automatically choose your OEM parts

Last month, we talked about how you have to give a compelling reason for customers to choose OEM parts over the competition. The key ingredient is lock-in. Aftermarket sales growth depends on customers being locked-in to buy your product or service. Extended warranties, long-term service contracts, patented parts you can’t find elsewhere, specialty service expertise – these are all examples of effective lock-in strategies.

Myth #3: Branding, advertising and social media are irrelevant for parts sales

Most OEMs do a remarkable job of marketing their original equipment, but they stop short when it comes to publicizing their after-sales services. Unless your customers are locked-in for life, your brand’s parts and services need to stay at the forefront of their minds. Manufacturers and dealers need to work together to generate buzz through press coverage, consumer events, and in-store promotions.

Myth #4: You have to lower prices to be competitive

Since most customers believe aftermarket parts are cheaper, slashing your prices may seem like a logical solution. Unfortunately, this accomplishes three things: 1) it lowers the profit margins on parts and services sold to locked-in customers and the small percentage of people who buy OEM parts regardless of price; 2) it incites competitors to lower their prices, thus starting a price war; 3) it sets you up to sacrifice quality for the sake of price. Instead, OEMs should focus on improving the overall customer experience and making their after-sales services more convenient for the customer.

Myth #5: Fill rate is the best yardstick of aftermarket performance

OEMs often measure their success and efficiency in the aftermarket by the percentage of orders satisfied from stock at hand, or the fill rate. But, as Harvard Business Review pointed out, “the level of demand that can be fulfilled through parts at the manufacturer’s warehouse has no meaning to the customer if her product hasn’t been repaired.” To truly increase customer satisfaction, manufacturers need to base their aftermarket business on customer-focused metrics like machine uptime rather than internally-focused metrics like the part fill rate.

Check out part two of our post for the next five myths about aftermarket success.

 Watch the video to learn a faster way to create parts catalogs

Mobile Websites and Apps: How OEMs Can Optimize the Mobile Experience

Digabit Inc March 23, 2015 Tags: , ,
featured image

For manufacturers, the global economy is moving away from manual processes and more toward the digitization of daily operations. From the production floor to the job site, the way manufacturers do business is a matter of staying on the cutting edge of the latest technological advancements. Not only is labor less physically demanding compared to the work of previous decades due to automation, but communications and data transfer are also being transformed into tasks that can be completed more quickly. And when factoring in the once-obtuse parts catalogs that OEMs and dealers relied upon, technology has served a vital purpose in moving these catalogs from thousand-page books onto the screens of computers and mobile phones.

But with such a dramatic shift in the way OEMs provide their services to customers, it’s possible that some companies aren’t fully maximizing how effective they can be in their mobile marketing strategies. However, modernity calls for greater customer engagement on the part of manufacturers if they wish to promote their own brands and achieve higher levels of business growth.

Data from Pew Research indicated that more than 90 percent of Americans have cellphones and nearly 60 percent own smartphones, which provides a large potential clientele of users who are capable of searching, contacting and working with manufacturers they can locate online. It’s not so easy, though, because simply having a mobile website doesn’t mean a certain company will show up in search results.

“OEMs can optimize their mobile offerings by creating precise, direct content geared to their customer base.”

Design for effectiveness

The key to leveraging information and communicating actively with customers is to restructure a traditional website to accommodate the needs of a mobile platform. On top of discrepancies between images, pixels and hardware, mobile websites should be designed for the purpose of interactivity on the go. For instance, marketing consulting company Moz noted page speed, reduced pop-ups and touchscreen navigability are some of the primary factors that manufacturers should focus on when creating a user-friendly mobile site.

Since wireless connectivity isn’t a guarantee in all locations, pages on mobile sites should be designed to load quickly and populate the screen with information so users can browse more efficiently. This can be accomplished by limiting redirects and factoring in that customers may accidentally click on certain items due to difficulties with touchscreen navigation.

Updated, consistent content

Once the design phase is complete, OEMs can optimize their mobile offerings by creating precise, direct content that is geared to their customer base. It’s important to note that while mobile websites are accessible by anyone with a web browser, mobile apps are exclusive only to those that own smartphones and probably paid for the app. Crafting content accordingly will help tailor messages to target audiences.

More shopping is done online than ever before and lacking the basic tools and technological solutions to capitalize on this development can directly hinder sales, according to Google research.

Roughly 61 percent of people would leave a mobile website if they couldn’t immediately find what they were looking for. In addition, 67 percent of people are more likely to purchase products from a website that’s mobile-friendly.

gears and manufacturing on top of mobile phone

Essentially, not updating to mobile systems to include the content customers want directly aids competitors because people will search elsewhere.

In terms of a parts catalog, having cloud-based software driving the transcription of numbers, orders and available parts onto a website or app is crucial because in today’s world of convenience and quick service, OEMs stand to gain from more closely aligning to the demands of tech-advanced customers. The after-market industry relies on obtaining spare parts as quickly as possible. Mobile website and app design can aid in this venture.

Impacting future growth potential

A report from mobile analytics company Flurry pointed out the amount of time spent on mobile apps is increasing every year. In 2014, the average person spent roughly 2 hours and 49 minutes on their mobile devices per day, with 2 hours and 19 minutes of that time spent on apps.

These developments are not mere fads, but documented avenues for greater success in the future.

Though manufacturing is typically thought of as one of the oldest economic sectors, the industry is actually advancing far beyond its capabilities of even a few years ago. No longer are phone calls, faxes and face-to-face meetings the primary means of transferring information and coming up with workable solutions to problems. With the use of mobile sites and apps, OEMs have an entire new world of opportunity at their fingertips and customers can see this information in real-time, creating a new, optimized relationship that benefits everyone involved.

 Learn about Documobile for tablets

The Secret to Helping Customers with After Sales Service

Digabit Inc March 13, 2015 Tags: , , ,
featured image

In an effort to increase customer satisfaction, differentiate from the competition, and achieve higher margins, the vast majority of OEMs have integrated some level of after sales service into their business model. For the most part, these forays into the service business go no further than spare parts supply for faster dealer repairs.

While spare parts management is critical, it has become a new baseline level of service, and customers are calling for more preventive measures, like the incorporation of smart technology, product-as-a-service models, consulting services, and customized warranties.

In recent years, market research firms have been strongly advising manufacturers to shift their attention towards these predictive after-sales service offerings, and early reports are overwhelmingly optimistic about the potential for this approach to revolutionize manufacturing.

Some leading manufacturers are already generating half of their revenue from the service business, thanks to the disproportionately high profit margins of services compared to new-product business.

However, what these reports and predictions leave out of the dialogue is how manufacturers can position these service offerings to truly help customers and enhance loyalty.

Selling The Outcome

The secret to successfully implementing an after-sales service strategy lies in transitioning from selling physical products to selling outcomes delivered by products.

Legendary Harvard Business School professor Ted Levitt famously quipped, “People don’t want quarter-inch drills – they want quarter-inch holes.” In other words, when customers are faced with a problem, they search for something that will solve that problem better than other alternatives.

Your customers didn’t pay you for a top-of-the-line riding lawn mower, they paid you for a beautiful, freshly mowed lawn that didn’t involve the discomfort of pushing a piece of equipment around the yard for 60+ minutes in ninety degree weather.

Maximizing Uptime

When equipment is down, it’s not solving the problem. Customers can’t make quarter-inch holes or maintain a manicured lawn. The product isn’t delivering on its promised outcome, so customers don’t feel like they’re receiving tangible value.

Downtime gives the customer two choices: get the equipment back up and running – and fast – or search for something else to solve the problem. This is why the most effective after sales services initiatives are geared toward, not just repairing equipment, but preventing the need for repairs in the first place.

If manufacturers want to keep customers happy, encourage brand loyalty, and drive repeat business, they need to maximize equipment uptime through predictive service efforts. It’s the only way the product will continue delivering its promised outcome.

Preventive Measures

Preventive maintenance is the new frontier for after sales strategy. More than 70% of manufacturers are evaluating, planning or implementing smart technologies for maintenance and optimization of their assets and their customers’ assets, according to a recent IDC report.

The application of smart technologies like sensors and data acquisition systems promise greater efficiency, cost reductions, and customer retention. In terms of preventive-focused after sales services, smart technology could prove especially useful as an early warning system, predicting when service events need to take place and enabling more responsive networks of service parts.

The movement towards product-as-a-service approaches is also gaining speed. Manufacturers share in the risk of the equipment’s operation by, essentially, renting out the equipment and assuring uptime to the customer.

As Heather Ashton, Research Manager of Service Innovation and Connected Products at IDC Manufacturing Insights, described, “In the coming years, manufacturers will continue to provide both competitive differentiation and higher margins by bundling or providing added services with products, including product-as-a-service business models where customers pay for product operational uptime and performance, over time.”

While the advent of smart technology and product-as-a-service in manufacturing is exciting, these trends won’t increase profits unless they are successfully translated into services that keep equipment up and running throughout the product lifecycle. To take a page from Ted Levitt, “people don’t want smart technology ­– they want continual uptime.”

 Watch the Documoto overview video

4 Ways for Manufacturers to Keep Dealers Engaged in Their Brand

Digabit Inc March 10, 2015 Tags: , , , ,
featured image

Most of the companies we work with here at Digabit rely on distributors and dealers to get their products in front of customers. This creates multiple layers between the manufacturer and consumer, leaving OEMs with little direct access to their end users.

As a result, maintaining strong dealer relationships is vital to manufacturing success. If the dealer isn’t happily engaged, the customer is unlikely to be excited about or even interested in the manufacturer’s product.

So how should manufacturers treat dealers in order to ensure that the end user will feel engaged with the brand?

A couple years ago, Gallup aimed to find the answer to strong supplier-distributor relationships, noting that the most effective ones were generally those in which manufacturers treated dealers, not as employees or customers, but as partners.

Let’s look at a few ways manufacturing executives can make that partnership work and optimize dealer performance:

1. Offer Exclusive Territories

Occasionally, manufacturers try to add more and more outlets for their products as a way to fuel growth. Unfortunately, as The Wall Street Journal explained, this strategy often leads to having too many dealers competing against each other for the same customers.

For a more dealer-friendly – and, ultimately, manufacturer-friendly ­– approach, offer your existing dealers larger, exclusive territories in exchange for greater promotion and display of your products. This might require cutting off weaker dealers so that you can focus your energy on high performers and ensure the market isn’t oversaturated or too competitive.

2. Improve Training Resources

While manufacturers have limited control over their dealers’ management policies, they can share best sales practices and training resources for a mutually beneficial relationship. Since the dealer’s salespeople serve as the OEM’s brand ambassadors, training can be a critical tool in helping dealers attract and retain top talent, turning their sales force into brand champions.

Motivated and well-trained dealers are better equipped to help customers understand the advantages and unique performance qualities of manufacturer’s equipment.

3. Setup One-on-One Support

To truly build and deepen manufacturer-dealer relationships, it’s helpful to have a point person. Arctic Cat, for example, promises its dealers a high degree of personal attention from a dedicated District Sales Manager and back it up with a 24-hour response guarantee.

Not only can field sales representatives maintain regular communication with dealers and keep them informed of new products and resources, but dealers will have the added benefit of knowing exactly who to contact with questions or feedback.

4. Help with Repairs

When products break, dealers need instantaneous access to part and repair information. By providing a centralized, electronic portal of repair manuals, instructional videos, maintenance advice, and parts information, OEMs can help dealers service their customers’ equipment quickly and efficiently.

Simply making these resources readily available will increase dealer productivity and profits and generate high customer satisfaction.

Want more ideas like this? Subscribe to our blog today and get the latest articles and industry news delivered straight to your inbox each month.

 Watch the video to learn a faster way to create parts catalogs

Only 30% of manufacturers are ready to go online

How Equipment Manufacturers Can Create a Successful Parts Sales Strategy

Digabit Inc March 5, 2015 Tags: , , , ,
featured image

While the aftermarket used to be an afterthought, leading OEMs have started to recognize the effect of parts sales on their overall financial health.

Not only are these sales less cyclical, but also they also frequently generate more profit and revenue than original equipment sales. According to Industry Week, sales from spare parts comprise 40% to 60% of total manufacturer revenues.

This is no surprise, considering American businesses and consumers spend approximately $1 trillion every year on assets they already own.

But the challenge – and it’s a formidable one – lies in devising and adapting a spare parts sales plan to ensure your dealers and customers buy OEM parts to help maximize profit margins.

Let’s go through a few of the ways you can drive growth, encourage customer retention and create a competitive advantage with your aftermarket strategy.

It’s All About Loyalty

As we’ve mentioned before, success in the aftermarket depends primarily on catering to your established base of customers. Delivering impeccable customer service and emphasizing the values you share with your customers are surefire methods to build customer loyalty.

Maintaining your customer base also depends on the durability of your original equipment. Every equipment replacement is an opportunity to lose your customers to a competitor.

On the other side of the coin, however, Sheila Brennan, program manager for Smart Service and Aftermarket Strategies at IDC Manufacturing Insights, cautions that “OEM executives must keep in mind that increased reliability of equipment is a double-edged sword when it comes to customer intimacy. Fewer service events mean fewer opportunities to create brand loyalty and form a customer relationship.”

For your aftermarket strategy to work, you have to find the middle ground between unreliable and over-durable. Providing extended service warranties and discounted equipment upgrades can help reduce the likelihood that customers will switch to competitors.

Lock In Your Customers

Third-party aftermarket parts suppliers will almost always win when it comes to price, so OEMs have to give customers a compelling reason to go with their parts. While this can come in the form of greater quality assurance or a better service experience, the most foolproof way to ensure customers will choose your part over the competitor’s is to give them no other option.

Patented part designs, service expertise, convenient replacement kits or warranties are all proactive offerings that lock customers into your aftermarket. You are supplying something they simply can’t get anywhere else.

Predictive analytics company Forio offers the basic example of a patented three-prong stapler and staples. While the original product – the stapler – itself may not have a huge market, in order to derive any value from it, every customer will also need to buy a few boxes of three-prong staples on a repeat basis. Over time, sales of staples will far surpass sales of staplers.

The Importance of Technology

To manage and grow aftermarket parts sales effectively, manufacturing executives have to put the proper tools in place.

Warren Smith, global industry director at Infor, suggests that you utilize fast, agile technology that is specialized for the equipment industry. “It will need to span the entire lifecycle of the equipment, from manufacture to aftermarket service, in one integrated solution.”

Incorporating manufacturing-specific products like Documoto into your aftermarket mix empowers dealers and customers to make real-time decisions based on accurate information and order the spare parts they need in a fast, convenient and electronic way. This enhances expert technical support and delivers unprecedented value to your customers, boosting spare part sales and driving repeat business.

Learn more about using Documoto as an integral solution for aftermarket parts sales.

Atlas Copco Case Study Download

 White Paper - Supercharge OEM publishing time with database approach