The responsibility for ensuring maximized product uptime is shifting from the end-user to the manufacturer. This shift means manufacturers need to start uncovering ways to increase cost efficiencies throughout the entire value chain. And, that need to uncover hidden after-sales service revenue is ultimately driving them to completely transform business logic, company cultures and product development strategies.
Today’s global manufacturers are at a pivotal moment, and those that adapt to the changing climate in 2019 will be the ones to come out on top. That’s why, recently, we sat down with academics, customers and industry leaders to talk about that digital change for our newest Orange Paper, 2019 After-sales Service Predictions: Powering The Journey To Servitization Through Maximized Product Uptime.
In this paper, we learned from Jay Johnson, General Manager at Daimler Trucks North America and Jon Dickinson, Director of Aftermarket Sales at Spartan Motors about the challenges facing automotive and trucking manufacturers today. Check out the list below to hear their 8 ways to uncover hidden after-sales service revenue in the months ahead:
1. Shift from reactive-based repairs to proactive-based maintenance.
In a world where most customers would rather plan their maintenance, and preferably eliminate downtime, repairs need to be preventative – and, if after-sales service failure causes unexpected downtime, the manufacturer could ultimately suffer the consequences to after-sales service revenue. “A lot of the business is very transactional,” says Johnson, “You don’t always know what the blips on the radar actually are until after [the failure] happens. So, instead of transactional, reactional work, we have to start thinking about ways to be more on the anticipatory, proactive side.”
2. Focus less on new product sales and more on service revenue.
“We build things as manufacturers,” says Dickinson. “The industry is focused on producing a product. But about a year ago, we discovered the question, ‘how do we better position ourselves in the market landscape?’ The biggest opportunity for growth is after-sales service, rather than new product sales. It’s the biggest driver to achieve repeat sales and customer loyalty. This was a huge awakening within our organization, and with a larger focus on the after-sales service side of the business, we’re bringing the business together through a singular focus on how we address our customers.”
3. Invest in training for the workforce.
Training results in a stronger workforce, which almost always results in better overall after-sales service revenue. “Most companies don’t necessarily focus on training,” says Johnson, “they just try to find the quickest to onboard. But, a relentless pursuit for perfection through training and development is what brings people together.” That’s why organizations who invest in training are ahead of the game.
4. Adopt a comprehensive customer service technology.
“Spartan Motors has a program called Project Horizon,” says Dickinson, “where we laid out the different parts of the organization and realized that technology is what we needed to scale our model. We realized we needed to listen to what our customers were saying to us, and ultimately learn how to become customer-focused – without incurring the cost, which can be a very expensive business model. We needed products that create a more efficient way to decipher where the help is needed most.”
5. Always be challenging, changing and creating.
Finding new revenue sources requires creativity. “I started in the business at Honda Motors and learned to always challenge, change and create,” says Johnson. “Go into things and ask why you do them that way; question it and try to create a new way to do them. Nokia lost their principle because they couldn’t execute this – they couldn’t transition into the smartphone industry and they got left behind.”
6. Collect and study customers’ behavior.
Sometimes, after-sales service revenue is hidden in the customers‘ behavior patterns. “Look at everything that’s not a value-add to your customers and decide if it’s a priority to you,” says Dickinson. “If the customer’s not willing to pay for it, then you shouldn’t [spend time on it]. Time is the one commodity that you can’t buy, barter or trade, so the quicker customers can get to do what they want to do, the better. ‘Easy-to-do-business-with’ is more valuable than ever.”
7. Evolve sensor technology.
To maximize the value of your data, and the revenue you gain from its analysis, you have to invest in the right technology. “You have to invest in technology, but you can’t just invest in the proven ones,” advises Johnson. “Sensor data has been around a long time, and reliability is better than it ever has been – but it wasn’t always that way. During a recent benchmarking study, Honeywell said their integration of sensor-data points for vibration on a jet took twenty years to get where it is today, but they’ve written algorithms to correlate the vibrations with the actions over time.”
8. Invest small now, reap big rewards later.
“Start small – but start somewhere,” says Johnson. “For example, DTNA is pushing to print 3D parts. And while out of the 70,000 lines we sell a day, 3D parts only make up a fraction of that – we have to start somewhere. Invest small now so that when that technology matures and is more economically viable, you will have already started spending nickels to earn dollars.” Dickinson agrees, adding, “Aim small, miss small. Where do we start? By identifying key dealers and service centers and starting meetings with them to communicate our goal, so our vision gets everyone on board with the process together rather than just voicing from the top down.”
Download our new Orange Paper to learn more about what these thought leaders predict will be major manufacturing trends in 2019 and beyond, and what resources and technologies will be needed to win.