The time for aftermarket and services revenue growth has finally arrived. In fact, a recent TSC survey suggests that Service Revenue will be the top initiative for 2018 – a full 46% of survey respondents indicated this was their highest vote getter. Here are some of the key benefits of addressing existing customers’ needs for B2B manufacturers:
- increased visibility into the existing install base
- improved customer connectivity and engagement
- enhanced effectiveness of service revenue campaigns
This is a welcome change as tending to current customers’ needs is critical for a healthy growth strategy for any company.
Installed Based Management in the spotlight
What’s even more heartening is that approximately 31% of the survey respondents also indicated that Installed Base Management is a top initiative for their companies. Now this may sound obvious, but without a solid understanding of customers, their behavior and needs, revenue generation initiatives are doomed for failure. Or at least lots of unproductive and incomplete implementations.
None of this is possible without investing in people, process and tools – and in this regard, more than 60% of Service organizations are planning for budget increases to support growth. For most of these organizations the cost investment comes in the form of better account management and in sales and marketing initiatives to increase service product reach.
Know your customers
In addition to actual coverage and renewal, service organizations must understand how customers are utilizing products and services. Awareness of customer adoption and usage will allow for improved account management opportunities. This customer intimacy during the asset lifecycle will further create the makings of new Innovative Products and Services in the future. It might also yield ideas for net new services that can be valuable to customers.
From Installed base management to Aftermarket Engagement
B2B manufacturers and their distribution partners are focusing on growing their aftermarket and services revenues now more than ever. And rightfully so: selling to existing customers is wildly profitable and can bring more top-line revenues than original equipment sales over the life of customers. The thing is, manufacturers have known this forever. So, what is causing this shift to happen now?
The answer lies at the intersection of people, processes and tools. While the motivations have existed for a while, even if they had the right set of people in place, organizations simply did not have the tools to effectively sell to their installed base. With the advent of big data and the emergence of AI, the tools for a true system of intelligence are now beginning to take shape. And we are not talking about IOT (a 20-year old piece of equipment in the field doesn’t have any sensors and is not sending any IOT data to analyze). We’re talking about systems of intelligence that enable manufacturers to effectively identify who their customers are, connect with them in meaningful ways, and to engage with them through the entire lifecycle of the asset. We’re talking about end-user applications that provide actionable insights to sales, marketing & service functions and directly drive customer engagement and ultimately, top-line revenue growth. Installed base management platforms like ServiceMax and CRMs like Salesforce, currently offer out of the box solutions for streamlining data collection and visualization, while also providing service and sales teams with the tools they need to manage inbound service request. Other companies, like Entytle, are taking this a step further. By applying AI and machine learning algorithms to massive amounts of historical and new customer data, the platform cleanses and reconciles ERP, warranty, CRM and service contract information to provide enhanced visibility into the installed base and predictive business insights. This enables service, sales and marketing professionals to proactively sell services and parts rather than waiting for the phone to ring.
The sophistication of such tools and the underlying big data and AI technologies powering them is now at a point where integrating and deploying these systems of intelligence can happen in a few weeks or months. Manufacturers and their distributors no longer have to be captive to multi-year million-dollar engagements and can test and launch aftermarket engagement campaigns with minimum to no business disruption at all.
About the Author
Vivek Joshi is the CEO and Founder of Entytle, a Palo Alto based company that helps B2B manufacturers increase customer loyalty and lifetime value. Entytle’s AI-driven Aftermarket Engagement platform Insyghts assembles data from multiple systems, and processes that data to identify usage patterns and customer segments, deliver opportunities, and drive revenue from installed base.