The after-market of construction machinery refers to various derivative services around the use of equipment after the equipment is sold. It covers various follow-up services around equipment after-sales service and the use of customers in the process of equipment from sale to scrap The general term for a series of trading activities that results.
The aftermarket of construction machinery includes: repair, maintenance, spare parts supply, financial services, insurance, leasing, second-hand equipment, overhaul and remanufacturing, etc. The services required by customers also include: refueling, finding machine operators, looking for engineering, etc. In mature markets in Europe and North America, companies attach great importance to the post-development market. This is an important link for construction machinery equipment OEMs and agents to realize service premiums. The profit structure pursued by the company is that two-thirds of the profit comes from the post-market , A third came from new equipment sales. In this way, when the market for new machine sales declines, the income of the aftermarket is an important guarantee for the company to "live".
The turnover and after-market contribution rate of Caterpillar agent Tromond Industries, the agent ’s after-market turnover contribution rate is about 60%, the profit contribution is close to 80%, and the after-market absorption rate (ie, after-market revenue accounts for The ratio of operating expenses) exceeds 100%. In this way, when they encounter a downturn in the market, they can survive the crisis without layoffs.
Why do customers lose a lot?
Compared with the aftermarket contribution rate of mature foreign markets, the proportion of Chinese agents in the aftermarket is pitifully low (Figure 2). 80% to 90% of the aftermarket services and accessories business are lost to social maintenance plants and accessories Stores and "backpackers" (individual service personnel), closed loop after-market service systems built by OEMs and agents only cover less than 20% of end users. After the end of the equipment warranty period, many customers have been lost. Why is there such a situation?
First of all, the loss of customers in the aftermarket is an inevitable result of the OEM ’s marketing policy of quick success and profit. The 4 trillion economic stimulus has caused a serious overcapacity in the industry. For example: Zero down payment, buy the whole machine to send maintenance accessories, free maintenance for life ... For the promotion of the whole machine, the after market is given to the customer as an "adding head", clearly conveying a message to customers and employees: the after market is not important! It can be said that the business policies of the OEMs have destroyed the ecosystem of the aftermarket.
Second, the after-market business model designed by the OEM is a top-down, closed-end service model. The agent has manufacturer authorization and technical information (including man-machine dialogue system), and only allows the sale of expensive original parts. Initially, users purchased construction machinery and equipment of foreign brands. When spare parts were needed, they could only be purchased from authorized agents. With the rise of "Made in China", more and more domestic spare parts can replace original parts, and the cost performance is more competitive. Customers' choices will of course change accordingly.
Third, the equipment market in the Chinese market exceeds 7.5 million units, and the closed service system of agents simply cannot support such a huge equipment inventory. In addition, the OEM ’s free service policy has caused the after-sales service to lose money. In this case, the agent has neither the ability nor the motivation to provide services for the outsourcing equipment. Due to the low service coverage, agents often only meet the needs of the equipment within the warranty. It is difficult to ensure the timeliness of the service of remote areas and equipment outside the warranty. The loss of customers is an inevitable result. Repair shops and backpackers naturally become after-sales services. The perfect addition.
A few years ago, the construction machinery industry experienced a market decline for several years. OEMs, agents, and users all faced a survival crisis. Agents have been overwhelmed by their own survival in order to survive, and it is difficult to have the power to help customers. He and the accessory store help customers overcome the difficulties. It is an inevitable choice for customers to turn services and accessories from agents to society, otherwise customers will not survive.
After careful analysis of the aftermarket of construction machinery, the author believes that OEMs and agents have always used a monopolistic mindset to operate a fragmented and fully competitive aftermarket, thinking that the equipment I sell to users, and of course customers are my customers, services and accessories Of course, I will come to buy it from me. Participating in the buyer's market competition with this seller's market thinking will inevitably lead to the loss of a large number of customers!
The main responsibility for the current status of the post-market ecosystem lies in the new machine marketing strategies of the OEMs for quick success. The post-market is to make slow money and cannot achieve immediate performance goals. Marketing, marketing, and marketing are still the main melody of many OEMs today. Looking at their marketing and aftermarket development budgets, they understand that the attention of OEM management to the aftermarket is only lip service. Nowadays, those aggressive marketing and business policies are back, and the price war is intensifying. I did not expect people to forget the pain of previous years so quickly.
Aftermarket competition has changed
Monopolies require barriers, whether they are technical barriers or market access barriers. Although OEMs often change part numbers and keep various technical information strictly confidential, they still cannot establish technical barriers in the aftermarket and buy them from suppliers The spare parts can be sold for several times the price when they are replaced by their own brands. Such an era is over. After the warranty period of the equipment, original parts lacking barriers are no longer an inevitable choice for users.
After decades of development, the quality of "Made in China" products is getting higher and higher, and the cost competitiveness is becoming stronger and stronger, as more and more domestic equipment is exported overseas. The same is true of parts and components. When it comes to parts stores, people will immediately think of couples selling fakes. Nowadays, many parts stores are taking the road of high-end, high-quality brands, with better product quality, larger scale of operation and management methods. It is also more scientific. It can be said that the quality of sub-factory parts and original parts are getting closer and closer, and the cost performance is even higher.
The same is true for maintenance services. We used to think that authorized agents ’services are more professional and more reliable. But the free service policy of the OEM makes the service personnel in the agent ’s low position. During the market decline in the past few years, many service personnel left the agent and became backpackers. A member. A friend told me in private: "Without excellent repair technology, backpackers are really difficult to survive," because this is a profession that relies heavily on word of mouth, customers do not recognize your ability, there is no meal, and they are not confident in their skills The technicians usually choose to stay in the agent to continue leveling, rather than coming out as their own boss.
The table above lists the author's comparison of the competitiveness of agents and backpackers / accessories. Unlike many people's perceptions, agents are not only inferior in price, but also inferior to the overall competitiveness of backpackers / accessories Store, which is why a large number of customers are lost. After the failure of the post-market failure of the law of "cheap is not good, good is not cheap", it is not surprising that a large number of customers are lost to backpackers and accessory stores.
How can OEMs and agents win back customers in the aftermarket?
After giving up, the market is equal to giving up the customer's viscosity and giving up the future, which many people don't really understand. Without the aftermarket, agents cannot sustainably develop, and such a high rate of customer churn is fatal to agents. Once there are no repeated purchases and word of mouth from old customers, new machine sales must start from scratch, not only The cost is high and the risk of new customers is greater.
The author believes that if OEMs and agents want to retain customers in the aftermarket, they must first abandon the current marketing strategy of quick success and quick profit, rebuild the ecosystem of the benign market after development, and value the value of customer service. A fundamental question in the market ecosystem after the reconstruction is: Should we develop the market around the OEM's production capacity, sales volume, and occupancy, or should we develop the market around customer needs? To give an example, in a market where only one thousand construction machinery and equipment is needed, the OEM has oversold two thousand units through various promotional methods. What will happen? The equipment operating rate will inevitably decrease significantly, and fierce competition will make it difficult to increase the cost of desk shifts, and customers will not have the money to undertake high-quality repairs and maintenance. Once the ecosystem of the post-market is destroyed, no one can benefit from it.
Therefore, OEMs and agents should carry out market activities around the needs of customers. How much equipment they sell and how much market they occupy is only the result. The practice of amplifying market demand through artificial means violates economic laws and will eventually get market revenge. The service coverage of agents is limited. Why can't we use backpackers and accessory stores to extend our service network so that customers can enjoy more timely and convenient services? Why can't OEMs cooperate with domestic brands to create their own second or third brand accessories to better meet customer needs? OEMs and agents cannot enjoy the cakes of the aftermarket alone. If the enterprise really regards satisfying customer needs as its highest program, it will inevitably find ways to meet customer needs and strive to create more loyal customers, rather than blindly To meet the needs of its own production capacity, rely on price wars and business policies to kill you in the red sea of new machine sales.
When Professor Michael Porter of Harvard University visited China in 2004, he told a very interesting story. There is an island in northeastern Canada. In the past, there were many Indian tribes living on hunting, but now only one tribe survives, and the other tribes disappear. Professor Porter has always been curious. What made this tribe survive? Through research, it is found that other tribes first explore where there are more prey before hunting, and then rush to hunt; and this tribe has a strange tradition before hunting, they will burn the bones of animals on fire, and then according to the bone crack Direction to determine the direction of the prey. Professor Porter believes that this tradition of near witchcraft makes them different from other tribes in hunting. It is precisely this difference that allows them to avoid competing with other tribes in the Red Sea and survive to this day.
After the market environment has changed, what should OEMs and agents do? They can choose to continue the price war, fight for business conditions, and send out the aftermarket, and the result will be the last bullet (profit), as Einstein said: "Continuously use the same method Doing the same thing but expecting different results is ridiculous!
