In the process of transforming the incremental market to the stock market, the development of the after-service market has highlighted its importance. This is the next fiercely contested commanding height of the enterprise. Whoever wins the after-service market will win the old customers and win Good reputation and brand opportunity. At the same time, the after-service market can also bring certain benefits to agents. With the increasingly fierce competition in the complete machine market, the profit of the complete machine sales continues to shrink. An enterprise lacking an aftermarket is equivalent to walking on one leg, relying solely on the complete machine. Sales agents have been difficult to survive, and under the conditions of the stock market, the ability of the market after service will surely become a watershed in distinguishing the quality of agents.
How to develop the aftermarket is a brand new subject. Over the years, many companies have invested 90% of their time, energy, and budget on the sale of the whole machine, and even shouted the slogan of "free service", giving the service as a marketing tool to users for free. When the after-service market began to enter people's vision, many companies suddenly discovered that the after-market turnover in their hands was pitifully small, because old customers, out-of-warranty services and accessories had long been lost.
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The dilemma of "players" in the after-service market
At the Changsha China Construction Machinery Aftermarket Thousand Talents Summit in May 2019, Mr. Xue Xiaoping proposed the famous "elephant, rabbit and ant theory", describing the "players" in the construction machinery aftermarket ecosystem: OEMs "Elephants", agents and distributors are "wolves", domestic parts suppliers are "rabbits", social repair shops, parts stores and individual maintenance technicians (also known as "backpackers") are "ant ".
Facing the after-service market, the foreign brand "Elephant" and the domestic brand "Elephant" have two completely different mentalities: The foreign brand "Elephant" deeply understands the importance of the aftermarket, and tries to protect the profits of original parts and services. , I hope to enjoy the "cake" of the aftermarket exclusively. On the one hand, parts and maintenance information are kept strictly confidential, and part numbers are frequently changed; on the other hand, agents’ exclusive service areas and parts supply channels are strictly protected, and agents and distributors are strictly prohibited. Dealing with non-original parts. Indeed, the accessories of "Elephant" and "Wolf" used to be very profitable and made a lot of money.
On the contrary, the domestic brand "Elephant" seems to have insufficient understanding of the importance of the aftermarket. They are still immersed in the high-margin sales of the whole machine. They regard maintenance service and parts business as "chicken ribs" and adopt a kind of "who loves to do it". "Who does it" laissez-faire attitude. Some domestic brands "Elephants" even feel that if "Ants" assume all the services, they can reduce the pressure they face in the market after the service, and they can still lose some money in terms of services.
All "Elephants" believe that the equipment is produced by them and sold to users through "Wolves". All technical standards, maintenance manuals, and parts catalogs are formulated by them. For this reason, they have established a complete set of services and accessories support. On the Internet, the customers are of course theirs, and of course customers will come to them for help when they encounter problems. Due to technical barriers and supply channels, customers of brand A usually do not go to brand B to purchase accessories and seek services. Therefore, the initial competition in the market after service is not so fierce. The "elephant" focuses on the whole machine. In terms of sales and competition for market share, they did not pay serious attention to customer needs and pain points in the aftermarket.
With the rise of "Made in China", more and more "rabbits" have grown and expanded, and more "ants" have met the needs of customers in the after-service market. More than 80% of the after-service market has been lost to "Elephant". Outside the service network. When the stock market came, "Elephant" was surprised to find that customers, especially those old customers, were not in the hands of "Wolf", and many old customers did not look for "Wolf" to do business long ago! "Elephant" thinks The loss of customers is the responsibility of the "wolf", so they are constantly putting pressure on the "wolf" to increase the number of service technicians, increase the coverage of service outlets, and increase the inventory of parts to improve the timeliness of service.
However, "Wolf" believes that the loss of old customers is because the price of original parts is too high, and "Elephant" prohibits "Wolf" from operating subsidiary parts, causing them to watch the loss of old customers. In recent years, the "wolf" life has not been easy, and the sales profit of the whole machine has continued to shrink, resulting in the unsustainable operation model of "the whole machine maintenance service". The market decline a few years ago is still fresh in memory, leaving "wolves" with lingering fears about increasing service personnel, because the market will not make money after the service, and the increase in service resources will inevitably lead to a decline in efficiency. The free service slogan shouted by "Xiang" makes market profitability after service a fantasy.
The "elephants" looked down on the "ants" in their hearts, thinking that they were just "spouse and wife shops", a group of scammers "selling fake and shoddy parts," and they were not worth looking at. It is precisely this arrogant attitude that gives the "ant" the opportunity to grow and develop. With more and more equipment sales and declining rents, it is more difficult for customers to make money. They have to pay attention to equipment repair and maintenance costs, otherwise they will not be able to make money. In this environment, the first choice of customers in the aftermarket is not "elephant" and "wolf", but "ant" and "rabbit". Unknowingly, 80% of the old customers and the aftermarket have been renewed. Shuffle.
"Ants" are also facing challenges from the market. The prices of accessories are becoming more and more transparent, making it more and more difficult to make money. "Elephant" and "Wolf" have awakened and began to pay attention to the challenge of "ants", extending the equipment warranty period, signing service agreements, adjusting the price of accessories, and launching adaptive and remanufactured parts in order to restore those lost old customers. Many "ants" lack technical support, and some "ants" still do not speak good faith and deceive customers. National tax regulations have a great impact on the profits of "ants". Although many "ants" are close to customers and operate flexibly, they are small in size. There is a serious inventory backlog in accessories stores operated by "ants", and many "ants" are still struggling to survive.
The situation of "Rabbit" is similar to that of "Ant". The goal of many "Rabbits" is to eventually become a parts supplier of "Elephant" through the development of the aftermarket and realize their dream of becoming bigger and stronger. However, when they became a supplier of "Elephant", they realized that the payment terms of "Elephant" were very harsh, and they had to advance a lot of funds for the production process of "Elephant", and the cash flow faced huge challenges. Faced with unfair payment terms, the "rabbits" had to swallow their anger, because they simply couldn't bear to give up the supplier qualifications that they had so hard to obtain.
Community of Destiny in the After-Service Market
From this point of view, all "players" in the after-service market have a hard time, and every family has a hard-to-read book. "Elephant" hopes to increase service resources, but "wolf" is unwilling to increase investment. Although the service resources of "ant" and "rabbit" are widely distributed, they are not professional enough. "Elephant" wants to use it but dare not use it. Very tangled inside.
"Elephant" has to admit that with such a huge amount of equipment, only relying on the service capabilities of "Wolf" can no longer meet the needs of customers. The high customer churn rate proves this point. "Elephant" and "Wolf" There is no solution to this. The root of the problem lies in: "Elephant" and "Wolf" did not give up the idea of "cake" in the market after exclusive service!
In the article "On the Community of Destiny in the Aftermarket", the author analyzed in detail the relationship between the "players" in the after-service market. If we look at this problem from the perspective of customer needs, we will find that: the rate of customer churn is high. It shows that "Elephant" cannot provide aftermarket products that customers need, while "Ant" and "Rabbit" can. Especially in the period when the market declined in the previous few years, "Elephant" only saw that it was difficult for itself and "Wolf", but the life of customers was equally difficult. "Elephant" sold excessive equipment through price wars and credit. As a result, the competition among customers becomes more intense and it becomes more and more difficult to make money. "Elephant" and "Wolf" both clamored that the interests of customers are first, but when the market is down, many customers have overdue loans that are not available. "Elephant" and "Wolf" not only failed to help them, but also sued them. court. If it hadn't been for "ants" and "rabbits" to help customers through the difficulties, many customers would no longer exist today.
Therefore, "elephant" and "wolf" and "ant" and "rabbit" are not necessarily competitors. They can complement each other, help each other, cooperate, and develop together to establish a community of destiny for the after-service market and maintain the after-market ecosystem. This is the only way out for the healthy development of the aftermarket, and it is also the result that customers most hope to see.
The "addition, subtraction, multiplication and division" strategy of the after-service market
We must understand that customer needs are divided into levels. Some large corporate customers require high-reliability original parts, and those individual customers are more price sensitive; some parts, such as the moving parts in diesel engines, customers like high-quality original parts. Factory parts; some parts customers will never buy original parts, such as: bucket teeth, four wheels and so on. Therefore, the cooperation between "Elephant" and "Ant" may better meet the needs of customers.
In order to establish a post-market community with a shared future, all "players" must think about their own development strategies. The author suggests adopting the post-market "addition, subtraction, multiplication, and division" strategy. The basis of this strategy is to abandon "elephant" and "wolf" and "ant" and The "rabbit" competition has turned to cooperation.
addition
With the increase in equipment inventory, "Elephant" will of course ask "Wolf" to increase the number of service personnel and parts inventory. This seems reasonable, but it is likely to increase the cost of the agent, causing the cost to exceed the benefit, and many new additions In the branches and service stations, the actual increase is the cost rather than the profit. Many newly added parts stocks eventually become sluggish stocks.
Therefore, it is unrealistic for the "Elephant" to expect the "wolf" to increase service resources. The market for the whole machine is ups and downs. It is too inefficient to rely on the power of the "wolf" to increase the service coverage, and the timeliness of the service will not be profitable. Focusing on profits will inevitably sacrifice service coverage and timeliness. Moreover, the ecosystem of the market after service has been destroyed. Who wants to invest money in "non-profitable businesses"?
The author believes that “elephant” can use the service resources of “ant” and “rabbit” as a supplement to the “wolf” service network to form a “hybrid” in the after-service market. For example, “wolves” can cover provincial capital cities. , Covered by "ants" in prefecture-level cities and counties, to provide customers with more timely services, and to solve the contradiction between efficiency and timeliness through cooperation.
Subtraction
The "family doctor-like" service model is unsustainable. The profit of the whole machine declines and the labor cost rises. Sooner or later, this "scissors gap" will lead to a loss in the operation of the "wolf". Therefore, "Elephant" must abandon the linear growth strategy and find a breakthrough in improving service efficiency. The lack of flexibility in the allocation of service resources according to the amount of equipment holdings requires companies to passively adjust the service configuration and switch between recruitment and layoffs when the market fluctuates, which leads to serious damage to the corporate vitality and damage to the corporate culture.
To put it another way, "Elephant" and "Wolf" can use "Ant" as partners, provide them with training, and then subcontract part of the maintenance work to "Ant" to make up for the "Wolf" in service resources. insufficient. Of course, cooperation must be a win-win situation. The "Elephant" must assess the service quality of the "Ant" and must also provide sufficient benefits for the "Ant". As long as they can make money, the "ants" are willing to cooperate.
multiplication
Many equipment are being constructed in remote areas, and service technicians often need to drive for a few hours to troubleshoot a simple fault. The new crown epidemic has increased the difficulty and uncertainty of on-site services, but it has also given birth to the development of remote intelligent services and self-service. And remote support becomes simple and feasible.
Through the empowerment of intelligent equipment, an expert can guide and support 100 junior service technicians, empower them, guide them in maintenance, maximize the power of experts, and invite those masters and masters in the society to diagnose intractable diseases. . If "Elephant" and "Wolf" cooperate with "Ant", the entire service process can be recorded through smart equipment, and "Elephant" can check whether the service meets the specifications and whether the accessories used are compliant to ensure customer satisfaction. The normal service does not require the real-time intervention of the "elephant", they only need to confirm that the requirements are met after the service, and settle the service fee for the "ant".
If the "ant" encounters difficulties in the repair process, they can request online assistance from experts through smart equipment. Experts far away from the headquarters can view the scene in real time through the high-definition camera on the technician's glasses, and guide the technician to analyze and diagnose the fault in time. Solve customer’s problems in a timely manner.
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The entire service process (including photography, video recording, accessories confirmation, expert guidance, etc.) can be used as training materials and knowledge bases to provide case data for the future artificial intelligence service system, which will greatly promote the development of the intelligent service system and become an "elephant" "A very precious wealth of knowledge.
division
We must realize that future competition is also a competition for operational efficiency, and it is impossible to enhance competitiveness by increasing the number of service personnel. The same is true for parts inventory management. In order to improve the timeliness of service, "Elephant" asks "Wolf" to increase the inventory of parts. It seems that the more parts in stock, the greater the possibility of meeting customer needs, but this is not the case.
If you store the right parts, you can get profit returns, capital turnover and customer satisfaction, but if you store the wrong parts, you can only produce sluggish losses, capital occupation and customer complaints. Obviously, only storing the correct parts can improve the timeliness of service. Therefore, we cannot blindly increase inventory, but use the intelligent inventory system to calculate what parts should be stored and how much quantity should be stored (see the author’s article "From "What is needed" to "What should be stored"" ).
The inventory turnover rate of parts is equal to the accumulated outgoing cost in 12 months divided by the average inventory amount in 12 months. The numerator in the formula is the cost of parts sales, and the denominator is the inventory cost. Increasing sales volume can increase the inventory turnover rate. Also through throttling, reducing the denominator is also a smart strategy, reducing unnecessary inventory, eliminating sluggish and excess invalid inventory, which means reducing parts that should not be stored, reducing the denominator, and inventory turnover. The efficiency will naturally be improved, which will increase the return on investment of the accessory business.
Increasing inventory is not an effective means to improve timeliness and customer satisfaction, but smart inventory management is, because now the spare parts inventory of "elephant", "wolf" and "ant" is not less, but is seriously surplus. The key problem is that companies make inventory planning based on experience and feelings. It is difficult to accurately calculate what to store and how much to store, resulting in a huge waste of inventory and a risk of overstocking. According to the statistics of Youke Information Technology, the average invalid inventory in agents and parts stores exceeds 80%, that is, 80% of the parts inventory should not be stored or stored too much, which makes no substantial contribution to corporate profitability and customer satisfaction. If the company does a good job in parts inventory planning and management, it can greatly reduce the funds occupied by these invalid inventory, increase the inventory turnover rate, and double the return on investment of the parts business!
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In the past, the parts business had high profits and made money. Now parts prices are becoming more and more transparent, profits are very low, and competition is very fierce. If companies do not manage inventory assets, huge inventory holding costs and sluggish inventory risks (hidden costs), companies may not make money. Reducing unnecessary parts inventory to improve efficiency is what it means for companies to "divide", which is especially important in the market down cycle.
Vicious competition and price wars will only make the ecology of the industry worse and worse. Only cooperation and a community of shared future can bring benefits to customers, enterprise development, and ecological health. The above is the author's humble opinion in the after-service market. All "players" in the industry must focus on customer needs, improve efficiency and corporate competitiveness to do "addition, subtraction, multiplication and division". The road is under our feet, and the power is in your hands. Please choose where to go.
