In 2012, China's per capita GDP reached US $9000. According to international experience, the turning point from manufacturing to service transformation occurred in the year when the per capita GDP reached US $8000 to US $9000.
Since 2012, China's industrial product development support has continued to decline, and service expenditure has increased rapidly, reflecting the changing trend of "from manufacturing to service" at the consumption level. The market has gradually entered the stock feature from the incremental feature, and the market has also entered the buyer's market from the seller's market, so customers have more say.
In 2012, the construction machinery industry experienced market adjustment for five consecutive years. Overcapacity made the characteristics of the buyer's market more obvious. If the product or service is not good, customers will naturally lose.
The rapid growth of 20 years in a row has made many enterprises focus on sales rather than service. Some enterprises even put forward the slogan of "lifelong free service", taking service as a means and gift of whole machine promotion.
When the industry entered the stock market, the sales of complete machines declined, and the enterprise urgently needed to survive in the post market generated by the equipment ownership, the enterprise suddenly realized that a large number of old customers and post market businesses had been lost, and the construction machinery industry had become one of the industries with the lowest customer loyalty.
Construction machinery is similar to automobiles and agricultural machinery. After the realization of equipment sales, customers still rely heavily on the service support of enterprises, which leads to a "post market", namely, repair, maintenance, service, parts supply, technical consultation, equipment modification, accessories, second-hand equipment, overhaul, remanufacture, lease, etc. With the dual carbon policy and emission upgrading, oil to electricity, charging, electricity replacement Fueling and other services add new dimensions to the aftermarket.
However, many enterprises believe that the post market is a "false proposition", because when the complete machine market declines and the post market is urgently needed as a supplement, they find that they can hardly find any entry point in the post market. They lack both competitive products and technologies and conditions. The policy of free service in the past few years has had a great side effect, which has made enterprises taste the bitter fruit.
Farmers know that no pains, no gains. If they want to harvest food, they need to sow, weed, water and harvest. What do our enterprises sow in the post market? "Lifetime free service" and "whole machine maintenance service". What do you expect to gain after giving away all services for free? Of course, the service consumption cannot be upgraded. According to the 2021 White Paper on the Construction Machinery Industry, 72% of service technicians have been employed for more than 10 years, and only 9% of them have been less than 5 years. The service in the construction machinery industry is still at a low level of labor-intensive, low efficiency, and poor competitiveness. In 2022, about 75% of agents and 85% of accessory enterprises will suffer losses!
In fact, the significance of service and post market far exceeds its contribution to turnover. Because of the high value of construction machinery, many enterprises look down on the aftermarket business and earn much faster by selling complete machines. However, the service life of a piece of equipment is 8-10 years, and the customer will replace it in 3-5 years on average. The sales of the complete machine is a typical "low-frequency" business, similar to that of a hammer sale; While maintenance, repair and spare parts oil are "high-frequency" businesses, and customers need such services every month or every quarter. The customer's viscosity will naturally be higher if the service is well done.
In 2021, Caterpillar will have a turnover of 51 billion US dollars, a profit of 6.9 billion US dollars and a market value of about 100 billion US dollars. Another company, Netflix, is engaged in streaming media services. Its turnover in 2021 will be 24.9 billion US dollars, less than half of Carter's, and its profit will be 5.1 billion US dollars. Its employees are only one tenth of Carter's, but its market value is three times of Carter's! Similarly, Tesla's sales volume is far less than that of General Motors, but its market value is 12 times of that of General Motors!
Why are Tesla and Netflix so valuable? Just because they are "data companies", they have a subscription business with customers, and the customer viscosity is very high. Netflix has more than 220 million subscribers, who pay monthly viewing fees, creating a business model of linking customers with high frequency and high viscosity.
Many enterprises underestimate the value of the post service market. Although the service turnover is lower than the sales of the complete machine, the frequency is much higher. Especially when the enterprise signs a service agreement with the customer, it greatly increases the customer viscosity, which is crucial to the sustainable development of the enterprise.
Digital transformation can help enterprises accurately grasp customer data and emotions in services, help enterprises improve service timeliness, enhance customer experience, and increase customer viscosity, so as to retain more customers and seize the growth opportunities of the post market. After all, customers are the only reason for the existence of enterprises.
