Do manufacturers need an eCommerce system to support their aftermarket parts business?
How important is aftermarket eCommerce?
eCommerce was highlighted as the top technology threat by respondents in our latest Parts Management Research Study but surprisingly, eCommerce systems only ranked 14th out of 19 for digital technology implementation.
SEE ALSO: Parts Management Research Report
In this article, Stan Eames, CEO of Genalpha Technologies, examines the importance of eCommerce for manufacturers and highlights 10 competitive advantages that aftermarket eCommerce systems can provide for original equipment manufacturers (OEM), parts manufacturers and parts distributors.
Jumping into eCommerce
The decision to establish an online presence by implementing an eCommerce system is one that for most businesses is the proverbial “no brainer.”
This is particularly true in the Business to Consumer (B2C) marketplace and has become a matter of survival in an increasingly competitive landscape that looks to the Internet for lowering the boundaries to expanded markets and increased sales.
eCommerce may not make sense to a manufacturer when looking at the sale of equipment because the sales process for these products typically demands interpersonal contact.
There is, however, a major component of a manufacturer’s business that can be offered via eCommerce, even significantly enhanced by it, and that is aftermarket parts.
Aftermarket parts and services provide stable revenues at significantly higher margins than original equipment.
Clearly, increased attention to aftermarket parts sales and marketing merits consideration, particularly with respect to eCommerce.
Without a focused effort to open innovative new sales channels, the aftermarket remains an afterthought.
Giving your aftermarket the attention it deserves requires realising exactly what compelling benefits there are for manufacturers to increase focus on their parts business.
What’s in it for the Manufacturer?
Implementing a company eCommerce website for your aftermarket will simplify the customer buying experience using a modified retail B2C approach.
Traditional B2C platforms lack the special requirements of aftermarket parts buyers and using them can result in a half-baked solution that does not maximise the buyer’s experience.
However, an eCommerce system that is specifically designed for the aftermarket offers much more significant benefits including the following:
1. eCommerce provides an additional sales channel
Adding an eCommerce system will immediately provide your business with a powerful new sales channel.
This addition will tap your aftermarket into a yet unrealised opportunity in aftermarket sales.
The B2C market has been experiencing tremendous growth in eCommerce-based selling to the point where not being in eCommerce represents a significant risk to sales growth.
This paradigm is quickly being applied to B2B businesses as well.
2. eCommerce makes it easier for customers to buy from you
There is a reason that eCommerce is booming – customers are enthralled with the ease with which they can buy products.
Further, their experience with consumer purchases have left them wanting a similar experience at work.
Making purchasing decisions easier, particularly when it comes to aftermarket parts, will not only entice more sales, but also improve customer loyalty.
3. eCommerce reduces your average cost per transaction
eCommerce provides a self-serve sales operation for your customers.
When combined with a complementary eCatalog offering, the customer has access to clear, concise information regarding what part is needed.
Compare this to the cost of filling the chair of a telephone customer service representative, and the cost savings become obvious.
4. Your Customer Service Reps will have more time to address customer needs
If your CSRs are buried with requests to find parts or aid customers in parts related transactions, then that takes them away from other areas of customer service that may require attention.
Helping a customer with a warranty question or planning scheduled maintenance, for example.
If you are like most manufacturers, CSR time is stressed, and anything that can be done to make them more accessible to customers will only improve relationships.
5. Value selling at the point of sale for online customers can be realised
eCommerce ordering systems can be configured to prompt the customer to order related items at the point of sale.
Amazon pioneered the art of cross-selling and up-selling by showing customers what similar customers to them typically bought at the same time as this purchase.
Systems can do this much easier and quicker than a CSR and they never forget or feel awkward doing it!
The result is improved customer service and more sales for your business.
6. Customer retention rate on your aftermarket will improve
Customer retention in the aftermarket boils down to offering a sales mechanism that makes it easy for customers to order the parts they need when they need them, at the best pricing.
eCommerce technologies enable this by guiding the customer to the right part either by direct entry of a part number, or by faceted searching and other query mechanisms.
If you make their jobs easier, they will continue to order through your eStore.
7. Processing errors in parts ordering will be reduced
Sending the wrong part or making a clerical error in processing a part order can be embarrassing and costly.
By using an eCommerce system, part order accuracy is enhanced because the amount of manual processing is virtually eliminated, and the customer can be directed to the right part via intuitive guidance provided by the system.
8. eCommerce provides greater insight into customer buying habits
An eCommerce system is only as good as the analytics that it provides to you in the analysis of customer buying habits and sales trends.
If you are selling thousands of parts, knowing exactly what parts are ordered over time can help you to focus on trends that create opportunities for enhancing marketing or addressing chronic product issues.
9. eCommerce enhances your image as an innovator
If your competitor sells aftermarket parts via eCommerce and you don’t, then the customer’s perception of you as an innovator may be tarnished.
eCommerce has moved beyond being a trend or a “nice to have” to be a mission-critical “must have” component of sales.
Not having an online presence means that you are behind in offering the latest in services to your customers.
10. Your customer reach is instantly globalised
Offering an online presence to your aftermarket opens opportunities for sales that go beyond traditional boundaries.
Due to the ease of access globally, you may find that you have customers in places that you never before felt possible.
Language and currency are easily overcome within an eCommerce system, and utilising images further breaks down these barriers.
The decision to go down an eCommerce path is a strategic decision that can open many doors that can lead to increased revenue and profitability.
The benefits extend across the business and enhance overall brand loyalty.
A robust eCommerce site has become an expectation of buyers, not just a convenience.
The time is now to enact a strategy before your competition does.
How Servispart Consulting Can Help
Servispart Consulting partners with leading aftermarket systems and service providers like Genalpha, so that we can help our clients to implement the latest technologies.
If you’d like an informal conversation with us about how you could develop your aftermarket eCommerce capability and improve your online parts sales, get in touch.
More information on how to discover your aftermarket genius and grow your aftermarket business is available here.