An aftermarket growth strategy is not something that just comes to you while you’re taking a shower or walking the dog.
Successful strategies that are easy to understand, easy to communicate and easy to implement are always carefully researched, well thought out and focused on factual details, rather than just a single eureka moment of inspiration.
Developing Your Aftermarket Growth Strategy
The process of developing a robust aftermarket growth strategy involves several critical steps, all of which must be completed properly in the right sequence.
Completing all of the right steps but not necessarily in the right order (like the famous Eric Morecambe sketch on BBC with “Andrew Preview”) will not suffice on this occasion, I’m afraid!
A strong, properly developed aftermarket growth strategy should last for a good number of years albeit with some minor tweaking or updating on an annual basis.
That said, be careful not to overdo the tweaking because wholesale flip-flopping about with your aftermarket growth strategy from year to year will just confuse everyone (customers, suppliers, partners and staff) and will damage your business sooner rather than later.
If it’s been a while since you revisited your aftermarket strategy or it’s time you settled on the optimum aftermarket growth strategy for your business then there really is no time like the present.
The steps are not rocket science but it’s surprising how often business leaders try to cut corners to save time or money or because they don’t have the right tools and resources to do it properly.
1. Assess Capability
Much aftermarket talk at events and on social media is about advanced techniques such as the Internet of Things (IoT), predictive analytics, and so on.
Whilst that may be the logical next step for the most advanced companies, it is far too advanced for many.
If the maturity of your aftermarket capability is low then implementing advanced strategies now is like studying for a degree in pure mathematics and trying to learn algebraic topology or catastrophe theory when you’ve not yet learned how to do fractions, percentages or simple algebra!
The key to developing your aftermarket capability, just like developing your mathematics capability, is to build logically from your current level of maturity.
Which implies that you need a method of assessing and measuring your existing capability maturity and an idea of what the logical development path is for building from here.
The obvious answer to this conundrum is a comprehensive aftermarket capability maturity model.
Your capability model needs to provide maturity measures spanning all the core aftermarket capability drivers and critical aftermarket capabilities.
Taking a scientific approach to aftermarket capability development is a revelation for most companies, boosting profitability.
We have seen significant investment returns with multiple clients in multiple engineered parts and equipment sectors and have unlocked many remarkable results.
Capability assessment and benchmarking, when done consistently, ensures that focus is maintained on your most important development areas.
It also enables capability improvement progress to be tracked and feedback to be provided to business leaders so they know their investment is having the desired effect.
At this stage, it is recommended that you track capability maturity scores alongside your operational and financial Key Performance Indicators (KPIs).
These are the things that will really inspire leader’s confidence to continue investing and growing your aftermarket.
2. Analyse Capability
After measuring your existing aftermarket capabilities and comparing with your desired level, you will have gaps that must be addressed.
You will also have identified some capability strengths.
At this stage though, more analysis is required to uncover the full nature of your capability gaps and the true genius of your capability strengths.
It can be extremely difficult to remain objective in your self-assessment and analysis but you need to find a way of doing this if possible.
Reluctant interviewees can be encouraged to share more if you utilise independent interviewers, for example.
It is most effective when they interview your customers, suppliers and business partners on your behalf and can often uncover strengths or weaknesses that would otherwise stay hidden.
3. Plan Capability
The next task is to identify the business growth opportunities that will be targeted first and the associated capability developments required to realise those opportunities.
This involves synthesising information gathered so far into a clear action plan detailing the specific capability development projects, resources required, timings, risk assessments and investment appraisal.
This is an important stage requiring care and objectivity.
It also requires experience of similar capability development projects to determine the type and quantity of resources required.
Whilst it might be tempting to try and upgrade big chunks of capability all in one go and do everything yourself, risk can be reduced significantly and iterative growth momentum established by building and delivering capability upgrades in smaller chunks that link directly to (ideally) one defined business growth opportunity at a time.
The aim then is to iterate the aftermarket growth cycle as rapidly as possible, building bite-size chunks of capability and measuring progress as you go.
Those familiar with modern system development techniques may recognise this as being very similar to a project management method known as “agile,” albeit what is described here is a little less structured and less formal.
4. Upgrade Capability
With your strategy and plan in place and signed off by your leadership, your required new capability projects need to be developed.
These will involve a combination of process developments, system developments, people recruitment, training and organisational changes or finding, selecting and appointing new business partners.
Of all the five stages of the aftermarket growth lifecycle, this is the one most likely to go wrong. When it does, business leaders often compound the problem by blaming the strategy or plan when, in fact, the root cause of their problem is a lack of specialist experience in developing new aftermarket capabilities.
Nobody would ask a family doctor to conduct a life-saving surgical operation or ask a heart surgeon to conduct brain surgery.
It is therefore critical to have experienced aftermarket resources and know-how leading your aftermarket development projects.
Adopting appropriate project and programme management methods such as Prince 2 and MSP (Managing Successful Programmes) is also highly recommended.
Experienced leaders of change with the right qualifications will not only minimise the risk of failure, but will also save time and money in the longer run.
5. Deliver Capability
After implementation, it is important to run your business with your new processes, systems, people, partners, etc. for a period to allow for adjustments to be made, new resources and methods to fully embed, etc.
Eventually, when the new level of aftermarket capability becomes the new norm or “business as usual,” it will be time to re-assess your capability maturity again and to record your latest KPIs.
When you do this, it is essential that you use the same method of measuring your aftermarket maturity and KPIs as you did before so that you can track progress as you go along.
For larger organisations, consistent use of the same capability maturity model and associated KPIs enables lines of business, geographic or product divisions, etc. to be compared against one another and capability to be shared or transferred.
So ask yourself:
Do your resources have the specialist experience to develop your new aftermarket capabilities?
Do you have access to a credible aftermarket capability measurement tool and maturity model?
Do you possess the objectivity and commercial independence to undertake your aftermarket assessment yourself?
How Servispart Consulting Can Help
Our aftermarket growth service is called Aftermarket 360™ and is specifically designed to assess your aftermarket capability strengths and weaknesses to create an aftermarket growth strategy that delivers high impact results in minimum time.
More information on how to discover your aftermarket genius and grow your aftermarket business is available here.