When aftermarket takes over
Fleet operators of today are concerned about their equipment’s ability to maximise uptime and production efficiency.
I recently had a conversation with a senior representative of a big international original equipment manufacturer (OEM) who reflected on the changing matters of importance for construction and mining equipment fleet operators.
Gone are the days when established brand names meant more sales and reinforced market shares. We are way past the era when quality of a product did much to influence buying decisions of equipment owners. In today’s operating environment, quality and reputation alone are not enough to influence buying decisions.
In my recent conversation with a big fleet operator who runs in excess of 300 machines, he concurs that, for him, aftermarket support comes first before the product. He reasons that 90% of his buying decision is solely influenced by aftermarket support, and a remaining 10% then revolves around the rest of traditional considerations often made when buying equipment. For him, a so-called quality product is as good as its service. There is no point in having an expensive quality machine that spends 50% of the time standing in his yard because the dealer cannot replace a filter on time, for example.
Moreover, aftermarket has since evolved. It’s no longer just about parts availability and fulfilling maintenance plans. Customisation is one key buzzword doing the rounds in today’s construction equipment business. Customisation means understanding what the end user’s needs are. Secondly it’s about being able to modify the product to meet the particular requirements.
What forward thinking OEMs and their dealers are doing right is placing a strong focus on identifying different tiers in different market segments. For example, in rental, the market starts from fleet owners of two machines through to those who operate as many as 2 000 units. It is ideal to segment these tiers accordingly because the needs of a big plant hire company are very different from the essentials of an owner of two machines. Additionally, the needs of a company that rents out equipment to mining clients are different from those of a company that hires its equipment to a general construction contractor.
After understanding the needs of the different fleet operators, an OEM needs to have the flexibility to customise the product as per requirements. This changing face of the market has also transformed the way in which OEMs and their dealers interact today. An OEM cannot achieve this feat alone, and likewise the dealer cannot be in a position to do it single- handedly. Dealers have since seized to be just selling agents for OEMs. They have become valued business partners, trusted advisors to the OEM in all matters relating to aftermarket service.
The representative of the OEM I spoke to alluded to this, noting that partnerships between OEMs and dealers have become very strong, compared with the way they used to work with each other before, say three to four years ago. He says that in the past an OEM would not so often discuss in detail about the customer with the dealer, but was rather concerned about sales figures. Today, customer needs is the principal topic of discussion between the two business partners.
In a nutshell, fleet operators of today are concerned about the equipment supplier’s ability to maximise their uptime and production efficiency. Equipment sales are no longer just about the product, they are about the whole value proposition ranging from preventative maintenance and service agreements to uptime, fuel efficiency and productivity best practices.
When one buys a machine, the next most important concern is how to minimise costs and maximise uptime and productivity, and good aftermarket provision is essential in achieving that throughout the machine lifecycle.