Aftermarket accounts for a quarter of total revenues for manufacturing businesses, but between 40% and 80% of total profits. Today, the average manufacturer only captures 25% of its customers’ total service spending because aftermarket is not part of most companies’ commercial operating model and the supply chain is not set up to handle the major differences between original equipment sales and service sales. Join us in this On Point webinar to hear more about how you can make aftermarket the centre of your growth strategy and improve your supply chain even in times of crisis. You will also get access to a benchmarking tool that measures the maturity of your aftermarket sales in your organisation.

1. 1

2. 6
WHY ARE WE
DOING THIS?
Awareness
Perspective
Inspiration

3. 9
AGENDA
Introduction to aftermarket
Perspective 1 - Put aftermarket at the centre of your growth strategy
Perspective 2 - From full ownership to no ownership
The aftermarket benchmarking tool
1
2
3
4

4. 10
What is aftermarket?
Shifting focus from equipment sales to aftermarket
VALUE CHAIN
of an OEM
Replacement parts
Maintenance and repair
Accessories
Digital services for the
original equipment sold
Product
development
New equipment
sales
ManufacturingLogistics
Aftermarket
sales and delivery

5. 11
WHAT PERCENTAGE OF YOUR
REVENUE COMES FROM
AFTERMARKET?
POLL

6. 12
WHAT PERCENTAGE OF YOUR
PROFIT COMES FROM
AFTERMARKET?
POLL

7. 13
5%75%
Aftermarket in numbers
Why such a big fuzz?
increase in customer
retention increases profits
by a minimum of 25%.
24%
of total revenues of
manufacturing.
40%
or more of the total profits.
of the customers’ spending
leaks away to competitors.
Sources: Servispart "The Aftermarket Growth Guide", 2017, and Cognizant: "Enabling Aftermarket Services as a Growth Driver for Manufacturers", 2014

8. Beat the crisis by focusing on selling in the
aftermarket…
“You can start small and scale
fast.” No major investments.
Depending on industry, spare
part sales increased up to 4%
while the rest of the economy
shrank in 2007-2008.
Aftermarket delivers a steady
income even in downturns.
Beat the crisis
by focusing on near-term growth opportunities

9. 15 15
PERSPECTIVE 1
Put aftermarket at
the centre of your
growth strategy

10. Change the systems,
reach the goals.
Change the conversation,
change the organisation.
• Staff needs training, reinforcement and
support
• Leaders need to step up and support,
lead, coach and follow up in a different
way.
• Internal conversations will change from
status to forecasting
• Sales will shift to service and service
shift to sales.
When you put the aftermarket at the
centre of your growth strategy,
everything is affected.
• The way you organise yourselves, work
together, and how we deliver.
• Strategy needs to take new elements
into consideration
Put aftermarket at the centre of your growth strategy
The commercial perspective
Commercial

11. The sustainability agenda
will be very visible.
It’s a different animal and a
different road to success.
• Notoriously unstable with delivery
requirements much more visible
• ~15-20 more SKUs with lower
inventory turn
• On-site field service rather than
production workers
• You wont be able to rely on express air as
customers will expect transport by rubber
• Train your reverse logistics muscle – spares
will increasingly be refurbished
• Local presence of fields service, if your
spares can’t fly neither can your people
Put aftermarket at the centre of your growth strategy
The operational perspective
Operational

12. 19 19
PERSPECTIVE 2
From full
ownership to
no ownership

13. 2020
PUT IN CONTEXTSERVITISATION MODEL
Operationalexcellence
Howrobustisyourdeliverymodel?
Commercial excellence
How well do you communicate the value of your services?
Spare parts
Reactive services
Proactive services
Performance-based
service solutions
No product
ownership
The servitisation journey
To reach the aftermarket potential
Development has been coming for years and is
largely driven by the B2C market. We expect this
crisis to further accelerate the B2B development.
Clear competitive advantage during a crisis. If you don’t
use it your competitors will.
Cash might be a prerequisite but its not enough –
focus on you operational and commercial backbone.

14. 21
WHERE ARE YOU ON
THE SERVITISATION
JOURNEY?
POLL
SERVITISATION MODEL
Operationalexcellence
Howrobustisyourdeliverymodel?
Commercial excellence
How well do you communicate the value of your services?
Spare parts
Reactive services
Proactive services
Performance-based
service solutions
No product
ownership

15. Understanding of parts
installed base a prerequisite.
Increased need for localisation
of the supply chain.
• Lead time and availability is no longer an
arbitrary trade-off with lost sales – too long
lead times will have a direct impact
• Higher incentive to keep parts and
technicians close to the installed base
• You can no longer rely on your partners to
keep stock
• Knowing your installed base is not only
important from a commercial
perspective
• From global to local requires insight or
you will be stocking the wrong things
in the wrong places
From full ownership to no ownership
The operational perspective
Operational

16. The organisation and the
people need to change.
The go-to-market model
needs to change.
• When you start selling aftermarket as a
service instead of selling products or
parts, your go-to-market model changes.
• Need to redesign how we segment our
customers and how we phrase our value
propositions for products and services
• Our ability to get more customer insights
(data) will increase.
• Pricing expertise becomes even more
relevant.
• The mindset in the aftermarket
organisation need to change from
inbound reactive customer service to
outbound proactive aftermarket
customer experience
• How we work interact with
other departments
• How we interact with customers
• Motivation to change
From full ownership to no ownership
The commercial perspective
Commercial

17. 25
KEY TAKEAWAYS
from today’s webinar
01
Change the
conversation,
change the
organisation.
02
Change the
systems, reach
the goals.
05
The go-to-market
model needs to
change.
06
The organisation
and the people need
to change.
03
It’s a different
animal and a
different road to
success.
04
The sustainability
agenda will be
very visible.
07
Increased need for
localisation of the
supply chain.
08
Understanding of
parts installed base
is a prerequisite.

18. THE AFTERMARKET
BENCHMARKING TOOL
Purpose: Provide an indication of what you can do
next to boost your aftermarket readiness, and it
also acts as a tool to facilitate aftermarket
discussions within your organisation.
Time: 10 minutes (all input is anonymous).
Results: Survey respondents will get a benchmark
report by 18 May. Survey closes on 14 May.