Marketplaces for aftermarket: a promising future
Today 70% of the world’s added value is created by the sale of services. Although this is the case, few companies seem to realize the power that lies in the digitalization of these services. Digital standardization today allows service providers to multiply their offers because of digital technology. Despite this, the appropriate platform still needs to exist.
Due to this, services create the need for digital platforms that allow them to be sold online. For companies, these needs represent great business opportunities that need to be seized.
In this article, we will focus on the opportunities offered by the aftermarket of industrial equipment, for companies that are already involved in this.
Why should you do this? As a well-known company in your sector, regardless of your industrial equipment you already benefit from having visibility with your customers, a circle of prospects and third party service providers. Therefore you already have a network of potential users in your sector who would be able to integrate your platform as soon as it is created. Finally, you already know the ins and outs of this field.
In other words: you have a competitive advantage over new digital entrants in your sector of activity.
Whether your company specialises in the manufacture, sale, export or maintenance of industrial equipment, you have a role to play in structuring the aftermarket.
The aftermarket is nowadays defined as the secondary market, where it is possible to obtain parts, accessories and services after purchasing a good.
Industrial equipment requires special maintenance due to their complexity, and often due to their size. Industrial equipment is a large investment for their purchasers. The expenses related to the maintenance of these types of goods often cost as much or more than the acquisition cost itself.
As a result, this equipment will typically have a long lifespan, and repairing them is preferred to replacing the equipment.
Use escalators as an example. They cost several hundred thousand dollars, and have an estimated lifespan of between 20 and 30 years.
During these decades of life, several expenses should be taken into account. Here is a non-exhaustive list:
→ compliance with security standards
→ structural maintenance
→ occasional maintenance and repairs in the event of technical failures
All these operations, which are necessary for maining industrial equipment like foundry furnaces, escalators, tractors, printing works, etc., constitute services. These services, due to the specific nature of the property require hiring specialised professionals.
When the intervention of a professional proves necessary, you still need to know who to turn to. Today the aftermarket for the maintenance of this type of equipment suffers from a lack of structure.
Due to this, many problems arise:
- Where should you look when the need for a professional arises?
- How do I know if the service performed by my service provider is at least as good as the one provided by their competition?
- How can I ensure that the rate they charged is fair?
- Is it more advantageous to turn to the company that sold us our equipment or to turn to an independent service provider?
- How can we be sure of the quality of the service provided?
Today, Second provides you with a tool that will enable you as a company in this sector to structure your aftermarket of services.
Whether you specialise in the manufacture, sale or maintenance of this equipment, we would like to use this article to highlight the opportunities provided by the aftermarket of industrial equipment.
In concrete terms, why should you diversify further down the value chain by creating a service marketplace?
- In order to become a leader in this sector.
In the aftermarket, or the market that is dedicated to the life of your equipment after its sale, an ecosystem of service providers is forming. This ensures its maintenance, and these professionals form a limited network due to their specialisation. Usually independent, they perform services for your company’s goods as well as those of your competitors.
Creating an online service marketplace, booking site, or appointment scheduling site is a way of structuring the aftermarket. This also helps to create an ecosystem in a common place.
This initiative will allow you to control the services offered on the aftermarket, and create a meeting place for supply and demand.
As the operator of an online service platform, you control both supply and demand for services.
→ You become aware of the equipment that requires regular interventions. Through doing this, you identify potentially unsatisfied customers and can find them alternatives. You can do this by offering your products. Another benefit is that you learn more about your competition’s products.
→ You make the meeting place of supply and demand unique.
→ You participate in the regulation of competition, particularly by naturally setting market prices
→You give applicants access to a set of information relating to suppliers like specifics of offers, prices, geolocation, and customer opinions after the service
→ You take part in the creation of a unique professional network of reference
Bringing service providers together is one way of controlling the ins and outs of your industry. Being integrated into this ecosystem is a way to make your company known to the network of relevant professionals. Then, they will be able to make your company known to prospects.
To involve yourself in service marketplaces allows you to have control over a key part of your business sector: the aftermarket. Ultimately, it means taking the place of a leader.
- Maximising your company’s offers
If you are a company that sells escalators and also offer maintenance and repair services for your products, you offer on your platform the services provided by your employees. That is not the only benefit of this, the possibilities are manifold:
- Integrating your service provider base with the independent professionals capable of repairing your products.
→ these independent service providers will benefit from increased visibility.
→ you have control over the services provided on your products by the competition
→ you are associated with the services carried out on your products
→ you expand your network of service providers in your field
- Expand your offerings, and offer services for equivalent products from competing brands.
→ your marketplace will be more complete
→ you expand your network of service providers in your field
Allowing competing service providers to integrate your online booking site, or online appointment scheduling site generates a virtuous relational loop:
→ By structuring the market with your marketplace, your company gains notoriety
→ Independent service providers have an interest in integrating because they gain visibility
→ By integrating your platform, they contribute to developing your customer base, and can redirect their own customers to your platform.
- Make the aftermarket of services your own
You already offer aftermarket services:
- Group all your services in a single structured digital space. → You facilitate the user experience.
- Expand your service offering by including professionals specialized in servicing similar goods from competing manufacturers. → In this way, you multiply your service offer and make it known to your prospects.
You do not offer aftermarket services:
- Identify service offers in a sector that is familiar to you. → You develop your offer and increase your customer potential.
- You participate in structuring a market with growing service needs. → You improve the customer experience in your sector.
In conclusion, for companies already established in the market the creation of a service marketplace in the aftermarket offers several opportunities:
- Multiplying your offers for your customers
- Responding to the service needs felt by its customers and prospects
- To offer to the service requesters the possibility to select their service provider, with information elements such as: type of service, location of the service provider, rates, and customer opinions. All while having the possibility of comparing with the competing offers.
- Dominate the market for the sale of services in your field of choice.