Maximising Service-Business Profitability and Customer Experience
Published on 7 December 2016 by Maria Danilova
Author: Tony Abouzolof, Syncron Co-Founder and Head of Sales MEEE
The Gulf Cooperation Council (GCC) − the largest economic group in the Middle East region − is currently facing a decisive moment with oil price falling and potential tax increases. Additionally, car sales within the region have increased at a much slower rate compared with the double-digit jump of 2014. To prepare for the years ahead, businesses need to diversify their operations to increase revenues and unlock profits.
In the Automotive industry, specifically, it is has become more critical than ever for dealers and manufacturers to shift from a “product” to “service” mindset to avoid increased competition and meet consumers’ growing expectations, and most importantly, to combat counterfeited, or “grey” service parts.To do this, dealers and manufacturers need to collaborate and optimise service parts distribution, while also expanding their service and maintenance networks.
To do this, dealers and manufacturers need to collaborate and optimise service parts distribution, while also expanding their service and maintenance networks.
The GCC’s fake auto parts market is valued at around USD 2 billion and is affecting organisations across the region in many ways. Service part authenticity is indeed important for a number of reasons, including safety concerns, short lifespans and the potential for manufacturers to lose some of their hard-earned brand image.
Organisations must ensure that after-sales services and repairs are seamless and competitive to avoid consumers turning to counterfeited parts.
They must adopt new business processes to strengthen competitiveness and customer satisfaction, tapping into the aftermarket as a lucrative source of revenue and profit, while also delivering a positive customer experience. A crucial first step is to optimise the management for both stock levels and prices.
Hopefully, technologies exist today to allow manufacturers to automate processes, and ensure customers have the right parts, at the right place, at the right time, and at the right price. Automation and optimisation, based on pre-defined strategies, allows organisations to move beyond spreadsheets and eliminates guesswork:
- Inventory management: With a dedicated inventory management solution, manufacturers and importers are able to identify and reduce excess stock, while simultaneously improving part availability. This eliminates many manual processes and allows service parts managers to focus on truly optimising the customer experience.
- Dealer inventory management: The proper technology enables an efficient redistribution of stock, taking into account inventories from multiple dealers − the system analyses demand, what’s been sold and what hasn’t, and redistributes spare parts to dealers which are most likely to sell and use the parts in their own shops. This ultimately keeps inventory costs down for both manufacturers and dealers, minimising the amount of inventory initially purchased.
- Price management: In addition to optimising inventory availability, it’s also key to automate service parts pricing. This allows manufacturers and importers to adapt to changing markets and react to competition, while also increasing margins, sales and customer satisfaction. Additionally, it allows companies to minimise labour costs and eliminate compliance concerns while responding quickly to changing market conditions.
Quality, availability and prices are always concerns for the customers. Shifting to a customer service mindset will impact customer loyalty and long-term growth. As downtime causes loss, the ability to provide affordable, reliable parts on demand keeps business running smoothly... and customers happy.By increasing customer satisfaction, genuine parts providers will be able to retain customers for a lifetime, ultimately maximising service-business profitability.
About the Author
Tony Abouzolof is one of the founders of Syncron − the aftermarket service provider that exclusively focuses on service parts management and pricing. Tony has nearly twenty years of experience in the development and implementation of global supply chain planning solutions. He has enabled many leading organisations, such as Al Futtaim, Electrolux and JCB to formulate aftersales strategies and lead successful global implementations. Tony holds a M.Sc. from Cranfield Institute of Technology.