The OEM Trends and Traits Driving Resilience and Growth

Resilient OEM manufacturers focus on aftermarket and service sales and channel management.
August 16, 2021. 5 MIN READ

Last year, manufacturers’ sales, forecasting, and collaboration methods were turned upside down. As ports closed, unsold stock piled up, creating severe cash flow shortages. Production lines shut down unpredictably with widespread absences across the supply chain. Original equipment manufacturers (OEMs) had to think on their feet. Many sped up the transition to digital processes to respond faster as conditions changed.

But the truth is, traditional processes have been due for an overhaul. Endless spreadsheets, organizational systems, and data silos create real obstacles in an age where customers expect transparency and personalized engagement. Over 75% of OEM manufacturers said inaccessible data, legacy tools, and cloistered teams impede their sales and forecasting process.

The most resilient OEMs were those who had made investments to digitalize their businesses. These investments give them the agility to continue their competitive advantage in the future.

Where did they focus their investments? Our Trends in Manufacturing report highlighted three key areas: aftermarket sales, service-based business, and better management of channel partners.


OEM Trend #1: Adding Income with Aftermarket Sales

It doesn’t take a crisis to disrupt manufacturing sales. Business cycles, finicky customers, competing products, and evolving technology make for a day-in, day-out income roller coaster.

But there’s one constant: products and parts break down or become obsolete over time. And the better you engage your customers, the more opportunity you have to sell them new parts and replacement technology they may otherwise get from third-party suppliers.

The stakes are high. Deloitte reports that the average operating margin from global aftermarket sales is about 2.5 times the new equipment margin. Many manufacturers generate 40-50% of their profits from aftermarket sales.

Which is to say, you can’t afford to miss out on this market, especially when it’s yours to lose. You’ve earned the trust of your existing customers, and that trust will drive more sales – if you continue to earn it. To do that, you have to make sure your customers know you have the parts they need and make it easy for them to buy from you.

Today’s digital tools can help. Social media, display ads, email campaigns, search engine optimization, etc. can work wonders in keeping your customers engaged and aware of your aftermarket offerings throughout their product ownership lifecycle. Then you can leverage configure, price, quote (CPQ) systems or ecommerce platforms to upsell or cross sell to help them get everything they need as easily as if they were ordering from Amazon.


OEM Trend #2: Generating New Revenue with Expanded Service-Based Offerings

To diversify beyond products and aftermarket parts, OEMs can expand service-based offerings. This could start with extended warranties, break/fix repair, and enhanced service level agreements.

As OEMs increase the level of information they capture about their products in the field - including product location, performance, and repair frequency - they can offer more advanced and preventative maintenance services. By embracing the use of sensors and Internet of Things (IoT) technology, OEMs can add proactive, and ultimately predictive, maintenance offerings.

During the pandemic, repair technicians often could not access customer equipment onsite to do repair work. As a result, more manufacturers turned to remote repair and virtual reality technologies to get customers back up and running. Adding these technologies to the OEM service portfolio reduces costs, speeds time to repair, and improves customer satisfaction.

As with aftermarket parts, success requires consistent engagement throughout the customer lifecycle. This ongoing engagement helps develop stronger relationships with end-customers and builds brand loyalty.


OEM Trend #3: Improving Relationships with Channel Partners

Finally, strong collaboration with channel partners is essential for driving revenue growth. Excellent partner relationships lead to excellent customer service, benefiting everyone. But too often, poor communication and competition get in the way. According to a BCG survey, 38% of corporate ecommerce channel managers said channel conflicts are their top business concern. And 44% believe tensions will increase in the future.

Digital technologies can help improve OEM/dealer engagement, drive increased revenues, and improve dealer and end-customer satisfaction. It all starts with the objective of providing an excellent end-customer experience that flows seamlessly from the OEM to the dealer to the end-customer and back.

You can help partners succeed with updated training modules, easily-customized marketing materials, and communication and productivity tools that improve efficiency for them while keeping you in the loop. Successful co-marketing is about adopting an everybody-wins mindset and using collaboration tools to make sharing easier. Establish a better connection with partners and they’ll help you learn more about customer trends. This will enable you to create better products and services.

A trusting, cooperative atmosphere loosens tensions and fosters brainstorming. That can lead to innovations neither party would have come up with on their own. And that can lead to hitting milestones faster, while reaching for new goals.


The Salesforce Advantage

Salesforce has the tools to support you in each of these areas.

Our commerce solutions can help OEMs digital aftermarket parts storefronts parts storefronts that enable seamless self-service purchasing experiences for dealers and end-customers.

Our service, field service, analytics and AI solutions can help you build a data and customer service infrastructure that drives strong service-based business models.

Our Accelerate Channel Management solution can help you build stronger working relationships with channel partners. You’ll find tools for recruiting and onboarding, co-marketing, sales collaboration, business forecasting, training, and more. In addition, with our new Channel Incentive Management Solution, you can leverage both rebates and loyalty programs to drive channel engagement and improve channel performance.


Where to Go From Here

Over the last year, OEMs had to evolve and change the way they do business. But many of those changes created new opportunities. Now it's time to build enhanced revenue sources and deepen relationships with partners and customers.

Salesforce can help put OEMs in position to capitalize on these opportunities.




The Manufacturer’s Playbook for Ecosystem Collaboration


How Manufacturers Can Use Data to Future Proof Their Business


More resources

3 Ways To Strengthen the Manufacturer-Partner Relationship That Improve Sales
White Paper
Future of Customer Experience in Manufacturing
Manufacturing Cloud Demo

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