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Reflections on the Construction Machinery Industry: Understanding Human Nature and Riding the Tide (Part 2)

Dec 09, 2024

In my previous article, I talked about human nature and proposed to fully understand the temptation of interests to people, align corporate policies with the interests of employees and customers, and follow the trend. The whole world will help you succeed; Against the tide, everyone is against you.

In recent years, there has been a contradiction between OEMs and agents regarding aftermarket parts. OEMs require their agents to only operate OEM parts, and if they are found selling aftermarket parts, their agency rights may be revoked. The quality of original parts is guaranteed, ordering is convenient, and it can also bring substantial profits to agents. Why do agents still operate sub factory parts without "guaranteed" quality? Because the customer needs it.

Due to the diversity of customer needs and the high price of original parts, it has become the last option for customers to purchase accessories, that is, to use original parts for key parts and substitute them with auxiliary parts in other places to reduce costs. Customers purchase equipment to make money, using original parts for repair and maintenance, so there is no money to make. How would you choose if you were a customer? Many companies lack empathy and only consider their own interests.

Momentum is momentum, and customer demand forms business momentum. Only by following the trend can we succeed easily; Going against the trend goes against the laws of nature, and the chances of success will decrease. The momentum of the incremental market lies in equipment marketing, while the momentum of the existing market is the existing customers. Developing the future market and maintaining old customers is the way to follow the trend.


Going against the trend goes against the laws of nature

In fact, most components and oil 名媛直播 are not produced by the host factory. With the improvement of localization level, most components come from domestic suppliers. When branded by the host factory, the price increases significantly, which provides a lot of living space for accessory stores. Customers are also increasingly choosing non original parts, resulting in a customer churn rate of up to 80% after the warranty period ends.

The biggest problem with original parts is their high price and decreasing cost-effectiveness, making them unaffordable for customers. The increasing number of devices, decreasing operating hours, decreasing rent, and rising operator wages have led to a decline in customer revenue. The ecological environment of the industry is becoming increasingly unfavorable to customers, and the reasons for the deterioration are overcapacity, credit sales, and price wars.

In this situation, the agent faces a dilemma: only operating original parts that comply with the regulations of the host factory will lead to customer loss; Choosing to operate some high-quality aftermarket parts to meet customer needs and retain old customers violates the requirements of the host factory. The loss of customers causes great harm to agents, especially in the existing market, and the host factory does not provide more competitive accessory resources. If customers are allowed to leave, there is no future for both the host factory and agents.

The author believes that only by considering the interests of customers can correct decisions be made. When customers and agents encounter difficulties, OEMs should try their best to reduce accessory prices, help customers survive, and support the development of agents. After all, they are the most important assets of OEMs.

Marking the parts produced by suppliers with the company's logo turns them into original parts, which can result in a premium of over 50%. What value does this approach create for customers? Shouting 'customer first' only in the mouth is meaningless, and companies must demonstrate it in their actions.

Instead of restricting the operation of by-名媛直播 by agents, it is better for the host factory to step in and rely on the advantages of scale and supply chain. The bare price of goods obtained from suppliers is lower than that of parts stores. As long as the price strategy is reasonable, it can provide high-quality and low-priced parts for agents and customers, help them survive and develop, and the host factory can also profit from it.

People tend to forget their original intentions and principles in the face of interests, and it is difficult for companies that prioritize profits to succeed. Companies that truly put customer interests first can win the support of customers, achieve healthy development, and follow the trend to move forward.

If the host factory does not make changes, customer churn is inevitable. Shouting 'customer first' in words but putting interests first in actions will only drive customers, employees, and partners further away, making it difficult for OEMs to achieve success.

The relationship between enterprises and customers is value creation and value exchange. Only by creating value for customers can enterprises qualify for profits, otherwise they are just a "scapegoat". The market has changed, and continuing to adhere to the previous policy of original factory parts will only lead to more severe customer loss and weaken the competitiveness of the enterprise.

Placing creating value for customers at the core of the enterprise, change is imperative!