In sales, there are two ways to increase revenue — Find new customers or generate more business with existing customers.
Both have merit but according to Inc. Magazine, “Acquiring new customers is expensive (five to ten times the cost of retaining an existing one), and the average spend of a repeat customer is a whopping 67 percent more than a new one.”
The responsibility for new customer acquisition typically rests with the sales and marketing team selling the new equipment, whether that is medical device equipment, cars or construction equipment. They seek out new connections to turn into customers, and hopefully into long-term accounts. The parts and/or service department however, plays a center-stage role in driving more business with existing customers. They must develop customer loyalty, ensuring a positive aftermarket experience and manage repeat business after the initial (new customer) equipment sale is made. It’s a natural alignment of responsibility.
This is great news for parts managers. It means they can concentrate on generating outstanding results from repeat customer business over the life of the complex equipment (ie. CT scan machine, mini-van or skid steer loader). The success of earning additional revenue from existing customers really comes down to how well parts and service managers are able to execute on their efforts to deliver great service to the installed base.
We’ve found that there are two tools in the service and parts manager’s arsenal that help them get the job done: The cross sell and the up sell.
The cross sell. With the cross sell technique, parts and service reps suggest related services or products that complement the work that the customer is having performed. For instance if a customer’s backhoe is having hydraulic work done, the service and parts manager could recommend new cylinder seals, new hoses and a hydraulic pump overhaul – services that would extend the uptime of the equipment and improve performance.
The up sell. With the up sell technique, parts and service reps may suggest upgrades or more expensive items to complete the service transaction. Using the same backhoe example, the parts and service rep may suggest top of the line synthetic oil instead of standard or upgraded hydraulic cylinders, stainless steel hoses and a new hydraulic pump following an inspection showing cracks or wear.
A robust parts catalog like Enigma’s InService EPC supports the cross sell and up sell efforts of a parts and service department by putting all product and related information in one place, a knowledge library. A core element of InService EPC, the knowledge library delivers all product data such as parts catalogs, maintenance manuals, technical specifications, warranty information, and sales collateral.
InService EPC makes it easy to identify parts, make recommended service suggestions, easily look up and recommend part assemblies or group kits, all with the click of a mouse. InService EPC gives parts and service staff access to the information they need, when they need it to cross sell, up sell, and better service their customers for all types of parts and service work so each interaction is a chance to increase revenue and improve customer satisfaction.