As the global recession deepens, managers across a number of industries are faced with the daunting task of
increasing revenue while reducing costs and conserving cash in an environment
where product sales and prices are falling rapidly. Many firms are considering
or have already begun to take drastic measures including workforce reductions,
capacity cutbacks and divestiture of under-performing businesses. Some are
facing the real prospect of bankruptcy and liquidation. But this singular focus
on cost cutting can result in missed top line opportunities; in these tough
times it is easy to overlook how aftermarket service can provide some timely
relief.
Historically, the
sale of aftermarket support has provided as much as 50% of a company’s revenue
and a disproportionately high contribution to profit. In many industries,
service contracts, spare parts and maintenance labor have some of the highest
profit margins in the product portfolio. Today, however, many customers have
slashed their budgets for new product and services acquisition, and are looking
for a rapid financial payback on any new expenditure. Aftermarket service
presents some unique opportunities that make it a prime candidate for
delivering value in the current financial climate. By increasing their market
share of aftermarket parts and services, companies will be able to generate a
more predictable, high margin revenue stream that will also increase customer
satisfaction and retention.
To continue reading, please
register and follow the link for the rest of the white paper.