Machine companies have made extensive investments in production and equipment but suffer from poorly developed customer procedures. Scattered data in outdated systems lead to insufficient customer insight and missed business opportunities. Now, with the digital imperative reshaping the buying behaviour, we are about to see established companies encounter severe issues as they have underestimated the importance of fundamental IT. In this article, we deep dive in the reality of lagging digitalization and the escalating struggles of an analogue industry.
Inconsistent investments cause friction in the machinery industry
Imagine being a reseller of industrial lawn mowers. To better get to know your supplier, you are being given a grand tour on their production site. Walking around the site, you are amazed by the robots putting all pieces together on the lawn mowers. On top of that, the robots are connected to a central IT-system signaling if any of the components is not working as it should.
After the tour you enter the main building where customer service, finance and sales are working parallel to the production, only separated by a soundproof wall. Now you are eager to know more about the strategies and technology used at the customer facing departments. Clearly, the sales manager is no longer vibrating with the same enthusiasm, as she shows you the outdated ERP, the isolated ticket handling tool, the excel files and the inventory sheets of products.
This is the reality for an alarming number of machine companies. It seems contradictive, but the lawn mower producer has made extensive investments in technology as it comes to production but nearly neglects their main source of income – the customers.
Everything starts with quality data
Treating your data as one of your most valuable assets is a recommended strategy in the digital economy. What is a company if not a collection of data on customers, resources, and transactions, in addition to the competencies of the employees? Everything, except for data, is replaceable.
Many companies do have a collection of data stored somewhere, or more like it: scattered everywhere. Therefore, the quality and relevance of the data is often inconsistent. It would not matter if you implemented the most high-tech business insight tool on the market if the insights are to be based on insufficient information.
Customer insight is your best competitive advantage
One must realize that the digitalization has come to change the buying behaviour both B2C and B2B. The harsh truth is that your customers will no longer stay loyal if someone introduces them to a better option, and your competitors will surely grab any opportunity to win them over.
The only way to have the customers continue to choose you, is to foresee their needs and tailor your offers accordingly. If your data is sufficient, you already are ahead of your competitors. By analysing customer behaviour and detecting patterns on an early stage, you could make smarter decisions regarding what products and services to develop going forward. Customer insight is a powerful tool to lock out competitors.
Companies that don’t go digital pay the highest price
Taking the leap and upgrading to modern IT is indeed an investment, but what does it cost in terms of missed opportunities, bad will and time spent per each day not going digital?
Imagine receiving a call from a stressed-out customer who wish to report a broken lawn mower. He refers to a conversation he had with your college the other day. You start franticly searching in the ERP for a comment regarding what you have promised the customer, jumping over to the Excel files of the customers products but end up calling your college who says, “I have no recollection of this…”. Now, how does it feel to return to the customer waiting on the line? Would you offer free spare parts and urgent technical service because the customer claims it was promised?
Situations like the above are a severe threat to sustaining business, especially as the customer easily could decide to make their next purchase trough a click on a competitor’s website. In a new era of available options, you can’t afford to give them reasons not to choose you.
Although we see a somewhat increasing level of digital maturity in the world of machinery, surprisingly many are still missing basic fundaments in their it-environment. The buying experience fails to meet the expectations of the customer, who has adapted new behaviors due to the digitalized civil society. As the friction escalates, the door opens for new actors to enter the competitive arena. Already, automated flows and digital services are on the verge of becoming the new standard in the world of machinery. Those who don’t act now, soon will find themselves in a downward spiral impossible to recover from. Inevitably, we are about to see a generation of established brands go extinct over the next 5 years.
Want to learn more more on how to prepare your business for the new paradigm? Download our report on trends challenging status quo in machinery