After-sales service is no longer a back-office necessity; for OEMs, it’s a key driver of growth and an essential anchor for nurturing customer relationships. Today, with the intensifying global competition, shrinking product lifecycles, and complex supply chains, manufacturers no longer have the luxury of banking on fresh product launches. 

Outstanding service quality and aftermarket assistance are the drivers of its growth. If not managed properly, service systems lead to lost revenues, along with brand reputation and clients shifting to other service providers.

Studies indicate that aftermarket solutions, including spare parts sales, repairs, and service contracts, can make up over 50% of an OEM’s profits. OEMs stand to gain a great deal from digital platforms by improving service delivery, enhancing service relationships, and ensuring a long-term competitive edge.

Why After-Sales Service Matters More Than Ever

As all industries are evolving rapidly, OEMs are now under greater competitive pressure from third-party or local service providers. In these circumstances, after-sales services hold the promise of sustaining revenue, loyalty, and resilience, which is crucial for OEMs to set themselves apart.

From Cost Center to Revenue Driver

Aftermarket sales and services are some of the few streams of revenue OEMs can count on during service operations.

• Growth in Parts Sales: Spare parts sales tend to have higher margins than new product sales. This gives OEMs a reasonably dependable source of profits, especially during economic downturns.
• Contract Services: Maintenance contracts help generate a reliable stream of recurring revenue and ensure customer retention in the OEM’s ecosystem to bolster long-term relationships.

Strengthening Customer Loyalty & Lifetime Value

Customer expectations extend well beyond the initial purchase. Every interaction at the service level shapes brand trust and determines whether customers stay loyal to the OEM.

• Service Team Coordination: Repeated dealings with the service team foster credibility and deepen the relationship well post the initial sale.   
• Retention Gains: Overlooking any post-purchase services turns customers towards third-party service centers, resulting in revenue and brand loyalty depletion.
• Lifetime Value Growth: Repeat purchases and longer usage periods motivated by quality service lead to a stretched customer lifetime value.

Strategic Differentiation in Competitive Markets

Due to the swift copying of product features, OEMs depend on service excellence to differentiate themselves. For an OEM to protect its market share and charge a premium fee, it must have superior aftermarket services.

• Premium Positioning: When OEMs respond to and address their customers’ needs promptly and adequately, and offer reliable services, they are entitled to charge higher prices, which is in line with the overall value the customers derive.
• Digital Edge: If OEMs decide not to invest and integrate digital platforms to streamline their service operations, they stand the chance of losing their market share.
• Global Competitiveness: Strongly developed service ecosystems allow OEMs to compete in different markets even against stiff competition from independent service providers.

Key Challenges OEMs Face in After-Sales Service

For many OEMs, the after-sales service is still under-optimized. Obsolete systems, inefficiencies, and a lack of investment not only stifle growth but also reduce customer loyalty.

Fragmented Systems & Legacy Processes

A significant number of OEMs still depend on antiquated inventory and dealer management systems. Such fragmented systems not only bog down processes but also escalate mistakes and deteriorate the quality of service.

• Disconnected Data: The absence of integrated systems causes a breakdown in communication channels between OEMs, dealers, and customers. This leads to slow responses and decreases overall productivity.
• Outdated Processes: Overreliance on fragmented systems poses significant challenges to updating, sharing, and tracking information, thereby creating operational delays.
• Ineffective Scalability: Outdated systems are inefficient in managing spread-out dealer networks, thereby posing a challenge for OEMs to provide uniform services on a global scale.

Lost Revenue from Incorrect or Delayed Parts Orders

Incorrect identification of spare parts results in revenue loss. Studies indicate that 25-50% of OEM spare parts sales leak to third parties.

• Catalog Errors: An outdated or poorly maintained catalog causes confusion and leads users to counterfeit parts.
• Misidentification & Wrong Orders: When parts are misidentified or when part supersession updates are missing, dealers may order obsolete components, resulting in wrong deliveries. This not only frustrates customers but also adds shipping costs, return logistics, and administrative burden.
• Lack of Order Tracking System: Frustrated customers are less likely to return due to the longer order lead time caused by inefficient order management systems.  
• Revenue Leakage: Each opportunity to secure a sale that is missed not only weakens profitability but also strengthens the position of aftermarket vendors.

Warranty Management & Return Complexities

OEMs incur increasing expenses due to the manual processing of warranty claims and returns. Fraudulent claims, coupled with processing delays, harm both profitability and customer trust.

• Manual Processing: The paper-based system is slow, error-prone, and fraud-prone.
• Fraud Exposure: Without automated checks, fraudulent claims are easier to make, which escalates costs for OEMs.
• Customer Frustration: The wait for claim approval dampens the satisfaction OEM customers derive from the service and likewise dampens the optics of the relationship.

Language and Global Distribution Barriers

The OEMs work in numerous different regions, which pose challenges in effective communication as well as logistics. The quality of global services is greatly affected by the language barriers and the lack of uniform documentation.

• Localization Issues: Inefficient methods of translating service documents and manuals lead to further communication problems.
• Regional Variations: Different markets require different service processes, which legacy systems are unable to support.
• Global Coordination: Disconnected supply chains decrease response time and create failures in spare parts distribution.

Underinvestment in Service Innovation

OEMs tend to focus on new product launches and ignore the sustained value offered by their aftermarket services. This lack of investment diminishes the ability to compete in today's service-based economy.

• Product-Centric Approach: OEMs should balance their focus between product innovation and strengthening their aftermarket service strategies, as services often deliver sustained profitability and long-term customer value.
• Outdated Systems: Not embracing digital platforms stunts growth opportunities and limits customer engagement.
• Missed Opportunity: Service innovation by other players enables them to enjoy better margins and market leadership.

Emerging Industry Trends Shaping After-Sales Service

The innovation OEMs introduce is driving dramatic transformations in after-sales service and support. Technologies are evolving, as are customer needs, and they are reshaping the methods of providing services, support, and monetization globally.

Digital Transformation of Service

OEMs are adopting digital platforms for service lifecycle management, including online portals, mobile apps, and aftermarket software solutions, in an attempt to shorten service cycles and improve their accuracy.

• Digital Solutions: Clients can browse spare parts catalogs and order items online, eliminating the need to visit dealerships.
• Mobile Access: Dealers and field technicians have the mobile applications needed to address issues immediately, with current data.
• Automated Processes: Removing the need for manual processes, as digital tools decrease the number of mistakes and increase the accuracy of orders and the speed of their resolution.

Predictive Maintenance & IoT

Using connected equipment and IoT, OEMs can predict and avoid equipment breakdowns. This not only reduces maintenance downtime but also helps in getting ahead of scheduled maintenance.

• Real-Time Tracking: The implementation of sensors enables full-scale tracking of performance and the ability to pick up on issues at the performance decay stage.  
• Predictive Repairs: Expense-heavy and badly-timed machinery breakdowns can be foresaw and prevented with timely, data-backed actions.
• Customer Satisfaction: Faster resolution of issues, coupled with the strengthened product lifecycle, intensifies the trust previously gained.

Data-Driven Service Contracts & Monetization

By using customer and effective equipment performance data, OEMs are able to offer custom services and open up new revenue opportunities.

• Usage-Based Contracts: Agreements that adapt to the real product use foster better customer relations.  
• Targeted Campaigns: OEMs can use analytics to effectively market upgrades or substitutes to users.  
• Performance Insights: The data allows OEMs to improve the product and enhance aftermarket earnings.

Sustainability in After-Sales

As OEMs adopt circular economy and eco-friendly measures, they focus on sustainability alongside partner service models.

• Recycling Programs: Waste and operating costs are minimized thanks to the recycling of parts.  
• Green Services: Repaired ecosystem services cause less environmental harm and are more profitable than replacements.  
• Support for EV: Clean-tech mobility and electric vehicles require specialized after-sales services for proper support.

Strategic Benefits of After-Sales Service and How Digital Tools Unlock Them

An OEM’s focus on after-sales services offers far more advantages than just improved operations. Such focus ensures improved margins, ongoing revenue, enhanced brand loyalty, and a buffer against economic shifts. These advantages are further enhanced and multiplied by digital solutions and technologies.

• Boost in Profit Margins Through Digitization: Computer-aided designs and digital tools not only improve the sequence of processes but also reduce errors and help sustain profit margins by applying adequate monitors and balances in the transactions. Contracts for post-sales parts and service always yield higher profits compared to the new equipment sales.
• Consistent Ongoing Income: Service agreements, spare parts sales, and upgrades provide consistent and dependable income. With the aid of digital tools, OEMs can monetize after-sales services and enhance their relationships with customers from all around the world.‍
• Improved Functionality: Warranty claims fraud is vastly diminished with the adoption of digital workflows, and so are the expenses linked to multiphase processing and holdups. Inventories become more profitable to OEM supply chains and dealer networks as modern systems support speedy order fulfillment and offer enhanced inventory insights. ‍
• Business Stability: Aftermarket services secure income as equipment sales drop in volatile markets. OEMs gain the ability to remain agile and competitive, regardless of sudden changes in demand, predictive analytics, and the real-time digitization of services.
• ‍Customer Retention & Loyalty: Improved after-sales services improve customer satisfaction, lifetime value, and trust indices. Failures are averted and product life is extended through the use of digital helpdesks and predictive maintenance, which motivates continuous allegiance to OEM ecosystems.

Intellinet Systems: Driving the Future of After-Sales Service

As OEMs move towards a digital transformation, Intellinet Systems is setting a new standard for after-sales service with its modern digital software solutions. With the right proprietary tools in place, OEMs can leverage the full potential of Intellinet Systems’ after-sales solutions to improve efficiency, raise customer satisfaction, and generate new sustainable revenue streams.

End-to-End Aftermarket Digital Ecosystem

Intellinet Systems offers OEMs a single ecosystem that addresses all phases of the after-sales lifecycle.

By reducing fragmentation, this approach eliminates opacity and empowers OEMs to create strong aftermarket operations on global networks.

Intellinet Systems: Comprehensive After-Sales Solutions

Intellinet Systems offers a suite of digital platforms designed to transform after-sales service operations for OEMs. Key capabilities include:

• Intelli Catalog: Intelli Catalog is an electronic parts catalog software that streamlines spare parts identification, ordering, and management. It minimizes errors, improves dealer efficiency, and helps OEMs protect revenue in the aftermarket.
• Intelli DMS: Intelli DMS is a cloud-based dealer management system that unifies OEMs, dealers, and service networks. It streamlines service operations, ensures accurate inventory, automates billing, and optimizes seamless collaboration and efficiency across the aftermarket ecosystem.
• Intelli Manual: Intelli Manual offers an effective and user-friendly solution for technical documentation. It converts traditional manuals to interactive HTML to make it easy for technicians to perform troubleshooting and maintenance. This reduces downtime and increases the accuracy of repairs.
• Intelli Desk: Intelli Desk is a field issue management system designed to report, manage, and resolve field issues. Maintains a structured reporting mechanism and ensures the issues are addressed promptly.
• Intelli Warranty: Intelli Warranty is a modern digital warranty claims management solution as well as a supplier recovery management system. It alleviates the need for manual processing, cuts down on fraud risks, and enhances claim processing speed.
• Intelli DVR: Intelli DVR is a dealer auditing system that enables OEMs to perform detailed compliance audits. It improves operability checks and supports the governance of functional policies.

These solutions are not limited to one domain. Intellinet Systems has proven the scalability and versatility of its ecosystem by successfully deploying it within automotive, aerospace, agricultural equipment, construction equipment, industrial machinery, and EV OEMs.

After-Sales as a Strategic Growth Lever

After-sales services have evolved from a complementary function into a strategic pillar for growth, resilience, and customer loyalty. The after-sales services model adopted by an OEM, especially with diminishing product lifecycles in place, can either elevate or hurt brand equity and profitability. Service models that are outdated and fundamentally rigid can negatively impact a brand's profitability and equity. OEMs, in this regard, need to transform their service models to keep pace with rising global competition to maintain profitability.  

After-sales services can be a source of predictable recurring revenue. OEMs can therefore enjoy stronger long-term relationships by focusing on bespoke aftermarket solutions and the adoption of digital platforms. Even though there is a focus on the bottom line, after-sales services pay off in terms of customer trust and position an OEM as an industry leader prepared for the future.   

With the assistance of Intellinet Systems, OEMs are well-positioned to compete and thrive in today’s market due to the comprehensive digital ecosystem provided, allowing for the optimization of operations and the delivery of unparalleled customer experiences.

Transform after-sales service into a true growth driver. Book a free demo and explore how Intellinet Systems enables OEMs to build scalable, future-ready service ecosystems that boost revenue and loyalty.