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equipment industry was US$4 billion last year. Purchases by rental much that they are willing to tell others. This means that they
companies accounted for US$2.3 billion of this or 58%. need to keep a pulse on what customers are thinking, saying,
This is a lower proportion than rental’s share in unit terms (67%) and doing to continuously refine and improve offerings. Leaders
because of the high number of backhoe loaders – a relatively must quickly sift between what is relevant versus what is noise.
low cost machine – bought by rental companies. However, this In becoming a customer-first organization, construction
share in value terms has taken a huge leap from where it was in equipment companies need to cement a stronger relationship
2010, when, despite representing 47% of the machines sold in with their dealers. In turn, dealers can use their extensive
unit terms, rental accounted for just 31% in value terms - about knowledge and networks to increase their engagement with
level with the share attributable to contractors. customers and act as advisers. They can stimulate interactions
With massive machines being deployed by rental companies among customers—for example, by hosting quarterly equipment
each year, equipment rental in the CE industry has witnessed forums—and provide deep content knowledge to customers
a rapid surge in the past few years. Going ahead, numerous on topics of interest such as equipment electrification, used-
attractive financing options for rental equipment promises to bring equipment value, and the benefits of connected equipment.
forth lucrative opportunity for investors and manufacturers. Dealers are optimally positioned to offer tailored advice to
customers (for example, how to lower TCO) given their deep
Customer Centricity understanding of both customers and their equipment. Dealers
To continue to thrive in this new environment, all the stakeholders could also create opportunities for customers and OEMs to
of the segment, be it manufacturers or their dealers, must invest collaborate on product development. Not only this, the partners
now to build the sales and service organizations, which will can leverage connected equipment to perform maintenance
need to operate as digitalized, customer-centric businesses. as needed and design a digital service journey with seamless
To achieve this vision, they need to have the confidence to scheduling, payments, and equipment status updates. These
disrupt themselves. Now is the time to define opportunities to efforts have led not only to increased aftermarket service and
better serve customers, develop competitive differentiators, parts revenue but also to increased new equipment sales
and translate these into strategic initiatives such as analytics use because of an improved customer experience, according to
cases, lead enrichment, and digital-sales front ends. Good news McKinsey analysis.
is that construction equipment industry has already embarked Once they are able to implement a forward-looking model
on this journey and are set to reap the benefits of the first-mover that encompass all these parameters, the journey to customer
advantage as they move ahead. Organizations need to ensure acquisition & retention will be far easier and smoother. In order to
that they are designing offers that a set of customers love so deliver greater convenience and higher economic value to their
26 CONSTRUCTION OPPORTUNITIES|JANUARY 2023