Competition in After Sales – Do You Really Know Your Market Players?
A recent in-depth conversation with a former colleague prompted me to summarize my observations on competition in after sales—a topic that is present in many companies, yet often underestimated.
After-sales managers in the machinery and plant engineering industry oversee a portfolio that ranges from a simple M4 screw to complex retrofit projects. This wide spectrum alone highlights how demanding the field truly is.
After Sales as a Highly Complex Management Discipline
In addition to day-to-day operations, after sales organizations face numerous further requirements:
- Defining a future-proof strategic direction for the after-sales business
- Managing highly diverse customer needs across global markets
- Coordinating with agents, representatives, and international subsidiaries – currently further complicated by import and customs regulations
- Close collaboration with adjacent functions such as engineering, purchasing, and machine sales
This multitude of dimensions makes after sales a highly complex management discipline. As a result, many organizations focus predominantly inward – on process optimization, digital transformation, and the efficient operation of their own structures.
The Underestimated External Threat
It is precisely here that opportunities have emerged in recent years for regional and highly specialized competitors. These providers are often perceived as too small, irrelevant, or qualitatively inferior.
However, my experience from numerous mandates and international travels – including to China – paints a very different picture. In many cases, these competitors have already captured significant market share and offer product quality that is at least on par with that of OEMs.
While OEMs are heavily occupied with internal challenges and monitor competition only superficially, these niche players achieve slow but steady growth. The threat is often recognized only once service revenues have already begun to decline.
Why Niche Players Succeed
The success factors of these competitors are usually quite clear:
- A strong and consistent focus on one or a few product segments
- Concentration of all resources on a clearly defined core customer base
- High agility and fast response times to customer requests
- Significantly lower cost structures and margin expectations compared to OEMs
- Product quality that has continuously improved over many years
This clarity in their business model provides a distinct competitive advantage – particularly in after sales.
Three Key Learnings from Practice
Across various customer projects, three critical action areas consistently emerge:
1. Intensify Market and Data Analysis
Regularly link internal sales and service data with external market research. This is the only way to identify shrinking customer, product, or regional shares at an early stage.
2. Targeted Measures Instead of Pure Price Pressure
Regularly challenging your own manufacturing costs and pricing calculations is essential. This enables targeted adjustments in pricing, sourcing, or service scope – rather than across-the-board price reductions.
3. Build Systematic Competitive Intelligence
A one-time SWOT analysis is not sufficient. Invest in continuous monitoring of your competitors to develop a lasting understanding of their offerings, pricing logic, service levels, and strategic direction.
Conclusion: Understanding Competition Means Securing Revenue
Only companies that truly understand their after-sales competitors – and translate these insights into a future-proof strategy – will be able to sustainably increase service revenues and secure market share.
The effort required is not insignificant. But from personal experience, I can say with confidence: it pays off in the long run.
I would be pleased to support you in creating transparency around your after-sales competition and deriving concrete, actionable measures from it.
