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Reflection: Viewing the construction machinery industry with a third eye
Release time:
2024-07-09
The engineering machinery industry is most fond of investigating customer satisfaction. Almost every company spends money to hire third-party independent organizations to survey customer satisfaction. The management's idea is that ensuring customer satisfaction can guarantee the sustainable growth of the enterprise.
Many companies believe that satisfied customers will inevitably repurchase and recommend the brand, which is a cognitive misconception. Satisfied customers can also churn because satisfaction does not equal loyalty. Satisfaction measures the ratio of "customers without dissatisfaction," rather than the ratio of loyal customers.
Xerox found in a study that completely satisfied customers are six times more likely to repurchase products within the next 18 months than satisfied customers. The impact of this result is profound, proving that merely satisfying customers with choices is not enough to keep them loyal; the only customers who can be truly loyal are those who are completely satisfied.
In 2023, a certain media in the industry conducted a customer satisfaction and customer experience survey in the Chinese engineering machinery industry. According to the statistics that "both satisfied and completely satisfied are considered satisfied customers," the customer satisfaction of various brands ranges from 83% to 92.2%, with the overall industry customer satisfaction at 88.2%. Some companies' self-measured customer satisfaction is usually higher, and company management likes to flaunt this metric.
However, if the satisfaction measurement is to assess customer repurchase rates, then according to Xerox's standard that "only completely satisfied counts as satisfied customers," it is more reasonable.The real customer satisfaction in the engineering machinery industry is only about 54%.This is far below the expectations of many company managements, and this figure perfectly explains the reasons for the low customer repurchase rate and high customer churn rate in the industry.
The factors determining customer satisfaction are not only the quality of service and products. If a company attracts the wrong customers, and customers cannot make money using the products or cannot achieve satisfactory results, they cannot be satisfied.Therefore, choosing the right customers or target customer groups is very important. Choosing the wrong customers means that satisfactory results cannot be obtained, and retaining customers who are difficult to profit from and are long-term dissatisfied means that the enterprise has made a costly long-term mistake.
In pursuit of higher market share, some companies attract new customers at all costs.However, the service investment on "wrong customers" is a waste of resources, which not only fails to satisfy them but also overselling equipment damages the industry's ecology, making it increasingly difficult for customers to profit, resulting in a large amount of negative word-of-mouth and customer churn, and the industry's development path becomes narrower.
The demand for equipment in the Chinese market is not affected by the output and sales of the main engine manufacturers. The more equipment sold, the larger the equipment ownership in the market, the lower the average operating rate of the equipment, and customer profits will shrink. Overselling equipment harms customer interests, but many main engine manufacturers feel it has nothing to do with them and continue to engage in price wars and promotional activities.
When the industry turns profitable customers into unprofitable customers and "correct customers" into "wrong customers," it increases the proportion of dissatisfied customers and enlarges the camp of "detractors." The industry loses its future because these dissatisfactions cannot be eliminated by improving services. It is difficult for services to change the situation of these customers. The more investment enterprises make in services for them, the more wasteful it becomes, and the culprits are those "dominators" in the industry.
Blindly pursuing market share has initiated a cycle of failure, leading to customer dissatisfaction, employee turnover, shareholder losses, resource waste, and declining sales, gradually leading the industry into a "dead end."
Change is imminent.
Focus on hot spots
The Black Diamond held the 2024 Annual Employee Points Work Commendation Conference.
