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How to build the business case for a 3D parts catalogue

Aftersales

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Manufacturers are giving their customers access to 3D parts catalogues for numerous reasons. Providing users with a vastly improved aftermarket experience is just one of them.

By moving away from the traditional PDF and printed catalogue to embrace 3D digital platforms, businesses are also connecting ecommerce and fulfilment systems that allow them to offer a slicker, more efficient aftermarket service. This is helping to cut costs, increase revenues and introduce environmentally sustainable processes.

But, while the incentives are many, converting to a 3D parts catalogue still requires a change to traditional working practices. And, like any business change, this might be met with resistance unless a compelling business case is presented to the relevant stakeholders.

That’s why it’s important to look at both the short-term and long-term benefits and calculate the value this technology offers the business.

Short-term ROI

While you might be convinced that digital 3D platforms are the future of product catalogues, there may be others who question whether the change is needed right now. The best way to overcome those doubts is to demonstrate how soon the transition will provide a return on investment. 

The big positive with 3D parts catalogues, however, is that businesses can begin to see a return from day one – as one of the major advantages of these highly visual platforms is that they dramatically reduce ordering errors.

When customers can view the virtual twin of a product it becomes incredibly easy to identify parts quickly and accurately. And, for industries such as the automotive sector, where more than 85% of manufacturers complain about ordering errors due to the incorrect identification of parts, this is a massive win from a cost cutting perspective.

Studies have shown that ordering errors can increase business costs by 11%. Our own research has also shown that these cost savings alone are likely to deliver most businesses a return on investment within 18 months. This is before you even begin to consider the long-term benefits.

Long-term ROI       

It is well worth calculating the value a 3D parts catalogue will provide your business over the long-term too. This will involve an evaluation of the following eight factors:

  1. Enhanced user experience

A 3D parts catalogue creates an impressively simple user experience that increases: the ease with which parts can be identified; customer confidence when placing orders; and the speed of fulfilment – when parts can be purchased instantly, and errors are limited. This will have an impact on brand loyalty.

If this helped to increase customer retention by 10%, what would be the financial impact for your business?

  1. Additional revenues

The ability to identify a part and place an order quickly will be game changing for many manufacturers. The aftersales ecommerce market is currently growing at 23.3% each year in some sectors – and manufacturers are achieving profit margins that are 250% higher than the original product sale. By increasing the propensity to buy direct, manufacturers are reducing the potential for customers to procure parts from third parties.

Our research has shown that this will help businesses increase sales by 50% on average. What impact would this increase in parts sales have on company revenues?   

  1. Reduced production costs

When product catalogues are available online, manufacturers no longer need to pay for printing costs. When the information can be updated in an instant, businesses also eliminate the need to pay designers to manage version control. And when the digital platform can be made available in up to 71 different languages automatically, translation costs are also massively reduced.  

So, what figure can we put on the savings made from not having to pay for the printing, designing and translation of product catalogues?

  1. Reduced environmental impact 

By moving away from printed materials, manufacturers will also be embracing a more sustainable support model. This will help businesses demonstrate environmental, social and governance (ESG) credentials – which is increasingly important in B2B supply chains. It will also help in the more discerning consumer market, with more people looking to buy from ethical manufacturers.

What percentage of customers could be lost in the future if the business fails to meet these expectations – and what impact would that have on revenues?

  1. Error reduction

We’ve already discussed how a reduction in ordering errors can reduce business costs by 11%. But it is also worth considering the frustration that customers feel when they make mistakes, which are often not their fault. Aftermarket studies have shown that 10% of parts are not easily identifiable due to poor information.

So, what impact would a 11% decrease in business costs have on company profits? And how would a reduction in customer frustration impact customer retention figures?

  1. Component reliability insights

One of the major benefits of a digital platform is that it can capture order data and help businesses spot trends, such as the parts that are a common point of product failure. This data can be used by customer service teams to offer more informed advice to customers. It also tells businesses what parts need to be kept in stock – helping to reduce fulfilment times. These insights can also be used by product designers to improve the reliability of future product models.

What impact would these improvements to customer service and product reliability have on customer retention figures?

  1. More productive customer teams

Customer services teams wouldn’t just benefit from access to trend data and information around common part failures. If customers can self-serve more readily, and they are making fewer ordering errors, the customer service department can also spend their time more productively – for example, by building closer customer relationships and solving their more complex problems.

What impact would this improvement have on brand loyalty and customer retention figures?

  1. Product uptime

By enabling faster ordering, slicker fulfilment and fewer returns, manufacturers will reduce product downtime dramatically. With better insight into component reliability also helping to improve the design of future models, increased uptime will also be possible with future products. This will vastly enhance a brand’s reputation for reliability.

If that reputation helped increase the customer base by just 5%, what would be the impact on company revenues over the long-term?

The business case

Whenever new technology is implemented within an organisation it will impact working practices and cause some disruption. If the affected parties can’t initially see the benefits, it’s to be expected that there will be some resistance from those who say, “if it ain’t broke, don’t fix it.”

However, if you can demonstrate how soon the company is likely to see a return on investment, you will break down one of the first major barriers to adoption. And if you can also place a realistic value on the eight points above, you will have produced a compelling business case that will win over any doubters.

The emergence of 3D digital platforms is revolutionary for the aftermarket industry. So, the sooner we can help people understand the value it offers the better – and a solid business case is a sure fire way to demonstrate how this technology can futureproof manufacturing businesses.

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If only your parts service was as good as your products.