Taking Your AV Business Forward in 2024: Aftermarket Sales

Once upon a time, the term ‘aftermarket’ was largely associated with the automotive industry. And this industry did indeed get it right. Long before anyone dreamed of RMM (Remote Monitoring and Management), FOTA (Firmware Over-the-Air) or even the cloud - the automotive industry taught us to first profit by selling a platform (the vehicle), then profit again by letting consumers change that platform to suit their needs. Today, from piston rings to spinners, oil changes, extended warranties and everything in-between, the automotive aftermarket - a combination of hardware, software and services - remains massive.

In the cloud era, automotive innovators like Tesla leverage the digital aftermarket with a variety of premium software upgrades. But the race to the aftermarket has spread far beyond the automotive sector. Today, a wide range of industries look to the aftermarket as a viable route to enhance revenues, raise customer satisfaction and shore up brand equity. In fact, a recent Deloitte survey found that almost three quarters of manufacturers are optimistic about the potential of aftermarket services. 

The AV aftermarket is no exception, and big AV players are jumping on board. In this post, we’ll see why the aftermarket makes sense for AV manufacturers, OEMs, resellers and customers, and how to make it happen in your organization.

AV, AVaaS and the Aftermarket

Mirroring the shift to everything-as-a-service (XaaS) in other sectors, the first AV-as-a-Service (AVaaS) models have begun to emerge in recent years. 

Initially, AVaaS enabled businesses, regardless of size, to simply lease essential hardware and software. This shift allowed end users to enhance team connectivity and seamlessly transition between remote and in-office work - without needing extensive investments in new technology. It democratized access to AV technology with a dynamic financial framework that could adapt to evolving business needs.

But the shift to AVaaS represents much more for manufacturers, dealers, and end users. The as-a-service mindset and business framework, coupled with the right servitization platform, can unlock the true potential of aftermarket sales. This will fundamentally change the customer value chain and the growth trajectories of OEMs. 

The Aftermarket for AV Manufacturers

Using a servitization platform to focus on aftermarket sales holds immense potential for audio-visual equipment manufacturers, helping OEMs amplify revenue streams and nurture customer relationships. 

Firstly, remote monitoring and management (RMM) capabilities enable OEMs and their channel partners to engage directly with their customer base – improving end user satisfaction by resolving issues faster and more cost-effectively. What’s more, the data generated through ongoing monitoring offers valuable insights on how devices are being used – even further deepening the understanding of what users need and how to meet those needs in current and future product development.

Offering robust aftermarket service extends the AV product lifecycle. This enables manufacturers to capitalize the same customer base more effectively by tapping into additional revenue streams beyond the initial sale. Farther downstream, equipping resellers with better tools and support capabilities facilitates increased customer satisfaction, leading to higher retention rates and upselling opportunities.

The next level of servitization is actual aftermarket sales. For example, remote premium feature activation enables end users to access additional functionalities on-demand without requiring new hardware. This eliminates reliance on the "rip and replace" model, which exposes OEMs to the risk of competitors easily replacing their products. It also offers faster time-to-market for new features that can generate recurring revenue while fostering customer loyalty through access to the latest advancements.

Maximizing revenue from a single product through aftermarket sales contributes significantly to sustainability, too. Subscription-based products lower carbon footprints, eliminate the need for constant and resource-intensive product replacements, and facilitate sustainable equipment lifecycles. 

Overall, the shift to aftermarket sales enables OEMs to extract more value from their products - fostering sustainability, customer loyalty, and a competitive edge in the dynamic AV market.

The Aftermarket for Your Customers

Customers also gain significantly from an aftermarket and AVaaS focus, which helps eliminate the culture of “rip and replace” and offers them on-demand feature enablement, affordable upgrades, and a more cost-effective and sustainable user experience. 

A focus on aftermarket revenues offers customers the flexibility to explore and upgrade your equipment. They can experiment with additional features without committing to a whole new purchase. Customers can unlock the  potential of their initial investments gradually – enhancing the performance of their audio-visual equipment and accessing improved functionalities while retaining the core investment.

Emphasizing aftermarket sales will also likely align with customer sustainability efforts as well as regulatory imperatives. Instead of discarding functional but slightly outdated equipment, customers appreciate being able to extend the life cycle of their devices through upgrades or repairs. It’s the perfect alignment of incentives between OEMs, dealers, and the end-customer.

How to Get Started?

To grow your focus on aftermarket services and revenue, it's first essential to ask tough questions and build a solid business case. This involves evaluating your value proposition, aligning your pricing strategies, and assessing the impact the shift will have on your infrastructure, cash flow, compliance, sales, and company culture. 

Next, you’ll need to carefully construct your aftermarket offerings by setting up connected services and a robust tech stack to support them. You’ll need to create attractive pricing and transparent contracts to enhance customer experience and retention.

From a go-to-market perspective, you’ll need to adapt existing sales processes, create new collateral, and train internal teams to align with the subscription model's goals. Ideally, all of the above can be done through effective partnering with financing, legal, risk management, technology, and subscription management specialists. Doing so will provide the necessary expertise and support for legal compliance, technology optimization, and streamlined operations. Xyte Device Cloud is the fastest and most-cost effective path to connect your AV devices to the cloud, including a fully-branded cloud solution for your customers. Whether you’re just starting to think about connecting your devices or are already on the way to full digital transformation, Xyte offers tools such as premium feature enablement and more, enabling OEMs to successfully navigate the aftermarket. 

The aftermarket is the next frontier in AV. And it’s not just a nice-to-have checkbox - it's a dynamic ecosystem poised to redefine success for your businesses.

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