For close to two decades, a leading manufacturer of heavy-duty transportation vehicles and their parts has engaged kisquared to oversee its market research. This long-term collaboration has allowed the company to create valuable benchmark data that illustrate key performance indicators and guide the development of action plans to achieve its business goals.
The manufacturer’s customers mainly comprise municipalities whose procurement practices are generally conservative and risk-averse. The company is an aggressive innovator in this competitive, highly regulated sector. New products that save money or improve safety and efficiency win the business, but given the sector’s cautious climate, having a product fail is not an option.
The latest research kisquared carried out for the company combined an examination of present customer satisfaction as well as receptiveness to new parts products that were in the conceptual stage of development.
What we did
This study measured present product usage and the market for aftermarket, remanufacturing and knock-off parts. It examined the likelihood of customers switching parts suppliers and the reputation of the manufacturer’s own branded parts and service. We also looked at the approval process of customers as well as their inventory and future budgets. The survey used a representative sample of 163 customers and asked 166 questions. We employed numerous quality control mechanisms to ensure data integrity and guard against collection, data-entry and analysis errors.
In order to accurately extrapolate from the data, we needed to ensure broad customer representation that included parameters such as location, purchasing behaviour, fleet composition, climate and regulatory requirements. It was also important to weight survey responses with respect to satisfaction and reputation in terms of the customer’s importance to the company. For example, when data are not weighted, one survey counts as one response; however, when data are weighted for a property that generates ten times the revenue as another, this data will count ten fold.
This survey was carried out by telephone through kisquared’s in-house call centre. The key to engaging a representative sample of customers in this kind of detailed surveying is strong advance communication. Customers received detailed letters outlining what the survey entailed and how the results would benefit the company and the customers themselves. Their anonymity was also assured. Particularly important is identifying a process for addressing any highly dissatisfied customers that may be discovered during the surveying process.
What we found
Analysis of the survey results revealed what specialized parts customers most commonly purchased compared with the ones the company already manufactured. We were able to pinpoint the most lucrative product offerings based on customer size, need and purchasing intentions.
We were also able to determine the objections customers had regarding the purchase of specific knock-off parts, which included perceived concerns related to safety, reliability and durability—important information in terms of branding. We also identified knock-off parts that met with few or no customer objections, indicating the clearest, easiest path for the company’s product expansion.
As for the company’s existing branded products and their reputation, the survey analysis revealed that using these parts as original equipment on vehicles would likely meet with a positive sales response. The company’s strategy of marketing these branded products as a lower cost alternative appeared to be on target, particularly for large fleet customers whose profits are more sensitive to variable costs, such as supplies. One area of brand weakness was the company’s ability to meet on-time delivery demands. There was a clear indication that the company needed to improve its ability to respond to product orders with less lead time.
This latest survey as well as many others undertaken over the years, allowed this heavy-duty vehicle manufacturer to confidently pinpoint its opportunities for innovation in terms of its parts and service offerings. Based on the benchmarks established from previous studies, the survey was also able to confirm the success of a number of process improvements the company had made.
The manufacturer regularly includes kisquared in meetings to develop its action plans for products and service improvements, which greatly enhances its ability to apply detailed research to concrete business decisions and helps to avoid potentially costly misinterpretation of results.