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February 19, 2024updated 28 Feb 2024 4:51pm

Manufacturers are switching to personalised customer experience amid fierce competition

Shifting consumer demands have transformed customer experience from a value-add to a necessity. With customers having more choice than ever, how can manufacturers deliver personalised service and gain a competitive edge when the right price and quality are no longer enough to guarantee success?

Manufacturers are tussling for consumer wallet share by responding to shifting customer demands with increasingly personalised products and experiences. One level of differentiation is manufacturers offering increasingly made-to-order and engineer-to-order products. They then offer a personalised experience, such as product configuration on the website. But with the steep increase in data-driven technologies, such fierce competition is making it harder for manufacturers to differentiate their customer experience offerings, as some adopt technologies quicker than others. Those harnessing artificial intelligence (AI) and data analytics can offer more responsive and personalised communications with customers, as well as increase sales through product recommendations and customisations. The proliferation of social media channels and easy access to reviews and e-commerce has greatly enhanced and changed communications with customers.

A customer experience operative using AI
As more manufacturers adopt digital tools to enhance customer experience, those who can offer a more personalised approach will be able to differentiate themselves amid tough competition. (Photo by Tirachard Kumtanom)

“Modern manufacturers are trying to get closer to their customers and become more of a value-added provider,” says Andrew Kinder, SVP of industry strategy at Infor. “They seek long-term relationships, rather than simply sell and move on. From servicing to rental, to only selling the output that the machine delivers, these value-added services are transforming the relationship between manufacturers and their customers.”

Utilising the plethora of data sources to become a data-driven enterprise and deliver excellent customer experience with capabilities to personalise customer experience and products will be crucial to remaining profitable as manufacturers tackle other industry challenges, from limited resources and rising costs to supply chain complexity. Neglecting to integrate these technologies to adapt to shifting consumer demands will only result in manufacturers being left behind.

Personalising the products on offer

With businesses offering the opportunity to customise products and services, customers no longer desire off-the-peg, standard pieces of equipment. Instead, customised manufacturing is increasing in popularity, with estimations for the market value to reach more than $1.35 trillion by 2031, according to Allied Market Research. Offering customisation options in e-commerce, from material to motor or finish, is crucial for manufacturers to differentiate themselves and attract customers.

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“Manufacturers, who ideally might want to make one size fits all, because it’s highly efficient, are not be able to differentiate their offering in the marketplace,” says Kinder. “They have to move more toward personalised, customised products, but they have to do that in a way that still allows them to be profitable.”

To do this, some manufacturers leverage configuration, price, quote (CPQ) tools to guide a customer through personalising a product, while adhering to predefined options and specification parameters. The software captures data and decisions that sales and engineering teams use to configure, price, quote, and design products manually. Using this to set rule parameters and create dynamic pricing as the customer builds their order, customers can receive instant quotes to inform their purchasing decisions.

Improving speed and reliability of delivery

But customers don’t only now expect to customise a product, they also expect timely delivery and a tailored service to their exact requirements, that arrives as quickly as OTP products take to arrive.

“It’s about how you deliver customised products and services in a way that differentiates you in the marketplace, and that’s what’s taking place in manufacturing at the moment,” says Kinder. “That’s part of the front end of the complexity of dealing with customers.”

Buyers today are intolerant of delays and errors and will quickly switch to other sources if they are disappointed. In their personal lives, buyers have got used to placing orders online and receiving regular alerts on delivery dates and times. This visibility and confidence is what buyers expect from their business suppliers, and if it’s not delivered, businesses are at risk of losing customers to competitors who do.

To improve their speed and reliability of delivery, manufacturers are turning to modern, cloud-based ERP solutions that help manage and streamline the entire order to delivery process and utilise advanced supply chain capabilities that allow collaboration and sharing of real-time order and delivery status with suppliers.

On the factory floor, for example, Manufacturing Execution Systems (MES) also help with real-time production monitoring and synchronisation of shop floor processes to reduce bottlenecks and delays. Such solutions also support quality control processes to ensure that products ship as ordered and meet expectations for value and performance. Investing in shop floor technology can yield reliability, product consistency, increased productivity, and efficiency, which are key ingredients for fulfilled customer satisfaction.

Integrating AI to improve productivity, service and profitability

While AI is not new, its use embedded into e-commerce, ERP and CRM solutions has accelerated in the past two years. Integrated AI helps manufacturers build memorable customer experiences, through responsive communication using various channels such as online portals, customer relationship management (CRM) solutions, and real-time communication tools, while improving their operational efficiency and protecting margins.

Beyond customised products and responsive communications, manufacturers can go further to deliver excellent customer experience by providing buying recommendations that result in increased order value. Customers can be guided as to what their options are based on which customers have historically ordered in collaboration with other products and services, finding them the best value for their demands in a nuanced and data-driven way.

“Manufacturers can either integrate AI directly into their website, enabling customers to make informed decisions as they place orders, or use it to help the Engineering Sales functions when taking orders from their customers,” says Kinder. “In both cases, AI is used to guide the conversation and assist customers in making the best possible choices and automatically offering further product recommendations from data that shows what other customers have historically purchased.”

A familiar way companies have incorporated AI into a website is by implementing chatbots. These virtual assistants are used to handle customer questions, provide fast responses and offer personalised recommendations. According to a 2023 CX Trends report by Zendesk, however, 55% of manufacturing leaders worry their organisation is lagging in their use of AI and chatbots in their customer experience strategies. 59% are also concerned that their approach to AI so far has been on an ad hoc basis, rather than strategic. With manufacturing companies in different phases of their automation journeys, it can be difficult, and costly, to implement new technologies or implement data-driven strategies altogether. Manufacturers should consider that implementing new technologies can increase sales and loyalty from customers, making the cost of implementation worthwhile.

An effective consumer journey

Many buyers, particularly those who purchase capital-intensive goods, prefer to conduct their initial research online. This is true for the procurement of complex items like construction machinery, medical imaging equipment, and in-plant assets such as overhead doors, conveyors and forklifts. By learning from other industries and sectors and setting up e-commerce platforms, potential customers can conveniently conduct preliminary research, compare specifications, and explore expected delivery dates.

E-commerce allows buyers to progress through the sales journey at their own pace, enabling them to set their own decision-making priorities. Furthermore, self-service e-commerce portals can reduce the cost of sales by allowing customers to research product features themselves, thereby reducing the time sales teams need to allocate to nurture a prospect, provide education, and support product comparisons. Another application of AI is the ability for manufacturers to collect data from these online tools to obtain valuable insights into buying influences, from which decision-making can become faster, easier and more responsive.

“With profitability being an important factor for manufacturers, AI tools can help to compare products for sales engineers to recommend,” says Kinder. “Understanding product A versus product B versus product C when making recommendations to customers helps them to see which are the most profitable options to suggest.”

Delivering aftermarket services

Modern aftermarket service solutions, which frequently been overlooked as a business opportunity, can also help manufacturers streamline their service processes, leading to faster first-call resolution rates. These solutions allow manufacturers to manage warranties, service agreements, depot repairs, and track parts used and their service history.

“AI is permeating through a number of different areas, from recommendations to servicing equipment. In the latter, AI can help to determine what sort of engineer is needed, such as a mechanical or electrical engineer, and ensure that when they arrive at the site they have all the parts they might need to complete the job” says Kinder. “A first-time fix is the best way to preserve a manufacturer’s margin in a service operation. That’s a KPI measure they are looking to improve.”

By leveraging AI correctly to ensure that the right technicians are sent to the right place at the right time with the right tools and replacement parts, these solutions can help enhance customer satisfaction while differentiating manufacturers who have implemented AI for this purpose effectively. Being able to deliver on this promise is what will bolster their competitive edge.

A modern customer experience

Providing excellence in customer service is a crucial step in improving customer loyalty. However, it can be a costly and time-consuming process. The good news is that manufacturers can leverage digital tools to improve their responsiveness to customers, provide after-market services, and improve speed to delivery, all of which contribute towards an effective and competitive customer experience. By retaining their existing customer base in a competitive and uncertain landscape, manufacturers can remain profitable, compete effectively and unlock new revenue opportunities.

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