“Don’t take your work home with you.” In an always-connected world, many of us strive to follow this advice, and all too many of us fail to do so.
Yet as digital technologies permeate our lives at work and at home, something interesting is happening beyond lively dinner conversations about work-life balance. The adage is flipping. Our daily digital experiences shape how we desire to engage with and purchase digital services at work. As aerospace and defense companies look to digital to differentiate themselves in aftermarket services, the “experience” they deliver will be essential in motivating operators to buy services and, more important, renew them.
While the aerospace and defense industry remains focused on delivery and bringing new programs to market, the aftermarket is grabbing headlines with new brands, mergers and acquisitions, and an increased OEM presence. Many of these moves have a familiar, “physical” core of spare parts and MRO. Yet around this core is a new, digital wrapper of customer-facing apps, analytics and partnerships.
The 2017 Paris Air Show was replete with announcements of digital aftermarket services. While algorithms and data insights matter, Accenture’s research and market observations indicate that operator experience may ultimately determine winners in the digital aftermarket.
An important theme that emerged from Accenture’s Technology Vision 2017 research for aerospace and defense was the need for companies to “design for humans” using technology to form bonds that translate a human connection into long-term commercial partnerships. The research found that aerospace and defense executives tightly linked operator experience to their own market leadership; 84% agree that technology that tightly aligns with customer experience and human behavior is a competitive differentiator. More directly, 79% stated that companies that integrate operator experiences with operators’ business motivations will emerge as industry leaders. We also see these sentiments reflected in the market, as operators seek out intuitive solutions that reduce the complexity of aftermarket execution and increase aircraft operational availability.
Launching and monetizing compelling experiences will require a fundamental shift in how our industry designs, develops and runs aftermarket services. New talent and methods focused on customer and operator research, experience design and development will need to be paired with the analytical and data science skills that OEMs are embedding in their emerging digital organizations. The “engineering” and “manufacturing” of experiences draws upon ethnographic and social research, visual design and agile software development—skills not typically found in a legacy aerospace engineering organization.
Measuring how operator experiences can increase sales and service renewals will also require fundamental change. A shift toward experience-led services will lead the industry beyond individual service transactions and toward measuring the lifetime value of customers, a metric focused on customer product refresh and service contract renewals. Our industry will need to revisit how it tracks and manages contract and customer value to optimize the design and delivery of aftermarket services. Service providers must also shift their mindset from one of just delivering a service (e.g., MRO) toward providing a blend of information and physical services to deliver value specific to the needs of a given operator or segment.
The aerospace and defense companies that are beginning to focus on experience recognize that technology alone cannot deliver the revenue growth they seek. These leaders have started their investments in experience with four actions. First, they are applying effort and data-driven analytics to better understand operators’ real business drivers and pain points. Second, they are reviewing their existing service portfolios to realign them with market expectations. Third, they are taking what they learn to “wrap” their services in relevant digital experiences. Last, they are shifting marketing approaches away from people and products and toward value-added services powered by digital technologies.
Ultimately, what is a good customer experience worth in the aerospace and defense aftermarket? While the industry’s shift to “the new” is just beginning, it could help quite a bit. Even a 1% improvement in service contract renewals due to an improved experience could yield tens of millions of dollars in additional annual aftermarket revenue for an OEM or Tier one provider. For aerospace and defense companies to achieve the aggressive promise of their new digital aftermarket offerings, they must capture new sales by aligning with operator value and create long-term revenue by embedding themselves in operators’ operations. An algorithm alone cannot do that. A compelling experience can.