Kyle Fritz
Industry Awareness Committee Member
Northwest Electric LLC
EASA does a phenomenal job of providing members technical support, networking opportunities, technical resources, education and many other benefits. As members, we are keenly aware of these services and how to leverage them to our advantage.
EASA provides us an additional competitive edge through its market/industry research regarding the vendors, customers and service centers. These insights can help us strategize our business roadmaps. At the EASA 2019 Convention, attendees heard the results of research conducted on end-users. The presentation in its entirety, as well as the handouts, are available at easa.com.
Research Methodology
The research explored how plant maintenance customers view the EASA business channel. Those surveyed were involved in decisions regarding plant maintenance policies and practices, including repair and replacement of electric motors. Eighty-five percent of the respondents live in the U.S. or Canada. Respondents represented more than 25 industries. The results have a confidence level of 95 percent, with a six percent margin of error.
Repair vs. Replace Decision
There is always the concern that customers aren't repairing as much as they used to. EASA asked our customers if they noticed an increase or decrease in the number of repairs they have had. Only about one-third of respondents say they are repairing fewer electric motors than two years ago. That segment holds that belief for four main reasons:
- The quality of the product had increased.
- The root cause of the failure had been fixed.
- It wasn't cost-effective to repair.
- The customer preferred to replace instead of repair.
When customers do choose to repair, 50 percent of customers tend to be very loyal to their preferred service center. Another 41 percent tend to use two or three service centers. Respondents reported using multiple service centers for several reasons, including:
- Different providers service different types or sizes of equipment.
- Fastest turnaround time.
- Company policy requiring multiple bids.
- Lowest-cost provider.
It's worth noting that only 22 percent of the respondents indicated they select based on the lowest price.
Overall, customers seem to be very loyal to their service provider if they are meeting their expectations.
Does Accreditation Matter? Yes, But ...
Approximately 60 percent of customers said they would favor a generally accredited service center (not specifically EASA's Accreditation program). Sixty percent of customers believe that a repaired motor, if repaired to industry standard, maintains or improves the motor's reliability, and 56 percent of customers believe that repair maintains or increases efficiency. However, 50 percent would be willing to pay extra for work performed by an accredited service provider. Still, that is a significant opportunity for those of us who are EASA Accredited firms! If you have not yet taken the “next step” to become Accredited, I encourage you to do so.
This next finding presents an excellent opportunity to educate our customers on the value of repair. The research shows 23 percent of customers don't understand the positive effect an industry-standard repair has on efficiency. Fortunately for us, EASA provides resources that help us have that conversation with our customers. Find them at go.easa.com/marketing.
Repair vs. Replace Policies
About half of customers do have a policy for replacing a motor below a specific horsepower rating. On average, that horsepower is roughly 25 hp.
The other standard policy held by about 60 percent of customers concerns the cost of replacement versus repair. If the cost of repair is less than 52 percent of replacement (on average), the customer will choose to repair over replacing the equipment. The positive part of this is that customers typically prefer the EASA channel for new purchases. Considering that customers indicated they spend the same amount of money on repair versus new equipment annually, EASAns are situated well to offer both repair and replacement options to the customer.
Final Thoughts
The decisions that customers make about repair versus replace are complicated, and everyone approaches them differently. If we, as EASAns, understand the trends, factors, and policies that affect those decisions, we put ourselves in a strong position to capitalize on either decision they make.
Related Reference and Training Materials
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