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Bite-size Case Study

Caterpillar: a service brand for customer peace of mind

Published on July 31, 2017   4 min
0:04
New product development is crucial because companies need it for growth, they also need it to remain competitive. There are very few organizations that can just live with their existing products and services. Almost all organizations need to renew, and also, sometimes in order to get real growth, introduce products and services in areas where they haven't been active before. However, although they're crucial, the real problem is, that lots of these products fail. The company Caterpillar is well known for its earth moving equipment, and it's well known for the superb designs it's got. Should stress that Caterpillar though is actually very clever in that it does a lot around marketing its service brand. If you buy one of these pieces of earth moving equipment, you need to have it maintained because normally you're a plant hire company. You're renting out this equipment to construction companies. And if your equipment fails, your source of revenue dries up immediately. So, the whole maintenance of equipment is very, very important. Caterpillar have taken that to a really interesting degree. Most other companies will repair things relatively quickly. Caterpillar, for years, had worldwide, 24 hour spare part delivery. Other companies have copied that, but Caterpillar even further now, and they have a thing called "negative downtime". And that is that the customer only knows the equipment has had a problem once it's already been repaired. That's how they define "negative downtime". How it works on a piece of equipment? For example, a truck will be connected by GPS. It will send out through various sensors signals about its performance and if something, like one of the hydraulic pumps fails on the back of the truck, there will be a reserve pump that comes in to keep the function working. The signal will go back to the factory, "Pump number one has failed, pump number two reserve is now taking over." And that spare part, pump number one, will be ordered. And the next time the service engineer, the maintenance person, comes to that truck on a routine visit, he or she will replace pump one. And then, they will go to the customer and say, "We've repaired your truck". And the customer will say, "But I didn't realize it had failed!" And that's how they've taken it to a degree that lots of other companies have not even thought of. They want to stop the problem before the customer's even recognized it. Also, got some really interesting things around the way Caterpillar deal with the emotions of their customers, as well as the actual technical requirements. Now, of course, we know the iPhone and the iPod are very good in nice design, and they address both emotional needs of users and also the technical needs. The phone works but also it looks very nice, various other things. Caterpillar do this as well. So, if you climb up into this truck, as you climb up, you'll pass a number of gauges. One of which will tell you that the oil level in the gearbox is okay. Because Caterpillar have found that the drivers feel good about their vehicles if, as they climb in, they see a number of indicators that are telling them, the truck is okay. One of them is oil level. Actually, the oil level in the gearbox never needs to be checked because it's a sealed unit. And over the lifetime, you don't have to change the oil. What they've done there is they've really recognized that they actually provide features like this meter, just to make the driver have that peace of mind, everything's okay, and feel good about the equipment. And Caterpillar really, really, superb brand in terms of their reputation. But it's a combination of understanding the technical and also, sometimes, emotional needs of the customer.
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Caterpillar: a service brand for customer peace of mind

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