Aftermarket attach

Parts and service revenue from a customer's installed units over what those units would generate at the rate the OEM's fully-contracted customers pay per unit per year, by model and age band.

DefinitionParts and service revenue from a customer's installed units over what those units would generate at the rate the OEM's fully-contracted customers pay per unit per year, by model and age band.

Age band matters

Year-one units are under warranty; years three to eight generate the most. A young fleet has a low expected figure and is not a gap.

Register check

Units in the register against units shipped, per model and year. Where the register is short, expected is understated and the report says by how much.

How it is computed

Parts and service revenue from a customer divided by its installed units, compared with the norm for units of the same type and age band among customers who buy fully.

Example

A customer runs 40 machines and buys $24,000 of parts a year: $600 per machine. Similar fleets buy $2,400. The gap is $72,000 a year at parts margins.

Where it goes wrong

The installed base register is out of date, so the denominator is wrong. Units sold through distributors, resold or scrapped make attach look better or worse than it is.

Articles that use this term

Wallet share and penetration · Industrial manufacturers

Aftermarket attach: installed base against parts and service revenue

How an industrial manufacturer measures aftermarket capture per customer from the installed base register and the parts and service ledger: expected annual aftermarket per unit from the customers who buy it all from the OEM, actual per customer, the attach rate, and the list of customers running the OEM's equipment on someone else's parts, ranked by the revenue at norm.

16 Sept 20262 min read Forecast and pipeline · Industrial manufacturers

Service contract renewal by fleet age: the units coming off warranty, and who owns the call

How an industrial manufacturer builds a service contract calendar from the installed base register: units by warranty end date and contract end date per customer, the attach rate for units in their first year off warranty from the manufacturer's own history, the customers with units coming off warranty in the next two quarters and no contract offer logged, the value of a contract at the norm per unit, and why the call belongs to the service sales team before the parts desk hears from the customer.

16 Sept 20262 min read Wallet share and penetration

Share of wallet by industry: what the denominator is in twelve industries

Share of wallet is one formula and twelve different denominators. This hub sets out, for twelve industries, what the customer's wallet is, where the number comes from, what the numerator is in that industry's ledger, and the natural ceiling a share can reach, with a link to the full guide for each. Written for a commercial leader who has heard the term and wants to know what it means for their desk.

16 Sept 20263 min read Wallet share and penetration · Industrial manufacturers

Ten questions a manufacturer's VP of aftermarket asks, and the table that answers each

The ten questions a vice president of aftermarket at an industrial manufacturer puts to the service and parts teams, which customers run our equipment on someone else's parts, which units come off warranty next quarter with no contract offer, is the installed base register complete, which batches are claiming above the model's rate, which customers claim above the norm across batches, which quotes convert and which are price checks, which distributors and direct accounts double count, what is catalogue fit per customer, which service contracts renew with a bad claims history, and what changed, each with the table from the installed base register, the claims file and the ledger, and the answer to send back.

16 Sept 20263 min read How-to guides

The norm by industry: what 'similar customers' means on twelve desks

Every gap on this site is measured against a norm from the company's own best customers of the same kind, and what the same kind means changes by desk: same menu type and covers, same size band and sector, same tenure band, same rig count, same property type and market. This hub gives, for twelve industries, the fields that define similar, the unit of size the norm scales by, the population the norm is drawn from, and the guide for each.

16 Sept 20263 min read Board and management reporting · Industrial manufacturers

Warranty claims by customer and product: the installed base that costs the most

How an industrial manufacturer reads its warranty claims against the installed base register and the ledger: claims per unit per model, claim cost per customer against the revenue the customer brings, the customers whose claim rate is well above the model's norm, the models whose rate rose with a production batch, and the two findings, a product problem by batch and a customer application problem, that the same claims file separates.

16 Sept 20263 min read