Aftermarket Sales Maturity Model

Over the past 15 months, we’ve had the privilege of meeting with more than 300 leading manufacturers in the US and Europe. All of these companies have stated growing their Aftermarket revenue streams, through sales of spare parts, consumables and service contracts is a key part of their growth strategies. In addition, these companies have developed innovative service offerings, and are leading the trend towards outcome driven innovation.

While these goals and aspirations are commonplace, we were surprised by the range of performance differences across the population of companies we interviewed. There were clear differences in;

  • How these manufacturers went to market
  • Their level of sophistication in sales approaches
  • How proactive they were in connecting with their Installed Base

In particular, we realized selling motions ranged from completely reactive – “we wait for customers to contact us” – to proactive and preemptive – “we anticipate our customers needs and reach out to them with solutions”.

It was clear to us that depending on the maturity of the Aftermarket organization, companies self-selected into various levels that defined a Maturity Model. We used these learnings to define the Entytle Aftermarket Sales Maturity Model.

Not surprisingly, there were clear differences in performance at both ends of the Model. Champions, or those companies that were proactive and preemptive had growth rates more than double that of the laggards, who self-described themselves as reactive. Performance along other key metrics (wallet share, gross margin etc) also showed had demonstrable performance differences.

While this may sound discouraging to companies in the less mature categories of the Model, there are lessons to be learned, and steps that can be taken to put yourself on the journey to becoming a Champion. It takes clear strategic intent, leadership, commitment – and data!  We will share lessons from the leaders in our next blog post.

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