Machinery manufacturing has a pricing problem. But not where most companies look for it. Not in product sales, but in after-sales. Your customers often value maintenance, spare parts and software updates far more highly than your price list suggests. This is where the biggest untapped potential in after-sales pricing lies.
Research on servitization in manufacturing even reveals something surprising: manufacturers who expand their offering with services do not automatically earn higher margins. Often their margins are lower than those of pure product manufacturers. We see the reason for this again and again in our projects: service is offered, but it is not consistently priced according to its value.
In other words, machine builders don’t lose their margin when they sell the machine. They lose it afterwards, through service underpricing that nobody has tackled systematically for years.
Why After-Sales Is Underestimated in Machinery Manufacturing
When a production machine stops, the plant manager doesn’t have a pricing problem. He has an availability problem. Every hour of downtime costs money, and usually far more than any spare part or service fee.
That’s why willingness to pay for fast, reliable service is much higher than many manufacturers assume. Yet spare parts prices are often calculated as cost plus a historically grown margin. The value that availability creates for the customer barely plays a role.
Value-Based Service Pricing: The Kaeser Example
Kaeser Kompressoren shows how it can be done differently. With its operator model SIGMA AIR UTILITY, Kaeser no longer just sells compressors. It sells compressed air as a service. The customer pays for the compressed air actually used, and Kaeser guarantees availability. The price is based on customer value, not on manufacturing costs.
Three Levers for Profitable After-Sales Pricing
Lever 1: Separate Price Lists for Service Spare Parts
When spare parts and product components share the same price list, they are subject to the same discounts and negotiation logic as new business. The simplest first step is therefore a dedicated price list for service spare parts. Its pricing logic is based on the value of availability to the customer, not on cost.
Lever 2: Subscription-Based Maintenance Contracts
Good maintenance contracts bundle response time, spare parts availability and preventive inspection. This shifts the conversation from “What does the inspection cost?” to “What is the availability of your machine worth to you?”. Customers with a maintenance contract pay more on average than customers who buy services one at a time. And they are less likely to switch suppliers.
Lever 3: Pricing Psychology in Spare Parts Quotes
The order of the options in your spare parts quote influences what customers choose. Three design decisions have a direct impact on your margin: showing original spare parts before alternatives, offering fast delivery as a premium option, and presenting the overall benefit (availability, warranty, downtime protection) before the price.
Three Barriers to Service Pricing and How to Overcome Them
Barrier 1: “Our customers won’t accept it”
This assumption is rarely tested. Our experience shows otherwise: when you clearly demonstrate the value of availability and fast response times, customers accept higher service prices. The prerequisite is a rationale that holds up.
Barrier 2: Internal Resistance in Sales
Salespeople whose targets are built around machine volume see service pricing as extra work. Without clear incentives and targeted training, service pricing will never be sold consistently.
Barrier 3: Lack of System Support
If your ERP and CRM can’t map a dedicated service pricing logic, after-sales pricing stays in Excel and remains inconsistent. Whether your systems can support it is an architecture decision, not just an IT question. Our CRM consulting shows you how to anchor your pricing logic properly in your systems.
Conclusion: After-Sales Is the Most Profitable Revenue Stream in Machinery Manufacturing
After-sales is not a side service on the edge of the core business. Priced correctly, it is the most profitable revenue stream in machinery manufacturing. If you recognise this and design your pricing logic accordingly, you win back margins that product sales could never deliver.
How We Support You with After-Sales Pricing
Profitable after-sales pricing needs two things: a pricing logic based on customer value, and systems that support this logic in day-to-day business. That’s exactly where we come in.
Pricing architecture and service pricing: In our pricing management consulting, we work with you to develop a dedicated pricing logic for spare parts, maintenance contracts and services. We analyse your customers’ willingness to pay, design the price structure of your offers and train your sales team so the new prices convince in customer conversations.
Systems that support service pricing: With our CRM consulting, we make sure your service pricing logic doesn’t end up in Excel. We embed price lists, contract models and service processes properly in your CRM, so your team quotes consistently and you can always see where margin is created in after-sales.
Ready to win back your service margins? Get in touch: [email protected]
