The Essential KPIs for Success in the Parts Business

The parts business within the machine manufacturing industry is experiencing significant growth. For instance, the global construction equipment aftermarket was valued at over $25 billion in 2022 and is projected to grow at a compound annual growth rate (CAGR) of 4% from 2023 to 2032

Similarly, the agricultural equipment market is expanding, with projections indicating growth from $193.46 billion in 2024 to $344.77 billion by 2032, reflecting a CAGR of 7.5% during this period.

To remain competitive in these expanding markets, pricing and aftermarket managers must track the right KPIs.

Table of Content:

• Why KPIs Matter
• Revenue and Profitability KPIs
• Operational Efficiency KPOs
• Customer Satisfaction and Market Positioning KPIs
• Pricing and Market Intelligence KPIs
• How MARKT-PILOT Supports These KPIs 

Why KPIs Matter

Tracking KPIs ensures informed decision-making, process optimization, and a proactive approach to market trends. Without proper monitoring, businesses face:

• Missed revenue opportunities due to ineffective pricing strategies
• Stockouts or excess inventory, leading to higher costs
• Delayed deliveries and poor customer experience
• Reactive rather than proactive decision-making

Revenue and Profitability KPIs  

Aftermarket Revenue as a Percentage of Total Revenue

• A strong aftermarket business should contribute a significant portion of total revenue. Industry leaders generate up to 30% of their revenue from aftermarket services (Middlesex Consulting).
• Formula: (Aftermarket Revenue / Total Revenue) x 100 
  
  

Ratio of Aftermarket Margin to Equipment Margin

• This KPI highlights the profitability of spare parts and service offerings compared to original equipment sales. A higher ratio indicates that aftermarket services are a major profit driver.

Service Contract Renewal Rate

• A high renewal rate suggests strong customer satisfaction and recurring revenue potential.
• Formula: (Renewed Contracts / Total Contracts Up for Renewal) x 100 

Operational Efficiency KPOs 

Production Lead Time

• Efficient production times ensure timely deliveries and minimize customer downtime.

On-Time Delivery Rate (OTD)

• Meeting promised delivery dates is critical in the aftermarket business.
• Formula: (Orders Delivered on Time / Total Orders) x 100 
  

Downtime to Operating Time

• Measures machinery effectiveness and maintenance efficiency. Preventive maintenance reduces downtime, improving operations
• Formula: (Downtime/ Operating Time) 

Yield (First Pass Yield - FPY)

• Assesses production efficiency and quality control. A high FPY means fewer defects and rework.
• Formel: (Parts Passed Without Failure / Total Parts Produced) 

Customer Satisfaction and Market Positioning KPIs   

Customer Service Levels

• Measures responsiveness, issue resolution time, and overall service quality—critical for retention.

First-Time Fix Rate (FTFR)

• Measures service efficiency and technician effectiveness. High spare parts availability directly impacts FTFR, reducing downtime and improving satisfaction.
• Formula: (Issues Resolved on First Visit / Total Service Calls) x 100 
  

Transparency Towards Customer

• Providing real-time updates on order status and pricing builds transparency and customer trust, increasing repeat business.

Pricing and Market Intelligence KPIs  

Profit Margins

• Monitoring gross and net profit margins ensures sustainable pricing strategies.
• Formel: [(Sales Price- Purchase Price) / Sales Price] x 100 

Price Elasticity

• Understanding how price changes affect demand is crucial for optimizing pricing strategies.
• Formel: % Veränderung der Nachfrage / % Veränderung im Preis 

Kundenakquisitionskosten (Customer Acquisition Cost - CAC)

• A lower CAC while maintaining pricing integrity drives sustainable growth.
• Formula: Total Marketing and Sales Spend / New Customers Acquired 

Customer Lifetime Value (CLV)

• Focusing on CLV helps businesses develop long-term pricing strategies that foster loyalty and profitability
• Formula: Average Revenue per Customer x Customer Retention Period 

How MARKT-PILOT Supports These KPIs

MARKT-PILOT helps aftermarket businesses leverage real-time market insights, competitive pricing intelligence, and automated data analysis to improve efficiency and profitability.

Market-Based Pricing Optimization

• Supports KPIs: Profit Margins, Price Elasticity, Aftermarket Revenue %
• Analyzing global market data to ensure pricing aligns with demand while maximizing profitability.

Customer Satisfaction and Service Optimization

• Supports KPIs: Transparency Towards Customer

• Improving transparency in pricing and availability, ensuring customers receive the right parts at the right time.

Rentabilitäts- und Wachstumskennzahlen

• Supports KPIs: Ratio of Aftermarket Margin to Equipment Margin, CLV
• Enabling strategic decision-making by uncovering revenue opportunities in the aftermarket segment.

Key Takeaways

• Tracking the right KPIs drives revenue, profitability, and efficiency
• A data-driven approach optimizes pricing and inventory management
• Prioritizing service excellence and market transparency strengthens customer relationships
  
  

Take the Next Step: Ready to elevate your aftermarket business? Get in touch with our team and request a personalized demo with one of our experts. Learn how MARKT-PILOT can help you track and improve key KPIs for sustainable business success.