In recent years, spare parts pricing has been recognized and professionalized as an important profit lever across numerous industries. However, price pressures have increased significantly worldwide in the recent past. The increasing intensification of competition, the growing transparency of market prices and the professionalization of purchasing make pricing a complex and multi-layered management task in the digital age.
Manufacturing technology companies generate a turnover of approx. 10 percent with spare parts, but the profit share is more than 30 percent. In plant construction and mechanical engineering, new business often only serves the purpose of bringing the largest possible installed base onto the market. At the same time, high margins are subsequently achieved in service. Against the backdrop of the enormous potential for profit, approaching the pricing of spare parts systematically and professionally becomes crucial.
Based on our comprehensive project experience in the field of spare parts pricing, we are familiar with the main challenges:
In recent years, professional pricing software and tools have played a central role in the further development of the spare parts pricing methodology. Using sophisticated algorithms, we can ensure maximum market intelligence in spare parts prices using large amounts of data.
The increasing comparability resulting from digitization requires marketable prices and price fairness for parts with high competitive pressure. Concerning know-how and monopoly parts, the primary challenge is to siphon off customers’ willingness to pay in as differentiated and comprehensive a manner as possible.
As part of our SMART Parts Pricing® approach, it is crucial to optimize all adjustable parameters of a price waterfall. In addition to the global list price, we consider a clear differentiation in the international price structure as well as a performance-related discount logic for customer-oriented final prices. All price parameters are fine-tuned on the basis of a comprehensive simulation model with which the effects on the relevant target values can be forecast. The focus is not on the individual spare part, but on the overall price structure within associated part families. That way, we can ensure a price architecture that is as consistent as possible.
By systematically optimizing spare parts prices, EBIT increases of 3-5 percentage points and significant volume effects can be achieved. Even with low sales in the spare parts business, an optimization project usually pays for itself after just a few months. On average, the spare parts business accounts for about one third of the total margin in the industrial goods sector. This makes systematic and market-oriented spare parts pricing one of the most powerful profit levers available.