Every equipment OEM has two businesses. The one it actively manages  –  new equipment sales  –  and the one it mostly ignores: the installed base it spent decades building.

That second business is where the real money is. And most OEMs are leaving it on the table.

The Gap Between What You Own and What You Capture

According to McKinsey’s analysis across 30 industries, the average EBIT margin for aftermarket services is 25%, compared to 10% for new equipment sales. The margin advantage is not marginal – it is structural.

BCG’s 2025 research reinforces this: aftermarket services carry gross margins twice those typically earned from equipment sales. Yet the same research found that only 4% of OEMs have succeeded in generating recurring revenue from digital services linked to their installed equipment.

The gap between what the installed base could deliver and what it actually delivers is not a market problem. It is an execution problem.

McKinsey’s study of more than 40 Fortune 500 industrial OEMs found that the best-performing companies capture three times the aftermarket lifetime value of the lowest performers – often in the same industry, selling the same categories of equipment. The difference is not product quality or market size. It is how well they know and activate their installed base.

Why the Installed Base Revenue Opportunity Stays Invisible

Most OEMs believe they are already working on this. They have a BI tool. They have an analyst. They have a dashboard.

What they don’t have is coverage.

Installed base data is rarely clean or centralised. It sits fragmented across ERP systems, CRM platforms, service records, and dealer networks – each holding a piece of the picture, none of them talking to each other. What BI tools surface is a fraction of the actual opportunity: the part of the base where data happens to be structured and accessible.

The rest – equipment past service cycle, lapsed contracts, uncontacted accounts – remains invisible. Not because it doesn’t exist, but because the tools in use were never designed to find it.

McKinsey’s research on agriculture OEMs makes this concrete: even among the highest-performing manufacturers, aftersales coverage typically reaches less than half of the installed fleet. In an industry where the equipment base runs for decades, that is not a data problem. It is a revenue problem.

The Cost of Treating Insight as Execution

Here is the distinction that matters: BI produces a list. Activating the installed base produces revenue.

An analyst running a quarterly report identifies accounts that may be due for service. What happens next? The lead sits in an inbox. A sales rep may or may not follow up. There is no workflow. There is no trigger. There is no conversion.

McKinsey documented one industrial manufacturer that moved beyond this model by building a data-driven approach to identify which customers had the highest propensity to buy aftermarket services. The result: a 30% increase in service revenues with no increase in sales headcount – by focusing effort on the right 39% of the customer base.

That is not a technology story. It is a prioritisation story. And it starts with knowing your installed base well enough to act on it.

What 30-60% Installed Base Revenue Growth Actually Requires

McKinsey’s research is direct on this point: industrial OEMs that understand their customer base and prioritise aftermarket sales can boost service revenues by 30 to 60% within three to five years – without new product development, new markets, or significant capital expenditure.

The requirement is not a transformation programme. It is:

• Complete, accurate visibility into the installed base across all systems of record
• Prioritisation by opportunity – which accounts are most likely to buy, which equipment is past cycle, which contracts are lapsing
• A sales motion that triggers action, not just awareness

The OEMs closing this gap are not necessarily the largest or most digitally mature. They are the ones that stopped waiting for clean data and started working with what they have – systematically, at scale.

The Question Worth Asking This Quarter

If your aftermarket revenue as a percentage of total revenue has not grown meaningfully in the past three years, the issue is unlikely to be market demand or sales talent.

It is more likely that a significant portion of your installed base has never been meaningfully engaged – and your current tools are not designed to change that.

The installed base you have today is the growth engine your business needs. The question is whether you are running it, or leaving it idle.

Interested in understanding what your installed base is actually worth?