Half of manufacturers learn a contract lapsed when the customer calls
Two leaks dominate the aftermarket findings in the 2026 benchmark. One is silent and shows up months late. The other happens in plain sight, every day. They look unrelated. They are not.
Why do service contracts lapse without anyone noticing?
In the survey of 300 revenue and service leaders at U.S. equipment manufacturers (TrendCandy, 2026), 49 percent said service contracts lapse before anyone notices - frequently. The same study finds 79 percent calling contracts the foundation of predictable revenue. Half of the industry watches its foundation quietly expire.
The mechanics are mundane. A contract's end date sits in a system nobody opens unless something breaks. No renewal owner is assigned, or the owner changed jobs. The customer keeps calling for service, the team keeps helping - covered or not. The lapse is discovered when the machine goes down and the customer calls - and someone finally checks the coverage.
What does a lapsed contract actually cost?
More than the missed months. A renewal conversation held before expiry is a formality between partners. The same conversation held after a lapse - usually during a breakdown - is a win-back negotiation with a customer who has just discovered they were unprotected and is asking why nobody told them. The price of silence is paid twice: the uncollected coverage, and the weakened renewal position.
The lapse chain, step by step: the end date passes unwatched, service continues on goodwill, a failure forces a coverage check, the customer learns of the lapse at the worst moment, the renewal becomes a rescue.
How do manufacturers lose parts revenue to other channels?
The loud leak: 74 percent of leaders see parts bought outside their preferred channel at least frequently. Distributors, marketplaces, third-party brokers, will-fitters - the customer needs a part today, the manufacturer's channel is slow or opaque, and the order goes where the friction is lowest. The manufacturer holds the best data on earth about which part fits which unit - and loses the order on convenience.
What do the two leaks have in common?
Both are information problems wearing revenue costumes. A contract lapses because no system watches the date against the unit. A parts order escapes because the customer cannot see, from the manufacturer, what fits and whether it is covered. In both cases the knowledge exists somewhere in the company; it just is not present at the moment of the decision. That is also why both leaks respond to the same class of fix - and why the benchmark treats them as one theme, not two.
The full 2026 benchmark - the survey of 300 revenue and service leaders at U.S. equipment manufacturers.
Get the reportFAQ
How often do service contracts lapse unnoticed at equipment manufacturers?
In the 2026 survey of 300 U.S. equipment manufacturers, 49 percent of revenue and service leaders said service contracts lapse before anyone notices - frequently. At the same time, 79 percent call contracts the foundation of predictable revenue.
Why do customers buy parts outside the manufacturer's channel?
Convenience. When the manufacturer's channel is slow or opaque about what fits and what it costs, the order goes to whoever answers fastest - distributors, marketplaces, or third-party brokers. 74 percent of leaders see parts bought outside their preferred channel at least frequently.
What is contract leakage?
Contract leakage is revenue lost from service agreements that expire, under-renew, or go unenforced - coverage that lapses unwatched, entitlements that are never billed against, and renewals that start only after a failure forces a coverage check.
How can manufacturers improve service contract renewals?
Watch end dates against specific units rather than in a standalone system, assign a renewal owner per contract, and open the renewal conversation before expiry - a renewal discussed before the lapse is a formality; the same conversation after a breakdown is a win-back negotiation.