Aftermarket, Field Service & Service Parts worked example

Contract Renewal Value at 85% expected renewal probability: a worked example

What does the result look like when expected renewal probability reaches 85%? The full calculation is worked below with real intermediate numbers. an aftermarket sales manager needs to forecast the value of upcoming service contract renewals

The inputs for this scenario

  • Renewable service contracts: 165 contracts (unchanged)
  • Average renewal value: 4,200 $ / contract (unchanged)
  • Expected renewal probability: 85 % (raised for this scenario; the documented default is 74)
  • Fixed upsell or discount adjustment: 28,000 $ (unchanged)

Working through the calculation

  • Applying the documented formula (Probability-weighted renewal value = renewable contracts × average renewal value × expected renewal probability) to the inputs above produces each figure below.
  • At this operating point the engine returns 617,050 $ renewal value for contract renewal value, the number this scenario is built around.
  • At this operating point the engine returns 3,740 $ / contract for average renewal value.
  • At this operating point the engine returns 589,050 $ renewal value for probability-weighted renewal value.
  • At this operating point the engine returns 28,000 $ for fixed upsell or discount adjustment.

How this compares with the baseline

  • Against the tool's baseline example, where expected renewal probability sits at 74% and the headline result is 540,820 $ renewal value, this scenario comes in 14.1% above the baseline at 617,050 $ renewal value.
  • A figure at this level is achievable when expected renewal probability is genuinely sustained, not just peaked for a shift. It applies one blended renewal probability and average value to the whole book, so a portfolio with very different segments needs to be split for an accurate number.

Results at a glance

  • Contract renewal value: 617,050 $ renewal value (headline result)
  • Average renewal value: 3,740 $ / contract
  • Probability-weighted renewal value: 589,050 $ renewal value
  • Fixed upsell or discount adjustment: 28,000 $

Run it with your numbers

  • Every input above is editable in the live Contract Renewal Value calculator, which recalculates instantly and can be shared with the inputs intact.

Last reviewed 2026-05-12.