Contractor Finance Glossary
What is Pull-Through Revenue?
Definition reviewed .
Also called: service agreement pull-through, drag-along revenue
Pull-through revenue describes repair, replacement and project revenue associated with service-agreement customers beyond the agreement fee. Association with an agreement does not prove the agreement caused the work.
Scheduled visits can surface equipment problems and lead to additional quotes. Measure the downstream work instead of assuming it exceeds the agreement fee. The Level Index pull-through definition includes customer relationship project work, not only work discovered during a maintenance visit.
When an agreement lapses, the scheduled visit that may surface repairs stops; the customer does not necessarily become a cold lead. Compare repair revenue before and after lapse and compare members with similar non-members, while recognizing that customer selection can explain differences. Measure gross profit after member discounts and delivery costs before pricing an agreement on this association.
How it is calculated
Customer pull-through revenue = non-fee repair, replacement and project revenue from agreement customers over a stated term. Per-contract pull-through = that revenue divided by eligible agreements; pull-through revenue ratio = non-fee revenue divided by agreement-fee revenue. Do not label either ratio incremental or causal without an appropriate comparison.
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