Managing value in use in business markets

Suppliers in business markets are increasingly providing complex offerings, which is reflected in concepts like hybrid offerings, servitization and solution business. Such complex offerings are characterized by value propositions in which the value that emerges throughout the entire customer usage cycle builds the core element. To secure and increase this value in use, as perceived by the customers, suppliers need to establish activities of value-in-use management. This value-in-use management comprises monitoring the delivery of the promised value, and enhancing customer value in use throughout the entire lifecycle of a complex offering. This article investigates which value-in-use management activities are currently implemented by suppliers, how these activities are linked to other business processes, and what differences in value-in-use management activities exist between various types of complex offerings. By addressing these questions, this research contributes to literature by exploring post-deployment processes that affect value in use customer experience when using complex offerings. Moreover, from a managerial perspective, it reveals in which constellations measures of value-in-use management are currently implemented in practice and therefore are of particular importance. Furthermore, the results of the study may serve as a starting point to elucidate how measures of value-in-use management can be implemented successfully.     

Value Creation and Value Capture Alignment in Business Model Innovation: A Process View on Outcome-Based Business Models

Industrial manufacturers are innovating their business models by shifting from selling products to selling outcome-based services, where the provider (manufacturer) guarantees to deliver the performance outcomes of the products and services. This form of business model innovation requires a profound yet little understood shift in how value is created, delivered, and captured. To address this research gap, our study examines two successful and four unsuccessful cases of this shift. We find that effectiveness in business model innovation hinges on the three process phases that unfold in collaboration with the customers: value proposition definition, value provision design, and value-in-use delivery. We also find that that success is determined by the alignment of specific value creation and value capture activities in each phase: identifying value creation opportunities—agreeing on value distribution in value proposition definition, designing the value offering—deciding on the profit formula in the value provision design, and finally refining value creation processes—regulating incentive structures in the value-in-use delivery. Our process model contributes to the literature and practice on business model innovation by providing a thorough understanding of how alignment of value creation and value capture processes is ensured, whilst paying special attention to their interdependence and the interactions between provider and customer.     

A typology of business usage center members

Repurchase in business-to-business settings is driven by relational outcomes like satisfaction. Recent research suggests that these are mainly determined by the customer perceived value in use, which stems from the customers' experiences within the usage of products and services. This usage usually takes place in multi-actor usage processes, which encompass a multitude of interactions between the users of a focal resource, the members of a business usage center. These users typically perceive the processes and interactions differently depending on their position, responsibilities, expertise, mood, etc. As the actors follow various multiple goals on the individual and collective levels, they perceive the value in use of the same product or service typically differently. Thus, understanding the interactions during organizational usage processes is crucial for grasping the peculiarities of value cocreation in business-to-business usage processes. Hence, we develop a typology of business usage center members through 20 interviews using repertory grid technique and means–end chaining. We elicit five types of users based on 32 characteristics of perceived behaviors in organizational usage processes: Lead, Doer, Soldier, Maven, and Laggard. Furthermore, we show how the characteristics and types influence the actors' value-in-use perceptions and their behaviors toward a focal resource and their co-workers.     

Customer churn analysis: Churn determinants and mediation effects of partial defection in the Korean mobile telecommunications service industry

Retaining customers is one of the most critical challenges in the maturing mobile telecommunications service industry. Using customer transaction and billing data, this study investigates determinants of customer churn in the Korean mobile telecommunications service market. Results indicate that call quality-related factors influence customer churn; however, customers participating in membership card programs are also more likely to churn, which raises questions about program effectiveness. Furthermore, heavy users also tend to churn. In order to analyze partial and total defection, this study defines changes in a customer's status from active use (using the service on a regular basis) to non-use (deciding not to use it temporarily without having churned yet) or suspended (being suspended by the service provider) as partial defection and from active use to churn as total defection. Thus, mediating effects of a customer's partial defection on the relationship between the churn determinants and total defection are analyzed and their implications are discussed. Results indicate that some churn determinants influence customer churn, either directly or indirectly through a customer's status change, or both; therefore, a customer's status change explains the relationship between churn determinants and the probability of churn.     

How business customers judge customer success management

In business-to-business markets, customer success management is gaining growing practical importance. The concept comprises customer-related activities that aim at monitoring, securing and enhancing customer success as well as the implementation of the corresponding organizational structures and processes within the supplier firm. In contrast to existing research, this article takes a customer perspective to customer success management and investigates how business customers judge respective supplier activities; first, to reveal the quality dimensions business customers apply when assessing suppliers' customer success management activities, and second, to investigate how the quality of suppliers' customer success management activities leads to business customers' perceived value. Addressing these questions, this research contributes to literature by exploring customer success management from a customer perspective. The findings elucidate that customers' perceived value in use does not simply develop over time. Rather, through the implementation of customer-related activities of customer success management, suppliers can actively influence customers' value-in-use experiences thus fostering customers' rebuy decisions. From managerial perspective, the findings support suppliers in successfully shape their customer-oriented customer success management activities as well as the necessary internal structures and processes.     

顾客价值链探析

顾客不仅仅是“经济人”、“消费人”,更是“生活人”,消费行为是其生活活动中的一个环节。研究顾客需求、顾客价值,制定有效的营销战略应该从顾客生活角度出发。生活价值追求形成顾客生活价值链;往往某一生活活动由若干种消费活动组成,各相关消费形成顾客追求生活价值的一个“组合消费价值链”;而某一消费行为是其中一个基本组成单元,单项消费的各有关环节组成“单项消费价值链”,与其他相关生活、消费行为紧密关联。企业的产品经营可以通过顾客价值链营销,提升顾客有关生活价值体系的整体价值水平,来营造良好的产品生态环境,提高顾客满意度和产品营销水平。     

Resource integration: Adopting a paradox perspective to inform the management of tensions in customer resource allocation

Service-dominant logic maintains that value is created collaboratively through a process of resource integration. Knowledge-intensive business services, the context for this study, are heavily dependent on customer resources for the fulfilment of the value proposition. Value co-creation is compromised when resources are not allocated in appropriate quality or quantity. While there is a growing body of research identifying antecedents to customer resource input, few studies investigate how customers might overcome barriers to resource allocation, particularly when faced with competing demands. This article uses a paradox perspective to explore the management of tensions affecting resource allocation. Empirically, we draw on interviews with service providers to identify perceived resource deficiencies, and with customers to explore resource allocation management. We show that it is possible to manage resource allocation tensions by devising novel solutions that integrate the two opposing demands. In addition, these solutions can result in an ‘augmented’ resource, particularly if the service provider is permitted to influence customer resource deployment. Finally, these novel solutions can activate an unintended by-product or secondary resource, enhancing the relationship between provider and customer.     

The customer as enabler of value (co)-creation in the solution business

Through 31 in-depth interviews with customers and providers of knowledge-intensive business service solutions, this article explores their view on customers' contribution to value (co)-creation. First, the study defines five internal factors that prompt customers to engage with providers for value (co)-creation and discusses unique factors that influence how customers define their needs before engaging a solution provider. In addition, the study suggests extending the known solution process by proposing the problem and need definition phase to reflect the customer's early activities. The results support the theory that customers define their typical needs not only to aid them in selecting the right provider but also to use their awareness of possible issues to guide the solution process. Providers benefit from this definition in that they gain a better understanding of their roles and responsibilities in the process. Second, the study identifies eight variables that typically enable value (co)-creation. The findings show that customers should focus their activities on those variables and providers should identify possible customer shortcomings so that they can compensate for them.     

基于客户满意和业务流程的供电服务综合评价研究

对目前供电公司内部工作质量考核和客户满意测评现状及存在问题进行剖析;根据供电服务整个业务流程,从时限、质量、环境等不同角度对供电服务的综合评价进行了深入研究,提出了基于客户满意和业务流程的供电服务综合评价的总体框架,重点对如何实施内部评价和外部评价进行了论述,并指出了在综合评价中应注意的事项。     

Customer participation in knowledge intensive business services: Perceived value outcomes from a dyadic perspective

Knowledge intensive business services (KIBS) are considered a cornerstone of contemporary developed economies. Successful production and delivery of these services, and thus their perceived value outcomes, highly depend on customer participation (CP) in the service processes. However, the extant understanding of the perceived value outcomes of CP, which is crucial to the appropriate inducement and integration of organizational resources in service processes, is limited. Through the exploratory investigation of three dyadic cases, each comprising one customer and one service provider organization engaged in a knowledge-based service project, this study addressed this crucial topic. Results indicated four categories of perceived value outcomes emerged through CP: functional, economic, relational, and strategic values. The study provides insights on the evolution of value perceptions over time, the individual value components within each value category, and perceptual similarities and differences between customer and provider organizations. Further, these results indicate that various value outcomes of CP receive divergent levels of attention from personnel in different organizational hierarchies. The paper provides useful and applicable suggestions for managers, especially in the context of technology-based KIBS and solutions.     

System supplier's customer strategy

The article addresses the management of dynamic customer relationships in large-scale, complex system business. It combines the existing knowledge on system business, high-tech services and buyer-seller relationships with an international multiple case study. As a result, we produce a framework model, which provides the answers to the following critical questions: What are the key activities through which a system supplier provides value for the customer? What are the system supplier's roles for the customer? How does the customer's strategy and capabilities influence the customer's need for the supplier's activities and its evaluation of potential suppliers? And, how does the stage of the supplier-customer relationship and the system's technology cycle influence the customer's perceived need for the supplier's activities? In sum, the framework model provides a major theoretical contribution to more profoundly understand and manage complex system supplier-customer relationships.     

To outcomes and beyond: Discursively managing legitimacy struggles in outcome business models

Outcome business models (OBMs) guarantee and deliver economic and operational results for customers. The risk transfer from customer to provider enables the emergence of new value drivers, such as mutual learning. However, if the outcome-based service (OBS) customer learns the operational capabilities, based on which they are willing to rely on the OBS provider to achieve outcomes, how then does an OBS provider justify its role as a legitimate partner in the future? To answer this question, we conducted an in-depth single-case study and performed a critical discourse analysis with an OBS provider delivering outcomes. We identify causes for legitimacy struggles (lack of intentional and competence trust) in an OBM and subsequent discursive legitimation strategies used to defend legitimacy: 1) trustification, 2) rationalization, 3) authorization, and 4) normalization. For managers, we elaborate certain OBM problematics causing legitimacy struggles and offer discursive resources that can be mobilized to recreate legitimacy.     

Customer service strategy options: A multiple case study in a B2B setting

This study addresses the question whether customer service actually has order winning potential in B2B situations, which customer service strategies are deployed, and what determines customer service relevance. A literature review was followed by a multiple case study, using 12 organizations from different industries and from different positions in supply chains. Based on having both problem solving and transfer characteristics, four customer service strategy options are identified: customer integration, customer adaptation, logistical precision, and standard customer service. Many organizations are positioned in the least attractive customer service strategy option: customer adaptation. Partially, this is caused by difficulties in assessing the customer service capability and the customer's sensitivity for customer service. The article concludes with the theoretical and managerial implications.     

Marketing metrics' usage: Its predictors and implications for customer relationship management

This research aims to determine the conditions that foster use of marketing metrics in customer relationship management (CRM) and identify the organizational factors that strengthen/weaken the impact of usage of marketing metrics on CRM performance. Based on the customer value-based theory of the firm and the contingency perspective, a research framework was developed to shed light on the predictor roles of customer value-based organizational culture and processes in determining usage of marketing metrics, and foster an understanding of the moderating roles of marketing-supply chain conflict, and innovative value proposition on the marketing metric-performance relationships. Empirical evidence from a sample of 209 business firms confirmed the main effect that customer value-based organizational culture and processes support a firm's use of marketing metrics that in turn enhance its CRM performance. Notable moderating effects were also identified. Although marketing-supply chain conflict weakens the impact of marketing metrics usage in achieving superior CRM performance, innovative value proposition strengthens the conversion of marketing-metric-related knowledge into superior CRM performance.     

Managing customer share in key supplier relationships

Supply base consolidation is an important issue in many business markets. Against this background, the allocation of purchasing budgets across vendors becomes an area of vital interest to suppliers. In the present research, we argue that customer share is a key decision variable in business marketing settings and investigate how a supplier can proactively manage the share of its customer's business. We report the results of a cross-sectional study among purchasing managers in U.S. manufacturing industries. Our findings confirm the role of customer value as an antecedent to customer share in business relationships. The study further shows that customer share influences the stability of key supplier relationships. Rather than displaying a direct impact, our results suggest that trust mediates and dependence moderates the link between customer share and search for alternative suppliers. Based on these findings, we propose a framework for managing customer share in key supplier relationships. Four approaches of how industrial vendors can proactively manage customer share are discussed.     

What's in it for me? Capital,value and co-creation practices

Marketing research is increasingly concerned with the practices through which service providers and their customers interact and how these practices influence value co-creation.Applying S-D logic and drawing on practice theory developed in sociology research in past decades, we propose a definition of value in terms of the coexistence of diverse forms of capital and currency variations. We then develop a conceptual model to explain value co-creation in terms of service provider–customer interaction practices (SPCI practices). We employ an extensive, qualitative study in the context of professional service firms. Our findings reveal three general categories of SPCI practices (access to capital, capital exploitation and capital attrition) that affect value co-creation. These insights move forward business-to-business marketing theory and practice, advancing our understanding of how service provider–customer interaction practices can be used to define value propositions and assess the types and amount of value that are co-created.     

Towards a framework of customer value assessment in B2B markets: An exploratory study

This paper examines the key processes and activities of customer value assessment in business-to-business (B2B) markets. Given that an increasing number of B2B firms are providing combinations of products and services, or integrated solutions, the present study examines customer value assessment from the solution supplier's perspective. Specifically, based on an exploratory field study and in-depth interviews with 18 managers in three different firms, the present study identifies five key processes (i.e., value potential identification, baseline assessment, performance evaluation, long-term value realization, and systematic data management) and 11 related activities involved in customer value assessment in B2B markets, and integrates them into a managerially grounded framework. The findings from this study contribute to the literature on customer value and solution research, and provide useful insights for managers on how to assess the value delivered by their offerings to customers.     

Identifying leaders and laggards—A method and application to US local telephone companies

Performance attributes of public utilities vary in definition according to the stakeholder: service provider, customer or regulator. A framework is provided for defining, measuring and ranking service quality from multiple perspectives by developing a “quadrant analysis” method. This method is applied and US local telephone companies are ranked over time as leaders and laggards or biased according to one, two and three stakeholder perspectives. Application of the method to 1994–2001 data for the US local telephone industry suggests that some local companies hold their position consistently as leaders among their peers in the industry and some continue to lag behind. While the leaders could be studied for best practices the analysis of the laggards’ practices would also yield valuable insights regarding good practice as perceived by the different stakeholders.     

Effect of service-related resources on employee and customer outcomes in trade shows

Despite widespread recognition of trade shows as a vehicle to provide services to visitors by exhibitors, there is a paucity of research in this area of special interest. Drawing on the resource-based view, we develop a research framework to examine the effects of service-related resources on exhibitor's personnel attitudes and visitor responses. We collected on-site data from 151 exhibitor's personnel and 366 visitors during a trade show. These responses were matched at the exhibitor level to test the research framework. We found a positive effect of service leadership and service technology in developing a customer-oriented service strategy with satisfied employees. Additionally, we demonstrate that service leadership positively moderates the effect of service technology on customer orientation. In contrast, service leadership negatively moderates the effect of empowerment on customer orientation. This suggests that similar firm resources do not complement each other perhaps because they are substitutable. Finally, we show that service-related resources not only affect customer orientation but also influence job satisfaction of exhibitor personnel and visitors responses such as interaction quality, satisfaction, and word-of-mouth intentions.