B2B relationships on the fast track: An empirical investigation into the outcomes of solution provision

In academic and business literature, suppliers providing solutions to their business-to-business (B2B) customers are often described as achieving increased customer retention, higher sales volumes, and enhanced cross-selling. Yet there is limited empirical evidence to support the positive impact of solutions on these customer-related outcomes. Moreover, it is unclear whether suppliers obtain similar outcomes from buyers at different relationship life-cycle stages. This paper aims to address these two gaps and tests the contingency role of the relationship life-cycle in driving future customer outcomes. It proposes that there is a positive effect for solutions provided to recent customers (labeled as “accelerator” role) rather than to established ones (labeled as “leverage” role). Results from a longitudinal analysis of the sales database of a North American company providing solutions to its customers empirically support the “accelerator” role of solutions.     

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.     

Supplier traits for better customer firm innovation performance

Previous research on embedded ties with suppliers in an innovation context has ignored the need for customer firms to assess and select suppliers on the basis of market orientation strategies and relationship marketing attributes. To address this void, this study investigates the effects of suppliers' downstream customer orientation and supplier-customer homophily (i.e., similarity of the supplier and the customer) on the customers' innovation performance. Data pertaining to new product development projects with contributions from supplier firms was collected on both sides of the supplier-customer dyad. The analysis shows that downstream customer orientation and supplier-customer homophily have a significant impact on the customer firms' new product efficiency (i.e., project cost and project speed) and new product effectiveness (i.e., innovativeness), which in turn positively influence new product performance in terms of profitability, market share, and growth.     

When Does Customer Orientation Hinder (Help) Radical Product Innovation? The Role of Organizational Rewards

Prior marketing literature offers a compelling theoretical rationale in support of two contradictory propositions, namely, that customer orientation is negatively related to (i.e., hinders) radical product innovation and that customer orientation is positively related to (i.e., helps) radical product innovation. In this research, the contextual conditions that determine the validity of these contradictory propositions are identified. Drawing from the literature on organizational rewards, two types of organizational rewards—outcome based and strategy based—are identified as being the key contextual conditions. It is hypothesized that when outcome‐based rewards are in effect, customer orientation is negatively related to radical positive innovation and, that when strategy‐based rewards are in effect, customer orientation is positively related to radical product innovation. Results from a survey of 156 manufacturing firms, and from a survey of 97 of their customers, provide support for these hypotheses. While prior research has attempted to explain the contradictory nature of the relationship between customer orientation and radical product innovation using typology‐based and mediator‐based approaches, the contextual condition‐based approach has not been well developed. This gap is addressed by the present research. From a practitioner perspective, the research is important because it identifies a concrete mechanism that new product development managers can deploy, in tandem with customer orientation, if they intend to generate radical product innovations. Given the potential gains that flow from radical product innovation, the research findings are expected to be of considerable interest to managers of new product development projects.     

Identifying the right solution customers: A managerial methodology

The purpose of this paper is to develop and apply a methodology for identifying, assessing and segmenting customers for business solutions. Firstly, criteria for evaluating solution customers are identified from the literature. These criteria are then refined and differentiated through interviews with 23 solution project managers. Secondly, a longitudinal case study with three solution suppliers and five of their customers is conducted to transfer the selection criteria into a managerial methodology which is validated by both solution suppliers and customers. The developed methodology comprises 21 criteria which are structured into two dimensions: the quality of the relationship to date and the customer's potential for future solution partnership. By combining these two dimensions into a portfolio analysis, four customer segments are identified to help suppliers determine customer attractiveness. The study's contribution lies in bridging academic knowledge and managerial practice to develop a new methodology for helping solution providers to make better informed decisions and reduce the risk of solution failure.     

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.     

Measuring Involvement of a Network of Customers in NPD

The new product development (NPD) literature is rife with suggestions to involve customers in the innovation process, and many firms collaborate with customers. But the extant literature does not offer much guidance concerning the nature and quality of involving such a network of customers. This paper contributes to the extant literature on customer involvement by identifying a comprehensive set of metrics to measure the involvement of a network of customers in NPD. It introduces metrics describing three aspects of customer involvement: (1) the rationale for involving a network of customers in NPD, (2) the network of customers involved in NPD, and (3) the interaction process between manufacturer and customers at the level of individual customers. These metrics help to understand the roles of customers, the timing of their involvement at each stage in the development process, the type and number of customers that are involved, as well as the frequency and intensity of their involvement. The use of these metrics is illustrated by a study of customer network involvement by Irish business‐to‐business companies. Forty‐six percent of the sampled firms (n = 1400) were actively involved in NPD, but very few of them involved customers in the early stages (n = 77). The involvement of customers in early NPD stages is significant, although manufacturers tend to go back to the same customers repeatedly. The intensity of customer involvement is also extensive, but even more so during the later NPD stages, especially for new products as opposed to product improvements. By incorporating a network perspective, the proposed metrics for customer network involvement provide a new approach for researchers to study the involvement of customers in NPD.     

Supplier market orientation and accommodation of the customer in different relationship phases

As customers' needs have changed rapidly, market orientation has become a more primary focus of marketing literature. This study explores the strategies market-oriented suppliers use to accommodate customer needs. In addition, because buyer-seller relationships proceed through phases characterized by distinct behaviors, this study explores the relationship between market orientation and accommodation strategies over the course of the buyer-seller relationship lifecycle. The results show that market-oriented firms use flexibility and relationship-specific adaptation as accommodation strategies. Also, three market orientation components (customer orientation, competitor orientation, and interfunctional coordination) relate differently to flexibility and relationship-specific adaptation during the relationship lifecycle. Finally, accommodation strategies significantly mediate the effects of the three market orientation components on customer satisfaction. Thus, market-oriented firms can satisfy their customers and avoid an overreliance on current relationships by emphasizing either flexibility or relationship-specific adaptations that correspond to the lifecycle of the relationship.     

Projective customer competence: Projecting future customer needs that drive innovation performance

Projective customer competence is the ability of a product development organization to both understand as well as shape the future needs of customers. To conceptualize this competence and establish its antecedents and performance implications, we draw upon the literature on inter-organizational relationships and innovation. Based on survey data from managers involved with business to business product development, validated with secondary financial data and in-depth interviews, we establish measurement properties for projective customer competence and demonstrate that this competence develops through customer relationships characterized by relational embeddedness, knowledge redundancy and interactivity. Projective customer competence is also shown to have positive implications for both innovativeness and financial performance. Surprisingly, relational embeddedness is shown to be the strongest predictor of projective customer competence, and, while knowledge redundancy helps build projective customer competence, it also has a negative impact on innovativeness.     

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.     

Effects of Supplier and Customer Integration on Product Innovation and Performance: Empirical Evidence in Hong Kong Manufacturers

While the beneficial impacts of supplier and customer integration are generally acknowledged, very few empirical research studies have examined how an organization can achieve better product performance through product innovation enhanced by such integration. This paper thus examines the impact of key supplier and customer integration processes (i.e., information sharing and product codevelopment with supplier and customer, respectively) on product innovation as well as their impact on product performance. It contributes to existing literature by asking how such integration activities affect product innovation and performance in both direct and indirect ways. After surveying 251 manufacturers in Hong Kong, this study tested the relationships among information sharing, product codevelopment, product innovativeness, and performance with three control variables (i.e., company size, type of industry, and market certainty). Structural equation modeling with correlation and t‐tests was used to test the hypothesized research model. The findings indicate a direct, positive relationship between supplier and customer integration and product performance. In particular, this study verifies that sharing information with suppliers and product codevelopment with customers directly improves product performance. In addition, this study empirically examines the indirect effects of supplier and customer integration processes on product performance, mediated by innovation. This has seldom been attempted in previous research. The empirical findings show that product codevelopment with suppliers improves performance, mediated by innovation. However, the sampled firms cannot improve their product innovation by sharing information with their current customers and suppliers as well as codeveloping new products with the customers. If the adoption of supplier and customer integration is not cost free, the findings of this study may suggest firms work on particular supplier and customer integration processes (i.e., product codevelopment with suppliers) to improve their product innovation. The study also suggests that companies codevelop new products only with new customers and lead users instead of current ones for product innovation. For managers, this study has demonstrated that both information sharing and product codevelopment affect performance directly and indirectly. Managers should put more emphasis on these key processes, especially when linked with product innovation. Managers should consider involving their suppliers and customers in the early stages of design. Information sharing with suppliers is also important in product development. As suggested by this study, extensive effort on supplier and customer integration should be made to directly augment current product performance and product innovation at the same time.     

Development and implementation of customer solutions: A study of process dynamics and market shaping

A broad, dynamic network perspective on solution processes remains scarce. This article presents the process of developing and implementing customer solutions and its effects on the wider business environment by investigating customers and suppliers in the global mining industry (Australia, Chile, and Sweden), analyzing the deployment of a new customer solution, and assessing the changes to the competitive environment and focal firms' relationships with other customers and suppliers. It shows that the forces that drive customer and supplier interests and motivation to co-develop customer solutions may change over time, thus redefining the aim and scope of solutions and creating failure risks. Customers present problems; suppliers respond, on the basis of not only the feasibility of the customer-specific solution but also of their evaluation of future solutions in a broader market; then suppliers aim to standardize successful solutions across markets. Customers want close supplier relationships and unique solutions but also like standardized and repeatable solutions, so they can share development costs with competitors and expose the supplier to competition to avoid lock-in effects. From a network perspective, a novel solution can have a market-shaping effect and evoke reactions from other actors who want to enhance their market position. However, these changes are not necessarily deliberate, and the dynamics that market introductions of solutions trigger may be difficult to predict.     

Assessing customer orientation in the context of buyer/supplier relationships using judgmental modelling

Retail buying is a particular form of industrial buying, one characterised by buying for the purposes of reselling to the ultimate customer, rather than for use. Retail buyers have a complex role. They are responsible for meeting the requirements of their target customers and they also have to manage relationships with suppliers in order to obtain the best terms and conditions.Modern retailing is also characterised by a high degree of concentration and centralisation of the buying function. Buyers can operate autonomously or within a buying group. Those selling or marketing to commercial buyers need to understand the needs of the buyer in order to be effective. They need to understand the buyers' businesses and how to develop relationships with them.A mediator in the development of a customer relationship is customer orientation. A customer orientation is a central factor in being market orientated, but despite the importance of customer and market orientation there has been little research into how well suppliers understand their customers in a commercial context.In the research reported here retail buyers of textile products were personally interviewed with the aid of decision analysis software to identify the significance of criteria they use in a defined buying situation. The same methodology was repeated with suppliers to identify how well suppliers understood the decision making of buyers in their market. The decision-making process was modelled using a compensatory approach, assuming six decision criteria in a choice of sourcing options. These criteria were partly selected from a pilot conducted with eight retailers in the UK and partly from the literature review and in particular the works of Nilsson and Høst [Nilsson J, Høst V. Reseller assortment decision criteria. Aarhus: Aarhus University Press, 1987] and Weber et al. [Weber CA, Current JR, Benton WC. Vendor selection criteria and methods. Eur J Oper Res 1991;50(1):2-18].The study found that while buyers were able to understand the relative importance of decision-making criteria adequately, they underestimated the importance of certain criteria. The results demonstrate the potential for judgmental modelling in the appraisal of customer orientation.     

Firm orientations, innovativeness, and business performance: Advancing a system dynamics view following a comment on Hult, Hurley, and Knight's 2004 study

Hult, Hurley, and Knight's [Ind. Mark. Manage. 33 (2004) 429.] study reports correlations for each of the three subfactors of market orientation (competitor orientation, customer orientation, and interfunctional coordination) and innovativenss. However, their report fails to discuss the nature of these relationships. Such findings are worthy of discussion because they support prior evidence demonstrating the centrality of customer orientation in linking competitor orientation and interfunctional coordination with both innovativeness and business performance. Also, the finding that interfunctional coordination relates strongly with innovativeness supports the paradigm shift toward relationship marketing. The point needs mentioning that several different (more than one) standardized effects, structural equation models explain similar amounts of variance of business performance besides the models that Hult et al. examine. Thus, the implication by Hult et al. (p. 436) that “…learning orientation has no significant direct effect on performance” is accurate only for the model tested (shown in their Fig. 2). Applying the “quick clustering” method helps to inform interpretation when nearly all relationships among variables are statistically significant. The present article includes a proposal for advancing from one-directional structural equation modeling of innovativeness and business performance to system dynamics modeling that includes real-world feedback loops.     

Interaction Orientation and Product Development Performance for Taiwanese Electronics Firms: The Mediating Role of Market‐Relating Capabilities

While academics and practitioners are increasingly aware of the value of including the customer in new product development (NPD), processes for doing so effectively remain unclear. Therefore, this study explores the process through which a firm's interaction orientation (the ability to effectively interact with customers) influences product development performance. Drawing on the resource‐based view, this study develops a research model in which two market‐relating capabilities—market‐linking and marketing capabilities—mediate the effect of interaction orientation on product development performance. The validity of this model is examined by analyzing primary data gathered from 167 Taiwanese electronics companies. The model results provide support for a process link between interaction orientation, market‐relating capabilities, and product development performance, such that a firm's capabilities enable the conversion of customer‐based resources into productive new product outcomes. More specifically, the interaction orientation–product development speed relationship is mediated by both marketing and market‐linking capabilities, while the interaction orientation–product innovativeness relationship is partially mediated by marketing capability. That is, interaction orientation has indirect effects on product innovativeness and product development speed by strengthening both marketing and market‐linking capabilities that in turn improve product development performance. In addition, the results suggest that a firm's interactive rationality moderates the relationship between interaction orientation and marketing capability. Overall, this study enhances our understanding of how firms achieve superior product development performance by developing effective customer interaction. The findings of this study provide important strategic insights into NPD.     

The role of horizontal and vertical new product alliances in responsive and proactive market orientations and performance of industrial manufacturing firms

This study examines different roles of new product alliance partners in enhancing responsive market orientation (RMO) and proactive market orientation (PMO) of industrial manufacturing firms in the context of learning in business-to-business (B2B) relationships. A survey of 146 firms shows that horizontal new product alliances with competitors provide access to similar industrial knowledge and know-how and thus help improve a manufacturing firm's RMO through exploitative learning. Although vertical new product alliances with suppliers may grant access to similar domains of knowledge, the findings of this study do not provide any support for their effect on a manufacturing firm's RMO. In contrast, the study shows that vertical new product alliances with research institutions provide access to a broader knowledge base and greater know-how with higher levels of non-redundancy and thus help improve a PMO through explorative learning. In addition, the results suggest that both RMO and PMO developed in different types of new product alliances enable a manufacturing firm to improve its new product performance and eventually its overall performance.     

Organizing for solutions: How project-based firms integrate project and service businesses

Project-based firms (PBFs) increasingly provide comprehensive solutions that consist of products, product systems and services. In solution businesses, long-term collaborative relationships between solution providers and customers are essential. However, little is still known about how relationship marketing activities should be integrated across organizational units, particularly at the practical level of delivering individual projects and services belonging to complete solutions. In this study, based on a case study of a project-based firm and four of its system delivery projects, we identify eight micro-level integration mechanisms for integrating the activities of the project and service business units at the level of delivering a single solution. The joint participation of both project and service business units in project and service activities over the life cycle of a single delivered system enhances the management of customer relationships between the units, and ensures the continuity of the customer relationship over the system life cycle. The identified integration mechanisms also help PBFs to integrate services into their core business and overcome the problems arising from the discontinuous nature of project business.     

Explicating Hearing the Voice of the Customer as a Manifestation of Customer Focus and Assessing its Consequences

It is often asserted that hearing the voice of the customer (VOC) can generate meaningful product and process innovation. Minimal empirical attention has, however, been devoted to evaluating this claim. The paucity of academic research exists, in part, due to the lack of an underlying conceptual foundation for the VOC concept. An opportunity thereby exists to impart theory, and evaluate whether hearing the VOC can indeed lead to favorable consequences. This research construes customer focus as a market‐sensing capability which manifests itself in the key organizational processes (i.e., intelligence generation and continual performance assessment) and values (i.e., a customer orientation serves as the guiding principle) that allow the VOC to be heard throughout the organization. Those manifestations are hypothesized to impact positions (i.e., relative [task‐related] performance) and outcomes (i.e., customer loyalty). The results based on data obtained from a cross‐sectional survey research design fielded in a supplier‐business customer context provide empirical support for the favorable consequences of being customer‐focused, and support the need to consider moderating variables. This paper advances theory by (1) answering the call to examine the capabilities that underlie a customer‐focused organization; (2) establishing empirical support for the (a) linkage between hearing the VOC and acting on that information, (b) elusive relationship between acting on the VOC and future buyer intentions, and (c) sources→positions→outcomes model as a path to achieving competitive advantage; (3) demonstrating that being customer‐focused does not have a direct effect on customer loyalty, thereby revealing a result different than that obtained in the consumer empowerment literature; and (4) demonstrating the importance of key moderators, namely (a) that relative (operational) performance has a strong positive effect on loyalty in relationships characterized by lower switching costs, and (b) that the effect of customer focus may lessen over time, implying that core capabilities may evolve into core rigidities. Additionally, this research contributes to business practice by providing managers with an understanding of how to hear the VOC throughout the firm (i.e., how to become a customer‐focused organization), and offering guidance on how to manage buyer–seller relationships.     

Moving from basic offerings to value-added solutions: Strategies, barriers and alignment

Commoditization erodes the competitive differentiation of companies and often leads to a profit squeeze. Existing literature recommends the transition from basic product offerings to service-based value concepts in order to regain competitiveness in such a context. This paper explores the concrete efforts of suppliers in the commoditized electro-technical industry to create new non-price-based customer value. In this paper, a taxonomy of efforts is developed which builds on the competitive strategy and strategic marketing literature. Our research identifies barriers to the market introduction of these new value concepts. Observations in this industry lead to a framework that (1) proposes alternative step-by-step strategies for making the transition from basic products to service-based solutions, and (2) offers alignment suggestions for overcoming identified barriers. Migration paths to introducing new service-based value concepts are incremental rather than radical, and managers should complement their market approach with (a) value chain actions to create multilevel industry support and (b) an organizational alignment approach.