Rethinking Customer Solutions: From Product Bundles to Relational Processes

Abstract

This study draws on depth interviews with 49 managers in customer firms and 55 managers in supplier firms and on discussions with 21 managers in two focus groups to propose a new way of thinking about customer solutions. Extant literature and suppliers interviewed for this study view a solution as a customized and integrated combination of goods and services for meeting a customer's business needs. In contrast, customers view a solution as a set of customer-supplier relational processes comprising (1) customer requirements definition, (2) customization and integration of goods and/or services and (3) their deployment, and (4) postdeployment customer support, all of which are aimed at meeting customers' business needs. The relational process view can help suppliers deliver more effective solutions at profitable prices. In addition, field research suggests that the effectiveness of a solution depends not only on supplier variables but also on several customer variables. Supplier variables include contingent hierarchy, documentation emphasis, incentive externality, customer interactor stability, and process articulation. Customer variables include adaptiveness to supplier offerings and political and operational counseling that a customer provides to a supplier. Several of these variables underscore the importance of suppliers developing social capital with customers. The authors discuss implications for solution suppliers and identify areas for further research.

The bonding effects of relationship value and switching costs in industrial buyer–seller relationships: An investigation into role differences

“…These investments might include buying additional services, providing capital, information, manpower or other resources, or participating in company events" (p.29). This description also applies for suppliers: they generally try to leverage an existing relationship by cross-selling or offering new services (Davies, Brady, & Hobday, 2007), providing capital, information, and dedicated staff or adapting their production and logistics to customer demands (Tuli, Kohli, & Bharadwaj, 2007). However, the degree to which a customer or a supplier is ready to enhance their relationship varies according to the current state of their relationship.…”

Contract functions in service exchange governance: evidence from logistics outsourcing

“…Codification of service activities, resources and performance levels is more accurate and 'stable' when partners have already developed good understanding of service operations realities and one another's requirements, rather than when such knowledge is absent and the counterparts rely on invalid assumptions to specify and design service delivery (Terho et al 2012;Tuli et al 2007). However, it is recognised that broader roles and responsibilities of the counterparts can also be codified during prolonged contracting processes, even when there is limited relational experience .…”

“…Relational experience refers to accumulated knowledge of the counterpart's business requirements, goals, intentions and expectations (Tuli, Kohli, and Bharadwaj 2007;Ulaga and Eggert 2006;Zollo, Reuer, and Singh 2002). Partner-specific learning is enabled through buyersupplier interactions and information and knowledge sharing at multiple organisational levels (Dyer and Singh 1998).…”

Service Productivity: What Stops Service Firms from Measuring It?

“…Thus, the service firm must provide customized attributes, features, and unique delivery methods. Typically, service providers and customers work together to achieve customization (Tuli, Kohli & Bharadwaj, 2007). However, greater service customization tends to exacerbate the challenge of measuring service productivity though (Wang et al, 2010).…”