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.
In today's business-to-business (B2B) marketplace, companies increasingly enhance their customer offerings with services to achieve differentiation and a competitive edge in the market (Eggert, Hogreve, Ulaga, & Muenkhoff, 2014; Fang, Palmatier, & Steenkamp, 2008). Such service-led growth strategies frequently entail what is referred to as “customer solutions” (Matthyssens & Vandenbempt, 2008; Ulaga & Eggert, 2006), whereby companies move from a stand-alone product or service offering to providing a much more complex and customized integration of goods and/ or services that address customer needs more completely and specifically and include a relational process between customer and supplier (Evanschitzky, Wangenheim, & Woisetschläger, 2011; Tuli, Kohli, & Bharadwaj, 2007). These customer solutions contribute to achieving key business objectives in a variety of sectors ranging from industrial equipment, chemicals, information technology, to healthcare and beyond (Day, 2004; Sharma, Lucier, & Molloy, 2002). For example, Ricoh not only sells printing equipment and supplies but also offers centralized printing solutions to its customers.1 In the heating, ventilation, and air conditioning industry, Belimo provides integrated solutions where the Internet of Things enriches its offering of damper actuators, control valves, and sensors.2 Notwithstanding their costs and organizational challenges (Sawhney, 2006), solutions are often presented as leading to increased revenues for their providers by means of improved customer retention, higher sales volumes, and more extensive cross-selling (Biggemann, Kowalkowski, Maley, & Brege, 2013; Miller, Hope, Eisenstat, Foote, & Galbraith, 2002). These customer-related outcomes should arise because customers tend to respond favorably to such offerings and further develop their relationship with the solution provider, leading to higher switching costs and increased dependency on the provider (Bonney & Williams, 2009). Although there is a growing literature that deals with the topic of solution provision, according to Evanschitzky et al. (2011), there is a lack of empirical research to support the claims above regarding customer-related outcomes. Thus, the first objective of this paper is to undertake such empirical research to deal with this limitation and to determine whether solution provision does enhance customer-related outcomes for their suppliers.