The sales context of B2B service providers has been identified as one of the relevant business areas in need of improvement via novel service architecture and design (Agndal et al. 2007; Nordin et al. 2011;
Pemer et al. 2014). In fact, current research on B2B marketing underlines the role of sales management as a distinct research direction and emphasizes where academic focus should be (LaPlaca and Katrichis 2009; Lichtenthal and Mummalaneni 2009). Since the paper from Leigh and Marshall (2001), who presented seven strategic aspects of the sales function, it is no longer considered merely an operative part of the company, but instead that it has long-term consequences for the business model. Furthermore, Blocker et al. (2012) built on the Service-Dominant (SD) logic (Vargo and Lusch 2004) and introduced an integrative framework that delineates how the sales force creates, sustains, and appropriates value in the buyer-seller relationship. Through the use of appropriate IT and other sales, service, and technical support systems (Leigh and Marshall 2001), the sales context has become a popular application area for IS research, resulting in new concepts that are relevant to B2B services, such as sales force automation (Speier and Venkatesh 2002) or marketing automation (Järvinen and Taiminen 2016).
Although there exists no universal agreement as to what is covered by the sales department of a company12, in the corporate context ‘sales’ generally describes a set of activities directed at selling products or services to the interested customer (Kotler and Armstrong 2010). While previous research
12 In some cases, even among well-established companies, there exists no separate sales department for strategic reasons, but instead each employee with a direct customer interaction (product manager, software architect, etc.) assumes all necessary sales activities (Lubarski and Pöppelbuß 2017).
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emphasized solely the “transfer of ownership” (Laemmli 2014, p. 1) as a result of (successful) sales activities, the SD-logic sees sales as a value-exchange process (Nätti et al. 2015), in which all the involved actors offer their respective resources for the overall value creation (Blocker et al. 2012; Lusch and Nambisan 2015). This sales interaction between the involved actors covers the whole value chain, starting from the marketing activities to attract potential customers, via the quotation process based on a pre-defined service portfolio and ending with the after sales communication and developing opportunities for further projects (Panagopoulos and Avlonitis 2010; Rouziès et al. 2005). Within this interaction, the service portfolio describes the provider’s services in terms of their business value (Cannon et al. 2011) and acts as an intermediary between the provider’s internal capabilities and the external communication to the customer. On the one hand, a service portfolio may remain on the abstract level (e.g., enumeration of the key competencies or even a simple overview of the previous projects), thus leaving enough margin to adapt to a customer’s requirements in personal meetings. On the other hand, it can also be used to communicate the external service variance to the customer in a transparent manner, i.e., what is possible and at what price, thus acting as a competitive advantage (Kohlborn et al.
2009). Due to the overall heterogeneity of the offered services and standards among industries, especially in the B2B markets, there exist no universal guidelines on the level of granularity of the service portfolio (Dörbecker and Böhmann 2015). Instead, this decision depends on the strategic considerations of the provider (i.e., whether transparency of the offer will harm or benefit the company).
This is shown in a study a study from Lubarski and Pöppelbuß (2017) on B2B service providers for wind energy and logistics.
Accordingly, all the company’s sales activities can be categorized as either Build-Time; strategic variant management completed prior to and leading to the creation of the service portfolio or Run-Time; the operative quotation process that builds upon a pre-defined service portfolio, along with the respective databases, and is executed on a regular basis.13 The perspectives are interconnected in the way that Build-Time provides specifications, while the insights gathered during the Run-Time can be used for future correction of the sales strategy (Figure 4).
Figure 4: Placement of the Quotation Process within the Overall Sales Activities
13 The separation of ‘Build-Time’ and ‘Run-Time’ is widely used in the context of workflow management, with the former describing the specification of the workflow model that acts as a “blueprint for implemented business processes in [the] workflow management system” and the latter containing the workflow engine that
“creates a new workflow instance based on the defined workflow model” (Weske 2012, p. 334).
Run-Time (operative perspective)
Configure Price Quote Monitoring
Build-Time (strategic perspective)
Specification New Insights
Service Innovation
Service Modularity Customer Segmentation
Sales Strategy
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Sales strategy can be defined as “the extent to which a firm engages in a set of activities and decisions regarding the allocation of scarce sales resources to manage customer relationships on the basis of the value of each customer for the firm” (Panagopoulos and Avlonitis 2010, p. 9). In this regard, the decisions made during Build-Time and the arrangement of the service portfolio(s) depend strongly on the outcome of the customer segmentation. Identified as one of the best practices in sales excellence (Leigh and Marshall 2001), and highlighted for its importance in the business model canvas (Osterwalder and Pigneur 2010), customer segmentation helps service providers to define their scope of activity and to define value-creating offerings for their customers (Rahikka et al. 2011). The outputs from the customer segmentation (e.g., definition of services, prices, and conditions depending on a certain customer segment) are then used to define a corporate service portfolio and create new services (Lusch and Nambisan 2015). Simultaneously, from a sales strategy point of view, “a key aspect is the decomposition of the overall selling process into subprocesses that can benefit from specialization and division of labor” (Leigh and Marshall 2001, p. 88). Therefore, the use of decomposition and subsequent modularization, as an architectural approach, can achieve efficiency in service design and sales, as long as the ability to satisfy customer demands is not diminished (Bask et al. 2010a). It is worth mentioning that the presented constituents of the Build-Time should not be seen as a unidirectional process, but rather that they exhibit strong interdependencies and thus can be performed in an arbitrary order. For example, it is also conceivable that an existing service portfolio will first be modularized, thus delivering the basis for new service development, which, in turn, form suitable customer segments. Each of these constituents thus influences the long-term orientation of the company and should be taken into account in the overall sales strategy (Panagopoulos and Avlonitis 2010; Rahikka et al. 2011).
In contrast, the operative activities of the Run-Time comprise a sequential process that is executed every time a customer approaches with an (individual) request. The main result of this process is the generation of a comprehensive document (quote) that is expected to win such a request. Although other terms such as ‘tendering process’ (Domberger et al. 1986) or ‘Configure-Price-Quote (CPQ) process’ (Gartner Inc.
2017) are also common in the literature and among practitioners,14 this dissertation will use the term
‘quotation process’ (Hvam et al. 2006), as an overarching description of this process. Since a (detailed) quote builds a legal reference point for the upcoming project, the conflict between customer-driven individualization and provider-driven standardization ambitions arises at the latest point during the quotation process (Schmidt 2008). However, as with sales in general and due to the heterogeneity of B2B services there exists no clarity on where the quotation process actually begins or ends and which departments are involved; however, some indicators for its placement can be found when examining a company's overall sales process management. For example, Söhnchen and Albers (2010, p. 1359) performed a large-scale survey among German industrial companies and derived a six-step sales funnel for the acquisition of industrial customers, in which the quotation process covers the stages of ‘product presentation’, followed by ‘design of the offer’ and ‘handling objections’ (i.e., steps 3, 4, and 5). The idea of their sales funnel is that each stage requires more effort and detailed processing per customer, so that unattractive customers are removed step by step, thus achieving an efficient ‘effort-to-probability-success’ ratio.
Similarly, an overview of the existing methods and decision criteria for selection of customer requests is given in the practical research of Geiger and Krüger (2013). The authors provide an exemplary detailed quotation process for an industrial construction site, beginning with the ‘rough clarification of the customer requirements’, leading to the ‘detailed planning of the technical concept’, finally resulting
14 The advantage of the term ‘quotation process’ is that it does not limit the application space to the projects from the public sector as is the case with the ‘tendering process’ (since ‘tenders’ are typically associated with public projects). In addition, it is more common for service industries and academic discussions in general, unlike the term ‘CPQ-process’ that is used mostly by practitioners.
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in the ‘finalization of the calculations and submission of the tender’ (Geiger and Krüger 2013, p. 84).15 Lastly, in their qualitative research on quality in designing and providing KIBS, Rahikka et al. (2011) identified three main challenges when developing value perception for business customers, namely
‘specification of services’, ‘estimation of the co-creation efforts’, and ‘cost determination’, each of which are essential for the quotation process.
Although their origins lie in different application contexts, the above-mentioned findings can be summarized in three consecutive steps – selection or (IT-based) configuration of the desired solution from the list of predefined elements (C), pricing of the composite product or service (P), as well as communication of the (standardized) quotation document to the customer and its usage for subsequent corrections and negotiations (Q). However, although having commonalities for the B2B product industry (Blecker et al. 2004), these three steps alone cannot build the base for a company’s overall ability to react to the customer’s changing requirements (which is an essential ability, especially for the providers of KIBS). For instance, by neglecting the documentation of the outcomes of the quotation processes, companies miss out on the opportunity of reusing historic quotation documents, both for operational processes (i.e., configuration, pricing and quotation), as well as continuous monitoring of strategic weak points (e.g., service redesign or innovation, identification of unprofitable services). In this regard, an additional step of monitoring and reporting that retains an ongoing track of the outputs from the quotation process (e.g., hit rate16, price composition for a certain service package) is needed as a connection to the Build-Time, leading to the possible adjustment of the overall sales strategy.