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Paper info: Willingness to Pay for Remote Services as an Element of Innovation Adoption in Business-to-Business Markets'

Title


Willingness to Pay for Remote Services as an Element of Innovation Adoption in Business-to-Business Markets'

Authors


Joerg Dauner,
Bernd Guenter
Heinrich-Heine-Universität Düsseldorf
Germany
Bernd Guenter and Philipp Johannes Nolte

Place of Publication


The paper was published at the 28th IMP-conference in Rome, Italy in 2012.

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Abstract


Globalization, cost management, and recent developments in telecommunication led to changes in services management concerning machinery and equipment sold by manufacturers all over the world. Teleservices or better “remote services” seem to be one possible solution. Remote services could be an innovative approach to offer customer solutions. Remote services require a substantial and different participation of the user and offer advantages and risks for the machine owner/user. Therefore the question arises whether the service innovation creates value or not. This paper analyzes the customer’s willingness to pay for remote services in a b2b setting. Attributes of remote services that are key to creating and destroying value are identified and evaluated. Publications of service management and industrial marketing management are addressed.Research method:The paper is predominantly based on a multinationally conducted conjoint analysis which explores the customer’s perception and evaluation of different service processes in order to establish an appropriate range of remote services. On the basis of a conjoint analysis willingness to pay as well as perceived risks and barriers to adoption are investigated for different segments of adopters. The participants of the study are 203 customers of a German machinery and industrial equipment manufacturer.Research findings:Compared to on-site services the virtual participation of customer resources through remote services is expected to result in a substantial increase in efficiency and effectiveness from both the service provider’s and customer’s perspective due to faster and more individualized problem solutions. From a customer’s point of view these benefits are evaluated differently among the identified segments of adopters in relation to the involved costs for reducing the risks associated with implementing communication technology.Main contribution:The transition from a traditional machinery and industrial equipment manufacturer to a service provider involves unique challenges. Many businesses offer a wide but unprofitablerange of services. Remote services could be an appropriate means to co-create added value, reduce service costs on both sides and at the same time increase willingness to pay. Therefore, service providers should implement instruments in their marketing strategy which provide a transparent service process and signalize trustworthiness in order to reduce perceived risk on the customer’s side