Showing papers by "Werner Reinartz published in 2008"

How to sell services more profitably.

Abstract: When products become commodities, manufacturing companies may seek to differentiate themselves with value-added services--a potentially profitable strategy. Unfortunately, companies often stumble in the effort. Reinartz and Ulaga conducted in-depth studies of 18 leading companies in a broad variety of product markets to learn what distinguished the successes from the rest. They discovered four steps to developing a profitable services capability. RECOGNIZE THAT YOU ALREADY HAVE A SERVICE COMPANY: You can identify and charge for simple services--as Merck did when it stopped quietly absorbing shipping costs. Switching services from free to fee clarifies their value for managers as well as for customers. INDUSTRIALIZE THE BACK OFFICE: To prevent delivery costs from eating up service-offering margins, build flexible service platforms, closely monitor process costs, and exploit new technologies that enable process innovations. The Swedish bearings manufacturer SKF provided off-site access to an online monitoring tool that could warn of potential failure in customers' machines. CREATE A SERVICE-SAVVY SALES FORCE: Services require longer sales cycles and, often, decisions from high up in a customer's hierarchy; what's more, product salespeople may be inimical to change. Schneider-Electric did a major overhaul of its sales organization and trained its people to switch from cost-plus pricing to value-based pricing. FOCUS ON CUSTOMERS' PROCESSES AND THE OPPORTUNITIES THEY AFFORD FOR NEW SERVICE OFFERINGS: You may need to acquire new capabilities to take advantage of those opportunities: The industrial coatings specialist PPG had to learn how painting robots function after it offered to take over Fiat's Torino paint shop. Services can both lock in customers and help acquire new accounts. They should be developed with care and attention.

Performance Implications of Adopting a Customer-Focused Sales Campaign

Abstract: Through field experiments conducted in two business-to-business firms, the authors evaluate the financial and relational consequences of adopting a customer focus in sales campaigns. In both the experiments, salespeople adopting the customer-focused sales campaign coordinated their sales calls with the objective of selling all the products that a customer was predicted to purchase only at the time the customer was expected to purchase. The authors compare this strategy with the current practice in the organization in which salespeople for each product category independently contacted the customers who were expected to purchase in that category without any guidance on the expected timing of customer purchase. The experiments show that adopting a customer-focused sales campaign can significantly increase firm profits and return on investment. The total incremental profits obtained from implementing the customer-focused sales campaign was more than $1 million. High-revenue customers were the source ...

Decision Models for Customer Relationship Management (CRM)

Abstract: The conceptual shift from a product-centric to a customer-centric organization has been a topic for discussion for more than a decade (Webster 1992; Day 1999). Despite the rhetoric and its conceptual appeal, the change to customercentric organizations has, in reality, been slow (Webster et al. 2005). Yet in recent years, significant activities, in both managerial practice and academia, have emerged around the concept of customer relationship management (CRM) (Boulding et al. 2005), representing a step closer to creating a stronger customer orientation. In managerial practice, these activities seem to revolve around IT-related questions and practices, whereas in academia, the discussion focuses on issues such as customer satisfaction, retention, and profitability. The purpose of this chapter is to describe and summarize existing academic models and approaches that have found CRM applications. As such, we attempt to provide an integrated, structured overview of some key issues prevalent in academic CRM thinking. Within the scope of this chapter, we also identify some aspects of CRM that require new models or extensions. According to Reinartz et al. (2004), existing literature suggests four distinct characteristics should be reflected in a CRM conceptualization: (1) building and managing ongoing customer relationships delivers the essence of the marketing concept (Webster 1992;Morgan andHunt 1994), (2) relationships evolve with distinct phases (Dwyer et al. 1987), (3) firms interact with customers and manage relationships at each stage (Srivastava et al. 1998), and (4) the distribution of relationship value to the firm is not homogenous (Mulhern 1999; Niraj et al. 2001). In recognition of these factors, the heart of CRM activities is differential, systematic resource allocations to customers (not products, geographies, or so forth) with different economic values for the organization. Fundamental to this conceptualization is the notion of customers’ economic value to a business. Managers should attempt to maximize the value that

How to Sell Services

Abstract: Product companies often try to differentiate themselves by offering ancillary services. Many truggle to make money at it.

Cómo vender servicios rentablemente

Abstract: Cuando los productos se convierten en commodities, las empresas fabricantes a menudo intentan diferenciarse ofreciendo servicios con valor agregado; una estrategia potencialmente rentable. Desafortunadamente, las empresas a menudo tropiezan en el intento. Reinartz y Ulaga realizaron estudios en profundidad a 18 empresas lideres en una amplia variedad de mercados de productos para saber que distinguia a las exitosas de las demas. Descubrieron cuatro pasos para desarrollar una oferta de servicios rentable. Reconozca que usted ya tiene una empresa de servicios. Usted puede identificar y cobrar por servicios simples, como hizo Merck cuando silenciosamente dejo absorber los costos de envio. Cambiar los servicios de gratis a pagados clarifica su valor para los ejecutivos y los clientes. Industrialice el back office. Para evitar que los costos de entrega se coman los margenes de la oferta de servicios, construya plataformas flexibles de servicios, monitoree de cerca los procesos de costos, y explote nuevas tecnologias que posibilitan procesos innovadores. Cree una fuerza de ventas conocedora de los servicios. Los servicios requieren ciclos de ventas mas largos y, a menudo, decisiones tomadas en los niveles mas altos de la jerarquia de los clientes; es mas, la fuerza de ventas de los productos puede oponerse al cambio. Enfoquese en los procesos del cliente yen las oportunidades que representan para nuevas ofertas de servicios. Usted puede necesitar adquirir nuevas capacidades para aprovechar esas oportunidades: el especialista en revestimientos industriales PPG tuvo que aprender como funcionaban los robots de pintado despues de ofrecer hacerse cargo del taller de pintura de Fiat en Turin. Los servicios pueden fidelizar clientes y ayudarle a adquirir nuevas cuentas. Deberian ser desarrollados con cuidado y atencion.