A1 Refereed original research article in a scientific journal
Performance-based and functional contracting in value-based solution selling
Authors: Johanna Liinamaa, Mika Viljanen, Anna Hurmerinta, Maria Ivanova-Gongne, Hanna Luotola, Magnus Gustafsson
Publisher: ELSEVIER SCIENCE INC
Publication year: 2016
Journal: Industrial Marketing Management
Journal name in source: INDUSTRIAL MARKETING MANAGEMENT
Journal acronym: IND MARKET MANAG
Volume: 59
Issue: November
First page : 37
Last page: 49
Number of pages: 13
ISSN: 0019-8501
eISSN: 1873-2062
DOI: https://doi.org/10.1016/j.indmarman.2016.05.032
Abstract
Solution sellers increasingly use value-based selling and pricing strategies to market and monetize their offerings. Performance-based contracts constitute a key component of value-based pricing strategies. The present study explores solutions to the challenges solution sellers may encounter while developing value-based selling processes and implementing value-based pricing. The research design builds on the explorative action research methodology. While our study confirms earlier research on barriers to value-based selling and pricing, we also identify legal-technical contract design issues as an important but previously unknown barrier. We further identify integration as the appropriate theoretical framework for conceptualizing the barriers. Finally, we identify functional contracting as a solution for value-based sellers to overcome the barriers arising from deficient precontractual integration. The study highlights the role of contracts as barriers to be overcome by legal sales efforts when implementing value-based selling and pricing strategies. Further, the study stresses the utility of functional contracting in pre-contractual integration. (C) 2016 The Authors. Published by Elsevier Inc.
Solution sellers increasingly use value-based selling and pricing strategies to market and monetize their offerings. Performance-based contracts constitute a key component of value-based pricing strategies. The present study explores solutions to the challenges solution sellers may encounter while developing value-based selling processes and implementing value-based pricing. The research design builds on the explorative action research methodology. While our study confirms earlier research on barriers to value-based selling and pricing, we also identify legal-technical contract design issues as an important but previously unknown barrier. We further identify integration as the appropriate theoretical framework for conceptualizing the barriers. Finally, we identify functional contracting as a solution for value-based sellers to overcome the barriers arising from deficient precontractual integration. The study highlights the role of contracts as barriers to be overcome by legal sales efforts when implementing value-based selling and pricing strategies. Further, the study stresses the utility of functional contracting in pre-contractual integration. (C) 2016 The Authors. Published by Elsevier Inc.
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