Many
manufacturing firms today claim to be solution providers. By means of highly customized
and integrated, product-service offerings, these firms address complex business
problems of customers in a holistic way. However, the extent to which
manufacturers derive financial returns from these investments remains
debatable. But despite the dubious profitability, we are not witnessing any
large-scale transition away from the solution business. We assume that
irrespective of the direct revenues generated by the solution business,
manufacturers benefit strategically from the positive spillover effects of
solutions on the firm’s underlying product business through a signaling
mechanism. This assumption has been tested in
a scenario-based, within-subjects, cross-industries online experiment. The
results show that a market positioning as a solution seller has a highly
significant and positive effect on the customer’s purchase intention in cases
where the customer is only considering the purchase of a single, product-based
component. Moreover, the signaling effect of solution business is even stronger
if the seller can boost the credibility of the signal through evoking upon
prior reference projects.