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Why small IT-consulting firms have problems adopting value-based selling
KTH, School of Industrial Engineering and Management (ITM), Industrial Economics and Management (Dept.).
KTH, School of Industrial Engineering and Management (ITM), Industrial Economics and Management (Dept.).
2012 (English)Independent thesis Advanced level (degree of Master (Two Years)), 20 credits / 30 HE creditsStudent thesisAlternative title
Varför mindre konsultföretag i IT-branschen har svårigheter att införa värdebaserad försäljning (Swedish)
Abstract [en]

The old dominant logic of marketing, goods-dominant logic, is being replaced by a new dominant logic, aservice-dominant logic. The old logic is focused on tangible resources, embedded value and exchange,while the new logic is instead focused on intangible resources, the co-creation of value and relationships. A central concept is that value is not viewed as embedded in products; instead it is co-created in the relationship between customer and supplier.

For companies, this means that value cannot be delivered; instead companies can only offer value propositions. A value proposition is a statement of the measurable benefits that could be realized for the customer upon accepting the value proposition. The idea of service-dominant logic and value propositions has been conceptualized into value-based selling.

Value-based selling acknowledges the changing role of the sales force to a strategic asset that has moved away from just selling products and services to selling business impacts that result in increased profits for the customer. There are three salient dimensions of a value-based sales process: (1) understanding the customer’s business model, (2) crafting the value proposition, and (3) communicatingthe value.

The IT industry is known for having trouble evaluating the value of IT/IS investments. This could become problematic for IT consulting companies that want to adopt a value based sales process. Through a case study of a typical Swedish IT consulting company, we highlight the main practical issues related toadopting value-based selling. We also provide underlying reasons that helps to explain why these issues exist.

Our findings indicate that the company in the selected case has an internally driven culture focused onthe technical aspects of their offerings which causes a lack of customer focus. Also there is a problemwith measuring the value of projects in part because of the general problems with evaluating IT/ISinvestments, but also because there is lack of knowledge and formalized routines for measuring in the organization. Finally, the company uses an overly complex and technical language when the potential value is communicated to the customer. This makes it hard for the customer to understand what problemsthe company can solve.

We suggest that more research need to be done on the practical issues with adopting value based sellingin typical organizations, not just “best-in-class” examples. Also it could be useful to incorporate the customer perspective.

Place, publisher, year, edition, pages
2012. , 40 p.
Examensarbete INDEK, 2012:79
National Category
Business Administration
URN: urn:nbn:se:kth:diva-98266OAI: diva2:536249
Subject / course
Industrial Economics and Management
Educational program
Master of Science in Engineering - Industrial Engineering and Management
Social and Behavioural Science, Law
Available from: 2012-06-29 Created: 2012-06-21 Last updated: 2012-06-29Bibliographically approved

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Karsberg, MartinJönsson, Pär-Johan
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