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1 Introduction

During the past decades, more and more Business-to-Business (B2B) companies approached their customers in a different way: instead of focusing on individual selling transactions, companies strive to co-create value by selling individual solutions and engaging in long-term relationships with their customers [1]. Instead of selling isolated product and maximizing short-term revenue, companies strive to fulfill the individual needs of their customers by combining, integrating and individualizing products and services according to the needs of the customer. This requires B2B providers to integrate internal and external resources to create their value proposition to their customer accounts. This transformation is perceived as a means to improve the competitive position, particularly in mature markets characterized by fierce competition and limited growth.

However, 75 percent of the companies that attempt to offer solutions fail to return the cost of their investment [2]. Little research has been conducted on how the sales force is being impacted by this shift and how the sales force contributes to the success of this transformation. In particular, we identified a research gap regarding comprehended markets and general implications on major companies within different stages of implementing Product-Service Systems (PSS) and solutions as sales offerings. To address this gap, we focused on three main (research) questions:

  1. 1.

    Where and why are PSS sales processes becoming more complex?

  2. 2.

    What are the main issues of PSS sales management and how are the solved?

  3. 3.

    What are the implications of selling PSS on requirements and skills of sales representatives and the organizational structure?

For investigating these research questions, we conducted explorative interviews on interrelations of success factors for selling product-service systems. The interview guideline was derived from a review of literature on product-service systems and related concepts, solution selling, and personal selling sales management in general.

Our findings are in line with [2] that companies are often struggling to generate additional profit from selling PSS. This struggle can surface regarding financial statements or in utilization and allocation of resources. There are a lot of external and internal reasons for this struggle which vary from the development stage of implementing PSS. Implications on PSS itself are not quantified easily due to high variability of accounting practice regarding PSS and their service components. According to our interview results, for achieving long-term success with PSS, some factors and their interrelations are crucial. First, PSS must fit into the targeted market strategy. Second, PSS and the market strategy must be consequently implemented within the organizational structure and the conduct of day-to-day business. Third, PSS providers have to deal with complexity which PSS comprise. And overall the logic for selling PSS has to be adapted by the whole company and its employees.

A review of fundamental literature on the impact of the shift towards product-service systems and solutions on the sales force is conducted in Sect. 2. Our interview methodology and findings are presented in Sect. 3. Section 4 discusses the results and their managerial implications. In the last section, we conclude this work and propose future research directions.

2 The New Role of the Sales Force

This section elaborates on the relationship between personal selling and the shift towards individualizing and integrating products and services and its academic paradigms.

Personal selling and sales management is indisputably impacted by this shift, which has been the topic of some research which is presented in the following.

2.1 Personal Selling and Sales Management

Personal selling is crucial for the sale of many goods in several industries, especially for B2B Companies. 10 % of the total workforce in the United States works in Sales [3] and 800 billion US dollars were spent in 2006 on sales forces in the United States [4], which is three times the amount spend on advertising activities. Subsequently, personal selling and sales management emerged as major subtopics in current literature on B2B marketing and related fields. Although sales force management drew interest from marketing researchers in the past years, still “the volume of research on sales force topics in the leading marketing journals has not matched its importance in the marketing mix” [4]. In the traditional marketing mix, personal selling takes place in promotion as illustrated in Fig. 1.

Fig. 1.
figure 1

Personal selling in the marketing mix, adapted from Cron and DeCarlo [3]

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Salespeople play a key role in the development of the relationship between the B2B provider and the customer [5], as they are the primary link between both firms [6]. Indeed, Biong and Selnes [6] state that salespeople have a high influence on the account’s perception of provider reliability, the perceived value of the provider’s services, and finally the buyer’s likelihood to continue the relationship. Furthermore, previous empirical research suggests that future sales opportunities of complex service offerings depend mostly on the relationship quality between sales representatives and accounts [5].

2.2 A Paradigmatic Shift Towards Individualizing, Integrating Products and Services

Scholars from marketing and related disciplines provided several theoretical foundations for this paradigmatic shift, specifically the Service-Dominant Logic and Product-Service-Systems. According to the Service-Dominant Logic [7], services are the fundamental unit of exchange. By providing a service, the provider company applies its resources, skills and knowledge. This also implies that “the normative marketing goal should be individualization” [8, p. 5] rather than selling standardized products, which is often the case in transactional selling.

Another related academic paradigm are product-service systems. In this context, Vandermerwe [9] coined the term servitization as offering services and solutions through products or at least in association with them (cf. [10]). This view on servitization is based on the value proposition for the customer and is independent of possible organizational transformation requirements. British academics such as Neely and Baines propose servitization as “innovation of an organizations capabilities and processes to shift from selling products to selling integrated products and services that deliver value in use” [11].

Definitions for systems selling are not unanimous in academia but mostly mutually understood. Page and Siemplenski [12] proposed systems selling as the provision of products and services as integrated systems that provide solutions to customer’s operational needs. This definition for systems selling has all the components and the means to describe the selling of Product-Service Systems (PSS).

The practical application and usage of servitization terminology is gaining access into companies’ strategies. For example Siemens AG uses servitization as strategic development from product vendor to vendor of hybrid product-service combinations. Grönroos [13] proposed the similar term servicizing as turning all elements in a customer relationship, regardless of their type and nature, into value-supporting inputs into the customers` process. His proposition for servicizing requires analysis of all customer contacts and all resources and activities in those contacts and all interactions with the customer and the effects they have on the customer process they influence. Rothenberg [14] uses the term servicizing to describe the focus shift of suppliers’ business models from selling products to providing services. Her approach emphasizes material reduction and the substitution of products through services in order to gain more sustainable and profitable market advantages. She also indicates that services can create efficiency and value to support product sales. Although her approach seems to be more elaborate, the more common term servitization is also sufficient to cover the necessary market strategy changes and organizational implications.

A concept widely known in the practitioner literature is solution selling. Johansson et al. [2] propose solutions as a set of products and services, technically and commercially integrated to address the specific needs of a customer firm. This concept is strongly related to some PSS definitions as “an integrated combination of products and services” [15] and the terms PSS and solution can therefore be used interchangeable. A comparison of those terms and their similarities is presented by Velamuri et al. [16].

2.3 The New Role of the Sales Organization as Co-creators of Value

Selling solutions radically changes the selling approach. Selling solutions increases the importance of long-term relationship rather than focusing on individual transactions [1]. Furthermore, successful solution selling companies sell in teams, consisting of different sales roles with specific responsibilities and skills [2]. This difference is illustrated in Fig. 2.

Fig. 2.
figure 2

Difference between transactional selling and solution selling

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The shift towards relational co-creation of value significantly impacts the role of the client rep: “The role of a salesperson in the emerging era will be more than that of a general manager. Salespersons will be responsible for marshaling internal and external resources to satisfy customer needs and wants” [5]. A similar role description for sales reps has been proposed in the context of selling complex services: “Salespeople involved in the marketing of complex services often perform the role of relationship managers” [19].

Literature on servitization agrees on this change: “adding the service element makes the sale more complex; and complex sales take longer to explain to customers, longer to negotiate, and therefore longer to sell.” [16, p. 4].

This implicates a wider range of tasks for solution sales reps than their traditional counterparts in the marketing mix.

Finally, current literature states that these days successful client reps develop a different relationship with their accounts. Instead of being a reactive problem solver, successful client reps are proactive partners to their accounts, maintaining and leveraging relationships with several account stakeholders [20].

3 Interrelations of Success Factors from a Sales Perspective

This section shows the identified success factors and their interrelations to each other as well as to the complexity of the underlying PSS. It shows also the design of the study with a description of the interviewed companies and a brief digest regarding the answers of the interviews.

3.1 Study Design

In 2013, personal interviews with sales managers and sales representatives were conducted, using a semi-structured qualitative questionnaire. The eight interviewees from three multinational B2B companies worked in sales on different management levels (from top management to account management). The companies itself operate on a multinational scale and offer Product-Service Systems (PSS). To build deductive hypotheses the companies are chosen according to different stages of organizational development regarding their implementation of PSS.

Company 1 achieves multiple billions US Dollar of revenue with medical systems and 5,000 - 10.000 personnel worldwide. The organizational structure and PSS development is not yet fully adapted as intended.

Company 2 achieves multiple millions US Dollar of revenue with software and integrated business solutions and up to 500 personnel. The organizational structure is built from the start to underline the PSS offers which are main focus of the company.

Company 3 achieves multiple billions US Dollar of revenue with hardware, software and integrated business solutions and more than 100,000 personnel worldwide. It has already finished the organizational implementation of PSS as a major part of its offerings.

The questionnaire is designed to guide through a semi-structured personal interview as suggested from Gläser and Laudel [21] and Mayer [22] and it has been tested in front of an audience with different professional backgrounds. It contains 18 main questions (see Table 1) as well as further annotations and follow-up questions to achieve the same detail depth throughout all interviews. Main questions are asked as given. Depending on the interviewers understanding either the term PSS or solution is used throughout the interviews. Follow-up questions are asked either as open or closed question, depending on the targeted answering depth. All interviews started with a scheduled duration of one hour, which could be extended to one and a half hour if necessary. To avoid a language barrier within the interviews and due to the native language of the interviewees, the interview and the analysis of the results are conducted in German. The results are comprehended in English to address the included relevance for the international service community. Especially topics regarding market characteristics and strategies, described from the interviewee, include international references.

Table 1. Overview of interview results
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Each interview started with an introduction of the participants and a brief description of the studies purpose. This includes an explanation of the usage of terminology and its mutual understanding. Finally the main questions and their follow-up questions are asked and answered. The interview ended with a brief comprehension of the discussed contents. At this time, all interviewees received the results of the study.

For analyzing and comprehending the given answers, the approach from Gläser and Laudel [22] is chosen because of its intuitive logic to deal with long textual answers. If an interviewee used pictorial language, the answers are interpreted with best of knowledge to comprehend the core meaning. Obvious biases of the interviewee are taken carefully into consideration while analyzing the answers and in case of doubt the answer is excluded from the analysis.

3.2 Overview of Success Factors

The identified success factors can be categorized according to their main sphere. There is consensus within the interviewees that there has to be some external fit or strategy fit, so that the provider’s market strategy fit market conditions.

According to the interviewees, most PSS sales are high quality offerings and usually go along with unique selling propositions. They are also less exposed to price pressure than pure product sales.

As Treacy and Wiersema [23] pointed out, companies’ can leave competition behind, pushing boundaries either on operational excellence, customer intimacy or product leadership while meeting industry standards in the other two. Offering PSS challenges this distinction. To achieve product leadership with PSS, companies’ seem to require also excelling in customer intimacy to customize the service component. Apparently this is valid for high quality PSS and not for basic PSS (like maintenance). Additionally, interviewees pointed out that competition which operate as cost leaders have significant problems to sell high quality PSS.

Therefore companies’ strategy requires being formulated and implemented accordingly to the characteristics of the PSS and not the other way around.

Most interviewees accord also upon that there has to be an internal fit, so that organizational structure supports PSS sales activities which are dependent on the complexity of the PSS or its components.

PSS inherently contain multiple components. Besides basic PSS, PSS usually have a certain degree of complexity. As complexity parameters are mentioned: number of components in one PSS, number of possible component combination into one PSS, and the underlying component complexity itself.

To sell complex PSS, the interviewed companies use two kinds of sale representatives, specialists and generalists. Specialists excel in detailed knowledge regarding on component while generalists excel in knowing all different kinds of PSS and their combination possibilities. They are staffed dependent on sales volume and requirements of one targeted customer.

All interviewed companies are able to provide the whole PSS bundle to their customers along their value chain and prefer the matrix organization to do so. The matrix organization comprehends all departments and the one side is input oriented (e.g. PSS component oriented) while the other side is output oriented (e.g. solution application and usage of PSS oriented).

Another success factor mentioned by the interviewees is that the inherent complexity of PSS is being covered in day-to-day sales activities.

When the PSS sales activities become too complex to handle spontaneously and individually by each sales representative, most interviewed companies thrive to standardize components of PSS and the processes to provide PSS.

Some interviewees are able to pinpoint several time-eaters like internal communication between internal project personnel or administrative processes (e.g. contracting, invoicing, audit by the customer).They thrive to ensure professional and sufficient communication of project personnel on the customer side and within their own company.

Another success factor seems to be the integration and training of personnel base according to the project requirements. Most requirements needed to provide PSS are too specific, so they cannot be obtained within the classical education system. Therefore PSS providers have to develop, educate and train these required knowledge and skills by themselves.

3.3 Interrelations and Complexity

To succeed with the provision of PSS the interviewed companies describe similar central characteristics according to the success factors from the chapter above. As main emphasis they point to three different levels: market characteristics, organizational characteristics and sales personal characteristics.

First, the market characteristics which comprise the structure of the underlying market, competition and service proposal.

Offer-driven markets are superior in achieving high margins. In demand-driven markets vendors can also achieve high margins through establishing tangible USPs or use information about customers, competitors or PSS which the customers do not have (usage of non-transparencies).

Provider specialists which focus only on single PSS or only on single components of PSS are supporting transparency in PSS offerings and apply price pressure to general offerings. General PSS provider focus on out-of-one-hand solutions. PSS vendors with a general market approach have to consider offerings from specialists, especially if those are able to provide comparable quality output to less costs than the generalist is able to.

If the service component does not include a unique selling proposition (USP), than the service offering and possible the PSS offering as well is substitutable. This leads to more competition and pressure upon the margin, especially if there are many competitors specializing on the service component of the PSS. Possible counter strategies are dependent on the availability and controllability of the product component - at least one USP has to be controlled.

Second, the organizational characteristics which include parameters on various levels, the underlying business model and the strategy fit.

The most chosen organizational structure is the matrix organization with one side focusing on technology input (PSS components) and the other side on provision related output (solution offerings).

If the vendor has a major organization size of its own he can integrate a special division team to identify sales leads on a general basis. The necessity to do so derives from the degree of division of labor to support the sales activities.

There are two characteristics which lead to the requirement to adapt to local parameters. First, different governmental regulations may lead to different business opportunities. Second, competition can force local or regional irregularities which can also lead to different business opportunities. Both characteristics may lead most likely in different prices and maybe in different PSS characteristics as well. Either way, the vendor has an own interest to ensure that their own PSS and its components will not pirate their business in other regions. This also implies if different local sales teams of the vendor concur on the same contract which may be implemented in more than one region.

Efforts to keep the sales cost down lead not only to higher internal cost transparency but also to more fairness according to the input involved and abilities to influence them. For example, whilst previously the installation costs did not have any direct mapping, they are now accounted to the sales division. This cost transparency is also needed for pre-selection of PSS projects.

Due to different revenue stream characteristics of services the salary targets of sales representatives have to be different. Usually the product component is paid in full after delivery but the service revenue occurs over time (month and years). Therefore sales representatives are getting signing targets besides product revenue targets. They cannot be measured in one target figure because the margins of product revenue and service signings are usually different.

Usual goal is to sell the PSS in one piece. In some cases this is not always possible. For example, if the customer is from the public sector and has its own regulation for requesting proposals, the service components could be explicitly excluded from the proposal and the contract. This often happens especial if the product components relate to the buildings budget.

PSS offerings have to fit into the customer perception of the vendor company. They have to show an understandable and believable strategy how PSS complement the product strategy. For example, PSS offerings from vendors who focus on product leadership tend to have difficulties, if the customers do not believe in the high quality delivery.

The more complex PSS components are, the more implemented is a comprehensive overall support from all the personnel. In early implementation stages, PSS are integrated on the top management level within the company’s directive. Within further development stages PSS become more integrated in the day-to-day business of the provider and the support comes from all the personnel.

Similar to product manufacturing where the transportation costs have to be considered against full production on one location, there can also be observed a concentration of personnel related to the service component. This regards explicitly competence bundling on one office location compared to a high number of offices spread to different locations.

Third, the sales personnel characteristics, which comprehend trait requirements and resource utilization.

Sales representatives need the ability to fast comprehend and discuss complex and contextual issues. Implications are that the company has to train all sales representatives in the same tools so they speak the same methodological language and if needed train special abilities which are not available on the personnel market.

Especial with complex PSS, sales representatives do often not know all the details of the PSS characteristics. This implicates that the vendor implements a system with sales representatives who know general characteristics (goal: knowing all possible PSS combinations) and other with a higher focus on details (goal: knowing all possible details of some components). Also the personnel have to be trained regularly according to the complementary knowledge.

One main task of the sales manager is the utilization of his respective resources. The personnel are assigned manually to the tasks according to their ability and availability. Main implication is that both characteristics have to be transparent (e.g. skill matrix). Another implication according to the size of the company is that in small companies there is less potential for derivation of the usual team settings. Although in companies with thousands of personnel the teams can be built in also thousands of constellations. It is most common to not derive much from successful teams and personal contacts to the team members. Usual one member of the customer account put the PSS team together. Most common characteristic (besides ability and availability) for this is, if the team member and the customer worked successfully in the past and the internal team fit (social component).

The sales team is assigned on different characteristics. Most common is the regional root of the sales personnel to minimize driving distances. This characteristic appears sometimes as secondary but is usual the purporting characteristic. For example, if the assignment is based upon if the sales representatives has worked already successfully with the customer, the underlying characteristic is the availability and the first setting assignment of the sales representatives which is indicated to include regional considerations.

4 Discussion and Implications for Research and Management

As qualitative conducted study, the results give indication for further research approaches. From a service science and marketing perspective it is most interesting to verify quantitatively the identified success factors of PSS and the dependent parameters which have to be controlled as far as possible. The underlying study comprehends companies operating in different markets and assumes that the market characteristics have impact on implementation details only, but not in general how to implement PSS. Further research, to verify or deny this assumption, requires a large scale research and contacts to the same top management level as used for the interviews. This possible follow-up research could also look into the matrix organization as preferred organizational structure for major international PSS providers and at which organizational size smaller providers should also assume matrix organizations. Another possible research approach is, if smaller PSS providers use hierarchical organizational structures and on which development stage of implementing PSS they are. It might be that in some constellations hierarchical organizations are superior to matrix organizations for providing PSS successfully.

From our perspective, the most interesting implication for PSS provider is how to use PSS to create value for the customer and profit for the provider. The more all parameters are aligned the more successful the PSS implementation and value creation can be. All interviewed companies seem to struggle or at least have to invest resources and financials to profit from PSS. Whilst the development stages of implementing PSS cover the more formal success factors, the market and customer insight seems to be equally important for financial success of PSS. The interviewed companies struggle to create an environment to successfully use value based pricing and obtain a higher margin as a result. In new markets such environments occur naturally but in mature markets they are rather scarce. How these circumstances can be economically created and protected is equally interesting from a management and an academia perspective.

On a practical level the identification of required skills, how to train and how to allocate them into successfully operating teams seems to be an organizational success factor which is mostly dependent on personnel qualifications on the involved management levels (e.g. human resources, sales management). Within the interviewed companies there is no specific technical or automatically system to support these process steps, but possibly required to further creating value and reducing inefficiencies.

5 Conclusion

In this work, we investigated the interrelations of success factors for selling product-service systems through a solution-oriented sales force. Therefore, we first conducted a literature review on the impact of the shift towards product-service systems and solutions on the sales force. As discussed, several academic and practical paradigms embody the shift towards individualization and integrating bundles of products and services in B2B scenarios. Our interview findings suggest that providers struggle to profit from PSS, which is in line with the body of knowledge in literature. Furthermore, success of PSS requires a fit to targeted market strategy, a rigor implementation of the marketing strategy in the organizational structure and operational boundaries and the capability to deal with increased complexity.

The limitation of the presented study regarding the design and execution of the interviews are deliberate and agreeable. This applies specifically to the amount of interviewees and amount of interviewed companies as well as the extent of the study.

In delimitation to the focus and the results of this thesis, further research can be conducted as deductive research or deepen this thesis’ emphasis.

This work lays the foundation for our future research. It is a starting point for designing quantitative studies and verify quantitatively the identified success factors of PSS and the dependent parameters.