Building a Value Proposition for a Service Required to Realise the Full Potential of a New Digital Manufacturing Technology

Customers consider a product attractive only if the benefits they perceive surpass the sacrifices necessary for acquiring the product. This requires that the product result in perceived customer value that, especially in B2B context, should be measured in monetary terms. Compared to products, the service value is often more complicated to define and quantify in Euros, making also pricing of services a challenge. However, the literature on the customer value has remained vague and, as a result, management accounting perspective on customer perceived value has been called for.
The objective of the paper is to discuss how to build value propositions for new complementary services needed to support the diffusion of new manufacturing technologies. Harnessing the full potential of new digital manufacturing technologies, in some cases, requires reengineering of a customer’s products or processes, which the customer may not have the resources for. In such cases, the supplier needs to offer complementary engineering services, yet selling and pricing such engineering services requires new competencies. Elimination of customer’s bottlenecks provide potential for new sales for the customer, a benefit challenging to communicate with current customer value models.
The paper is based on an interventionist case study in a company that provides laser cutting for tubes. Following the idea of interventionist research, the research team has been involved in developing the cost analysis showing the full potential of the new manufacturing technology. Through unique, interventionist approach and in-depth data on the financial consequences of the product and complementary services, the article contributes to the customer value literature. Understanding customer value requires, not only calculations of the direct cost savings of the product, but considerations of the direct and indirect consequences to the customer’s value generations processes.