Dealing with Privacy Concerns in Product-service System Selling: Value-based Selling as Fair Treatment Practice

Edwin J. Nijssen*, Michel Van der Borgh, Dirk Totzek

*Corresponding author for this work

Research output: Contribution to journalJournal articleResearchpeer-review

41 Downloads (Pure)

Abstract

Privacy concerns are an important aspect of business-to-business customers' adoption decision of advanced product—service systems and a significant inhibiting factor. However, empirical evidence on its effect is scarce and anecdotal. Based on the observation that customers assess the “privacy vs. service/benefit” trade-off in a calculative way, this study examines how customers' privacy concerns affect their price sensitivity and in turn, the provider's profitability. Specifically, we propose value-based selling as an approach for providers to alleviate the potential negative effects of customers' privacy concerns. The results of a sample of 250 US firms confirm value-based selling's power to disable the privacy concerns–price sensitivity mechanism and mitigate the negative effect of price sensitivity on product-service system provider profitability. However, value-based selling's positive impact on performance is dependent on the level of contract specificity. Thus, value-based selling and contract specificity are complementary arrangements.
Original languageEnglish
JournalIndustrial Marketing Management
Volume105
Pages (from-to)60-71
Number of pages12
ISSN0019-8501
DOIs
Publication statusPublished - Aug 2022

Keywords

  • Servitization
  • Product service systems
  • Hybrid offerings
  • Value-based selling
  • Solution selling
  • Contract specificity

Cite this