Outcome-based Contracting From the Customers' Perspective: A Means-end Chain Analytical Exploration

Tobias Schaefers*, Stefan Ruffer, Eva Böhm

*Corresponding author for this work

Research output: Contribution to journalJournal articleResearchpeer-review

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Within the context of servitization, manufacturing firms increasingly offer outcome-based contracts (OBCs) which sell the outcome of a manufacturing process instead of the resources required for outcome creation. While extant studies have focused on the provider's viewpoint, this research explores industrial customers' requirements and goals when sourcing OBCs. We report the results of laddering interviews with purchasing and engineering managers from 32 actual and potential OBC customers. Based on a means-end chain analysis we find that, in addition to organizational goals, such as reducing costs or ensuring reliable supply, individual goals of the decision-makers also play a key role when purchasing OBCs. Specifically, the risk of being held accountable for problems that may occur in an OBC's implementation and operation emerges as an important concern of decision-makers. In contrast to extant research, that highlights how OBCs transfer operational risk from the customer to the supplier firm, our study indicates that customers also perceive elevated levels of individual and organizational risk when making OBC purchase decisions. Against this backdrop, OBC salespeople should address both individual and organizational goals of key decision-makers in the customer firm and focus on building trust in the supplier's ability to realize and operate an OBC.
Original languageEnglish
JournalIndustrial Marketing Management
Pages (from-to)466-481
Number of pages16
Publication statusPublished - Feb 2021

Bibliographical note

Published online: 9. July 2020


  • Laddering
  • Means-end-chain analysis
  • Outcome-based contracts
  • Servitization
  • Solution selling

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