Master Thesis
NEW SERVICE DEVELOPMENT
AT KPN BUSINESS MARKET
NSD PROCESS AND USE OF CUSTOMER INSIGHTS IN A B2B ENVIRONMENT
Sanne Taks
2012Master Thesis
NEW SERVICE DEVELOPMENT
AT KPN BUSINESS MARKET
NSD PROCESS AND USE OF CUSTOMER INSIGHTS IN A B2B ENVIRONMENT
2012
Sanne H. M. Taks | s1830341
Frederiksstraat 26hs 1054 LD Amsterdam +31 (0)6 16288612 sannetaks@hotmail.comUniversity of Groningen
Faculty of Economics and Business MSc BA Business Development
KPN The Hague
Business Market | Marketing & Strategy, Customer Management
Supervisors
Preface
Master Thesis; the final stage of the study Business Administration – Business Development before becoming Master of Science in Business Administration. To complete this phase, I conducted research at KPN Business Market concerning the characteristics of a New Service Development Process and the use of customer insights in a business to business market. The research, the steps taken, and the final design will be presented in this thesis.
Writing this thesis was not possible without the help of many people. First, I would like to thank Frank Streefland and Hans van der Bij from the University of Groningen. They helped me being critical, and supported me to go on and look further. Without their advice, faith, and time invested, my thesis would not be the way it is now. Besides that, I would like to thank all employees of KPN Business Market who invested time in my thesis. Special thanks to Bert Boerma and Marlous van der Elst for their support and advice. Furthermore, I would like to thank Marjolijn Niggebrugge from Nestlé. As a manager, she supported me the best she could and showed me the real meaning of a „win-win-situation‟.
Last but definitely not least, I would like to thank my friends and family for their endless support. Special thanks to my parents and Maarten, who always have faith in me and did everything they could to encourage me and to keep me smile.
Sanne Taks
Abstract
KPN is the leading telecommunications and ICT service provider in The Netherlands, offering wireline and wireless telephony, internet and TV to consumers, end-to-end telecommunications and ICT services to business customers. This study focuses on KPN Business Market (KPN BM), operating in the business to business (B2B) environment.
First, employees from different departments and disciplines at KPN BM were interviewed to discuss and define the business problem: a lack of integration of the voice of the customer into the New Service Development (NSD) Process at KPN BM. Interviewees stated that KPN BM is technology driven, and especially customer integration in the early development phases is missing. They assume this is the cause of disappointing sales numbers of NSD Projects. Besides that, interviewees mentioned the current NSD Process is not used and not designed to work effectively. The management question of this research is therefore defined as: How should KPN BM integrate the SME customer into the NSD Process in order to increase sales of NSD Projects?
After the preliminary analysis, an extensive project analysis was done on five NSD Projects of KPN BM to gain insight in the current way of working. By doing this, probable factors that influenced sales of NSD Projects were revealed. Characteristics of the NSD Process – sequence and completeness of phases, and role division – and the use of customer insights influence each other as well as the sales numbers of new services. After validation, the objective of this research was formulated: Advise KPN BM in order to solve its problem. More specific: Advise KPN BM in the redesign of the NSD Process regarding its characteristics and the use of customer insights in order to increase sales of NSD Projects. In order to meet the objective, recommendations needed to be given to KPN BM on the design of the NSD Process. Therefore, the research question was defined as: What should the redesign of the NSD Process of KPN BM look like? To gain insight in the characteristics of the NSD Process and possible methods to integrate customer insights, literature was consulted. Sequence and completeness of the NSD Process, role division of departments as well as methods to gain and use customer insights during the NSD Process were reviewed. To be able to select the appropriate information source, the customer in a B2B organization needed to be defined. In a B2B setting, the purchasing process is more professional and rational, and the customer in a B2B organization will likely not be the (only) consumer. Therefore, when selecting a customer for gaining insights in the NSD Process, it is important to look at the Decision Making Unit (DMU) of an organization and to take into account the role(s) a specific person in the purchasing process within a SME has.
After gaining knowledge to develop the redesign, specifications – requirements and restrictions from literature and KPN BM – were determined to start the actual redesign process. The original NSD Process of KPN BM was compared with the options available from literature, and phases of the NSD Process were linked to the original process in order to define a clear sequence and provide a complete NSD Process; the Redesign. The phases were divided in stages with a description of what to do, who to involve, which method of gaining and using customer insights to implement and which DMU role to integrate per stage; the Detailed Redesign. Gates, Go/ No Go decisions and its criteria were described per phase in order to be able to kill or adapt projects as early as possible in the process.
The redesign was tested by interviewing employees from different departments of KPN BM. The ideal test situation – implement the redesign in a NSD Project at KPN BM – did not take place, and therefore conclusions regarding sales success when implementing the proposed design were difficult to draw. Nevertheless, implementation of the redesign can be considered as the first step in increasing sales regarding NSD Projects. Reviewing the redesign periodically is important in order to optimize the NSD
Content
1
Research Problem
1
1.1 Problem Context 1 1.2 Business Problem 12
Problem Validation
3
2.1 Validation Structure 3 2.2 NSD Process KPN BM 3 2.3 NSD Projects KPN BM 42.4 Cause and Effect Diagram 8
2.5 Research question 10
3
New Service Development in Literature
11
3.1 New Service Development 11
3.2 Sequence and Completeness of Phases 11
3.3 Use of Customer Insights 13
3.4 Use of Customer Insights in NSD 15
3.5 Business to Business Environment 18
3.6 Business to Business Environment and NSD 19
3.7 Overview 19
4
Redesign Specifications
21
4.1 Functional Requirements 21 4.2 User Requirements 22 4.3 Boundary Conditions 22 4.4 Design Restrictions 225
Redesign
23
5.1 NSD Process: Sequence and Completeness 23
5.2 Use of Customer Insights 24
5.3 Redesign 24
5.4 Redesign in Detail 26
5.5 Test 30
6
Conclusions and Limitations
32
6.1 Conclusions 32
6.2 Scientific Contribution 32
6.3 Limitations and Further Research 33
References
35
Appendices
38
I KPN‟s Organization 39
II Preliminary Analysis 40
III Problem Validation 42
1
Research Problem
KPN is the leading telecommunications and ICT service provider in The Netherlands, offering wireline and wireless telephony, internet and TV to consumers, end-to-end telecommunications and ICT services to business customers. It is KPN‟s mission to enable all its customers – whether they are using consumer products or business (ICT) solutions – to enrich their work and leisure time with KPN‟s range of communication services. This study focuses on KPN Business Market (BM), operating in the business to business (B2B) environment. In the paragraphs below, the problem context and the business problem will be outlined.
1.1
Problem Context
KPN‟s ambition is to grow. To fulfil that ambition, KPN wants to be the best in the competitive and dynamic market it is operating in. Among other things KPN states that it must do ordinary things extraordinarily well and make sure its services work. To maintain growth, KPN‟s innovation is aimed at the customer and to anticipate on their changing needs and requirements by listening to customers‟ needs and ensuring KPN‟s products and services meet those needs. Customer satisfaction and loyalty are of vital importance for KPN. Within KPN there are various programs and methods to improve customer satisfaction. The customer satisfaction increased in 2010, however, KPN acknowledges the need for further improvement and will use the outcome of this study for customer satisfaction improvement programs in 2011 and 2012.
As can be seen in Appendix I, KPN operates in a business to consumer (B2C) as well as a B2B environment. As the name indicates, KPN BM focuses on the B2B environment. KPN BM is one of the four Dutch Telco departments of KPN and offers its business customers a complete portfolio of services from fixed and mobile telephony and internet to a range of data network services, workspace management and data centre services. The objective of KPN BM is to remain a leading infrastructure and managed ICT service provider for small and medium sized companies (SMEs) in The Netherlands, to be a preferred supplier to in the business market, and grow with best-in-class margins.
In May 2011, KPN‟s CEO Eelco Blok presented the strategy 2011-2015 and stated the following: „(…) everything is focused on the improvement of quality, service and technology (…)‟ and „If you want to be the best service provider, you have to think from the perspective of the customer.‟ (KPN Intranet, 2011). For KPN BM it is important to solve the problem of its customers. Not a single customer, but the whole market. Large companies get specific solutions, and Small Office Home Office (SOHO) companies often make use of the services the KPN Consumer Market (CM) offers. This thesis will focus on the SME market. SME customers of KPN BM do not have their own KPN BM Account Managers but have to choose from a standard offer of KPN BM services.
The main competitors of KPN in the wireless business market are Vodafone and T-Mobile. In the competitive telecommunications market, KPN BM managed to maintain the largest market share for Mobile Voice and Mobile Data in The Netherlands in 2010. Within Data/Network services, KPN BM is the leading provider in the Dutch business market both in terms of revenues and number of connections. KPN‟s goal is to maintain this position in the future, and therefore it has to anticipate on its customers and potential customers in order to keep up with competitors and to retain customers. (KPN Annual report 2010; KPN Intranet 2011; www.kpn.com)
1.2
Business Problem
Within KPN BM there is dissatisfaction about sales numbers and the customer focus in the process of developing new or redeveloping current services. KPN BM often offers solutions to customer problems that do not even exist; technology push instead of market pull. KPN states that it wants to anticipate on the
developed and introduced to the market without or with minimal customer interaction, and this causes failure of sales according to the interviewees. For this reason, KPN BM thinks it is important to integrate the voice of the SME customer into the development process to match the offering of KPN BM with the wishes and demands of the SMEs; the organization wants to create a dialogue with customers in order to increase sales.
To define the management question, several interviews were held with different managers of KPN BM. Quotes that summarize the problem in short:
“The task of KPN BM is to help entrepreneurs to be successful. We have to get rid of the product push process.” (Erik Jan Gelink, Marketing Director KPN BM)
“Once I came back from my holiday, and saw a KPN BM commercial on TV. KPN BM was offering a service that had a negative customer research outcome. I called the Marketing Manager, and told him I was surprised to see that commercial on TV. He said to me that the outcomes of the research did not cause a „No Go‟; the service was already fully developed and the commercialization fully outlined. There was no way back… Sales numbers were dramatic.” (Bert Boerma, Manager – Customer Management – Market Intelligence)
“We often come up with solutions to problems of SMEs that do not even exist, and therefore sales fail. We have to find out what the real problems are, and then find a solution for those problems. Not Marketing, not R&D, not Market Intelligence; together we have to come up with a solution.” (Eric Oldenburger, Strategist/ Business Developer – Marketing Strategy)
It is recognized by all interviewees that there is a problem with regard to sales of NSDs, which may be caused by a lack of integration of the voice of the customer into the NSD Process; interviewees stated that KPN BM is technology driven, and especially customer integration in the early development phases is missing which causes sales failure. Besides that, interviewees mentioned that the current NSD Process is not used regularly and not designed to work effectively. The management question of this research is therefore defined as: How should KPN BM integrate the SME customer into the NSD Process in order to increase sales of NSD Projects?
When mentioning SME in this thesis, a company with 5 – 49 employees is meant. Talking about SME market, the whole market of SMEs with 5 – 49 employees is meant (more than 130,000 in The Netherlands). If the term customer is used, it is about the SME customer. KPN offers its customers mainly services with accompanying products. Therefore, the offering of KPN in this thesis is named services, and the development process is named the New Service Development (NSD) Process.
2
Problem Validation
In order to solve the problem of KPN BM, it is necessary to define what the real problem is, and what actually has to be solved; the problem and its causes need to be validated (van Aken et al., 2009). First, the validation structure will be presented, after which the NSD Process and Projects of KPN BM will be outlined. After that, the overall analysis will be described and the overall cause and effect diagram will present the main causes of sales failure of NSD Projects at KPN BM. Finally, the research objective and research question will be formulated.
2.1
Validation Structure
In order to define the real problem of KPN BM, factual information is needed. As it was hard to collect factual information, the only source left were the employees of KPN BM. To discuss and define the business problem, employees from different departments and disciplines at KPN BM were interviewed. For an overview of the preliminary analysis, see Appendix II. After the preliminary analysis, an extensive project analysis at KPN BM was done to gain insight in the current way of working at KPN BM. By doing this, potential causes that contributed to sales of NSD Projects positively or negatively were revealed. How are the projects currently executed? And what are the probable causes of disappointing sales numbers? To answer these questions, several SME NSD Projects at KPN BM were analysed as a form of a multiple case study. Information about the projects was gathered by analysing the existing, limited documentation about the projects and interviewing at least two project members per project. Besides that, observation at the office of KPN BM was also part of gaining insight in the way of working. In this way, it was possible to gather information from multiple perspectives.
Table 2.1 Overview NSD Projects KPN BM
Project Initiation Phase Overall Result: sales
HD Voice Fail To be defined
MKB Werkplek Fail Fail, later Success (to be defined)
Computerhulp Fail Fail
VAMO Success Success (to be defined)
ZBIM Success Success
The NSD Projects above are initiated between 2009 and 2011. Although limited, the projects were selected because of the available interviewees and documentation, and the variations in Initiation Phase (first phase in the NSD Process of KPN BM; important phase according to the interviewees mentioned in Chapter 1) and Overall Result (the achievement of predetermined sales goals by KPN BM).
These variations in phases and results made it possible to analyse the probable causes of sales failure or success; similarities and differences could be compared and analysed per project as well as the whole NSD Process. An overview of the interviews and interviewees is presented in Appendix III, and the results of the validation are outlined in the next paragraphs.
2.2
NSD Process KPN BM
The current execution process of NSDs at KPN BM is called Project Admittance Committee Process, in short PAC Process. The process provides structure and sequence by means of phases (arrows) and gates (triangles). The description of the process is not detailed, and different versions were found at KPN BM. The most recent version of the process is updated in 2007. After interviewing and checking documentation, it became clear that the execution of the PAC Process is not exactly similar to the formal PAC Process. Figure 2.1 shows the formal process as documented at KPN BM.
Some interviewees had never heard of the PAC Process, others heard of it but never used it. A few interviewees used the process as a guideline, and from interviews can be concluded that the non-users do follow a certain process but the overall execution of projects is not matching the PAC Process. Just before Decision to go Public (DP), or even during DP, Market Intelligence (department responsible for customer, trends, and competitor research) sometimes gets involved via Marketing in order to do research. This does not happen on a structural basis, and research outcomes are not always determining the Go/ No Go to the Realisation phase. Figure 2.2 displays the current execution of the PAC Process at KPN BM.
2.3
NSD Projects KPN BM
The projects as introduced in the first paragraph of this chapter were analysed on documentation, interviews, and observations. All projects will be discussed individually, and the most important outcomes will be presented below. Cause and effect diagrams will also be displayed per project. In the next paragraphs the overall diagram and final validation of the research problem will be outlined.
1 HD Voice
HD (High Definition) Voice is a functional innovation. HD Voice is an innovation on the mobile network which realizes an increase of the quality of the conversation. This NSD Project started technology driven, initiated by Product House („building‟ department).
The Marketing department was not involved during the first steps of the PAC Process, and therefore Marketing was not aware of the exact execution of the process. The project started technology driven, and continued technology driven; customer research did not take place, neither in the early phases nor in later phases of the PAC Process.
“This project concerns a change in the mobile network, this cannot be tested by customers. No customer insight is needed in this PAC Process, maybe later. Therefore, Marketing is not involved now.” (Shanti Presentacion, Marketing Manager – Proposition Management).
Figure 2.1 Overview PAC Process KPN BM (KPN Intranet 2011, most recent update: 2007)
The IO stage (part Initiation Phase) was dismissed, and therefore no customer insights were gained. According to the interviewees, this increased the risk of a mismatch between the offer and demand. Marketing will be involved in the later stages of the process.
The new technology was noted by Product House, and Initiation, Analysis and Design were executed without cooperation with the Marketing and Market Intelligence departments. Phases were not executed via the formal PAC Process, but after interviewing it became clear that the execution could be compared with the three phases of the PAC Process. Because of the probable late involvement of Marketing and Market Intelligence, the use of customer insights will be lacking. Adjustments to or killing the project at that late point in the process is expected to be difficult. Besides that, extensive gaining and use of customer insights will be more difficult because of the limited time left till launch. The risk of a too optimistic Business Case, written from a technological point of view, is therefore high. HD Voice is not launched yet, and (sales) expectations differ. One can say that skipping research, and therefore making use of customer insights, is a missed chance to increase the chance on success on sales.
Lack of use of Structure by Product House
No/ late involvement Marketing
Lack of use of Customer Insights
High Risk Non-realistic Business Case No/ late involvement
Market Intelligence
Figure 2.3 Cause and Effect Diagram HD Voice
2 MKB Werkplek
MKB Werkplek offers SMEs a complete package of online secured services: an online secured workplace, wherever and whenever accessible via the internet by making use of the so called cloud computing technique. KPN BM Business Partners are selected as point of sales. MKB Werkplek offers KPN BM customers a full package of services for a fixed amount of money per month.
There were two rounds of the NSD Process of MKB Werkplek. First, the IO stage of the PAC Process was skipped; the project started technology driven and Product House started the process. In this round Marketing, and therefore the customer, was not involved in the PAC Process and that probably caused a mismatch between the offered new service and the needs and wishes of the SMEs.
“The first round was basically „thinking for the customer‟, that was the way of bringing the outside-in. The second round was „thinking from the perspective of the customer by hearing them‟. The goal is to solve a problem, not guessing what might be a problem and have a solution for that.” (Bert Boerma, Manager – Customer Management – Market Intelligence).
KPN BM took a phew steps back in the process, and via both qualitative as well as quantitative research KPN BM uncovered customer demands. Marketing and Market Intelligence developed and validated a concept by generating and using customer insights. Different SMEs were involved in the research.
The diagram shows the failure steps of the first round as well as the steps taken in the second round. By analysing the MKB Werkplek Project, one can say that gaining customer insights by doing customer research seems to be an important factor for generating sales at the end. Interviewees seemed to be convinced that customer insights need to be clear in order to write a realistic Business Case and match the offered service with the demand of the SMEs. Or, in other words, dismissing customer insights in the PAC Process, and therefore handle without customer insights, appears to be an important cause of failure.
Besides that, the structure of the process seems to play an important role in the development. First, no formal structure was followed. This caused chaos with regard to involvement of departments and preparation of the Business Case. Through cooperation between Marketing, Market Intelligence, and Product House, KPN BM came up with a second version of the service which matches offer and demand looking at the sales numbers.
MKB Werkplek was first launched with minimal integration of customer insights. The second round was executed via the PAC Process, and the voice of the customer was integrated. The MKB Werkplek PAC Process execution strongly suggest that cooperation, structure, and customer research play an important role in the NSD Process.
Use of Structure by Product House Involvement Marketing Use of Customer Insights Realistic Business Case Expected Sales Numbers Involvement Market Intelligence
Match offer and demand
Figure 2.4 Cause and Effect Diagram MKB Werkplek
3 Computerhulp
Computerhulp is a paid service for SMEs, 1-20 workplaces. KPN BM offers its customers help from a distance to find solutions for problems with computers, software and/or peripherals. The ICT support can be offered by KPN BM itself or by companies that have a contract with KPN BM (outsourcing).
This project also started technology driven, and Product House skipped the IO stage by not cooperating with Marketing and Market Intelligence. Later in the PAC Process, Computerhulp was tested qualitatively but – due to time pressure and (therefore) poorly asked questions – the test results were not really useful and therefore positively interpreted towards the Business Case. During the project, KPN BM convinced itself that Computerhulp was what the customer wanted. The statement „A SME wants to do business, and does not want to worry about maintenance or problems regarding computers, software, and hardware.‟ is probably true, but what does this mean regarding a service KPN BM could offer? KPN BM came with a „solution‟ for SMEs:
“After launching, it became clear that the interpretation of „Customers want to pay for help‟ was not the same as „Customers will subscribe for Computerhulp‟.” (Bert Boerma, Manager – Customer Management – Market Intelligence)
Marketing realized that KPN BM needed to either adapt or kill the project, but because of the large amount of money and time already spent on the project it was decided that there was no way back. Besides that, the marketing campaign was already launched.
The time available and the quality of the customer research played an important role in gaining and using customer insights, in negative sense. It turned out that SMEs did have problems that could be solved by Computerhulp but these problems were solved in other ways (e.g. ad hoc help from a local company or a „neighbour‟). Subscription was not attractive for most SMEs, there was no demand for subscription to Computerhulp.
The main driver of this project were the financials, not the customer. When looking at the different steps taken, one can say the project passed the PAC Process but due to time pressure, poor customer research, and financial drivers, it failed on sales (<1000 subscriptions). Both structure of the process and the use of customer insights were lacking. This project suggests that a lack of thinking from the outside-in
Initiation Product House Late involvement Marketing Late involvement Market Intelligence
Poor collection and interpretation of Customer Insights
Non-realistic Business Case
Sales failure
Figure 2.5 Cause and Effect Diagram Computerhulp
4 VAMO
The NSD Project VAMO is about integrating fixed (VAst) and mobile (MObiel) telephony with regard to the price plan, call solutions, and customer service (after sales) offering. New technologies make it possible to increasingly integrate fixed and mobile telephony, which can offer benefits for KPN BM as well as its customers. The benefits for the customers of KPN BM were guessed but were not clear. Therefore, the PAC Process started with a new technology but with immediate execution of the IO stage to see if KPN BM should develop this new technology into a new service. By taking these steps, the formal PAC Process was followed.
Extensive customer research – interviews, observations, and concept testing, in cooperation with Market Intelligence – collected customer insights, and integration of customer insights became part of the „to-do‟ lists at Marketing as well as Product House. Extensive and profound research showed which concepts were worth further execution. Insights showed that KPN BM needed to combine fixed and mobile in order to meet customer demand. The outcomes were reported in the Business Requirements Document (demand, wish, priority, and phasing), and development took place in a multidisciplinary team: Marketing, Product House, and Market Intelligence. Interesting fact of this research is that KPN BM made distinctions between different roles within the SME; board/ management, ICT manager, and user. Similar and different questions were asked to different roles in order to come up with a representative outcome.
“The idea came from Product House. I immediately started cooperation with them, and with Market Intelligence. The customer got involved from the beginning, I did not want to „guess‟ if I was doing the right thing, I wanted to make sure the NSD was what the customer wants.” (Arnoud van Dorth, Marketing Manager – Proposition Management)
VAMO was managed by the commercial team. At the start of the project, KPN BM was aware of the significant investment – time, money, and other resources – and therefore it forced itself to develop the service by following a clear structure and integrating customer insights as soon and as much as possible in order to adapt or kill when necessary. The concept was chosen based on three predefined criteria: customer relevance, strategic distinction, and execution possibility. Because of the recent launch, long term results cannot be given yet. Because of the execution of the PAC Process, and further gaining and use of customer insights during the process, KPN BM stated that the offered service matches the demanded service. Besides this, the first sales results are positive and therefore it is likely that VAMO will be a success in terms of sales numbers.
Use of Structure by Product House
Involvement Marketing Involvement Market
Intelligence
Early and rich Collection of Customer Insights Distinction SME Roles
Realistic Business Case
Positive Initial Sales Numbers
5 ZBIM
ZBIM; the integration of Business (Zakelijk) calling (Bellen), internet (Internet), and Mobile telephony (Mobiel). The three main benefits of ZBIM for customers: 6% decrease of billing costs, increased quality of the service level (after sales) by having one service desk instead of three, and decreased complexity by offering one invoice instead of three separate invoices. ZBIM is an important new service for KPN BM because many customers have two subscriptions at KPN BM, and ZBIM will encourage them to switch the third service from a competitor to KPN BM in order to benefit.
Like VAMO, the PAC Process of ZBIM started technology driven with the immediate execution of the PAC Process; execution of the Initiation Phase by Product House as well as Marketing and Market Intelligence. Customer insights were collected through interviews, observations, and concept testing, and integration of customer insights became part of the „to-do‟ lists at Marketing as well as Product House. Extensive and profound research showed that KPN BM needed to combine discount, service desks, and invoices in order to meet customer demand. The outcomes were reported in the Business Requirements Document (demand, wish, priority, and phasing), and development took place in a multidisciplinary team: Marketing, Product House, and Market Intelligence.
“The customer got involved from the beginning, since Marketing more or less started the PAC Process. Product House involved Marketing right away; Marketing cannot develop a service without Product House and its technical skills and Product House is depending on Marketing and Market Intelligence for matching the offer and demand. Therefore, besides inventorying of the technical possibilities, we also started to gather customer insights. So, we checked if we could offer our idea – the technical side, and we checked if we could meet the demands of our customer with this idea.” (Arnoud van Dorth, Marketing Manager – Proposition Management)
ZBIM was managed by the commercial team. All kinds of combinations of cross-selling were tested, as well as pricing and marketing. One can say that the success of this project can be assigned to the extensive use of customer insights in the PAC Process (and) by following the structure of the PAC Process. The offered service matches the demanded service, and therefore sales numbers are positive. Besides that, resources were spent in a more optimal way by following a process, which also positively influenced the time to market. Use of Structure by Product House Involvement Marketing Involvement Market Intelligence
Early and rich Collection of Customer Insights
Realistic Business Case
Expected Sales Numbers
Figure 2.7 Cause and Effect Diagram ZBIM
2.4
Cause and Effect Diagram
Most analysed NSD Projects at KPN BM started technology push instead of market pull, and a clear structure of the process and gaining and using customer insights later in the process seem to be lacking. Some projects were even launched without customer research, and after market launch KPN BM often found out that the offered service did not match the customer demand. Adapting or even killing the project was not possible or desirable because of the large amount of resources, especially money and time, spent on the project, and sometimes the marketing campaign was already planned or (partly) executed. This leads to higher risks of failure of a NSD Project. Besides that, adaption is hard because the lack of structure does make it difficult to decide which phases or stages need to be repeated. Not only customer insights are important, sequence and completeness of phases of the NSD Project appear to be important aspects of the process too.
Gaining and using customer insights in order to match the offer and demand – and thus increase chance of sales success – starts at the Initiation phase. Based on the cases analysed in this research, it is likely that during the start of a project, but also during later phases in the PAC Process, it is important to monitor and use customer insights and to be able to kill or adapt the service. Customer insights seem enable companies to measure customer satisfaction and develop new services that better meet customer needs. This leads to an increased customer value which ultimately increases sales. At the VAMO project, KPN BM made a distinction between different roles within the SMEs in order to get specific information from each role. This distinction gave interesting and useful information for further development of the service but the distinction is not made regularly and is therefore worth further research.
After analysing the selected projects the following overall diagram – cross analysis is made:
Figure 2.8 Overall Cause and Effect Diagram
The Overall Cause and Effect Diagram shows the relationship between the characteristics of the NSD Process, the use of customer insights, and sales; two factors that can make service developments more successful to increase sales numbers. The characteristics of the NSD Process are:
(1) Sequence of Phases (2) Completeness of Phases (3) Division of Roles
In this research, the use of customer insights is defined as “Those processes, deeds and (inter)actions where a service provider collects and integrates insights of current (or potential) customers at the program and/or project level of service development, to anticipate customers‟ (latent) needs and develop new services accordingly.”. It is about collecting and integrating customer insights during the NSD Projects, which can be done in different ways. The definition is derived from literature, and will be further explained in Chapter 3.
Researchers have found that gaining and using customer insights is an important success factor for new services (e.g. de Brentani, 1995; de Brentani & Cooper, 1992; Edgett, 1994, in: Alam, 2002). NSD relies on the complex task of understanding and anticipating on latent customer needs (Matthing et al., 2004); it is a vital part of the NSD Process (e.g. Zomerdijk & Voss, 2010; Alam & Perry, 2002; Matthing et al., 2004). The lack of a clear NSD Process and customer input seem to lead to a higher risk of sales failure at KPN BM because without following the whole NSD Process and therefore not integrating the voice of the customer it cannot be stated that the offered service meets the demand of the customers.
Integrating customer insights does not mean that projects cannot be driven by technology (e.g. new techniques, new delivery possibilities). In the complex market of KPN BM, it is likely to let Product House come up with ideas a customer could never think of. Besides that, NSDs are initiated because of market developments (e.g. introductions or adaptions competitors, market share, regulators EU and OPTA), and strategy (portfolio management). Still, customer insights need to be integrated (early) in the PAC Process.
Characteristics NSD Process Use of Customer Insights Sales + + +
By structural integration, resources can be spend in a more optimal way and risk of sales failure can be reduced.
From an internal perspective, according to Storey & Hull (2010), the use of multidisciplinary teams in NSD makes the process more efficient. At KPN BM, Marketing is responsible for initiating customer research, and therefore it is important to cooperate with Product House from the beginning and stay cooperative from start till launch on a continuous base; division of roles needs to be clear during the execution of the NSD Process. By structuralizing and formalizing the NSD Process and dividing roles of departments, resources can be used more efficiently. A complete process, including the use of customer insights, will likely affect sales numbers positively.
2.5
Research question
By analysing the NSD Projects of KPN BM, causes of sales failure are made plausible and KPN BM‟s problem is validated. The five analysed NSD Projects of KPN BM partly underlined the presumption that was made by KPN BM regarding the use of customer insights. In previous paragraphs, it became clear that it is not only about the use of customer insights what causes the problem at KPN BM. The NSD Process and its characteristics sequence, completeness and role division play an important role as well. The objective of this research is therefore formulated as follows: Advise KPN BM in order to solve its problem. More specific: Advise KPN BM in the redesign of the NSD Process regarding its characteristics and the use of customer insights in order to increase sales of NSD Projects.
In order to meet the objective, recommendations need to be given on the design of the NSD Process. Therefore, the research question is defined as: What should the redesign of the NSD Process of KPN BM look like?
KPN BM gave the restriction the research project should be finished by January 2012. Besides this, the redesign should not have high initial costs. Not only these restrictions from KPN BM determine the redesign. To come up with a redesign of the NSD Process of KPN BM, all requirements and restrictions need to be determined. Besides from KPN BM, these design specifications come from a review of existing design knowledge. Therefore, the next chapter will give a literature review about NSD, its characteristics and the use of customer insights in the NSD Process. Various options will be presented to gain insight about the possible designs for KPN BM. Since KPN BM is operating in a B2B environment and this research focuses on the SME customer, the literature chapter will also mention differences to take into account when integrating SMEs.
After the literature review, redesign Specifications will be outlined in Chapter 4 in order to match the redesign with the requirements given by literature and KPN BM. In Chapter 5 the final redesign will be presented, both general as well as in detail. Also implementation by KPN BM will be discussed. Finally, Chapter 6 will give conclusions and the scientific contribution of this research. The chapter will finish by stating limitations of this research and giving recommendations to further research.
3
New Service Development in Literature
To gain insight in the characteristics of the NSD Process and possible methods to use customer insights, literature was consulted. An extensive literature search – in the databases Business Elite Source, EBSCO HOST, and Emerald – was done on NSD and customer insights, as well as related notions and research areas (see Appendix IV). Articles were selected based on two criteria: the main focus of the article should be activities or processes of NSD, its characteristics, the use of customer insights, or market research techniques that support learning from and with customers.
3.1
New Service Development
As mentioned before, KPN mainly offers services to its customers. Products are accompanying the services of KPN BM, and therefore this paragraph will focus on the literature of NSD. Services are different from tangible products because services are characterized by intangibility, heterogeneity, perishability, and inseparability (Alam, 2002; Lovelock, 1983; Shostack, 1977; Thomas, 1978, in: Alam, 2002). Intangibility tends to be the most common feature, and makes it hard for customers to know in advance what they will get and may expect (Hipp & Grupp, 2005).
In general, the new product development (NPD) model is often used as NSD model. However, looking at the characteristics, services do differ from products and therefore it is worth looking at the differences in the process of development. New services can have multiple dimensions (den Hertog, 2000); Service Concept, Client Interface, Service Delivery System, and Technological Options (Figure 3.1). NSD often involves changes in more than one dimension, not only the service concept itself (den Hertog, 2000; Vermeulen, 2002; de Jong et al., 2003).
3.2
Sequence and Completeness of Phases
From idea generation till market launch; NPD is the process of developing a new product or service. Cooper‟s Stage-Gate model is probably one of the most well-known NPD models. The model outlines the NPD to be more effective and efficient by dividing the process into stages. All stages entail prescribed, multifunctional, and subsequent activities (Cooper, 1990). An overview of different phases of the NSD and NPD process mentioned by different authors:
Five phases are crucial, and mentioned by all authors named in Table 3.1. These Development Phases are of great importance in the NSD Process, and should be followed during the development:
(1) Idea Generation, Screening and Concept Development (2) Business Analysis
(3) Service Design (4) Testing and Pilot Run (5) Commercialization
Figure 3.2 is derived from Johnson et al. (2000, in: Trott, 2011) and adapted by making use of Table 3.1. Preceding phases and stages are the input for following phases and stages; sequence and completeness plays an important role in the NSD Process. Besides that, the NSD Process Cycle underlines the importance of the factors team, tools, and culture.
Table 3.1 Overview of phases NSD/NPD Process
Alam (2002) Cooper & Kleinschmidt (1986)
Brockhoff (1998) Johnson et al. (2000)
Rohrbeck et al. (2010)
Kim et al. (2008) Jones (1995)
1 Strategic Planning 1 Initial Screening 1 Strategy
devel-opment
2 Idea Generation 2 Preliminary mar-ket assessment 1 Idea Generation 1 Idea Generation & Screening 1 Idea Generation 1 Idea Generation 2 Idea Generation 3 Preliminary technical assessment 3 Idea Screening 4 Detailed Market
Study/ Research
2 Concept Development
2 Selection 3 Screening & Evaluation 4 Business Analysis 5 Business/ Financial Analysis 2 Business Analysis 4 Business analysis 5 Formation of Cross Functional Team
6 Service Design & Process/System design 6 Product Development 3 Core concept & design 3 Design & Testing 3 Execution phase 2 Development & testing 5 Development 7 Personnel Training 8 Service Testing & Pilot Run
7 In-house Product Testing 4 Concept evaluation 6 Testing 8 Customer Tests of Product
9 Test Marketing 9 Test Market/ Trial
Sell 5 Pre-announce-ment 10 Trial Production 11 Pre-commerciali-zation Business Analysis 12 Production Start-up 10 Commercializa-tion
13 Market launch 6 Market launch 4 Full launch 4 Commercializa-tion 3 Launch & Profit Management 7 Commerciali-zation
Formalizing the NSD Process provides guidelines which stimulate effectiveness and efficiency. According to Fähnrich & Spath (2006), formalization of the process does not imply constraints. As current and future market opportunities continuously ask for new services, a company could benefit from a planned and formal process of NSD in which the use of customer insights is sustainable and the scarce time and resources are used optimally.
Not all stages of the NSD Process are always critical; it depends on the specific type of service innovation. Johnson et al. (2000) indicate that the presented NSD Process accounts for radical innovations. For incremental NSDs, the process “becomes the architecture for innovation”. Radical or technology driven innovations require more competence during the first and second phase of the NSD Process. For incremental innovations, the last three phases of the NSD Process require greater competence (Johnson et al., 2000). The types of innovations can be described as follows:
(1) Incremental. Innovations where the characteristics of services are added or changed without making essential changes to the service.
(2) Radical. This type can be divided into two categories: introduction of a the-market or new-to-the-industry service, and a significant change in service offering or mode of delivery (Wheelwright and Clark, 1992).
3.3
Use of Customer Insights
Customers evaluate service quality by comparing the perceived service performance with the expected service performance (Parasuraman et al., 1988). In their SERVQUAL model, Parasuraman et al. (1988) describe four gaps. One of them is the gap between the expectations of the customer and the perception of the customer expectations by the service provider. NSD relies on the complex task of understanding and anticipating latent customer needs (Matthing et al., 2004); it is a vital part of the NSD Process (e.g.
and rapidly changing markets, companies have to recognize the need to develop new service offerings that are timely and responsive to customer needs (Alam, 2002). According to Moeller (2008), the use of customer insights is the incorporation of resources from customers into the organization processes. The value of the involvement is partly determined by the degree of involvement and the customers‟ motivation (Enkel et al., 2005). From an internal perspective, the use of multidisciplinary teams in NSD makes the process more efficient (Storey & Hull, 2010).
Benefits
From a NSD perspective, customers become not only a necessity, but also an opportunity (Matthing et al., 2004). Many studies have concluded that to develop successful new services, an in-depth understanding of user needs must be acquired (e.g. Brown & Eisenhardt, 1995; Craig & Hart, 1992; Montoya-Weiss & Calantone, 1994, in: Alam, 2002), which requires using customer insights in the development process. Similarly, researchers have found that integrating customer insights is an important success factor for new services as well because the gap between the service delivered and the customer expectation can be minimized, which results in maximization of customer satisfaction and sales (e.g. de Brentani, 1995; de Brentani & Cooper, 1992; Edgett, 1994, in: Alam, 2002).
Several authors (e.g. Alam, 2002; Enkel et al., 2005; Jansen & Dankbaar, 2008; Sandmeier et al., 2010; Svendsen et al., 2011; Brandt, 2008) present the following general benefits of integrating the customer into the NSD Process:
(1) Superior and differentiated service. By using customer insights, it is possible to develop a differentiated new service with unique benefits, in line with customer preferences, that provide more value and solve the customer problems. CI also helps to reduce the customer‟s uncertainty about preferences and insecurity about the ability of the producer to meet specific needs.
(2) Rapid diffusion. CI in the NSD Process helps in rapid diffusion of the new service. This accelerates the market acceptance and increases the commercial potential.
(3) Improved public relations. The purpose of user involvement is to improve public relations before the introduction of a new service. This generally helps in building quick support for a new service and increases purchase intentions, willingness-to-pay, and customers‟ intention to recommend to others. (4) Long-term relationships. CI in the NSD Process may improve the producer-user relationships, and
should facilitate long-term rebuys. Integrating the customer can make it less attractive for customers to switch to another supplier.
(5) Reduced cycle time. By making use of customer insights, the overall new service development process can be stimulated. This may result in cycle time reduction and development with more precision in resource spending.
(6) User education. With user involvement, the users can be easily educated about the use, attributes, and specifications of a new service.
Risks
NSD is often difficult because the „need – what does the customer want‟ resides with the customer, and the „solution – how to satisfy these needs‟ lies with the company. Linking the need and solution can be both costly and lengthy (Kim et al., 2008). Integrating customer insights into the NSD Process has challenges. According to Hoyer et al. (2010), one of the major challenges is the diminished control over strategic management and planning. Next to decreasing control, the empowerment of customers can increase complexity of managing objectives and interests of diverse stakeholders, e.g. employees, shareholders and integrated customers.
The disadvantages of customer integration related to uncertainty concern potential problems in internal barriers to acceptance and conflict during interactions, and in identifying suitable customers (Rohrbeck et
process might increase project uncertainty, whereby a need for further control and evaluation is needed. This is further complicated by the fact that customers may suddenly withdraw. In addition, customers often need additional knowledge about the product and technology in question, and therefore a need for customer training may arise. The main challenges in the role „customer as user‟ lie in ensuring the right mechanisms to structure and channel customer input as well as to involve different customers to ensure a broad representation.
According to Edvardsson & Olsson (1996), customer insights should be a central point of departure for all service development. It is important to understand and respect the needs and act on this. Placing the customer in the centre does not mean “(…) being governed in all respects by the customer and what he says.” or “(…) follow him slavishly.” (Edvardsson & Olsson, 1996). Correspondence or agreement between offer and needs is essential, also fit in the service portfolio of the service provider itself is important. Matthing et al. (2004) define customer integration (CI) as “The processes, deeds and interactions where a service provider collaborates with current (or potential) customers to learn about the market and alter organizational behaviour.”. Integrating customers in NSD is defined as “Those processes, deeds and interactions where a service provider collaborates with current (or potential) customers at the program and/ or project level of service development, to anticipate customers‟ latent needs and develop new services accordingly.”. Besides Matthing et al. (2004), also Enkel et al. (2005) state that customers have trouble imagining and giving feedback about something they have not experienced. Latent and unarticulated needs cannot be accessed, understood, and met by only using surveys and interviews. Latent needs can be referred to as the services the customers need or value, but “have never experienced or would never think to request” (Senge, 1990 in: Matthing et al., 2004).
In this research, as stated in Chapter 2, the use of customer insights is defined as “Those processes, deeds and (inter)actions where a service provider collects and integrates insights of current (or potential) customers at the program and/or project level of service development, to anticipate customers‟ (latent) needs and develop new services accordingly.”. It is about collecting and integrating customer insights during the NSD Projects, which can be done in different ways. Selection of appropriate customers is essential and establishing ties to actually make customer insights relevant is important.
As mentioned before, KPN BM wants to involve SME customers in its NSD Process. To be able to select the appropriate information source, one needs to define the customer in a B2B organization. So far, specific B2B customers are not mentioned in literature. The next paragraphs will give a review of the use of customer insights in the NSD Process as well as the B2B environment.
3.4
Use of Customer Insights in NSD
Research of Johnson et al. (2000) has concluded that the development of new services is a major competitive factor for the service industry. A distinct way to gain sustainable competitive advantage is to assure that these new services have a greater customer value than the offerings of the competitors (Grönroos, 2000). This greater customer value can be achieved by developing new services that are more responsive to customer needs. By integrating customer insights into the development process, organizations can discover customer value: customer satisfaction, which can be defined as the customer's feeling regarding the gap between his expectations towards a company or service and the perceived performance of the company or service. Martin & Horne (1995) suggested that by increasing direct customer participation in the development process and using customer information at specific stages, the potential of success of a newly developed service will likely increase.
to involve customers in their delivery, and the purchase of services tends to involve a longer commitment and therefore a more intimate relationship with customers. Alam (2002) therefore states, that integrating the customer plays a more important role in service organizations that in tangible product organizations. As mentioned before, there are five important phases in the NSD Process. From Idea Generation till Commercialization, in all phases it is important to integrate customer insights because it will have positive influence on the new service (Alam & Perry, 2002). In this paragraph the intensity of integrating and the ways of integrating will be discussed.
Alam (2002) states that three phases are more important than other stages; Idea Generation, Service Design, and Testing and Pilot Run. The integration of customer insights is more intense during the initial (Idea Generation and Screening) and later phases (Design, Testing, and Commercialization) of the NSD Process. Alam describes the intensity as a continuum, where passive participation is the least intense, and representation is extreme intense. Four levels of intensity are distinguished:
(1) Passive acquisition of input. Users take the initiative to provide input into the NSD Process. The managers acquire input passively, and the intensity of user involvement is considerably low.
(2) Information and feedback on specific issues. The service developers may approach major service users to obtain information and feedback on specific issues at various phases of the NSD Process. The intensity of involvement is somewhat high.
(3) Extensive consultation with users. The service producers take the initiative, and invite user input by means of a planned process governed by predetermined objectives; detailed customer interviews, focus group research, and group discussions. The intensity of involvement is relatively high.
(4) Representation. Consumers are invited to join a NSD team, where they contribute to the specific NSD phases in their capacity as a team member. The intensity of involvement is considered to be extremely high.
Besides intensity, several modes of integration are mentioned by Alam (2002). Also Cooper & Dreher (2010) present different methods to integrate insights of the customer, both market intelligence as well as customer involvement. The following methods are most common:
(1) In-depth interviews. Face-to-face interviews to gather customer input on various aspects of the new services to be developed: users‟ needs, wants, preferences, likes and dislikes, gaps in the market, competitors‟ offerings, desired improvement in the service delivery process, timeliness of the service delivery, comments on the marketing mixes, and service acceptance criteria.
(2) User visit and meetings. Invite customers to attend several service development team meetings to provide input on various aspects of the development process.
(3) Brainstorming. Group creativity techniques that were designed to enable people working in groups to arrive at creative ideas or solutions.
(4) Users‟ observation and feedback/ „camping out‟. Customers are asked to observe and comment on several NSD activities: service delivery process, testing of service delivery process, and personnel training. Besides customers observing activities it also includes observation of customers, and watching and probing as they (mis)use services.
(5) Focus groups. The service producers conducted discussions with groups of invited users on several issues related to the development process; identify needs, wants, problems and suggestions for new services.
(6) Lead-user analysis. Assembling a group of innovative customers, who are ahead of the wave, to identify problems and potential solutions to uncover the next new service.
(7) Customer advisory board/ panel. Identify problems and what new services are needed.
(8) Community of enthusiasts. Forming of a community with enthusiastic customers who discuss the category, offline as well as online.
According to Kaulio (1998) and Janssen & Dankbaar (2008), the issue of selecting techniques for integrating and using customer insights in NSD is not about selecting a single technique, but about designing a system of techniques linked together in an overall process in service development. Therefore, the five most important phases, the intensity, the modes of involvement, and the involved departments are presented in Table 3.2.
Table 3.2 Overview Use of Customer Insights in NSD
Adapted from Alam, 2002; Alam & Perry, 2002; Kim et al., 2008; Alam, 2006; Nambisan, 2002; Rohrbeck et al., 2010; Brockhoff, 1998.
Development Phase Activity Performed by the Producers Activity Performed by the Customer Involved 1 Idea Generation, Screening and Concept Development Customer as resource Customer as co-creator
Internal and external search for ideas. Probe customers‟ needs, wants, and preferences and their choice criteria, likes, and dislikes; seek competitive product ratings.
Screening; attribute analysis; gather
customers‟ problems and their solutions; elimination of weak concepts by analysing how these meet users‟ needs; assess customers‟ purchase intent; look for patent legal and regulatory issues.
State needs, problems, and their solution, suggestions, complaints; criticize existing service; identify gaps in the market; provide a wish list (service requirements); state new service adoption criteria.
Suggest desired features, benefits, and attributes; provide reactions to the concept; liking, preference, and purchase intent of all the concepts. Identification of concepts. Marketing Research & Development 2 Business Analysis Customer as resource
Economic analysis to justify the project, that is, payback analysis and net present value; market assessment, profitability analysis; drafting of budget for each concept;
commitment of resources by top
management; detailed competitive analysis.
Suggest rough guide to sales and market size; Help the producer in go/no-go decision. Limited feedback on financial data, including profitability of the concepts, competitors‟ data. Research & Development Marketing 3 Service Design Customer as co-creator
Combine the service attributes identified earlier with their delivery process, including service delivery personnel; map this process jointly with the users; develop documentation and final service design blueprinting; find out service delivery time; install, refine, and debug the service delivery mechanism. Train the service delivery workforce; prepare
them for encounters; manners and
attentiveness are key criteria; ensure consistent service quality.
Participation in development. Review and jointly develop the blueprints; suggest improvements by identifying fail points; observe the service delivery trial by the firm personnel. Compare their wish list with the proposed blueprints of the service.
Observe and participate in mock service delivery process; suggest improvements.
Research & Development Marketing
4 Testing and Pilot Run
Customer as user
Test the blueprint; implement design change and refinements; test to prove the service under real-life conditions; determine users‟ acceptance of the service.
Develop marketing plan and test with customer; examine the saleability of the new service; examine the marketing mix options in different markets; limited rollout in the selected market.
„Prototype‟ testing and feedback
information: Participate in a simulated service delivery processes; suggest final improvements and design change.
Comments and feedback on various aspects of the marketing plan; detail comments about their satisfaction with marketing mixes; suggest desired improvements.
Marketing Research & Development
5 Commercialization
Customer as user
Plan promotional campaign; appoint
distributors and brokers; roll out in the market; look for potholes; modify according to the market conditions.
Adopt the service as a trial; feedback about overall performance of the service along with desired improvements, if any; word-of-mouth communications to other potential users.
Marketing Research &
Development
As stated before, integrating insights of customers is important in all phases of the NSD Process. Even though, the first phase – Idea Generation, Screening and Concept Development – is found to be the most important (Alam & Perry, 2002). The so-called innovation front end or definition phase, is the best possibility to utilize customer contributions (Sandmeier et al., 2010). Lynn et al. (1996, in: Sandmeier et al., 2010) demonstrated that the realization of a process which is able to continually consider new customer input requires probing, testing, and learning. This implies a “continuous interplay between developers and customers of acquiring, disseminating, utilizing, and re-acquiring new customer contributions.”.
The study of Martin Jr. & Horne (1995) states the more direct customer participation in general, and the more use of customer information (market intelligence) in specific phases, the more successful NSD is. What can contribute to the success is the internal involvement. Integration of Customer Contact personnel plays an important role when it comes to gaining essential customer information for development, screening, and commercialization of an NSD. Useful information can be brought outside-in via the Customer Contact personnel. They can get impressions of customer reaction, both verbally as well as non-verbally, can identify (dis)satisfaction and experience with their services, needs, unsolicited solutions, and provide the organization with other customer information by listening to and observing the customer. Also Janssen & Dankbaar (2008) state, that to improve the utility of customers‟ contributions, multiple departments – especially Marketing and R&D – have to interact with both the customer as well as each other. In other words, multiple departments and the customer should be part of the NSD Process. Alam & Perry (2002) argue that in general it is necessary to have long-term relationships with customers, involving them in the decision making process. This is supported by Smedlund (2008, in: Alam & Perry, 2002), who states that to involve customers in innovations a close collaboration process is needed. Common goals are needed. Smedlund concludes that issues of relationships, trust, common goals, expertise, engagement, and motivation seem to be of great importance but of varying degrees across the different customer roles and the service provider involved.
3.5
Business to Business Environment
There are many challenges in relation to the use of customer insights in NSD (Alam & Perry, 2002; Nambisan, 2002). Nambisan (2002) argues that the main challenges and conditions for using insights, is first of all to get in touch with customers. Selection of appropriate customers is essential and establishing ties to actually make customer insights relevant is important. In a B2B organization, the customer (purchaser) is not necessarily the consumer (user), or at least not the only consumer. Which role has to be integrated in the NSD Process: the purchaser, the user, or both? Does the new service needs to meet the purchaser‟s wishes and demands in order to sell the service or does the new service needs to meet the user‟s requirements because it is the actual user of the service? Or is distinction of roles unnecessary? As mentioned, the context of this research is a B2B environment with B2B customers as end user of a service. In a B2C environment, it is likely that the user or consumer is the customer. In a B2B setting, the purchasing process is more professional and rational, and rather complex (Fill & Fill, 2006; de Pelsmacker et al., 2007). As said, the customer in a B2B company will likely not be the (only) consumer. Therefore, it is important to look at the Decision Making Unit (DMU) of an organization; persons that are involved and
(Brennan et al., 2011; Kotler et al., 2008). In general, there are five roles in the DMU: purchaser, user, influencer, deciders, and gatekeeper. In short, the process contains the following steps: the user starts the purchasing process, and helps to determine the requirements. Then the influencer provides the purchaser with information and the requirements to evaluate the alternatives, after which the purchaser selects a provider. The final decision is made by the decider. The gatekeeper makes sure that only relevant information is send from one role of the DMU to the other. Important is to talk about „roles‟ of the DMU; one person can fulfil more than one, or even all roles (Brennan et al., 2011; Kotler et al., 2008).
3.6
Business to Business Environment and NSD
The NSD literature reviewed in previous paragraphs, does not give an answer on questions which role to involve and when to involve the B2B customer; characteristics of B2B customers are not taken into account. It is likely that the different DMU roles play a role in the gaining and use of customer insights in a NSD Process, and there seems to be a gap in literature about the use of customer insights in the NSD Process in a B2B environment. Therefore, B2B literature was consulted to gain additional insight regarding differences and similarities between B2C and B2B customers.
When looking at different roles of the DMU in the NSD Process, one can say it is important to use insights of the user, purchaser, and decider. The gatekeeper is used for internal information gathering and selection, and therefore not useful to integrate into the NSD Process. The influencer is the one that provides the purchaser of information that comes from the user, and therefore, like the gatekeeper, mainly used for the internal process.
As mentioned before, the specific context of this research is SME customers; 5 – 49 employees. The DMU in SMEs concerns one or a few persons. When selecting a customer for a mode of integration and use of insights in the NSD Process, one should take into account the role(s) a specific person in the purchasing process within a SME has. The different roles can be integrated in different phases, in different ways as presented in the next paragraph.
3.7
Overview
The table below is designed to give an overview of the different phases, methods and DMU roles; the options of gaining customer insights according to literature. Each phase has its applicable methods, and each method has its possibilities to use insights of the different DMU roles. The column DMU Role represents the roles that can be involved in the specific phase.
