Interview: The ring of truth – value quantification in B2B services

In the second interview of this section, “The ring of truth – value quantifcation in B2B services,” Andreas Hinterhuber and Pascal Kemps discuss value quantifcation in complex B2B services. To start of, the importance of value quantifcation seems to grow with the importance of customers, to a point where it is factually required by strategic accounts. Second, and more counterintuitively, Kemps suggests: The fact that some customers treat suppliers transactionally does not imply that suppliers should not treat these customers strategically. Transactional customers – customers who bid out every contract – may enable suppliers to standardize their own internal processes or to accumulate valuable competencies and insights. Treating them transactionally or, worse, writing them of would mean, according to Kemps, cutting of proftable business. Next and again controversially, collaborative customer relationships where suppliers quantify value beyond price may yield process improvements that could mean that suppliers end up selling less. This ability to solve customer problems even at the expense of the supplier’s own, immediate, and certain sales forges customer relationships which are, truly, strategic. Next, Kemps warns against the folly of managing by KPIs. KPIs are typically related to business processes which have only a random ft with the few business outcomes customers ultimately want to achieve: improvements in proftability, customer satisfaction, or innovation, for example. Kemps suggests that the cultural alignment between traits of customers and traits of the account management team is the most important factor enabling value quantification and efective collaboration. So where should companies start that wish to become fully profcient in value quantifcation? Kemps ofers two pieces of advice: Number one, patience and perseverance – once the direction is clear, perseverance is required; number two, the relentless pursuit of diferentiation – the opportunities for joint value creation –is limited only by individual imagination. Finally, the ring of truth – value is a promise; results are all that matter to customers. Kemps suggests that presenting the value credibly in ways that customers can relate to and verify for themselves is fundamentally important in the context of value quantifcation. Companies that excel at quantifying value cut through the fog of vague data and promises. The ring of truth is thus the metaphor for the ability to summarize the fruits of much thought and labor briefy and clearly.