abstract

Business-to-business (B2B) professional service firms often develop highly customized offerings for their customers. Customizing B2B professional services is a knowledge intensive process that requires the coordinated efforts of individuals with specialized knowledge and skills. Drawing on customization and social capital theory, we develop and test an intellectual capital (IC) model of customizing B2B professional services that rests on two foundational premises. First, three different forms IC, that is, employees' knowledge of customers, employees' technical knowledge and abilities, and organizational creativity, make firms more effective at customizing B2B professional services. Second, internal social capital (ISC) is a precursor to the intellectual capital that enables firms to effectively produce customized B2B professional services. Analyses of data from key informants of 161 marketing research firms support our theses.

1. Introduction

Business-to-business (B2B) professional services are growing rapidly (La, Patterson, & Styles, 2009). Despite its growth, research on B2B professional services is limited. Extant research suggests that B2B professional services are characterized by complexity (de Brentani & Ragot, 1996), knowledge intensity (Wang & Ma, 2014), and the importance of specialized skills and knowledge (La et al., 2009), which has contributed to customization becoming central to value creation and a major concern of CEOs (BizEd, 2016; Chan, Yim, & Lam, 2010). Customized professional services (1) are highly tailored for one, specific customer, (2) involve many creative options, (3) address numerous individualized customer requirements, and (4) are produced in highly context-specific, environments (Burke, Rangaswamy, Wind, & Eliashberg, 1990). Many marketing research firms–the context of our study–have long produced customized marketing research offerings that are tailored to the specific knowledge needs of individual clients (Malhotra, 1996). However, no research specifically focuses on the customization of B2B professional services. Customizing B2B professional services involves braiding together many tasks that (1) are knowledge intensive, (2) require the coordinated efforts of individuals with specialized knowledge and skills, (3) are systemic (elements of the offerings depend on each other for development and performance), and (4) have emergent properties during development (unpredictable and unexpected events and interactions often occur). When B2B professional services firms produce high quality, customized offerings, such offerings can significantly impact the overall effectiveness and/or efficiency of the firms' customers. Consider, for example, marketing research firms. The client of a research firm may successfully develop, launch, and execute a marketing strategy when it is based on a well-done, customized, estimation study of a new product's market potential. In contrast, the client's marketing strategy may fail when it is based on a poorly-done study. Therefore, marketing research firms that are more effective in customizing market offerings to clients' specific needs may have marketplace positions of competitive advantage (Hunt, 2000; Hunt, Morgan, & Morgan, 1995.)