The drivers of customer attractiveness,supplier satisfaction and preferred customer status: A literature review

In this paper, we focus on the preferential treatment of buyers by their suppliers. As there is a lack of detailed information regarding the reasons that suppliers serve some buyers better than others, our research addresses a supplier's evaluation of customers and how this evaluation can be influenced by buyers. To give an overview of the drivers of preferential treatment by suppliers, the provided literature review covers three research fields that are considered crucial to this issue: (i) customer attractiveness, (ii) supplier satisfaction and (iii) preferred customer status. By integrating these research topics, we provide a state-of-the-art analysis and overview of the various drivers of preferential treatment, build a preliminary conceptual model and suggest several directions for future research. The identification of the drivers and the resulting conceptual framework can serve as a stepping stone for additional research in this new field.     

Customer attractiveness,supplier satisfaction and preferred customer status: Introduction,definitions and an overarching framework

Industrial markets are frequently characterized by an oligopolistic market structure. As a result, suppliers may become highly selective with respect to decisions that involve collaborating with certain customers. Buying firms must therefore be more attractive than their rivals to obtain opportunities to collaborate with these selective suppliers. This apparently counterintuitive inversion of the classical marketing approach (that is, relationships that involve buyers competing for suppliers rather than the other way round) constitutes the foundation of the special issue that is introduced in this paper. In this paper, we present key terms and propose a model of preferred customership that uses a social exchange perspective to link customer attractiveness, supplier satisfaction and preferred customer status. The papers that contribute to this special issue are introduced within the context of this framework. Finally, this paper concludes with suggestions for future research directions.     

How can business buyers attract sellers' resources?: Empirical evidence for preferred customer treatment from suppliers

This paper describes a study that investigates what makes a buyer attractive to a seller in a business-to-business buyer–seller relationship and encourages the seller to commit to and invest resources preferentially in the relationship. The study helps answer the question, “What is it that the buyer needs to do to create this attractiveness?” The perspective is somewhat unusual in the marketing literature for two reasons. Firstly, because it investigates how the supplier perspective of customer financial attractiveness affects the attitudes and actions of the supplier towards the buyer, rather than taking the buyer's perspective across the relationship. Secondly, the study has relationship attractiveness in terms of financial performance as an antecedent of its relationship constructs, whereas most relationship studies investigate performance as an outcome. The paper develops a model that proposes the seller's perception of customer financial attractiveness, seller satisfaction, and seller commitment as drivers of the seller's preferred customer treatment by allocation of resources to the relationship. The bases for the study's model are the resource-based view of the firm, the industrial marketing and purchasing (IMP) models, and related resource-focused theoretical streams. The study finds support for the model in the analysis of survey data.     

How business customers judge customer success management

In business-to-business markets, customer success management is gaining growing practical importance. The concept comprises customer-related activities that aim at monitoring, securing and enhancing customer success as well as the implementation of the corresponding organizational structures and processes within the supplier firm. In contrast to existing research, this article takes a customer perspective to customer success management and investigates how business customers judge respective supplier activities; first, to reveal the quality dimensions business customers apply when assessing suppliers' customer success management activities, and second, to investigate how the quality of suppliers' customer success management activities leads to business customers' perceived value. Addressing these questions, this research contributes to literature by exploring customer success management from a customer perspective. The findings elucidate that customers' perceived value in use does not simply develop over time. Rather, through the implementation of customer-related activities of customer success management, suppliers can actively influence customers' value-in-use experiences thus fostering customers' rebuy decisions. From managerial perspective, the findings support suppliers in successfully shape their customer-oriented customer success management activities as well as the necessary internal structures and processes.     

Basking in reflected glory: Using customer reference relationships to build reputation in industrial markets

Corporate reputation is an important intangible asset that enables firms to establish customer relationships. Customer relationships, specifically customer reference relationships, can in turn be utilized to build supplier reputation in industrial markets. The aim of this conceptual article is to analyze the combination of these two concepts. It lays the foundation for further investigations into the effectiveness of reference customer relationships in enhancing supplier reputation. By developing propositions on the determinants impacting effectiveness of reputation transfer between customer and supplier firm, implications for practice and research in business marketing and corporate reputation management are derived.     

Becoming a preferred customer one step at a time

A preferred customer is a buying organization who receives better treatment than other customers from a supplier, in terms of product quality and availability, support in the sourcing process, delivery or/and prices. The decision to become a preferred customer implies a continuous commitment by the purchaser to a complex, expensive and often uncertain process. It is important to use a strategic approach, as well as appropriate tactics. Based on well-known models on the development of buyer-supplier relationship, on customer portfolio analysis and on the emergent literature in customer attractiveness and preferred customer status, we suggest four steps to become – and remain – a preferred customer: initial attraction, performance, engagement and sustainability. The process takes the perspective of a buyer willing to obtain the preferential status and focuses on the strategies and tactics that could influence the supplier's decision of granting this status. The proposed process considers that the supplier is continuously comparing the value offered by the customer to its expectations, and to the value offered by other customer relationships.     

Asymmetric customer–supplier relationship development in Taiwanese electronics firms

The purpose of this paper is to analyse the relationship development stages of asymmetric customer–supplier relationships. The structure of relationships between larger customers and smaller suppliers has been the focus of a number of studies in IMP (Industrial Marketing and Purchasing Group) research. But, there is a paucity of research that examines development stages in relationships where a difference in size between the parties exists. The paper links the characteristics of asymmetric customer–supplier relationships and the relationship development stages through a literature review. The findings from a set of five in-depth case studies of asymmetric customer–supplier relationships in the Taiwanese electronics industry are presented. The case studies involved 50 semi-structured interviews with customer and supplier executives and, in addition, multiple observations of customer–supplier interactions within each case study. Individual and cross-case analysis was conducted to examine the links between the characteristics of asymmetric customer–supplier relationships and relationship development stages. The findings revealed that asymmetric customer–supplier relationships in the Taiwanese electronics industry were very unbalanced and vulnerable in the exploratory stage of development. In the developing stage relationships were more likely to develop if suppliers and customers mirrored each other's behaviour and echoed each other's priorities. In the stable stage suppliers and customers worked on shared and balanced contributions to the relationship. The paper contributes to the understanding of how smaller suppliers and larger customers can identify and develop key sets of relationship characteristics through the exploratory, developing and stable stages of asymmetric relationship development from both customer and supplier perspectives.     

Managing customer share in key supplier relationships

Supply base consolidation is an important issue in many business markets. Against this background, the allocation of purchasing budgets across vendors becomes an area of vital interest to suppliers. In the present research, we argue that customer share is a key decision variable in business marketing settings and investigate how a supplier can proactively manage the share of its customer's business. We report the results of a cross-sectional study among purchasing managers in U.S. manufacturing industries. Our findings confirm the role of customer value as an antecedent to customer share in business relationships. The study further shows that customer share influences the stability of key supplier relationships. Rather than displaying a direct impact, our results suggest that trust mediates and dependence moderates the link between customer share and search for alternative suppliers. Based on these findings, we propose a framework for managing customer share in key supplier relationships. Four approaches of how industrial vendors can proactively manage customer share are discussed.     

The effect of buyer behaviors on preferred customer status and access to supplier technological innovation: An empirical study of supplier perceptions

Buying firms are increasingly looking to suppliers for technological innovations that enhance the competitive position of their new products. However, extant research provides limited guidance on how buying firms may gain access to suppliers' innovative technologies. To address this gap in the literature, we draw from social exchange theory to posit sequential relationships among buyer behaviors, preferred customer status, and supplier's willingness to share technological innovations. We test our assertions by applying structural equation modeling statistical analyses to survey response data from 233 sales personnel of production good suppliers in the U.S. automotive industry. Whereas our results show that two buyer behaviors – early supplier involvement and relational reliability – positively affect preferred customer status, a third behavior – share of sales – has no effect. In turn, we find that preferred customer status is positively associated with supplier's willingness to share new technology with the buyer. Further, our findings indicate that preferred customer status fully mediates the benefits exchanged within a buyer–supplier relationship. Hence, our study highlights why buyers seeking innovations should take care that their behavior is appropriate for managing suppliers' perceptions. Accordingly, our results provide specific guidance to buyers as to how they may increase their access to suppliers' new technologies.     

The role of boundary spanners in the formation of customer attractiveness

This paper examines the question of how to understand the formation of suppliers perceived customer attractiveness. It argues that existing conceptualization of buyer–supplier relationships are too simplistic to understand the full complexity involved in the formation of such perceptions, and models the buyer–supplier relationship as a set of micro-dyads and intra-, inter-organizational exchange relationships. In exploring these micro-dyads this research apply an embedded case study approach and explores three buyer–supplier relationships. Following Bacharach et al. [Bacharach, S.B., Bamberger, P., & Sonnenstuhl, W.J. (1996). The organizational transformation process: The micropolitics of dissonance reduction and the alignment of logics of action. Administrative Science Quarterly, 41(3), 477–506.], it is interested in the involved actors sense-making processes and the concept of “logics of action” is deployed. The analysis demonstrates how suppliers' formation of perceptions related to customer attractiveness can be understood as constituted through a set of discrete historical means/ends alignments and misalignments between boundary spanning roles in the involved organizations.     

Unpacking value creation and capture in B2B relationships

Although the relationships among different dimensions of value creation, characteristics of dyadic relationships and value concepts are well studied, they have been conceptualized independently and without much linked theorizing. Hence, little is known about how these concepts and their effects interplay with each other. This article takes a configurational approach and investigates how different dimensions of value creation and relationship factors affect value capture. The study draws on an embedded case study encompassing relationships of a focal customer in the financial payments industry with six specialized service suppliers, followed by a Qualitative Comparative Analysis (QCA) of 29 relationship conditions. For both buyers and suppliers, value creation is based on “core” value dimensions, and relationship characteristics, such as power and change in supply strategy. Five different configurations of these constructs represent sufficient conditions to increase value capture, by either negotiating better prices or shifting volume among the parties involved. Focusing on both buyer and supplier perspectives of the same phenomenon, the study increases knowledge on how contextual variables interact in influencing value capture. From a practical perspective, the proposed configurations help managers to choose adequate supply strategies, or better allocate resources according to specific conditions of a business relationship.     

Market Orientation and Innovativeness in Supply Chains: Supplier's Impact on Customer Satisfaction

As today's firms increasingly outsource their noncore activities, they not only have to manage their own resources and capabilities, but they are ever more dependent on the resources and capabilities of supplying firms to respond to customer needs. This paper explicitly examines whether and how firms and suppliers, who are both oriented to the same customer market, enable innovativeness in their supply chains and deliver value to their joint customer. We will call this customer of the focal firm the “end user.” The authors take a resource‐dependence perspective to hypothesize how suppliers' end‐user orientation and innovativeness influence downstream activities at the focal firm and end‐user satisfaction. The resource dependence theory looks typically beyond the boundaries of an individual firm for explaining firm success: firms need to satisfy customer demands to survive and depend on other parties such as their suppliers to achieve customer satisfaction. Accordingly, the research design focuses on three parties along a supply chain: the focal firm, a supplier, and a customer of the focal firm (end user). The results drawn from a survey of 88 matched chains suggest the following. First, customer satisfaction is driven by focal firms' innovativeness. A focal firm's innovativeness depends, on the one hand, on a focal firm's market orientation and, on the other hand, on its suppliers’ innovativeness. Second, no relationship could be established between a focal firm's market orientation and a supplier's end‐user orientation. Market orientation typically has within‐firm effects, while innovativeness has impact beyond the boundaries of the firm. These results suggest that firms create value for their customer through internal market orientation efforts and external suppliers' innovativeness.     

How does green innovation affect supplier-customer relationships? A study on customer and relationship contingencies

As the demand for eco-friendly products arises, many suppliers have devoted significant effort to green innovation. Prior studies have investigated how green innovation influences product and firm performance; however, its influence on the relationship between suppliers and organizational buyers (customers) is still unknown. Organizational buyers' receptivity to green products is uncertain as they must adjust their current systems to accommodate the new products. As such, understanding how supplier green innovation effort affects the supplier-customer relationship is essential for green innovation success. Using data collected from 196 B2B customers, we find that the relationship between supplier green innovation effort and relational performance depends on several customer- and relationship-level contingencies. Specifically, green innovation benefits a relationship more if customer participation and relational embeddedness are high, or if customer risk aversion and customer-perceived product criticality are low. This research provides valuable guidance for the effective implementation of green innovation.     

Knowing me,knowing you: Self- and collective interests in goal development in asymmetric relationships

This paper investigates how self-interests and collective interests in goal development are manifested in the context of asymmetric customer–supplier relationships. Taking an interaction approach (IMP Group, 1982), a conceptual structure highlighting possible patterns of characteristics of the asymmetric customer–supplier relationship and approaches to self- and/or collective interests in goal development has been created.Based on a multiple case study approach, the findings suggest that smaller suppliers who deliberately pursue self-interest in their business activities with larger customers experience better outcomes. Larger customers recognise that the creation of collective business goals enhances the outcome of joint efforts in terms of market impact and profitability. The findings also highlight that trust is perceived as a necessity for the development of collective interests in asymmetric relationships and that the power of the larger customer is not perceived as a constraint. A key conceptual contribution is the identification of two distinct types of asymmetric relationships: ‘product/technology-oriented’ in which self-interest dominates by focusing on one party's resources for developing new products or technology and ‘complementary competencies-oriented’ in which collective interests link the competencies of the larger and smaller party for new joint business ambitions.     

An exploration of the ‘dark side’ associations of conflict,power and dependence in customer–supplier relationships

The purpose of this paper is to present the findings from a critical literature review of the ‘dark side’ issues related to three constructs, namely conflict, power and dependence, in customer–supplier relationships. Previous research has focused on discrete characteristics that influence relationships, but there is a paucity of research that considers the intertwining of a set of characteristics that may create darker associations or consequences for relationships. The paper contributes to IMP literature through this investigation of darker associations of relationships as much of the previous literature on customer–supplier relationship development has been concerned with building trust, developing commitment or managing long-term goals and mutuality (IMP Group, 1982).The paper considers the research on conflict, power and dependence in relationships, tracing its development from January 1980 to the end of 2014, and assessing the dark side issues raised in previous research, placing particular emphasis on ‘asymmetric’ customer–supplier relationships.The contribution of the paper lies in its critique of this focused body of literature and in the development of a better understanding for future IMP researchers on the derivations, foundations and findings concomitant to the ‘dark side’ of conflict, power and dependence in customer–supplier relationships. The paper proposes themes and future avenues of research related to the dark side of conflict, power and dependence, placing emphasis on the ‘bi-polarity’ of each relationship characteristic, the dynamics of relational benefits, the consequences of their evolution on inter-organizational trust and its impact on the dark side of relationships. Hence, the paper contributes through the identification of potential research areas and propositions to guide future conceptual developments in the field.     

Supplier adaptation: A qualitative investigation of customer and supplier perspectives

Differing views and goals in the buyer–supplier dyad can create underlying tension in supply chain relationships. Although research recognizes that adaptation is often expected from both customers and suppliers in exchange relationships, researchers have not adequately explored the long-range relational implications of customer adaptation requests. This research uses data from two qualitative focus groups to examine the interaction of customers and suppliers surrounding adaptation, as prior research has not yet considered how the customer's response to adaptation may change if they are aware of how the supplier actually perceives and evaluates specific adaptation requests. The first focus group included 20 active participants representing both customer and supplier perspectives, while the second focus group included five participants to provide a more in-depth examination of issues that emerged in the first focus group. Results suggest that customers' and suppliers' adaptation expectations differ; each has difficulty recognizing adaptation conflict because of perceived benefits and biases surrounding adaptation. Results suggest several adaptation conflict management behaviors are utilized to minimize its negative impacts on supply chain relationships, including blameshifting, justifying and negotiating techniques. Results suggest that trust can create blind spots in relationships, potentially causing customers and their suppliers to have difficulty recognizing conflict until it deteriorates relationships' foundational trust.     

Effects of Supplier and Customer Integration on Product Innovation and Performance: Empirical Evidence in Hong Kong Manufacturers

While the beneficial impacts of supplier and customer integration are generally acknowledged, very few empirical research studies have examined how an organization can achieve better product performance through product innovation enhanced by such integration. This paper thus examines the impact of key supplier and customer integration processes (i.e., information sharing and product codevelopment with supplier and customer, respectively) on product innovation as well as their impact on product performance. It contributes to existing literature by asking how such integration activities affect product innovation and performance in both direct and indirect ways. After surveying 251 manufacturers in Hong Kong, this study tested the relationships among information sharing, product codevelopment, product innovativeness, and performance with three control variables (i.e., company size, type of industry, and market certainty). Structural equation modeling with correlation and t‐tests was used to test the hypothesized research model. The findings indicate a direct, positive relationship between supplier and customer integration and product performance. In particular, this study verifies that sharing information with suppliers and product codevelopment with customers directly improves product performance. In addition, this study empirically examines the indirect effects of supplier and customer integration processes on product performance, mediated by innovation. This has seldom been attempted in previous research. The empirical findings show that product codevelopment with suppliers improves performance, mediated by innovation. However, the sampled firms cannot improve their product innovation by sharing information with their current customers and suppliers as well as codeveloping new products with the customers. If the adoption of supplier and customer integration is not cost free, the findings of this study may suggest firms work on particular supplier and customer integration processes (i.e., product codevelopment with suppliers) to improve their product innovation. The study also suggests that companies codevelop new products only with new customers and lead users instead of current ones for product innovation. For managers, this study has demonstrated that both information sharing and product codevelopment affect performance directly and indirectly. Managers should put more emphasis on these key processes, especially when linked with product innovation. Managers should consider involving their suppliers and customers in the early stages of design. Information sharing with suppliers is also important in product development. As suggested by this study, extensive effort on supplier and customer integration should be made to directly augment current product performance and product innovation at the same time.     

Mobilizing suppliers when starting up a new business venture

Prior research has shown that new ventures can complement their capabilities and extend their limited internal resources by drawing on suppliers. Yet, our knowledge of the supplier mobilization process in new ventures is limited. In this paper, we take a relational perspective on the mobilizing process, which entails investigating the scope for mobilizing suppliers in new ventures and new ventures' attractiveness to suppliers. Drawing on three new venture cases, we posit that for new ventures the scope for mobilizing suppliers: 1) ranges from the use of suppliers for the procurement of well-defined existing inputs to the co-development of various resources and capabilities with suppliers; 2) varies across ventures, reflecting the new venture's distance to market; and 3) depends on the supplier's assessment of the new venture's attractiveness as a customer. We also argue that the attractiveness of new ventures as customers to the suppliers is based on elements that differ from those found in studies of ongoing businesses, and include: 1) stimuli to innovate and develop new competencies, 2) reputational benefits and prestige, and 3) personal satisfaction.     

Development and implementation of customer solutions: A study of process dynamics and market shaping

A broad, dynamic network perspective on solution processes remains scarce. This article presents the process of developing and implementing customer solutions and its effects on the wider business environment by investigating customers and suppliers in the global mining industry (Australia, Chile, and Sweden), analyzing the deployment of a new customer solution, and assessing the changes to the competitive environment and focal firms' relationships with other customers and suppliers. It shows that the forces that drive customer and supplier interests and motivation to co-develop customer solutions may change over time, thus redefining the aim and scope of solutions and creating failure risks. Customers present problems; suppliers respond, on the basis of not only the feasibility of the customer-specific solution but also of their evaluation of future solutions in a broader market; then suppliers aim to standardize successful solutions across markets. Customers want close supplier relationships and unique solutions but also like standardized and repeatable solutions, so they can share development costs with competitors and expose the supplier to competition to avoid lock-in effects. From a network perspective, a novel solution can have a market-shaping effect and evoke reactions from other actors who want to enhance their market position. However, these changes are not necessarily deliberate, and the dynamics that market introductions of solutions trigger may be difficult to predict.     

The use of asset specific investments to increase customer dependence: A study of OEM suppliers

Making asset specific investments without sufficient economic safeguards is usually seen as a poor managerial practice according to transaction cost economics. However, in practice, many suppliers still invest in asset specificity to satisfy their major customers' requirements, who do not make sufficient investment commitments. The objective of this study is to explore how suppliers that make asset-specific investments maintain long-term relationships with their customers and even make their customers reliant on them. Empirical analysis of data from a sample of Taiwanese original equipment manufacturer (OEM) suppliers shows a significant positive indirect effect of asset specificity on the dependence of customers on suppliers, mediated through joint learning capacity. In addition, a positive link between a proactive market orientation and the degree of customer dependence on the supplier was found. This investigation finds evidence that joint learning capacity and proactive market orientation play critical roles in linking asset specificity to customer dependence.