Antecedents and benefits of obtaining preferred customer status

Abstract

Purpose – The purpose of this paper is to explore both the antecedents and the impact of a buying company having preferred customer status. Specific attention is paid to an, until now, unexplored antecedent: the buyer’s maturity as perceived by the supplier. In terms of impact, the focus is on the link between obtaining preferred customer status from a specific supplier and the buyer’s satisfaction with its collaboration with that supplier. Design/methodology/approach – Two case studies in the Dutch construction industry were conducted and, in each case, representatives of three companies were interviewed: one supplier plus two of its customers, one of them having a preferred status. As such, a total of four dyadic matched-pair inter-organizational relationships have been investigated. Findings – First, it is beneficial for buying companies to obtain preferred customer status at their suppliers, since this will have a positive impact on the buying company’s satisfaction with the collaboration. Second, if buying companies aim to obtain preferred customer status at their suppliers it is important that they are perceived as mature in managing supplier relationships. Practical implications – Although buying companies and suppliers often both want to increase their mutual business, there can be many factors that impede this. The framework presented in this research can help companies overcoming these impediments. Originality/value – This is the first study exploring the impact of being a preferred customer on the buyer-supplier relationship in the construction industry.