Antecedents and Benefits of a Preferred Customer Status in a Buyer-Supplier Relationship: A Case Study at WILO SE and 4 of its Key Suppliers

In recent years, developing supplier relationships has become a major strategic activity which is associated with cost savings, enhanced flexibility and increased innovativeness. As the attainment of a preferred customer status is associated with preferential resource allocation, it can be a potential source of sustainable competitive advantage. Since the majority of academic literature on the preferred customer status takes a rather theoretical stance, a case study is conducted at WILO SE and its key suppliers to provide more practical insights. The existence of a preferred customer status has been confirmed as preferential treatment, which is obviously attributable to a high status at key suppliers, could be identified. The findings thereby do not only confirm several existing antecedents and benefits of a preferred customer status that have been identified in earlier literature, but also reveal some novel findings: It has been shown that a preferred customer treatment can also lead to the establishment of contacts to third parties, to acceptance of extraordinary financial transaction wishes, an excellent crisis management, a forward-looking pricing model, high management commitment at the supplier and to a key account status despite low purchasing volumes. Furthermore, novel drivers for the achievement of such a status could be identified.