How startups become attractive to suppliers and achieve preferred customer status: Factors influencing the positioning of young firms

Juliano Afonso Tessaro*, Rainer Harms, Holger Schiele

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

2 Citations (Scopus)
21 Downloads (Pure)

Abstract

Achieving preferred customer status with suppliers helps startups to mobilize suppliers' resources. However, in purchasing, startups also compete against large buyers for suppliers' resources. Furthermore, their newness is a liability that suppliers find unattractive. Consequently, attracting and maintaining relationships is a challenge for startups' procurement. This paper investigates the strategies that startups use to attract large suppliers, improve mutual business relationships, and receive preferential supplier treatment. Based on the preferred customership literature and world café data from 15 startup buyers and suppliers, we identified seven factors that explain how startups attract suppliers, maintain relationships with them, and achieve preferred customer status. These factors are strategic compatibility, innovation potential, startup network, credible growth opportunity, profitability, memorable experiences, and purchaser sellership.

Original languageEnglish
Pages (from-to)100-115
Number of pages16
JournalIndustrial marketing management
Volume113
DOIs
Publication statusPublished - Aug 2023

Keywords

  • Customer attractiveness
  • Preferred customer status
  • Startups
  • Supplier relationship
  • UT-Hybrid-D

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