Buyer sentiment about attaining preferred status among your supplies seems to wax and wane with economic cycles and supply market dynamics. However, growing economic uncertainty and increased supply risks due to more global supply chains have more procurement teams are taking a serious look at how to attain full-time Customer of Choice status.


There are many benefits to achieving such lofty rank:

  • Reliable supply and manufacturing capacity;
  • First access to new innovations; and, of course,
  • Preferred pricing.


In the latest edition of CPO Agenda, State of Flux consultancy offers some good guidance on how to attain (and maintain) Customer of Choice status. You may be surprised to learn that such rank is not doled out based upon how much revenue you contribute to a supplier. (Although, revenue contribution surely is a contributing factor to which customers suppliers work with most closely.) Instead, State of Flux's examination of more than 100 buyer and seller companies identified the following recommendations for securing a Customer of Choice title:


  • Be willing to engage suppliers. Actively solicit suppliers' feedback on your products, processes, and policies. Listen to their recommendations on how to improve them.
  • Open your kimono. "...organizations that willing share information -- org charts, product strategies, demand forecasts, technology roadmaps -- with key suppliers increase their chances of getting preferential treatment."
  • Take action -- quickly. Listening and communicating only goes so far. Suppliers want action. If they offer a new innovation or process change that you feel could be beneficial, implement it quickly.
  • Rethink your approach to business. Suppliers are very interested in your ethics and approach to business. They look for clarity and consistency in your selection criteria. They prefer longer term relationships that value their innovation suggestions (rather than bidding their ideas out to competitors) and reward them for success. Performance evaluations should be a two-way street, with you valuing their feedback as much as they value yours.
  • Pay on time. Not surprisingly, suppliers favor customers that pay on time. They also look for efficiency and transparency in the payment process. Extra work or dealing with AP outsourcing shops to get paid received particularly harsh critcism from suppliers.


You can access the full article here. And, if you have tips of your own on how to be a Customer of Choice, please share them in the comments section below.