2024 GLOBAL SRM RESEARCH REPORT
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“76% of Leaders consider improved innovation and continuous improvement as the most significant benefit of collaboration with their critical and strategic suppliers, thus making this the most commonly reported benefit from those that fall within this cohort.”
Customer of Choice Achieving customer of choice status with critical and strategic suppliers brings significant advantages to an organisation, including priority access to resources, favourable pricing, and enhanced opportunities for collaboration and innovation. This coveted status cannot only strengthen competitiveness, it can enhance organisational efficiency. Organisations that have a well- developed supplier management strategy are well positioned to attain, and maintain, their customer of choice ambitions. This year, an impressive 95% of Leaders identified themselves as preferred customer among their suppliers, significantly outperforming the 58% of Fast Followers and just 27% of Followers who reported the same. A comparison with last year’s data reveals a growing certainty among Leaders about their status as customer of choice, growing to 95% from 93%. However, considering the broader landscape, a growing trend is emerging where an increased number of organisations do not perceive themselves to be a customer of choice. The figure has grown from 51% in 2023 to 59% in 2024. This suggests organisations are facing increased competition, making it more difficult to secure preferential treatment. Equally, they may lack the ability to fully understand or identify if they are a customer of choice. However, it does underscore the importance of strategic supplier management and the need for organisations to adapt and strengthen their approaches to
maintain or improve their status as preferred customers. Failure to do so, could have implications for operational efficiency, cost management, and innovation capabilities. Respondents were asked to provide insight of the benefits received for being a customer of choice. Almost all organisations have been able to identify advantages from their supplier management programs, with only 8% of Followers failing to identify any benefits. Leaders and Fast Followers, whose programs are more mature, naturally report more substantial rewards. The most common benefit, improved account management - reported by 76% of Leaders and 68% of Fast Followers compared to only 50% of Followers. Additionally, preferential pricing was noted by 63% of Leaders, compared to lesser percentages among other groups. Notably, 71% of Leaders enjoy first refusal on innovations from their suppliers—a significant strategic advantage not afforded to 28% of Followers, highlighting the competitive edge that can be gained through achieving preferred customer status.
What kind of customer choice benefits are you receiving? (Select all that apply)? Leader Fast Follower Follower Improved account management 76% 68% 50% Preferential pricing 63% 57% 48% More supplier executive focus and engagement 41% Access to the suppliers’ best people and resources 66% 53% 39% Market insights and intelligence 66% 53% 32% More commitment ‘the supplier will always go the extra mile’ 68% 43% 35% First look at innovation 71% 43% 28% Our supply chain is more resilient 55% 35% 24% Preferential access to scarce products, materials or capacity 45% 30% 24% No benefits 66% 66%
“Embracing collaboration can help elevate organisations to a customer of choice, enhancing efficiency and competitive edge through priority access, favourable pricing, and first refusal on innovations.”
Team up with your suppliers
A broken strategic relationship can hinder your success. A joint business plan facilitates openness and teamwork to achieve shared objectives in risk, innovation, growth, and cost. Drive value and reach your goals together. Learn how.
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https://srm.stateofflux.co.uk/joint-business-plan
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