Suppliers have their own segmentation models. This is not a metaphor. It is a business practice. Every supplier of meaningful scale has some version of a customer portfolio — an implicit or explicit categorization of which buyers get the best people, the fastest response, the first access to innovation, and the most flexibility in a supply disruption.
Some customers are strategic. Most are transactional. A few are genuinely preferred. You are in one of those categories. The question is which one — and whether you have ever thought seriously about what it would take to move up.
Most procurement leaders spend their careers trying to get better performance from their suppliers. Almost none ask whether their organization is the kind of customer that earns better performance.
The Mirror Most Organizations Never Hold Up
The research on this is unambiguous. Henrik Schiele’s work on supplier segmentation documents that suppliers systematically allocate their best resources to the customers they value most. These customers of choice receive preferential access to capacity when supply is constrained, first consideration when new capabilities come available, and the kind of senior attention that rarely shows up in a contract but matters enormously in practice.
The buyers who are not customers of choice receive competent service. They receive what was promised in the contract. They do not receive what was never promised but always assumed — that their supplier is bringing their full capability and genuine engagement to the relationship.
Most procurement leaders operate on the implicit assumption that superior performance is extracted through pressure: tighter contracts, more rigorous scorecards, competitive bid events at renewal. What the research consistently shows, and what I observed across every program I built at Nike, State Street, and in consulting engagements since, is that this assumption produces adequate compliance and almost never produces genuine partnership.
What Suppliers Actually Want
When I asked supplier account managers directly, across multiple industries, what made a customer worth investing in, the answers clustered around three things consistently.
Predictability. Stable demand forecasts, reliable payment, consistent processes. Suppliers are businesses. Uncertainty is expensive. A buyer who is organized and reliable creates a lower cost to serve. Suppliers pass that efficiency back to preferred customers in ways that never show up on a scorecard.
Efficiency. Streamlined processes that don’t waste their time. Forty-seven-step onboarding processes. Fourteen-step invoice approval chains. Every hour a supplier spends navigating internal bureaucracy on your behalf is an hour they are not spending on your business. These things are visible signals — not of rigor, but of dysfunction.
Respect. This is the one that procurement leaders most often dismiss as soft, which is precisely why it matters. Supplier personnel who are treated with respect — whose expertise is taken seriously, whose feedback is genuinely solicited, who are spoken to as business partners rather than vendors — work differently on an account. A supplier’s strategic customers receive their best talent, their earliest innovation access, and their most generous flexibility when something goes wrong. Their transactional customers receive what the contract requires.
The Audit Most Organizations Avoid
There is a simple diagnostic that I use when working with procurement teams on SRM program design. It requires no survey, no external assessment, and no significant investment of time. It requires only a willingness to be honest.
For each of your most important suppliers, ask three questions. Do we pay on time, with predictable processes and minimal friction? Do we treat supplier personnel — at every level, not just account managers — with genuine respect? When we request flexibility, are we extending the same flexibility in return?
The follow-on question is harder. If a senior account manager at your most strategically important supplier were asked to describe your organization as a customer privately, to a colleague, what would they say? Most procurement leaders have never asked that question seriously. The ones who have tend to find the answers instructive.
The Strategic Implication
Supplier relationship management, at its most fundamental level, is not about managing suppliers. It is about creating the conditions under which your most important suppliers choose to bring you their best work.
That framing changes what you prioritize. A supplier scorecard that tracks on-time delivery, quality, and responsiveness is useful. A program that genuinely examines whether your organization is predictable, efficient, and respectful as a customer is more useful. Because the second one creates the conditions that make the first one unnecessary.
The organizations that achieve genuine strategic value from supplier relationships tend to share one characteristic. They are the kind of customer their most important suppliers describe favorably, without prompting, to other potential customers. That reputation is built one interaction at a time, over years.
The question for a procurement leader is not whether suppliers are meeting your standards. It is whether you are meeting theirs.
Jason Cipriano is the founder of VIDONAS and the author of Procurement 4.1 and SRM 2.0.