Becoming an Attractive Customer: How the Public Sector Can Strengthen Supplier Relationships
David Fridner’s new dissertation, "Customer Attractiveness in the Public Sector", explores how public organizations can become more attractive as customers, thereby fostering long-term, value-creating relationships with their suppliers.
Through three articles, Fridner demonstrates ways public organizations can enhance their supplier relationships, overcome bureaucratic obstacles, and establish partnerships that promote innovation, delivery reliability, and cost efficiency. David Fridner defended his dissertation at the Marketing Section, Stockholm Business School, on November 1.
The dissertation challenges traditional market logic by focusing on suppliers’ perceptions of public customers - termed customer attractiveness in the public sector. The articles examine this concept from various angles: what it comprises, why public organizations might want to actively address it, and how they can approach it.
The first article, "The Perks of Being an Attractive Public Customer", explores the importance of being an attractive public customer. The findings reveal that it can be key to mobilizing suppliers toward quality improvements and innovation, while also protecting against risks like delivery failures and added costs.
The second article, "Becoming an Attractive Public Customer to Strategic Suppliers", investigates what creates customer attractiveness for strategic suppliers. Findings show how different forms of trust play a crucial role in generating supplier value and long-term customer attractiveness, which ultimately serves as a foundation for mutually productive relationships with key suppliers.
The third article, "From Bureaucracy to Collaboration: Emerging Tactics to Enhance Customer Attractiveness in the Public Sector", examines practical methods public organizations can use to foster customer attractiveness. The results highlight four tactics public customers can employ during procurement and contracting phases to overcome barriers to customer attractiveness associated with public procurement.
The dissertation presents nine propositions and a framework that illustrates customer attractiveness in the public sector across dimensions of outcomes, formation, and management. The research suggests that customer attractiveness can be a powerful tool for improving supplier relationships in the public sector. It questions the power of the procurement and contract phases to govern supplier relationships in complex exchanges and emphasizes the importance of social aspects throughout the supplier journey. Furthermore, it implies that public procurement should move beyond “blind neutrality” (treating all equally regardless of performance) toward greater supplier differentiation.
How can practitioners benefit from your research?
There is considerable evidence that public organizations need to work more actively to increase their customer attractiveness—not only, or even primarily, to encourage competition in the bidding phase, but to mobilize suppliers toward a range of outcomes important to the public sector. A good starting point for this journey is to systematically understand what drives key supplier groups' behaviors and their perceptions of the specific public customer.
A successful move up in the customer hierarchy is then based on a degree of focus. Trying to increase customer attractiveness across the entire potential supplier market (beyond low-hanging fruit) is likely at best inefficient and, at worst, directly counterproductive. Becoming an attractive public customer requires active engagement beyond the procurement phase and a willingness to build relationships with suppliers.
Read the dissertation "Customer Attractiveness in the Public Sector"
Chair
Rana Mostaghel, Associate Professor, Stockholm Business School, Stockholm University
Opponent
Holger Schiele, Professor, Department of High-tech Business and Entrepreneurship, University of Twente, Netherlands
Examination Board
Lisa Govik, Associate Professor, Division of Supply and Operations Management, Chalmers University of Technology, Gothenburg
Zsofia Toth, Associate Professor, Durham University Business School, Durham, England
David Sörhammar, Associate Professor, Stockholm Business School, Stockholm University
Jon Nyhlén, Associate Professor, Department of Political Science, Stockholm University (substitute)
Supervisors
Fredrik Nordin, Professor, Stockholm Business School, Stockholm University
Jon Engström, Senior Lecturer, Stockholm Business School, Stockholm University
Last updated: November 1, 2024
Source: SBS