Many business customers today consolidate their supply bases and implement preferred supplier programs. Consequently,
vendors increasingly face the alternative of either gaining a key supplier status with their customers or
being pushed into the role of a backup supplier. As product and price become less important differentiators, suppliers
of routinely purchased products search for new ways to differentiate themselves in a buyer–seller relationship.
This research investigates avenues for differentiation through value creation in business-to-business relationships.
The results suggest that relationship benefits display a stronger potential for differentiation in key supplier
relationships than cost considerations. The authors identify service support and personal interaction as core differentiators,
followed by a supplier’s know-how and its ability to improve a customer’s time to market. Product quality
and delivery performance, along with acquisition costs and operation costs, display a moderate potential to help a
firm gain and maintain key supplier status. Finally, price shows the weakest potential for differentiation.