Suppliers' willingness to end unprofitable customer relationships: An exploratory investigation in the German mechanical engineering sector

Sabrina V Helm, Ludger Rolfes, Bernd Günter

Research output: Contribution to journalArticle

29 Citations (Scopus)

Abstract

Purpose - The purpose of this article is to investigate the supplier's view on supplier-initiated relationship dissolution due to lack of customer profitability. Design/methodology/approach - The research is focused on inter-organisational buyer-seller relationships. An exploratory study in the German mechanical engineering industry was conducted to provide insights into the usage of customer valuation techniques and the preponderance of unprofitable customer relationships, and to identify various ways of managing unprofitable customer relationships by means of cluster analysis. Findings - The study shows that many companies in the industry lack knowledge and use of customer valuation techniques. Three clusters of supplying firms are identified that differ in their willingness to end unprofitable customer relationships. Research limitations/implications - Provides an exploratory study into a neglected aspect of relationship marketing characterised by a low response rate. The sample contained companies from one major German industry, limiting the applicability of its findings. The main implications are that unprofitable customer relationships are a common feature of industrial markets, which merits further investigation. Respondents were shown to have a range of different views and approaches to such relationships. Research on customer valuation needs to focus on the implementation barriers of valuation methods. Practical implications - Study results stress the importance of developing and implementing customer valuation methods, the relevance of unprofitable relationships, and suppliers' decision making concerning such precarious relationships. It is a useful source of information and impartial advice for managers involved with customer management. Originality/value - The paper leads to a more thorough understanding of relationship marketing and provides empirical data on a neglected field of marketing research, as prior work did not consider the supplier's view on dissolution management in detail.

Original languageEnglish (US)
Pages (from-to)366-383
Number of pages18
JournalEuropean Journal of Marketing
Volume40
Issue number3-4
DOIs
StatePublished - 2006
Externally publishedYes

Fingerprint

Willingness
Suppliers
Customer relationship
Mechanical engineering
Dissolution
Industry
Exploratory study
Valuation methods
Response rate
Buyer-seller relationships
Empirical data
Managers
Cluster analysis
Marketing research
Decision making
Sources of information
Engineering industry
Customer management
Common features
Customer profitability

Keywords

  • Customer relations
  • Germany
  • Mechanical engineering
  • Profit

ASJC Scopus subject areas

  • Marketing

Cite this

Suppliers' willingness to end unprofitable customer relationships : An exploratory investigation in the German mechanical engineering sector. / Helm, Sabrina V; Rolfes, Ludger; Günter, Bernd.

In: European Journal of Marketing, Vol. 40, No. 3-4, 2006, p. 366-383.

Research output: Contribution to journalArticle

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