Volume 27 Issue 2 Article 1 June 2025 Customer Prioritization: From Conceptualization to International Customer Prioritization: From Conceptualization to International Application Application Maria Gracner University of Ljubljana, School of Economics and Business, PhD Student, Ljubljana, Slovenia, mvlasova555@gmail.com John William Cadogan University of Leicester, Leicester, United Kingdom Gregor Pfajfar University of Ljubljana, School of Economics and Business, Ljubljana, Slovenia Follow this and additional works at: https://www.ebrjournal.net/home Part of the International Business Commons, and the Marketing Commons Recommended Citation Recommended Citation Gracner, M., Cadogan, J., & Pfajfar, G. (2025). Customer Prioritization: From Conceptualization to International Application. Economic and Business Review, 27(2), 80-101. https://doi.org/10.15458/ 2335-4216.1353 This Original Article is brought to you for free and open access by Economic and Business Review. It has been accepted for inclusion in Economic and Business Review by an authorized editor of Economic and Business Review. ORIGINAL ARTICLE Customer Prioritization: From Conceptualization to International Application MariaGracner a, * ,JohnWilliamCadogan b ,GregorPfajfar c a University of Ljubljana, School of Economics and Business, PhD Student, Ljubljana, Slovenia b University of Leicester, Leicester, United Kingdom c University of Ljubljana, School of Economics and Business, Ljubljana, Slovenia Abstract This study examines customer prioritization, a strategic practice where businesses allocate resources and efforts based on customer value. While its signicance in international marketing continues to grow, limited research exists on how customer prioritization is understood and applied in international rms operating across diverse cultural contexts. Ad- dressing this gap, the study explores how international-marketing managers conceptualize customer prioritization and identies its key components. Using a qualitative methodology, the study conducted in-depth interviews with Slovene international-marketing and sales managers from 13 export-oriented rms. Thematic analysis, guided by the Gioia methodology, identied four central themes: prioritization tactics and strategies, international customer protability, headquarters–subsidiary relationships, and customer relationship management. The results indicate that companies adopt varied prioritization strategies inuenced by factors such as product lines, customer size, industry signicance, and the importance of foreign markets. Furthermore, subsidiaries play a pivotal role in collecting and relaying local market knowledge to headquarters, facilitating effective customer prioritization. This research advances the concep- tual understanding of customer prioritization as a dynamic capability that shapes customer relationship management strategies in international rms and can enhance protability in foreign markets. Keywords: Customer prioritization, Customer value management, Relationship marketing, International marketing, Headquarters–subsidiary relationships, Protability JEL classication: M30 1 Introduction I n the contemporary business landscape, companies striving to establish a sustainable competitive advantage are increasingly shifting their focus from short-term sales performance to cultivating long-term relationships with key market participants, particularly high-value customers. This shift aligns with the growing prominence of customer prioriti- zation in international marketing, which emphasizes the strategic allocation of resources to customer segments with the highest potential for protability and loyalty (Homburg et al., 2008; Zeithaml et al., 2001). By prioritizing key customers, rms can tailor their value propositions and marketing efforts to foster stronger relationships, thereby enhancing customer satisfaction, loyalty, and overall business performance (Harrison-Walker, 2010; Rust et al., 2004). Recent literature underscores the importance of this approach, highlighting its role in achieving competitive advantage in a globalized market where cultural and economic contexts vary signicantly (Ain et al., 2024; Mathur & Kumar, 2013; Wetzel et al., 2014). Companies are increasingly adopting tiered customer prioritization strategies, where selected customers receive preferential treatment, such as customized marketing instruments and enhanced engagement, to maximize relationship value (Blattberg et al., 2009; Homburg et al., 2008; Ramani & Kumar, 2008). However, the effective implementation Received 13 May 2024; accepted 21 January 2025. Available online 10 June 2025 * Corresponding author. E-mail address: mvlasova555@gmail.com (M. Gracner). https://doi.org/10.15458/2335-4216.1353 2335-4216/© 2025 School of Economics and Business University of Ljubljana. This is an open access article under the CC BY license (http://creativecommons.org/ licenses/by/4.0/). ECONOMIC AND BUSINESS REVIEW 2025;27:80–101 81 of customer prioritization requires a comprehensive understanding of its components, particularly within the international-business context, where alignment on goals, plans, and processes is essential to address diverse market dynamics and customer preferences (Yip & Bink, 2007). Prior research has highlighted various dimensions of customer prioritization, including customer lifetime value, relationship dynamics, and the impact of customer engagement on sales performance (Mathur & Kumar, 2013; Wetzel et al., 2014; Yeniaras & Kaya, 2022). Despite its growing application, the concept still lacks a comprehensive theoretical framework, requiring further exploration to guide rms in managing prioritization strategies that balance short-term gains with long-term value creation. This trend underscores the increasing complexity of customer relationships and the necessity for tailored strategies that resonate across varied cultural and economic landscapes. Despite growing interest in customer prioritization, signicant gaps in the literature warrant further in- vestigation. While numerous studies highlight the benets of customer prioritization, such as increased protability, loyalty, and enhanced business perfor- mance (Homburg et al., 2008; Lacey et al., 2007), they often overlook the potential risks, including the alienation of lower-priority customers and perceived unfairness in treatment, particularly in international markets where cultural norms regarding equity vary signicantly (Hüttinger et al., 2012; Polyakova et al., 2020; Pontes et al., 2021; Söderlund et al., 2014). Re- search to date has largely concentrated on domestic markets, neglecting the unique complexities of pri- oritization strategies in global contexts (Hu et al., 2025; Reinartz & Kumar, 2000). Moreover, customer prioritization is frequently addressed implicitly, with limited exploration of its specic features and compo- nents, which leaves both academic and practical un- derstanding underdeveloped (Kumar & Shah, 2004). Calls for research emphasize the need for a holistic examination of customer prioritization that not only considers its advantages but also explores its draw- backs, such as the negative impact on relationships with lower-priority customers and potential harm to brand equity (Davis, 2019; Harrison-Walker, 2010; Homburg et al., 2008). Additionally, there remains limited clarity regarding how rms balance compet- ing priorities across markets while maintaining con- sistent customer engagement (Slater & Narver, 1994). International customer prioritization manifests in various forms, such as favouring larger over smaller markets (e.g., Papadopoulos & Martín Martín, 2011), prioritizing fast-developing regions over established ones (e.g., Cavusgil, 1997), or segmenting customers by protability (e.g., Homburg et al., 2008; Niraj et al., 2001), standardized needs (i.e., homogenous as opposed to heterogeneous needs; e.g., Jain, 1989; Theodosiou & Leonidou, 2003), localized (adapted) needs (i.e., heterogeneous as opposed to homoge- neous needs; e.g., Ryans et al., 2003; Yeniaras & Kaya, 2022), or behavioural factors such as repurchase fre- quency (e.g., Kumar & Shah, 2004; Reinartz & Kumar, 2003). This diversity adds complexity to its imple- mentation, particularly in international marketing, where cultural, economic, and organizational dynam- ics create additional challenges (Mathur & Kumar, 2013; Mittal et al., 2005). Despite its practical impor- tance, the lack of a comprehensive framework leaves practitioners with limited guidance on effective im- plementation, especially in navigating these diverse contexts (Patrucco et al., 2024; Rust et al., 2002; Ver- hoef & Lemon, 2013). To address these deciencies, scholars must explore not only the conceptual facets of customer prioritization but also its operational- ization in multinational enterprises (MNEs), where alignment across diverse cultural and market set- tings is essential for success (Homburg et al., 2002). This approach will provide a deeper, more holistic understanding of customer prioritization and its im- plications for international-marketing strategies. The primary objective of this research is to enhance the understanding of customer prioritization within the realm of international marketing by identifying and examining its core features and components. By addressing signicant gaps in the literature, this study seeks to provide a comprehensive framework that elucidates how international-marketing profes- sionals conceptualize and implement customer pri- oritization strategies. The central research question guiding this investigation is: How is customer priori- tization understood by international-marketing managers, and what are the key components that constitute this concept? In particular, this research explores how cus- tomer prioritization is operationalized within MNEs across diverse cultural contexts, aiming to offer clarity and structure to this underexplored area. By investi- gating both the benets and potential drawbacks of customer prioritization, this study aspires to provide a more balanced perspective on its application, which can inform more effective implementation strategies (Homburg et al., 2008). Ultimately, the goal of this research is to contribute to a more holistic and ac- tionable understanding of customer prioritization, enabling organizations to optimize their marketing strategies and foster stronger, more effective customer relationships in international markets. To achieve these objectives, the study employs in-depth interviews with Slovene international- marketing/sales managers of 13 export-oriented rms. Thematic analysis, using the Gioia methodol- ogy (Gioia et al., 2013; Magnani & Gioia, 2023), is em- ployed to analyse the interview data, identifying key 82 ECONOMIC AND BUSINESS REVIEW 2025;27:80–101 themes and patterns in their understanding and im- plementation of customer prioritization. This study is expected to unveil the complex and multidimensional nature of customer prioritization, shedding light on the interconnections between customer value, relationship management, and strategic decision- making processes. Additionally, it aims to identify the contextual factors shaping prioritization strategies, including cultural diversity, market dynamics, and organizational competencies. By integrating these insights, the research aspires to offer practical guidance for marketers aiming to enhance their cus- tomer prioritization approaches in the context of an ever-evolving dynamic global business environment. This study makes a signicant theoretical contri- bution to the eld of international marketing by developing a comprehensive framework that identi- es and organizes the core components of customer prioritization within an international context. This framework establishes a solid theoretical founda- tion for future research, enriching the discourse on customer-centric strategies in global business envi- ronments and addressing ongoing calls for deeper investigation into these approaches (Rust et al., 2004). In addition, the research underscores the pivotal role of subsidiaries within MNE networks in inuencing customer prioritization strategies formulated at head- quarters, thereby advancing the understanding of the interplay between headquarters and subsidiary dy- namics. By synthesizing insights from international- marketing and sales managers, this study offers a novel conceptualization of customer prioritization, reecting the challenges and opportunities presented by contemporary global market dynamics. The nd- ings also hold practical signicance, emphasizing key elements of customer prioritization that managers can leverage to design and implement effective marketing strategies. By identifying critical components, the re- search provides actionable insights that enable rms to optimize resource allocation, rene market focus, and strengthen customer engagement (Reinartz & Kumar, 2000). 2 Customer prioritization 2.1 Conceptual challenges Customer prioritization is a concept that the lit- erature often links or sometimes even substitutes with concepts such as customer value management (Ramani & Kumar, 2008), customer orientation (e.g., Terho et al., 2015), customer lifetime value (e.g., Venkatesan & Kumar, 2004), or customer relationship management (CRM; e.g., Lindgreen et al., 2006). Thus, it is not surprising that the literature offers a wide variety of customer prioritization conceptualizations and denitions (see Table 1). These can be grouped in several meaningful cat- egories. Denitions based on customer differenti- ation, which appear most frequently, fall into the rst category. These are denitions that emphasize the varying levels of resources and effort allocated to different customer segments based on their im- portance to the rm (e.g., Harrison-Walker, 2010; Homburg et al., 2008; Lacey et al., 2007; Mathur & Kumar, 2013). In fact, the most often adapted de- nition is the one by Lacey et al. (2007). The authors adopting this denition focus on intangible and tan- gible benets provided to specic customer groups, in particular providing selected customers with ele- vated social status recognition, additional products, and enhanced services (e.g., Butori & De Bruyn, 2013; Chark & Wang, 2024; Jiang et al., 2013; Kim & Baker, 2020; Polyakova et al., 2020; Pontes et al., 2021, 2023). The second category comprises deni- tions based on marketing instruments. Denitions in this category emphasize a differentiated use of mar- keting instruments (product, price, promotion, place, processes, sales) for different customer tiers—in other words, a marketing strategy adapted to specic cus- tomer segments (Harrison-Walker, 2010; Homburg et al., 2008; Mathur & Kumar, 2013; Zeithaml et al., 2001). Other denitions that fall in the same category equate customer prioritization with offering a distinct value proposition to top-tier customers compared to bottom-tier customers (Harrison-Walker, 2010; Hom- burg et al., 2008). The third category consists of denitions that are based on relationship market- ing. The rst group of denitions falling into this category highlights the role of preferential treatment as a proactive strategy in building, maintaining, and strengthening customer relationships (Grönroos & Ojasalo, 2004; Lacey et al., 2007; Patterson & Smith, 2003). The second group of denitions in this category emphasizes the personalization aspect of preferen- tial treatment by customizing value propositions to match individual customer needs (De Wulf et al., 2003; Gwinner et al., 1998; Lacey et al., 2007). The fourth category comprises denitions that are based on customer perceptions. Here, denitions focus on the customers’ subjective perception of receiv- ing better treatment than other customers (Blader & Rothman, 2014; Butori & De Bruyn, 2013; Hüttinger et al., 2012; Lacey et al., 2007). Similarly, the de- nitions explore customers’ perceptions of the extent to which rms treat regular (loyal) customers better than nonregular (nonloyal) customers (Xia & Kukar- Kinney, 2014). The nal, fth category, consists of denitions based on resource allocation. These de- nitions emphasize the tangible aspect of preferential ECONOMIC AND BUSINESS REVIEW 2025;27:80–101 83 treatment, conceptualizing it as preferential alloca- tion of various resources (e.g., time, effort, human resources, etc.) to selected customers (Nollet et al., 2012; Steinle & Schiele, 2008). Some other denitions encompass providing preferential treatment through customized rm-initiated interactions—for instance, personalized communication can be considered a form of preferential treatment (Ruz-Mendoza et al., 2021). In sum, although we identied ve categories, it is important to note that the categories are not mutually exclusive, as many denitions incorporate elements from multiple categories. For instance, the most often used Lacey et al.’s (2007) denition (see Table 1) covers aspects of customer perception, mar- keting instruments, and customer differentiation. We observe a common thread across most cus- tomer prioritization denitions in the prominence of providing selected customers with enhanced service levels, elevated status, or additional benets in com- parison to other customers. Preferential treatment is often grounded in the importance to the rm or customer’s perceived value, which can be based on strategic considerations, relationship longevity, or - nancial metrics. In the context of B2B marketing, denitions emphasize the strategic use of preferen- tial treatment as a relationship marketing tool, which is aimed at enhancing customer loyalty, satisfaction, and protability. Several denitions also highlight potential negative consequences of customer priori- tization, including opportunistic behaviour, feelings of entitlement, perceived injustice, and even harm to other customers. This ethical dimension has become prominent particularly in recent studies, evaluating the social and psychological implications of pre- ferred treatment and instructing rms to carefully reevaluate the fairness and transparency of their pri- oritization strategies. Gaps in the existing denitions and conceptualizations mostly point at the narrow focus and a lack of a comprehensive denition that integrates various dimensions of customer prioriti- zation, encompassing both its benets and potential downsides. Additionally, we observe that none of the denitions explicitly address specic challenges and complexities found when managing international customer relationships across different markets, cul- tures, and regulatory environments. Based on the above argument we propose our own denition: Customer prioritization is a specialized tool utilized by organizations to enhance rm performance through the evaluation of the value of potential customers. This eval- uation is conducted based on formal or informal rules established within the company. Consequently, a hier- archical waiting list for customer treatment is formed, ensuring that resources are allocated efciently based on the perceived value of each customer. The process involves a careful evaluation of international factors that might impact the customer prioritization, including cultural sen- sitivity, legal and regulatory compliance, global supply chain dynamics, and technological advancements. Finally, the benets and potential downsides of customer prioritiza- tion should be considered before the implementation of an actual prioritization strategy. 2.2 Key ndings and knowledge gaps in customer prioritization research Customer prioritization is a strategic tool com- monly employed by businesses to enhance perfor- mance by focusing efforts on top-tier customers while reducing marketing and sales costs (Homburg et al., 2008). This approach typically results in higher prof- itability for rms (Brady, 2000; Kumar & George, 2007). However, it can also have adverse effects, such as strained relationships with customers who are deemed low priority. The majority of extant research (e.g., Kim & Baker, 2020; Mathur & Kumar, 2013) predominantly associates dissatisfaction with prefer- ential treatment with the nature or extent of benets provided. However, it is noteworthy that another aspect—targeting mismatch—may also contribute to such dissatisfaction. Targeting mismatch occurs when rewards intended for the most valued customers are erroneously bestowed upon individuals who do not align with this designation (Pez et al., 2015). In the contemporary business landscape, compa- nies increasingly expand their customer bases in new markets. To effectively identify potential partners during initial outreach, sales managers must ascertain key decision-makers early in the engagement process (Dutta & Kumar, 2024). These decision-makers of- ten provide vital insights into product requirements and supplier expectations. Armed with primary in- formation, managers can then preprioritize potential customers based on their perceived value. Through- out the communication process, the prioritization of potential customers may shift based on factors such as budget, order quantity, and delivery timelines. While many companies adopt formal or informal customer prioritization strategies, the execution can vary based on market dynamics and organizational culture (Trimi & Berbegal-Mirabent, 2012). It is im- perative for sales and marketing managers to discern which customers warrant heightened attention to op- timize resource allocation (Dutta & Kumar, 2024). However, mis-prioritization or inadequate attention to certain customers can strain supplier–customer re- lationships. For instance, if a customer’s needs are 84 ECONOMIC AND BUSINESS REVIEW 2025;27:80–101 Table 1. Customer prioritization conceptualizations, their uniqueness, similarities to other denitions, and gaps in the conceptualizations. Author Denition/conceptualization Uniqueness vs. similarities Gaps Ain et al. (2024) The authors dene customer prioritization as deliberate elevation of product or service provided to selected customers, which differentiates the customer experience by offering a higher value compared to what is available to the general customer base. Preferential treatment is a deliberate act of elevating the value offered to selected customers, leading to differentiated experience. The authors explicitly link preferential treatment to a differentiated customer experience and focus on how if inuences customers’ emotions and behaviours. They examine the impact of preferential treatment on impulse buying, customer delight, and advocacy through the lens of affective events theory. Limited to the retail sector and may not cover variability in other contexts Baxter (2012) Customers’ preferential treatment exclusively depends on the seller’s perceptions of customer nancial attractiveness. In other words, the buyer’s nancial attractiveness inuences the seller’s commitment, their resource allocation to the relationship, and preferred customer treatment. The conceptualization covers the supplier’s perspective on customer nancial attractiveness as a key driver for preferential treatment, reviewing it through the resource-based view and industrial marketing and purchasing network theory. Limited to B2B relationships with the focus on nancial criteria for preferential treatment, neglecting other potential factors Bemelmans et al. (2015) The authors focus on conceptualizing preferred customer status as an outcome of relationship development, attractiveness and satisfaction, preferential resource allocation, maturity of supplier relationship management, relationship-specic investments, and suggestions for innovation or improvement. The conceptualization provides a comprehensive overview of antecedents and benets of obtaining preferred customer status. The denition is aligned with those authors who emphasize long-term relationship as a criterion for customer prioritization. Limited to B2B relationships and construction industry, which means it might not be fully generalizable to all other contexts Blader & Rothman (2014) The authors treat preferential treatment as favouring some group members over others and explore the effect of empathy on perceptions of preferential treatment, specically endorsement of categorization based on needs and fairness, all viewed through the accountability framework. The conceptualization focuses on psychological mechanisms behind preferential treatment, offering a unique perspective on the subjective evaluation of preferential treatment through empathy and accountability. The denition aligns with those who incorporate ethical considerations in their denitions. Limited to perceptions of preferential treatment and does not account for actual implications for customer behaviour Butori & De Bruyn (2013) The authors introduce noncontractual forms of preferential treatment and call this discretionary preferential treatment (DPT), which they dene as “the selective granting of non-contractual advantages to a limited number of customers.” (p. 358). DPT is evaluated by customers on four dimensions: imposition, justication, surprise, and visibility. The authors introduce the new concept of DPT and identify four dimensions that customers use to evaluate DPT. The focus of this denition is on the individual differences and subjective evaluation of the preferential treatment, which is the aspect that aligns this denition to those that emphasize fairness and customer perceptions. Limited to unearned preferential treatment that does not reect the dynamics of planned or earned preferential treatment Chan et al. (2019) DPT is “an explicit strategy of the rm that authorizes the offering of structured or prespecied benets to selected customers based on contractual and publicly stated rules and policies to reward customers for time and effort they invest in the rm (e.g., spending).” Similarly, it is “an explicit strategy of the rm that authorizes its employees to use discretion to select a limited number of customers, based on their personal judgment (rather than publicly stated rules and policies) to grant non-contractual advantages as an unexpected benet above and beyond the core services to surprise and delight customers” (p. 372). The conceptualization is further enhanced through appraisal theory and relationship marketing literature, but in its essence it is similar to DPT proposed by Butori & De Bruyn (2013). Limited to hospitality services treatments and similar contexts (Continued) ECONOMIC AND BUSINESS REVIEW 2025;27:80–101 85 Table 1. Continued. Author Denition/conceptualization Uniqueness vs. similarities Gaps Chark & Wang (2024) The authors dene customer prioritization as the practice of giving selected customers elevated social status recognition and/or additional or enhanced products and services above and beyond standard rm value propositions and customer service practices. Customer loyalty and buying history are considered key criteria in preferential treatment selection, with specic implications for observer reactions and relationship norms. The denition incorporates social dynamics of preferential treatment, in particular relationship norms that come into effect especially in cases of unearned preferential treatment. The core of the denition relies on Lacey et al.’s (2007) denition. Limited to B2B relationships Choi et al. (2024) The authors evaluate preferential treatment through perceived status, effort, and loyalty. Specically, they examine the impact of service agent type (AI vs. human) on consumer satisfaction with preferential treatment, considering the factors listed above. The authors uniquely explore the emerging role of AI in delivering preferential treatment and compare its perceptions to human-delivered preferential treatment. This denition is aligned to those who emphasize enhancing the value proposition for selected customers. Limited to services and may not account for broader aspects of customer prioritization in other marketing contexts Homburg et al. (2008) “Customer prioritization implies that a rm is highly customer centric for the most important customers and at a lower level for less important customers.” (p. 110) “This idea of customer prioritization implies that selected customers receive different and preferential treatment regarding marketing instruments.” (p. 116) The authors see customer prioritization as a strategic approach to differentiating treatment based on customer importance. They explicitly dene customer prioritization as based on differential treatment with respect to marketing instruments and emphasize the potential impact on rm performance and customer relationships. Limited to performance- related outcomes and does not account for other potential consequences (e.g., social or ethical) Huang (2012) “The notions that customers have heterogeneous ‘lifetime values’ to a rm, that such values can and should be measured, that premium customers according to such measures should be especially pampered, and that the less protable customers according to such measures should be discriminated against or even red have been widely accepted.” (p. 497) It is unique by proposing measurement (forecasting as evident from the paper), but at the same time builds on the customer lifetime value (CLV) research (e.g., Venkatesan & Kumar, 2004). Limited to CLV modelling Hüttinger et al. (2012) The authors dene preferential treatment as a decision of the supplier to provide a better service to certain buyers. This decision is inuenced by customer attractiveness, supplier satisfaction, and preferred customer status. The conceptualization provides a comprehensive overview of drivers of preferential treatment from the supplier’s perspective. The denition is similar to those that emphasize better customer treatment based on customer value and relationship quality. May not adequately address the dynamic nature of preferential treatment and how it evolves over time Hüttinger et al. (2014) The authors explore drivers of preferential treatment by suppliers in the automotive industry, including growth opportunities, operative excellence, reliability, and relational behaviour. The conceptualization covers drivers of preferential treatment from both buyer and supplier perspectives, examining factors beyond nancial attractiveness. The denition is similar to those who emphasize earning preferential treatment through valuable contributions. Limited to automotive industry context and might not fully capture other dynamic contexts Kim & Baker (2020) The authors dene preferential treatment as giving selected customers elevated social status, recognition, and/or additional or enhanced products and services beyond standard rm value propositions and customer service practices. They conceptually align preferential treatment with loyalty programmes in the hotel industry context, differentiating treatment between programme and nonprogramme customers, and incorporate negative effects of unearned preferential treatment in the assessment. This is one of the strongest connections between preferential treatment and loyalty. The authors highlight a critical role of the rm explanations and compensation in mitigating negative perceptions of unearned preferential treatment. The core denition is based on Lacey et al. (2007) and similar to those who emphasize offering exclusive privileges to selected customers. Limited to hospitality industry and may not incorporate the complexities of other industries and contexts (Continued) 86 ECONOMIC AND BUSINESS REVIEW 2025;27:80–101 Table 1. Continued. Author Denition/conceptualization Uniqueness vs. similarities Gaps Lacey et al. (2007) “Preferential treatment is dened as the practice of giving selective customers’ elevated social status recognition and/or additional or enhanced products and services above and beyond standard rm value propositions and customer service practices.” (p. 242) Preferential treatment is considered as a proactive and progressive relationship marketing strategy, while at the same time the conceptualization builds on economic and customization components of preferential treatment proposed by Gwinner et al. (1998). Limited to relationship marketing view on customer prioritization Libai et al. (2020) The authors explore the impact of AI on customer relationship management, particularly the use of AI for personalized interactions and customer prioritization. Customer prioritization in their view is executed based on expected customer protability, which leads to different treatments in terms of service levels, pricing, and promotions, which can potentially result in customer abandonment. The authors uniquely highlight the potential of AI in automating customer prioritization, and at the same time raise ethical concerns of fairness and transparency of such AI usage. Similarly to other denitions, a part emphasizes preferential treatment based on customer value, offering personalized experiences and potentially abandoning low-value customers. Limited to technological/ measurement side of customer prioritization Mathur & Kumar (2013) Customer prioritization is the extent to which customers are treated differently with regard to marketing instruments based on their importance to the rm. Customer prioritization is conceptualized as rm’s ability to effectively use relationship investments to retain customers, depending on the relationship quality and length. The denition emphasizes the role of customer prioritization in customer retention. The authors view customer prioritization through the lens of the resource-based view and dynamic capabilities theory, treating customer prioritization as a strategic capability in the rm. The similarity to other denitions is in its emphasis of treating customers differently due to their value (CLV). May not fully cover ethical aspects of customer prioritization and neglects potential negative consequences Newman et al. (2019) Customer prioritization is measured through exclusive promotions, which the authors dene as “as an invitation-only, non-contractual promotional offer intended for a certain individual that can be acted upon by only that individual due to veriable eligibility and redemption criteria set forth by the promoter (i.e., rm)” (p. 77). The authors offer a view on customer prioritization through a sales promotion lens. Focusing solely on exclusive promotions as prioritization tools, applicable more in B2C than B2B settings Nollet et al. (2012) The authors introduce a 4-step process of a purchaser (buying organization) becoming a preferred customer: initial attraction, performance, engagement, and sustainability. Each step inuences the supplier’s decision to grant the customer a preferred status that manifests in terms of better product quality and availability, support in the sourcing process, delivery, or/and prices. The authors introduce a strategic approach for buying organizations to become and remain preferred customers, highlighting the dynamics of the buyer–seller relationships. The core of the denition is similar to those that emphasize the role of long-term partnerships in achieving preferential customer status. Limited to B2B relationships and may not fully capture the dynamics of other contexts Polyakova et al. (2020) “Preferential treatment is the provision of benets to some customers but not others (Jiang et al., 2013; Söderlund et al., 2014). There are many forms of preferential treatment, such as random-draw prizes (e.g. customer sweepstakes), milestone prizes (e.g. for the one-millionth customer), introductory gifts, surprise gifts, exclusive previews, selective discounts, initial bonuses and free upgrades, among many others.” (p. 693) The distinction in preferential treatment forms is made based on the rewards that lead to customers’ selection for such treatment. Focusing solely on the customer benets and applicable more in B2C than B2B settings (Continued) ECONOMIC AND BUSINESS REVIEW 2025;27:80–101 87 Table 1. Continued. Author Denition/conceptualization Uniqueness vs. similarities Gaps Pontes et al. (2021) “Preferential treatment is a common practice in service encounters where only a few customers receive special benets, such as priority boarding, access to exclusive events, and special discounts or offers, that go beyond the rm’s core service (Lacey et al., 2007). Such treatment may be formally earned by the customer through loyalty programs or given spontaneously (and thus unearned) by the service provider. By offering preferential treatment, service providers full the natural need for status and distinction individuals seek in consumption experiences (Dreze & Nunes, 2009; Henderson et al., 2011).” (p. 3034) The conceptualization distinguishes between formally earned and spontaneously given (unearned) preferential treatment, but extensively builds on previous conceptualizations (e.g., Lacey et al., 2007). Limited to services and B2C context Pontes et al. (2023) Customer prioritization is dened as giving selected customers elevated social status recognition or/and additional or enhanced products and services above and beyond standard rm value propositions and customer service practices. Preferential treatment is conceptualized with potential harm to others, impacting attitudes towards the service provider through negative moral emotions, and moderated by an individual’s need for distinction. The authors uniquely investigate the moderating role of the need for distinction on the effects of preferential treatment, especially in the light of negative consequences. The denition is similar to those that focus on offering exclusive privileges to selected customers. Limited to services and does not encompass a wide variety of exclusive privileges Pulles et al. (2016) The authors argue that a preferred customer status can be achieved through customer attractiveness and supplier satisfaction, which in turn lead to preferential resource allocation from suppliers. The denition highlights the role of customer attractiveness and supplier satisfaction in achieving preferred customer status and obtaining preferential resource allocation. The denition is aligned with those authors who emphasize the role of long-term partnership in achieving preferential treatment. Limited to B2B relationships and may not fully capture the dynamics of other contexts Ramani & Kumar (2008) “Customer value management represents the extent to which the rm can dene and dynamically measure individual customer value and use it as its guiding metric for marketing resource allocation decisions.” (p. 29) Customer value management is conceptualized as one of the key components of interaction orientation. Limited to resource allocation view on prioritization (i.e., how much prot each customer generates), measured through CLV Ruz- Mendoza et al. (2021) “The idea of prioritizing specic customers has received signicant attention under the label of ’preferential treatment’, understood as ‘the practice of giving selective customers’ elevated social status recognition and/or additional or enhanced products and services above and beyond standard rm value propositions and customer service practices’.” (p. 341). Preferential treatment is delivered through customized rm-initiated interactions, which can lead to improved relationship strength, protability, customer gratitude, and positive word of mouth. Acknowledging the equation of customer prioritization and preferential treatment, while adopting a conceptualization provided in the literature earlier (i.e., Lacey et al., 2007), the conceptualization distinguishes between standardized and customized rm-initiated interactions as mechanisms to deliver preferential treatment and focuses on building strong B2B relationships. Limited to B2B relationships and may not fully capture the dynamics of other contexts Söderlund et al. (2014) Preferential treatment is conceptualized as receiving something extra compared to other customers in service encounters, which may in turn impact the perceived justice and customer satisfaction. The conceptualization focuses on social and ethical implications of preferential treatment, while at the same time highlighting the potential conict between increased satisfaction and perceived injustice. The denition is well aligned with those authors who incorporate additional benets and personalized experiences in their conceptualizations. Limited to services application (Continued) 88 ECONOMIC AND BUSINESS REVIEW 2025;27:80–101 Table 1. Continued. Author Denition/conceptualization Uniqueness vs. similarities Gaps Tessaro et al. (2023) A purchaser/buying organization has preferred customer status if it receives better treatment than other customers from a supplier, in terms of product quality and availability, support in the sourcing process, delivery, or/and prices. The authors highlight preferred customer status as a key to accessing supplier resources and examine specic challenges faced by startups in achieving it. The focus is on value contribution and relationship development as a base for better treatment, emphasizing earning preferential treatment through long-term partnerships. Comprehensive conceptualization from the international-marketing viewpoint that may be validated in other contexts Varela-Neira et al. (2010) The authors emphasize the need for objective criteria for preferential customer status, as a lack of preferential treatment leads to customer dissatisfaction, especially after a service failure. The conceptualization considers the ethical implications of the perceived injustice of not receiving preferential treatment, emphasizing negative emotional and behavioural consequences, particularly when customers perceive a lack of equity and transparent criteria for preferential treatment. Limited to services application Wetzel et al. (2014) The authors dene customer prioritization as a double-edged sword, triggering both positive, gratitude-driven and negative, entitlement-driven processes, with tactics differing in their ability to impact the rm’s protability. The dual-process model of customer prioritization, highlighting positive and negative consequences, is unique and includes an analysis of the psychological mechanisms of gratitude and entitlements as a response to customer prioritization. This is similar to other denitions that build on the trade-off between positive and negative sides of the prioritization or even acknowledge its downsides. Limited to B2B relationships Xia & Kukar- Kinney (2014) “Preferential treatment is a prevalent relationship marketing practice of companies treating some customers better than others.” The conceptualization acknowledges that preferential treatment is a prevalent relationship marketing practice, focusing on dual mechanisms of fairness and gratitude in consumer responses to preferential treatment highlighting the potential for embarrassment and the role of social comparison, but similarly to others adopting the view that some (regular) customers are treated differently (better) than others (nonregular customers). Limited to relationship marketing view on the concept and limited in the scope of prioritization possibilities, not addressing implications for rm strategy or ethical considerations of prioritization Yeniaras & Kaya (2022) The study focuses on customer prioritization as a job demand that can impact (increase) job stress and customer service performance in SMEs, with business ties acting as a moderating resource. The conceptualization focuses on the organizational implications of customer prioritization by applying the job demands–resource model to examine potential negative consequences of customer prioritization on employee well-being and service quality. Limited to SME context and may not fully cover the dynamics of customer prioritization in larger rms Zheng et al. (2023) Preferential treatment is conceptualized in the context of Airbnb as giving selected customers elevated social status recognition and/or additional or enhanced products and services above and beyond standard rm value propositions and customer service practices. This conceptualization uniquely examines the challenges and consequences of preferential treatment through the lens of a sharing economy, focusing on the potential for unfullled expectations and the impact of online reviews, while emphasizing the provision of additional benets and elevated status similar to denitions that highlight offering exclusive privileges to selected customers. Limited to the context of Airbnb and might not be fully applicable to other platforms within the sharing economy ECONOMIC AND BUSINESS REVIEW 2025;27:80–101 89 neglected due to competing priorities, they may seek alternative suppliers, which results in lost opportuni- ties (Brozovi´ c et al., 2023). Small and medium-sized enterprises (SMEs), being more agile, are often better positioned to adapt to evolving customer needs. Amid this landscape, many export-oriented companies, consciously or unconsciously, adopt customer prioritization strategies (Nyu et al., 2022). Sales managers may oversee multiple markets, segmented based on geographical or economic factors, to streamline operations and better understand customer requirements (Nyu et al., 2022). These managers typically wield a degree of decision-making autonomy, although their actions are overseen by directors or the head ofce. Effective prioritization of markets is crucial for swift decision making and customer satisfaction, ultimately impact- ing revenue generation. Moreover, the prioritization of markets inuences the level of attention from the head ofce or directors, with strategically signicant markets receiving greater focus (Nyu et al., 2022). However, this approach can be contentious, as local suppliers may offer competitive advantages such as lower prices or faster service delivery. Nonetheless, prioritizing customer needs and market dynamics remains essential for business success. In the realm of customer-centricity, companies must also prioritize dignied interactions with customers and avoid price reductions that compromise product quality (Sharp, 1991). This principle extends to remote work practices, which have become prevalent during the Covid-19 pandemic. Remote work arrangements have reduced overhead costs and increased employee satisfaction, provided there is diligent performance (Smite et al., 2023). Furthermore, hiring sales man- agers or directors with local market knowledge can enhance customer-centricity and facilitate stronger supplier relationships (Day, 1999; Sharp, 1991). These individuals are adept at gathering and interpreting market insights, thereby contributing to organiza- tional growth and customer satisfaction. Previous scholarly investigations into the concept of customer prioritization span various disciplines, encompassing elds such as marketing, psychol- ogy, information support systems, and supply chain management. This interdisciplinary approach en- ables diverse perspectives but often yields ambigu- ous ndings. Contrary to the simplistic assumption that customers uniformly appreciate feeling special and receiving preferential treatment, it is impera- tive to recognize that the same preferential treatment may elicit delight in one customer while provok- ing anger or embarrassment in another (Butori & De Bruyn, 2013). While customers generally perceive preferential treatment as somewhat unjust, studies indicate that customer satisfaction tends to be en- hanced among those who receive it. Consequently, it can be argued that preferential treatment exerts differential effects on perceived justice and satis- faction, contingent upon contextual factors such as whether the preferential treatment is received indi- vidually or shared with another customer (Söderlund et al., 2014). Although customer prioritization has been linked to increased job stress on the seller’s side, the presence of business ties mitigates this re- lationship (Yeniaras & Kaya, 2022). Moreover, the attitudinal and behavioural consequences of pref- erential treatment are not universally positive (Xia & Kukar-Kinney, 2014). While recipients may ex- perience feelings of gratitude that positively inu- ence their purchasing behaviour and word-of-mouth recommendations, non-recipients may perceive the treatment as unfair, leading to concerns about fair- ness that negatively impact their response toward the rm. Interestingly, empathy has been identi- ed as a driving force behind preferential treatment, arising due to individuals’ concerns about fairness rather than in spite of them (Blader & Rothman, 2014). Observing others receive preferential treat- ment can evoke envy among bystanders, triggering a motivation for self-enhancement that subsequently inuences their future intentions regarding participa- tion in loyalty programmes (Huang & Brown, 2023). Furthermore, the individual customer’s need for dis- tinction/uniqueness has been identied as a positive moderator of the effect of perceived harm to others resulting from preferential treatment on customers’ attitudes toward the service provider (Pontes et al., 2023). However, witnessing others receive preferen- tial treatment does not invariably evoke negative sentiments. Empirical evidence suggests that prefer- ential treatment can serve as a constructive catalyst when bystanders believe they can attain compara- ble treatment, activating their goal-setting motivation and heightening their commitment to goal-relevant behaviours such as intentions to repatronize (Chang et al., 2020). Understanding the rules governing preferential treatment has been shown to increase mo- tivation to participate in loyalty programmes (Huang & Brown, 2023). Lastly, customer gratitude resulting from customer prioritization has been found to hinge on various factors including the breadth and depth of relationship marketing, as well as customer task and interaction orientation (Nelson et al., 2024). The critical success factors for the implementation of a customer prioritization strategy encompass a wide spectrum of elements (e.g., Homburg et al., 2008; Hüttinger et al., 2014), ranging from top man- agement support and commitment to information technology infrastructure, procient and motivated 90 ECONOMIC AND BUSINESS REVIEW 2025;27:80–101 personnel, organizational culture, quality of customer data sharing practices, formulation and dissemina- tion of the prioritization strategy, employee engage- ment, and effectiveness in measuring, monitoring, tracking, and providing feedback. Additionally, fac- tors such as knowledge management capability and the clear delineation of objectives and goals pertain- ing to customer prioritization play integral roles in ensuring success (Farhan et al., 2018). These factors can be categorized into four groups—project, process, technological, and organizational—although individ- ual factors may not be exclusively conned to a single group. Accordingly, the evaluation criteria for cus- tomer prioritization encompass a range of metrics, including the potential prot rate per unit of time, the anticipated value of future orders with higher prot margins, the alignment of potential orders with avail- able capacity, and indicators of customer loyalty that signify future business opportunities (Akyildiz et al., 2015). The typology of customer prioritization strategy remains somewhat elusive within the existing litera- ture. Drawing from the realm of CRM, a comprehen- sive understanding of customer prioritization strat- egy encompasses elements such as customer strat- egy, customer-interaction strategy, brand strategy, value-creation strategy, organizational culture, hu- man resources management, information technology infrastructure, relationship management processes, and knowledge management initiatives (Lindgreen et al., 2006). Moreover, previous studies have high- lighted specic prioritization tactics, such as the pri- oritization of communication channels (Venkatesan & Kumar, 2004). Expanding on this notion, a holis- tic prioritization strategy may encompass various facets including product, pricing, process, sales, and communication prioritization (Homburg et al., 2008). Within this broad spectrum of prioritization tactics, strategies may involve the provision of core bene- ts, elevation of status, and provision of preferential treatment (Wetzel et al., 2014). Finally, characteristics of preferential treatment may include selectivity and structure (Xia & Kukar-Kinney, 2014). To gain a comprehensive understanding of cus- tomer prioritization strategies, it is imperative to consider the perspective of customers or buyers and evaluate how supplier prioritization strategies man- ifest in their approaches. The literature introduces the concept of customer portfolio alignment (Højbjerg Clarke et al., 2017), contending that for customers to attain attractiveness to suppliers and secure pre- ferred customer status, both internal and external alignment are indispensable. In essence, achieving preferred customer status, a particularly formidable task for startups due to their novelty, which may render them less appealing to suppliers, hinges on several factors: memorable experiences, protabil- ity, innovation potential, credible growth opportu- nities, strategic compatibility, business network, and purchaser–seller relationship (Tessaro et al., 2023). A lingering question pertains to how buying rms, having already secured preferential treatment and thereby being acknowledged as preferred customers or ‘customers of choice,’ can perpetuate supplier com- mitment and uphold this esteemed status within a competitive marketplace. Empirical ndings suggest that supplier development and engagement directly contribute to sustaining commitment; while coupled with information sharing, they positively inuence expectations concerning relationship continuity (Pa- trucco et al., 2024). Other positive outcomes of the preferential treatment include relationship commit- ment, increased purchases, increased share of a cus- tomer, positive word-of-mouth communication, and continuous customer feedback (Lacey et al., 2007). International-marketing literature provides limited insights into customer prioritization within an inter- national context. However, as businesses expand into foreign markets, it becomes essential to understand how to prioritize customers effectively. This under- standing is crucial for optimizing resource allocation and enhancing customer satisfaction (Homburg et al., 2008; Wetzel et al., 2014). A comprehensive understanding of the international context—through both macro-level and micro-level factors inuencing customer behaviour—enables businesses to align their customer prioritization strategies with local market conditions, thus improving their competitive advantage in foreign markets (Douglas & Samuel Craig, 2011). Companies operating across borders face a complex interplay of cultural, economic, regulatory, and geopolitical factors that inuence customer behaviour and preferences (Yeniaras & Kaya, 2022). Customer participation can vary signicantly from one market to another (Menguc et al., 2020). Consequently, developing and adjusting customer prioritization strategies to t local market specics becomes more complex. Different cultures have various perceptions of value, fairness, and business practices (Kim & Baker, 2020; Wetzel et al., 2014). As a result, customer prioritization strategies that are acceptable in one culture might be seen as offensive or discriminatory in another. Additionally, economic conditions and income levels vary greatly across countries, impacting customer value perception and purchasing power (Homburg et al., 2008; Kumar & George, 2007; Reinartz & Kumar, 2000; Venkatesan & Kumar, 2004). Therefore, customer prioritization strategies must be adjusted to cater to different income segments and economic realities across markets. Moreover, customers in various international markets demonstrate different levels of ECONOMIC AND BUSINESS REVIEW 2025;27:80–101 91 task orientation (focus on efciency) and interaction orientation (focus on building relationships) (Nelson et al., 2024; Ramani & Kumar, 2008). This indicates the need to develop tailored targeting approaches for diverse markets. Lastly, much of the existing research on customer prioritization concentrates on specic industries or contexts (Homburg et al., 2008; see previous chapter). By examining customer prioritization across various international contexts, researchers could identify best practices for adapting strategies to foreign environments, enhancing the generalizability of ndings and providing a more comprehensive understanding of the phenomenon. 3 Methodology We selected the interview method to gain insights into the nature of customer prioritization strategies and how sales managers implement these strategies within their rms. Initially, we developed a semistruc- tured interview guide. This guide underwent a pretest phase involving three sales managers, leading to the renement of certain questions to better align with our research objectives to get an understand- ing of how international-sales managers understand customer prioritization and what components con- stitute this phenomenon. The nal interview guide comprised three sections. The rst focused on general demographic information about the interviewee and their company, including variables such as gender, tenure as a manager in an export-oriented sales de- partment, industry type, number of employees, and the number of markets in which the company oper- ates. The second section addressed the rm’s interna- tional activities, ranging from basic export data, such as total international sales over the past three years and the duration of the rm’s involvement in foreign markets, to more detailed insights, such as identifying the most important foreign markets and the ratio- nale behind their signicance, methods for measuring performance in foreign markets, and whether spe- cic performance metrics are prioritized over others. The third section constituted the core of the interview guide, focusing on customer prioritization within the rm. This section was organized around the study’s main themes: conceptual understanding of customer prioritization, barriers to its effective implementa- tion, the inuence of organizational structure on prioritization, performance outcomes, and strategies for implementation. Key questions explored whether prioritization strategies targeted products, countries, customers, or combinations thereof; how subsidiaries were categorized; and the strategies and tactics com- monly employed in prioritization. To ensure respondents were qualied to address these topics, purposeful sampling was employed. Participants were selected from international rms that had entered at least one foreign market through a subsidiary rather than through exporting or fran- chising. Additionally, all rms primarily served busi- ness customers—a critical criterion, as business-to- business (B2B) relationships often emphasize prior- itization strategies to sustain protability in foreign markets (Homburg et al., 2008). This emphasis aligns with insights from relationship marketing research (e.g., Lindgreen et al., 2006; Mathur & Kumar, 2013), which highlights the distinct nature of B2B customer prioritization compared to end-customer strategies. Thirteen in-depth, semistructured interviews were conducted with managers from sales departments of export-oriented rms. All respondents were responsi- ble for sales in foreign markets and provided insights regarding business customers in their most signi- cant international markets. The interviews were con- ducted either in person or via Microsoft Teams video calls, with each session lasting approximately 45 min- utes. For detailed information about the interviewees and their professional backgrounds within the com- panies, please refer to Table 2. Finally, a data analysis was conducted. The inter- views were transcribed and reviewed, after which they were combined and categorized into themes. To enhance comprehension of the topic, visualiza- tion tools such as quotes, tables, gures, word clouds, and comparison matrices were utilized. Additionally, descriptive statistics were employed to present and identify patterns and provide an overview of the data (Fisher & Marshall, 2009). In analysing the data, we adopted a combination of inductive and deductive approaches, commonly referred to in business literature as the Gioia method- ology (Gioia et al., 2013; Magnani & Gioia, 2023). Qualitative rigour was primarily ensured through our analytical approach, particularly in categorizing data into primary and secondary groups to facilitate their later organization into a more systematic format. Dur- ing the initial analysis phase, delity to participants’ language was maintained, resulting in a potentially extensive number of primary categories. Although this abundance of categories may initially seem overwhelming, this stage of confusion is deemed cru- cial, echoing Magnani and Gioia’s (2023) sentiment that clarity often emerges after navigating through complexity. As the analysis progressed, commonalities and differences among the numerous categories were identied, akin to Strauss and Corbin’s concept of axial coding. This process gradually reduced the relevant categories to a more manageable number. Subsequently, these categories were labelled or de- scribed, preferably retaining participants’ language, and examined collectively for underlying patterns. 92 ECONOMIC AND BUSINESS REVIEW 2025;27:80–101 Table 2. Sample characteristics. Years in Size of Interviewee Gender Age the company the rm Industry Main foreign markets Interviewee A Male 33 2 years SME Food processing Romania, Czech Republic Interviewee B Male 46 7 years Large Electrical installations Croatia Interviewee C Male 57 20 years Large Machinery production Germany, Russia Interviewee D Male 40 15 years SME Automation process control Croatia, Serbia Interviewee E Male 37 7 years SME Manufacture of bathroom ttings Germany Interviewee F Male 37 4 years SME Software developer Poland, Hungary, Czech Republic Interviewee G Male 42 7 years Large Automotive industry Germany Interviewee H Male 35 5 years Large Software as a service USA, Poland, Czech Republic Interviewee I Male 39 10 years Large Pharmaceutical industry Serbia, Romania, Germany Interviewee J Male 41 8 years SME Software as a service Serbia Interviewee K Male 40 15 years SME Broadcasting industry Europe, Middle East and North Africa Interviewee L Male 37 7 years Large Pharmaceutical industry Russia Interviewee M Male 35 6 years SME Machinery production CIS countries At this juncture, a multifaceted analytical approach was adopted, encompassing informant terms, codes, as well as abstract, second-order theoretical con- cepts such as themes, dimensions, and overarching narratives—aiming to answer the fundamental ques- tion, “What is the underlying phenomenon?,” from a theoretical standpoint. Engaging in a gestalt analysis, as advocated by Gioia and Chittipeddi (1991), prompted the formu- lation of additional inquiries, guiding subsequent in- terviews towards concepts and tentative relationships emerging from previous discussions—a process akin to Glaser and Strauss’s (2017) theoretical sampling. In the secondary analysis phase, a deeper exploration of the theoretical landscape was undertaken, exam- ining whether emerging themes suggested concepts that could aid in describing and explaining observed phenomena. Special attention was given to emerging concepts lacking sufcient theoretical grounding in existing literature or those standing out due to their relevance to a new domain. Once a viable set of themes and concepts was established and theoretical saturation was achieved, exploration of further condensing second-order themes into aggregate dimensions was pursued (see Fig. 1). This process culminated in the construction of a data structure, facilitating the visual representation of ndings and illustrating the progression from raw data to terms and themes—an essential aspect of demonstrating rigour in qualitative research (Pratt, 2008; Tracy, 2010). 4 Research results 4.1 Thematic analysis Four major themes emerged from our research: prior- itization tactics and strategies, international customer protability, headquarters–subsidiary relationships, and customer relationship management. We argue that these are key elements driving customer priori- tization strategies in foreign markets. Even more, we predict that the choice of prioritization tactics and strategies inuence international customer protabil- ity, which together with headquarters–subsidiary re- lationships forms successful customer relationship management. Moreover, we could argue that some of the rst-order categories that constitute these four identied themes can be treated as forms of cus- tomer prioritization (e.g., customer segmentation, customization, personalization), some as inputs to customer prioritization strategy development (e.g., customer value analysis, risk management), and some as outcomes of customer prioritization (e.g., customer loyalty, satisfaction and retention, strategic alignment). The enterprises under study divulge that their prioritization tactics and strategies vary contingent upon factors such as product line, customer rm size, industry relevance, and the signicance of foreign markets—a contextual prioritization framework, in essence. Consequently, we contend that customer seg- mentation should be approached in a twofold man- ner: rstly, delineating segments within each of these four pivotal factors independently; secondly, discern- ing commonalities across identied segments within these four factors to establish global segments. Sub- sequently, resource allocation ought to align with the identication of the most salient customer segments, where customization and personalization levels sur- pass those of other segments. The assessment of international customer prof- itability encompasses a spectrum of methodologies, ranging from broad risk management principles to more nuanced approaches such as activity-based costing (ABC), which categorizes customers into A, B, and C groups, alongside customer value analy- sis. A discernible trend reveals a growing reliance ECONOMIC AND BUSINESS REVIEW 2025;27:80–101 93 on contemporary data analytics and technological advancements—including big data, articial intelli- gence (AI), blockchain, and machine learning—to meticulously allocate prots to individual customers, thereby enhancing protability assessments. How- ever, while some rms adopt customer prioritiza- tion strategies with the explicit aim of bolstering short-term protability—such as prioritizing sup- port, upselling, and cross-selling—our investigation highlights notable disparities in the customer priori- tization strategies employed by rms based on their short-term versus long-term orientations. Notably, long-term-oriented approaches, such as relationship marketing, customer loyalty programmes, and cus- tomer success management, are favoured by certain rms seeking sustained protability and customer retention. We posit that in the international arena, customer prioritization strategies must be tailored in accor- dance with the entry mode adopted by rms in for- eign markets. Naturally, rms venturing into foreign markets with a subsidiary view such markets as piv- otal, with signicant growth potential. Consequently, customers in these markets warrant prioritization over those in markets where the company enters via agents, distributors, or other less resource-intensive entry modes. Accordingly, we regard headquarters– subsidiary relationships as a crucial determinant of customer prioritization strategy. Subsidiaries play a pivotal role in devising appropriate customer prior- itization strategies in foreign markets by furnishing performance feedback and transferring insights re- garding the specic needs and preferences of foreign customers to the headquarters and other subsidiaries. The efcacy of this process hinges upon the sub- sidiary’s ability to assert its voice and ensure that it is heard and heeded by other stakeholders, along- side the development of effective communication channels. Export sales managers have underscored subsidiary autonomy as a cornerstone of the or- ganizational structure of international rms, which facilitates the cultivation of international customer prioritization strategies. Lastly, strategic alignment emerges as both a prerequisite and a consequence of efcient customer prioritization at the foreign subsidiary level. It is a prerequisite insofar as sub- sidiaries must align with the goals, codes of conduct, strategies, and corporate culture of the headquarters. Conversely, it is a consequence in that effective cus- tomer prioritization can bolster the protability of the subsidiary, augmenting its strategic signicance and enhancing alignment with the headquarters and other subsidiary networks. Conclusively, our research elucidates the role of customer prioritization strategy in nurturing en- during customer relationships, a phenomenon com- monly referred to as customer relationship manage- ment. We nd that customer loyalty emerges as a pivotal factor, with some rms opting to prioritize customers based on their existing loyalty, while con- currently acknowledging that loyalty can also stem from heightened levels of customer satisfaction— a sentiment frequently experienced by those cus- tomers who receive prioritized treatment. In sum, effective customer prioritization strategies can engen- der increased customer retention rates and foster a heightened propensity among customers to engage in recurrent consumption. 4.2 Facets of customer prioritization strategy In formulating a customer prioritization strategy, it is imperative to comprehend how sales managers target and prioritize different customer groups. The following quotes offer valuable insights into this dy- namic: “Yes, we prioritize our customers, we categorize them into A, B, and C groups.”—Interviewee D “Our prioritized customers receive more attention from our product manager.” —Interviewee C “We are a market-oriented company, and we always listen to our customers and employ customer prioritization strategies.” —Interviewee A “Of course, income is crucial for every company, and we endeavour to enhance it through the implementation of customer prioritization strategies. Our most priori- tized customers enjoy certain privileges; for instance, we strive to accommodate their re- quests promptly and address their inquiries expeditiously.”—Interviewee F When analysing the responses of interviewees re- garding their perspectives on customer prioritization, we observe recurring themes. They primarily de- pict customer prioritization as a specic marketing strategy aimed at targeting and prioritizing customer groups. Based on the analysis provided, key messages are closely linked to how interviewees describe cus- tomer prioritization and its perceived value. This is evident in the following excerpts: “Our sales managers consistently under- stand how to prioritize our customers. We have some informal rules in place.” —Interviewee A 94 ECONOMIC AND BUSINESS REVIEW 2025;27:80–101 Representative quotes 1 st order categories Aggregate 2 nd order categories —MANIFESTATIONS NOTE: letter in the parentheses corresponds to respondent designation HQ–SUBSIDIARY RELATIONSHIPS CUSTOMER RELATIONSHIP MANAGEMENT INTERNATIONAL CUSTOMER PROFITABILITY PRIORITIZATION TACTICS/STRATEGIES strategic alignment autonomy knowledge transfer subsidiary’s voice/communication channels performance feedback loyalty and retention customer satisfaction risk management customer value analysis/ABC costing long- vs. short-term orientation data analytics and technology customer segmentation prioritization context resource allocation customization and personalization Our subsidiary has a voice, and we actively listen to their feedback, striving to address their wishes and comments appropriately (C). Our subsidiaries operate autonomously, which allows them to make decisions independently. However, we retain oversight and final decision-making authority over their actions (I). We have established subsidiaries in markets where we have achieved success (K). We are actively monitoring our customers’ responses to our products (G). We prioritize our customers based on various factors: revenue contribution, loyalty, and retention (A). We distinguish between our most significant and least significant customers for our business (C). We diligently record all comments and requests from our customers, striving to fulfil their needs and preferences (F). We prioritize our customers based on the potential profit they can generate for our company (D). Prioritizing our customers enables us to enhance our profitability in the short term (G). Customers prioritized within our company experience heightened satisfaction, leading to increased loyalty and a greater propensity to return to us repeatedly (M). We are a newly established company in the market, and our approach involves implementing a customer prioritization concept that focuses on customer groups across various markets, rather than exclusively targeting foreign markets (A). We prioritize our customers within the industries that hold the greatest significance for our company (M). We employ customer prioritization strategies based on product importance using advanced data analytics, prioritizing those we believe will be most successful in the market or hold the highest significance within our firm (D). Subsidiary prioritization is a success when it enables headquarters’ global vision to empower local agility to create shared success (B). Our best key-account managers serve our most important international customers (C). We grant our most important customers services not available to other customers, which turns our products into real personal experiences for them (E). Fig. 1. Data structure. ECONOMIC AND BUSINESS REVIEW 2025;27:80–101 95 “Sometimes we prioritize our customers, but mostly they are treated equally because we have regional managers overseeing different markets.”—Interviewee B “We believe that customer prioritization plays an important role in the rm’s development.”—Interviewee C “We aim to prioritize our potential cus- tomers from the outset of communication with them.”—Interviewee D The interview respondents underscored the paramount importance of implementing a customer prioritization strategy. These organizations exhibit a readiness to cater to customer needs while simul- taneously aiming to expand their market presence by accommodating as many customers as feasible. Firms must adopt a customer-centric approach, while also adhering to customer prioritization protocols. By doing so, sales managers can optimize protability within shorter time frames, thereby positively impacting overall company operations. During forays into new markets, company managers diligently heed the feedback of prospective or existing partners, striving to meet their needs with precision. Recognizing that contented customers serve as valuable ambassadors, these endeavours bolster the company’s reputation and foster growth. Conversely, neglecting potential or lukewarm customers risks losing them to competitors, which underscores the critical importance of attentive listening and accurate prioritization. In practical terms, there is an abundance of instances where dissatised customers, whether due to unmet offers or lacklustre supplier engagement, defect to competitors offering more responsive service. Retrieving such customers becomes increasingly arduous, potentially resulting in missed opportunities as resources are diverted to higher-priority orders. Further along the workow, suppliers engage in their own prioritization processes, a factor that can signicantly inuence customer perceptions of trust, attitude, and satisfaction with the supplier, as corrob- orated by recent research ndings (Brozovi ´ c et al., 2023). For instance, prolonged equipment assembly times at the factory, delayed responses from sup- port staff to customer inquiries, or interactions with less procient employees or project managers may prompt customers to seek alternative vendors. In such instances, customers are within their rights to transi- tion to another supplier who can deliver high-quality services and comprehensive support throughout the entire product or service implementation cycle. Hence, it is imperative to meticulously draft con- tracts between customers and suppliers, ensuring transparency regarding service costs and potential additional expenses incurred throughout project ex- ecution (Nyu et al., 2022). A conscientious supplier who provides accurate information and fulls con- tractual obligations is more likely to foster enduring customer loyalty. Every business aspires to differenti- ate itself to attract and retain a burgeoning customer base, employing various strategies and methodolo- gies in its management practices. Customer reprior- itization stands out as a method capable of swiftly and decisively inuencing the overall health of a com- pany. In export-oriented markets, companies must heed the insights of foreign market sales managers who serve as conduits for customer feedback. Effec- tive communication between the head ofce, such as the sales department director, and foreign cus- tomers is paramount. This proactive approach not only facilitates rapid growth in a globalized set- ting but also underscores the signicance of market prioritization. However, instances may arise where head ofces or directors become preoccupied with tasks deemed more critical, be they in the domestic market or in more lucrative and rapidly expanding foreign markets. This underscores the necessity for market prioritization strategies to efciently allocate resources and maximize opportunities for growth. The following quotes lend support to these ndings: “Sometimes we are prioritizing the markets; it means we have the most important mar- kets and the less important markets, and we will pay attention to the rst ones.” —Interviewee M “We need to listen to our customers to be market-oriented and to be successful on the export markets.”—Interviewee K “We want to attract new customers and for this we need to pay attention for them.” —Interviewee L A key nding of the study is the association between customer prioritization and organizational structures within the rm, such as the relation- ship between headquarters and subsidiaries, as well as the underlying rules and practices, which di- rectly impact its effectiveness. This observation aligns with the perspective of Lee et al. (2015), who as- sert that organizational structure plays a crucial role in achieving marketing objectives. They highlight several facets of organizational structure, including formalization, autonomy, and centralization. Auton- omy, which stands in contrast to formalization, allows 96 ECONOMIC AND BUSINESS REVIEW 2025;27:80–101 for greater freedom in decision making concerning customer prioritization. Conversely, centralization, akin to formalization, denotes centralized power in customer prioritization decision-making processes. Future research is needed to explore the relationships between these underlying concepts. 5 Discussion The ndings offer valuable insights into customer prioritization in an international context, expanding upon existing marketing research. The study high- lights how specic customer prioritization tactics and strategies inuence the structure and effectiveness of CRM. For instance, customer prioritization dictates the type and frequency of interactions with various customer segments (Peng et al., 2012). High-priority customers typically receive more frequent and per- sonalized communication, while lower-priority cus- tomers are engaged through standardized and less frequent interactions, shaping customer perceptions and the quality of relationships (Venkatesan & Ku- mar, 2004). Additionally, customer prioritization un- derpins segmentation and targeting efforts, enabling rms to categorize customers based on their value and protability and thereby tailor CRM strategies and allocate resources efciently (Peng et al., 2012; Farhan et al., 2018). This targeted approach not only optimizes CRM efforts but also maximizes returns by ensuring that the most valuable customers receive focused attention and services that foster long-term relationships. Effective customer prioritization strate- gies are, therefore, integral to achieving CRM success. The nding that customer prioritization tactics and strategies signicantly inuence international cus- tomer protability is well-supported in marketing literature. For example, Lee and Grifth (2019) un- derscore the importance of allocating resources to the most protable customers, emphasizing that con- centrating marketing efforts on high-value segments yields higher returns. Such prioritization enhances customer satisfaction and loyalty, ultimately driv- ing increased sales and protability (Homburg et al., 2008). Mathur and Kumar (2013) further highlight that integrating customer prioritization with relation- ship dynamics can improve retention, which posi- tively impacts protability. Additionally, analysing customer lifetime value (CLV) is critical for un- derstanding protability in international markets (Venkatesan & Kumar, 2004). Empirical evidence from McKinsey shows that enhancing customer ex- perience can more than double growth compared to industry peers (Bough et al., 2023). Prioritization drives protability through mechanisms such as a “gratitude-driven process,” where tailored benets and personalized experiences foster loyalty, repeat purchases, and positive word of mouth, particularly in international contexts requiring trust building (Ain et al., 2024; Blattberg et al., 2009; Wetzel et al., 2014). However, prioritization may backre if it leads to customer entitlement or perceptions of unfairness, es- pecially in culturally diverse settings where fairness perceptions vary (Butori & De Bruyn, 2013; Newman et al., 2019; Wetzel et al., 2014). Customized inter- actions are essential for strengthening relationships and triggering gratitude, as standardized approaches often fail to produce meaningful outcomes, which highlights the need for adaptability in international markets (De Wulf et al., 2001; Ruz-Mendoza et al., 2021). Thus, the dynamic interplay between prioriti- zation tactics and international customer protability is critical for rms aiming to succeed in competitive global markets. However, relatively little is known about how specic dimensions of prioritization and protability, such as contextual inuences on risk management, interact and shape outcomes. This study proposes that the protability of interna- tional customers signicantly shapes CRM strategies, aligning with the established inuence of protability on resource allocation (Homburg et al., 2008). Firms frequently prioritize customer relationships based on CLV , a predictive metric of long-term protability (Blattberg et al., 2009; Venkatesan & Kumar, 2004). By concentrating resources on high-CLV customers, rms can optimize CRM efforts and maximize re- turns in international markets (Rust et al., 2004). This approach involves identifying protable customer segments across borders and strategically allocating marketing investments to meet their specic needs (Venkatesan & Kumar, 2004). The service–prot chain model further emphasizes the necessity of aligning CRM practices with protability metrics to enhance outcomes (Hogreve et al., 2017). Developing tar- geted CRM strategies for high-value international customers often includes offering exclusive benets, personalized communication, and proactive service, which foster loyalty and retention (Kim & Baker, 2020). In essence, the satisfaction, retention, and loyalty of protable customers validate the imple- mentation of focused CRM initiatives. The dynamics of headquarters–subsidiary relationships is critical in shaping CRM practices within MNEs. Effective strategic alignment between headquarters and subsidiaries ensures that CRM initiatives are both consistent with corporate objectives and responsive to local market conditions. Factors such as coordination, control, and conict management signicantly inuence the success of these relationships (Roth & Nigh, 1992). Knowledge transfer from headquarters to subsidiaries enhances ECONOMIC AND BUSINESS REVIEW 2025;27:80–101 97 CRM effectiveness by sharing best practices and global customer insights, ultimately improving customer satisfaction and loyalty (Jean et al., 2015). This process is especially important in international contexts, where subsidiaries encounter distinct chal- lenges and opportunities that demand tailored CRM strategies. Headquarters can guide subsidiaries with insights into global trends, effective prioritization tactics, and culturally adapted CRM approaches, while subsidiaries contribute by customizing CRM practices based on local market dynamics and customer preferences. Achieving successful customer prioritization requires a “selective organizational alignment” between headquarters and subsidiaries (Homburg et al., 2008). This approach balances centralized strategic direction with decentralized autonomy, empowering subsidiaries to tailor CRM efforts while maintaining alignment with the overarching corporate goals. By striking this balance, MNEs can enhance the effectiveness of their CRM strategies and foster higher customer satisfaction. We contribute to the customer prioritization lit- erature by identifying the subsidiary’s structural position within MNEs as a key factor inuencing customer prioritization in an international context. This concept aligns with Bouquet and Birkinshaw’s (2008) framework of weight and voice, which exam- ines how foreign subsidiaries gain attention from corporate headquarters. We conceptualize a sub- sidiary’s voice and weight as enablers or mechanisms through which customer prioritization is operational- ized within MNEs. In this context, a subsidiary with greater voice and weight is better positioned to serve customers effectively. Specically, positioned in this sense refers to the subsidiary’s capacity to respond more promptly, exhibit greater attentiveness to cus- tomers, and better meet their needs and preferences compared to a subsidiary with less voice and weight. For example, subsidiary A, possessing higher voice and weight than subsidiary B, is likely to have greater responsiveness and customer-centric capabilities, en- abling superior customer service. This understanding can advance the theory of headquarters–subsidiary relationships and highlight the need for interdisci- plinary assessment of customer prioritization, inte- grating perspectives from marketing and interna- tional business scholars. 5.1 Theoretical contributions Our study on customer prioritization in an interna- tional context makes several signicant contributions to theory. Foremost, it lls a crucial gap by being the rst study to explicitly and comprehensively ex- amine the importance of the formality of customer prioritization. Previous research on customer prior- itization and its impact on business performance has largely overlooked the role of formality (e.g., Homburg et al., 2008). By highlighting the critical role of international-sales departments’ coordinative processes and activities in shaping the formality of customer prioritization across subsidiaries, our study addresses this gap. Additionally, we demonstrate that customer prioritization serves as a valuable capabil- ity that ultimately leads to improvements in business performance. Secondly, our research contributes to the conceptual understanding of customer prioritiza- tion. From the international-marketing perspective, we understand customer prioritization as an organi- zational ability that enables companies to reallocate and optimize their sales resources across markets, thereby creating a locally sustainable competitive ad- vantage and effectively addressing the challenges and opportunities presented by dynamic environments. By developing a conceptual model of customer pri- oritization, we identify and elucidate four distinct manifestations of this concept (see Fig. 1). Lastly, our study highlights the dearth of theoretically grounded research on customer prioritization and underscores the need to conceptualize it as a dynamic capability that evolves over time and in response to varying con- textual factors. In this regard, we advocate for future researchers to adopt dynamic capabilities theory as a framework for investigating customer prioritization and its implications. 5.2 Managerial implications A key takeaway for managers is that performance can be positively inuenced by promoting the formality of customer prioritization. Formality in this context suggests to managers that sales repre- sentatives should implement customer prioritization meticulously, carefully evaluating each customer to determine its applicability. Managers are encouraged to conduct regular assessments, such as annual evaluations, of customer prioritization practices within the company. During these assessments, it is crucial to evaluate the potential future protability of customers based on their expertise, nancial resources, and operational plans. This initial evaluation will enable managers to identify areas for improvement and recognize the importance of enhancing international-sales team capabilities in customer prioritization. Based on the assessment of customer prioritization formality within the organization, managers can devise targeted interventions to enhance customer prioritization and leverage resources available in marketing and sales departments more efciently. These interventions 98 ECONOMIC AND BUSINESS REVIEW 2025;27:80–101 may involve reallocating personnel, exchanging knowledge or resources, depending on resource availability. For instance, creating interest groups that convene in informal settings can facilitate the sharing of knowledge and expertise among sales employees, fostering open communication and enhancing customer prioritization practices. Following the implementation of interventions, management can select sales employees to serve as champions for customer prioritization. In addition to these interven- tions, managers can promote customer prioritization by fostering a supportive organizational culture and providing necessary instructional support. It is important for managers to recognize the pivotal role of sales managers in assessing, cultivating, and nurturing the formality of customer prioritization. Additionally, our ndings indicate that international customer prioritization needs to be aligned with the surrounding institutional and environmental context. Therefore, it is imperative for managers to continuously monitor the external environment and make timely adjustments to international-marketing and sales strategies accordingly. 5.3 Limitations and further research The research has several limitations. Firstly, the study was conned to Slovenia, which suggests the need for future research to include data from other countries to enhance the generalizability of ndings. Secondly, the small number of rms involved in our qualitative study restricts our ability to determine whether our ndings can be replicated and gen- eralized across a broader context. Additionally, we acknowledge that our assessment of customer pri- oritization, which informed the development of the conceptual framework (see Fig. 1), may be subjective. As this is a small-sample, qualitative study, we do not assert that rms universally embrace any partic- ular manifestation of customer prioritization; rather, we suggest a tendency towards these manifestations. Moreover, the research was conducted during the pandemic period of 2021–2022, which may have inu- enced the results. Lastly, while our exploration of the formality of customer prioritization in international sales and marketing has been narrowly focused on the operational interface, future research should broaden its scope to encompass both strategic and operational levels. Given the evolving trends in the dynamic international-business landscape, where rms increasingly adopt strategic customer prioritization approaches, further research into this phenomenon is both timely and essential. Future quantitative studies could evaluate the extent to which rms align with customer prioritization strategies and empirically test the proposed relationships, deepening our understanding of its connection to organizational protability. The relatively underexplored domain of international customer protability highlights the need for research that examines the nuanced interplay between prioritization strategies and protability, particularly in the context of diverse global markets. From an international-marketing perspective, it would be valuable to investigate why, when, and how rms prioritize different countries and regions, especially given the rising geopolitical tensions and deglobalization trends. While signicant progress has been made in understanding customer prioritization in B2B contexts, there remains a gap in understanding how practices differ between B2B and B2C rms or within organizations serving both client types. Additionally, exploring countertrends such as penalizing customers or managing production capacity to meet preferential treatment demands could offer fresh insights for scholars. Future research should focus on developing frameworks that guide rms in implementing ethical and effective customer prioritization strategies, accounting for diverse contexts, customer segments, and moral considerations. This includes investigating the role of emerging technologies, such as big data analytics, blockchain, and AI, in shaping customer prioritization practices and addressing challenges related to increasing personalization and automation of customer interactions. Such studies could provide actionable insights into navigating the complexities of contemporary customer relationship management in global markets. Acknowledgements The authors acknowledge the nancial support from the Slovenian Research and Innovation Agency (ARIS) under research core funding No. P5-0177. References Ain, Q. U., Lim, W. M., Rasool, S., & Zeshan, M. (2024). How do customers react to preferential treatment? An affective events theory and time-lagged survey. 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