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Account Management

Account Management is a term introduced as a way of improving selling techniques to a few key customers/major account (Barrett 1986; Millman & Wilson 1995)

By implementing account management, a supplier company will benefit from the relationship regarding business growth (e.g. selling to a new customer division, customer retention, identifying more opportunities with customers) and cost reduction (e.g. short learning curve, avoiding formal tenders, improved forecasting) (Ryals & Holt 2007).

Another term that is closely related to KAM is relationship marketing (McDonald, Millman & Rogers 1997). Relationship marketing is defined as "the development and maintenance of mutually satisfying long-term relationships with customers‟ (Buttle 1996, p. 1). The term relationship marketing was first introduced in marketing literature in the 1980s as an approach in service industries. Since then, researchers have debated the concept and its role in marketing depending on the orientation, whether product or customer (Barrett 1986; Millman & Wilson 1995). Marketing management that is based on relationships is now a common practice across industries (Buttle 1996), including retail and internet-based marketing (Egan 2000; Keating, Rugimbana & Quazi 2003).

Homburg, Workman Jr and Jensen (2002) proposed a model of KAM that consists of four elements: actors, activities, resources, and formalisation. Based on data collected from 121 US based and 264 German-based companies, these authors defined eight approaches to describe how a supplier manages their key business customers: 1) Top-management KAM; 2) Middle-management KAM; 3) Operating-level KAM; 4) Cross-functional dominant KAM; 5) Unstructured KAM; 6) Isolated KAM; 7) Country-club KAM; and 8) No KAM. These categorisations have shifted the focus of KAM research from issues related to the design of KAM programs or activities to a more structural reformation of KAM adoption in the organisation (Gounaris & Tzempelikos 2012). However, this classification does not reflect how a company develops their relationship with customers over time

Developing relationships in KAM can be considered to occur in stages as shown in the relational model proposed by (Millman & Wilson 1995) shown in Table 1. The key account manager plays a significant role in organising total offers to the customer and facilitating the exchange process across customer and seller organisations. This model is also supported by an empirical study by McDonald, Millman and Rogers (1997) involving 11 pairs of buyer-seller relationships, which concluded that account manager trustworthiness is one of the main customer concerns.

Table 1 Relational Model of KAM

Stage || Key relationship activities

Pre-KAM || Gather basic information, provide basic services

Early-KAM || Explore more opportunities, provide tentative service customisation

Mid-KAM || Frequent cross-boundary contact, more senior level involvement in buyer and seller organisation

Partnership-KAM || Sharing sensitive commercial information

Synergistic-KAM || Create joint value in the marketplace

Gounaris and Tzempelikos (2014) proposed an integrative model that incorporated both the organisations‟ structural reformations and the relationship approach of KAM. Adoption of KAM stimulates structural adjustment and skills development; both will improve relational capabilities of a supplier organisation. Improving relational capabilities will lead to better relationship quality that will significantly improve financial and non-financial achievement (Gounaris & Tzempelikos 2014; Ryals & Holt 2007).

References:


 * 1) Barrett, J 1986, 'Why major account selling works', Industrial Marketing Management, vol. 15, no. 1, pp. 63-73
 * 2) Buttle, F 1996, 'Relationship marketing', in F Buttle (ed.), Relationship marketing: theory and practice, Paul Chapman Publishing Ltd, London, pp. 1-16.
 * 3) Egan, J 2000, 'Drivers to Relational Strategies in Retailing', International Journal of Retail and Distribution Management, vol. 28, no. 8, pp. 379-86.
 * 4) Gounaris, S & Tzempelikos, N 2012, 'Conceptualization and measurement of key account management orientation', Journal of Business Marketing Management, vol. 5, no. 3, pp. 173-94.
 * 5) Gounaris, S & Tzempelikos, N 2014, 'Relational key account management: building key account management effectiveness through structural reformations and relationship management skills', Industrial Marketing Management, vol. 43, no. 7, pp. 1110-23.
 * 6) Homburg, C, Workman Jr, JP & Jensen, O 2002, 'A configurational perspective on key account management', Journal of Marketing, vol. 66, no. 2, pp. 38-60.
 * 7) Keating, B, Rugimbana, R & Quazi, A 2003, 'Differentiating between service quality and relationship quality in cyberspace', Managing Service Quality, vol. 13, no. 3, pp. 217-32.
 * 8) McDonald, M, Millman, T & Rogers, B 1997, 'Key account management: theory, practice and challenges', Journal of Marketing Management, vol. 13, no. 8, pp. 737-57.
 * 9) Millman, T & Wilson, K 1995, 'From key account selling to key account management', Journal of Marketing Practice, vol. 1, no. 1, pp. 9-21.
 * 10) Ryals, LJ & Holt, S 2007, 'Creating and capturing value in KAM relationships', Journal of Strategic Marketing, vol. 15, no. 5, pp. 403-20.