Returns on key accounts:do the results justify the expenditures?

Abstract

Purpose – The use of key accounts has become a mature trend and most industrial firms use this concept in some form. Selling firms establish key account teams to attend to important customers and consolidate their selling activities. Yet, despite such increased efforts on behalf of key accounts, sufficient research has not quantified the returns on key account strategy nor has it firmly established performance differences between key and non-key accounts within a firm. In response to this shortcoming, this study aims to examine returns on key accounts. Design Methodology/approach – Data were collected from a global consulting firm. The data collection started two years after the implementation of the key account program. Data were collected on recently acquired customers (within the previous year) at two time periods: year 1 and year 3 (based on company access of data). Findings – Initially, key accounts perform as well or better than other types of accounts. However, in the long term, key accounts are less satisfied, less profitable and less beneficial for a firm’s growth than other types of accounts. Because the returns to key account expenditures, thus, appear mixed, firms should be cautious in expanding their key account strategies. Research limitations implications – The study contributes to research in three areas. First, most research on the effectiveness of key accounts refers to the between-firm level, whereas this study examines the effect within a single firm. Second, this study examines the temporal aspects of key accounts, namely, what happens to key accounts over time, in comparison with other accounts in a fairly large sample. Third, it considers the survival rates of key accounts versus other types of accounts. Practical implications – The authors suggest that firms also need to track their key accounts better because the results show that key accounts are less satisfied, less profitable and less beneficial for a firm’s growth than other types of accounts. Originality/value – Extant research has not examined these issues.

Publication DOI: https://doi.org/10.1108/JBIM-11-2014-0234
Divisions: College of Business and Social Sciences > Aston Business School > Marketing & Strategy
College of Business and Social Sciences > Aston Business School
Uncontrolled Keywords: buyer–seller relationships,key accounts,Business and International Management,Marketing
Publication ISSN: 0885-8624
Full Text Link: http://www.emer ... IM-11-2014-0234
Related URLs: http://www.scop ... tnerID=8YFLogxK (Scopus URL)
PURE Output Type: Article
Published Date: 2016-03-07
Accepted Date: 2015-04-06
Submitted Date: 2014-11-20
Authors: Sharma, Arun
Evanschitzky, Heiner (ORCID Profile 0000-0003-1013-7679)

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