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Title: The impact of Key Account Management activities on performance.
Authors: Pol, NHM
Keywords: Key Account Management
Key Account Management activities
Firm performance
Sales activities
Sales-Marketing interaction
Supplier-Customer relationship
Customer knowledge
Issue Date: 28-Oct-2014
Publisher: Open Universiteit Nederland
Abstract: Buyer–supplier relationships have evolved tremendously. Consequently, Key Account Management (KAM) has gained relevance, since KAM includes the performance of additional activities and/or the designation of special personnel direct at the company’s most important customers. It is likely that the familiar structures of marketing and sales will be replaced by process-based structures, in which formalization of KAM should be included. The literature however shows mixed findings on the effect of formalization on KAM performance: Both positive and negative effects have been found. In order to understand how KAM formalization can increase performance, it is important to know which KAM activities will generate a positive effect on KAM performance, and how organizational aspects influences this effect. Therefore, this study has investigated the following problem statement: What is the influence of Key Account Management activities and organizational aspects on Key Account Management Performance? A comprehensive literature review was carried out in order to design a framework that includes KAM activities, KAM performance and the relationships between these concepts. A qualitative research method with two cases in different companies has been used in order to collect the data necessary to evaluate, identify and assess relationships in the framework. The KAM performance indicators found were sales growth for one company, and customer satisfaction for the other company. Looking however at the effect of KAM activities on these performance indicators, for each KAM activity no clear difference was found considering these different performance indicators. Looking at the activities in KAM as described in the literature, there are 4 main categories of activities: 1. Direct sales activities 2. Sales/marketing alignment activities 3. Customer management activities 4. Customer knowledge management activities The participants first gave their view on what the main activities per category are, and what the effect of these activities is on KAM performance. Subsequently, for each category they gave their opinion on propositions derived from the literature studies, as well as on organizational aspects influencing these propositions. Per category, the most important conclusions are given below: 1. Direct sales activities: Product/services should be based on identified customer problems. For the requirement-definition and for the project execution afterwards it is important to get involvement from the whole supplier organization. 2. Sales/marketing alignment activities: It is important to get a “fit” between the supplier company and the customer regarding products, roadmaps and strategy. There should be a good alignment on product definition, services and price. 3. Customer management activities: It should be made sure that the right stakeholders at supplier and customer build a good relationship with each other, and that the whole supplier company is customer focused. The account manager should play a major role in coordinating this. 4. Customer knowledge management activities: Letting the account manager actively deploy customer knowledge into the native organization gives better results than using a key account customer database. It is useful to make an inventory of the “customer knowledge gap” in the native organization. The following KAM activities should especially be considered for formalization: • KAM activities that improve the relationship with the customer • KAM activities that help gathering customer knowledge and actively deploy this in the supplier company • KAM activities that help to get a “fit” between the supplier company and the customer regarding products, roadmaps and strategy Companies should pay attention that there are important moderating factors (such as the native company’s competition and the success of the customer) influencing the effect of these KAM activities on performance. The results in this research project were gained by small-scale qualitative research. More qualitative or quantitative research on a bigger scale is recommended.
Appears in Collections:MSc Management Science

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