A framework for key account management and revenue management integration

a r t i c l e i n f o Keywords: Key account management Revenue management Customer relationship management Customer value Service industries Key Account Management (KAM) and Revenue Management (RevM) have been widely practiced in the service industries for more than three decades, but the effects of RevM on KAM remain largely unknown. This paper addresses this neglected area of study in the marketing field by presenting a framework for KAM and RevM integration that aligns the potentially conflicting management priorities of the two. The study uses an international hotel company as a research context to investigate, first, how a long-term relational approach to KAM may have been affected by RevM short-term revenue maximization goals, and, second, how KAM could be facilitated by RevM through an integrated approach to yield optimization from perishable products and from key accounts. The proposed framework is the first attempt of its kind to amalgamate KAM and RevM, involving critical analysis to assess comprehensively the revenue and the relationship value of a key account. The principal contention of this paper is that there are important interactions between revenue management (RevM), a widespread practice in business-to-business service industries, and key account management (KAM). These interactions have been neglected in prior research , and yet the practice of RevM is clearly likely to affect the practice of KAM, possibly with damaging results for key account relationships. In extreme cases RevM policies, which seek to maximize short-term revenue using a market segmentation approach, could adversely affect the development of effective KAM relationships, contradict a carefully designed relationship portfolio strategy, and prevent the alignment of a supplier's strategic objectives with those of a key account. For researchers , the interaction between RevM and KAM is an interesting theoretical question, and the neglect of RevM by KAM researchers is an important lacuna in prior work. For practitioners it is imperative to avoid a situation in which KAM strategies are unintentionally frustrated by RevM policies; guidance is needed on the integration of KAM with RevM. This paper examines the theoretical questions about interactions between KAM and RevM in the research context of the hotel industry, presenting a case study of an international hotel group based in the UK. KAM and RevM are two popular research areas in marketing and operations management. KAM primarily focuses on the management and development of profitable relationships with strategically important business-to-business Knox, & Maklan, …