KEY ACCOUNT MANAGEMENT: ADDING ELEMENTS OF ACCOUNT FIT TO AN INTEGRATIVE THEORETICAL FRAMEWORK

Keith A. Richards and Eli Jones A growing scholarly interest in key account management highlights the need for a framework to use in the study of these accounts. This study combines theory from relationship marketing, personal selling, and organizational-level resource allocation studies to build an integrative theoretical framework explaining both relational and performance aspects of key accounts. In building this integrative model, a qualitative study of key account managers revealed that t between the buying and selling company is of great importance. This concept of t, which has largely been ignored in key account studies, is added as both an antecedent and a moderator in the integrative model.

In recent years, marketing scholars and practitioners have embraced two important environmental shifts in marketing. First, the migration from short-term, transactional exchanges to long-term, relational exchanges (Rackham and DeVincentis 1999; Webster 1992). Second, marketers are increasingly moving away from the assumption that customer demand is homogeneous and are accepting the reality that customers are heterogeneous with respect to the value they provide to the selling rm (Hunt and Morgan 1995; Niraj, Gupta, and Narasimhan 2001). The impact of these two mind-set changes has been visible for more than a decade in several streams of marketing literature, including relationship marketing (Dwyer, Schurr, and Oh 1987; Parvatiyar and Sheth 2000), customer relationship management (Reinartz, Krafft, and Hoyer 2004), customer lifetime value (Blattberg and Deighton 1996; Rust, Lemon, and Zeithaml 2004), customer orientation (Jaworski and Kohli 1993; Narver and Slater 1990), and key account (KA) management (Homburg, Workman, and Jensen 2002; Workman, Homburg, and Jensen 2003). In particular, KA management is at the intersection of these two shifts in the marketing landscape (Homburg, Workman, and Jensen 2000) and KAs are, by denition, critical to the success of selling companies. This shift in focus has brought increased scholarly and managerial attention to KA management; however, researchers have yet to introduce a unifying theoretical framework related to successful KA management. The goal of this study is to develop such an integrative model of KA relationship effectiveness and to qualitatively explore

the antecedents of relationship effectiveness. Two important theoretical advances are incorporated in this framework. First, we reexamine relationship effectiveness and posit a new second-order formative construct as the central mediating variable leading to successful KA relationships. Second, we introduce account t to the list of previously studied antecedents of relationship effectiveness. Specically, we add three types of account t to the literaturestrategic, operational, and personal. Interactions between account t and previously studied determinants will also be proposed. These important contributions will be built into an integrative, account-level model that compiles much of the early work on KA relationship effectiveness. With these goals in mind, we suggest that this study makes the following contributions. First, an integrative model is proposed as the unifying framework to study KAs at the account level, which should serve as a platform for future study. Second, three types of account t (strategic, operational, and personal) are introduced as important antecedents to and moderators of relationship effectiveness, further completing the integrative model. Third, the key mediating variable, relationship effectiveness, is reconceptualized as a second-order formative construct to better model the theoretical nature of the construct. To achieve these goals, we review KA literature to identify important constructs for the integrative model and determine knowledge gaps in the current frameworks. KEY ACCOUNT MANAGEMENT DEFINITIONS AND LITERATURE REVIEW To establish the scope of the literature review, three terms related to KAs need to be denedkey account, key account management, and key account manager (KAM). First, it is necessary to have a clear understanding of how to dene KA. Many names have been used by managers and scholars to describe a companys best accounts (see Weilbaker and Weeks
Journal of Personal Selling & Sales Management, vol. XXIX, no. 4 (fall 2009), pp. 305320. 2009 PSE National Educational Foundation. All rights reserved. ISSN 0885-3134 / 2009 $9.50 + 0.00. DOI 10.2753/PSS0885-3134290401

Keith A. Richards (Ph.D., University of Houston), Assistant Professor of Marketing, College of Business, University of Tennessee at Chattanooga, keith-richards@utc.edu. Eli Jones (Ph.D., Texas A & M University), Ourso Distinguished Professor of Business and Dean, E.J. Ourso College of Business, Louisiana State University, elijones@lsu.edu.

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1997 for examples of various terms used to describe important accounts). In this study, we adopt key account, which is dened as customers in a business-to-business market, identied by the selling company as the most important customers, and serviced by the selling company with dedicated resources (Workman, Homburg, and Jensen 2003). This denition makes the distinction between regular accounts and those served with dedicated resources. Regular sales accounts are those that, regardless of size, are typically served through the traditional eld sales force. These regular accounts are not the focus of our study. Second, Workman, Homburg, and Jensen dened key account management as the performance of additional activities and/or designation of special personnel directed at an organizations most important customers (2003, p. 7). This denition implies two things: (1) KAs have been identied as requiring special treatment, and (2) the selling company has directed additional resources to these accounts. Finally, key account manager is dened as the individual designated by the selling rm to serve as an internal advocate for his or her KAs. This denition is consistent with the one offered by Sengupta, Krapfel, and Pusateri:
A key account [manager] salesperson is responsible for maintaining and developing direct relationships with a few customer accounts that cut across product and geographic boundaries. (2000, p. 253)

It is the primary responsibility of the KAM to assess the customers needs and to act as an advocate for his or her accounts within the selling organization. These three denitions offer boundaries as we explore the various streams of research associated with KAs. As expected with an emerging stream of research, the early theoretical literature has not established the dominant approach to study KAs (e.g., see Weilbaker and Weeks 1997 for a review of early KA research; see Jones et al. 2005 for a forward-looking KA research agenda). Early studies examined the following topics: appropriateness of KA programs (Sengupta, Krapfel, and Pusateri 1997a, 1997b; Shapiro and Moriarty 1980, 1982, 1984a, 1984b); KAMs and KA sales team effectiveness (Arnett, Macy, and Wilcox 2005; Schultz and Evans 2002; Sengupta, Krapfel, and Pusateri 2000); desirable characteristics of KAMs (Wotruba and Castleberry 1993), and KA organizational structures (Homburg, Workman, and Jensen 2002; Workman, Homburg and Jensen 2003). Table 1 includes a sample overview of KA research organized by date. The genesis of this table is a similar compilation of references from the work of Homburg, Workman, and Jensen (2002) and has been updated for use in this study. A review of these studies reveals two different views on how to study KA management. Most previous studies offer theoretical frameworks at either the organizational level or the personal level. Organizational-level studies typically ex-

amine organizational support mechanisms that are designed to build effective account relationships and measure output at the level of the rm. Personal-level studies generally examine the effects of the KAMs personal characteristics and relationship-building skills and measure success at the KAM level. To extend the current body of KA research, the goal of this study is to create a single integrative model at the account levelcombining two of these theoretical frameworks into one model. The account level of analysis proposed in our study is consistent with work done by Palmatier, Dant, and Grewal (2007). The authors argue that the exchange level is a fundamental level for marketing scholarship and base their results at this level. We extend that argument and suggest that important questions can be answered at both the organizational and the individual levels of analysis, but limitations exist. Organizational studies are appropriate for determining how to structure KA efforts but do little to uncover the strengths and weaknesses of an individual KAMs performance. Alternatively, the individual level is appropriate to answer the questions of KAM performance but does little to understand the effect of company-level decisions on the account. These limitations prevent us from studying accounts at the level of decision making and planning for most managers. The account level of analysis allows for the theoretical combination of previous work at the organizational level and personal level and for an expansion of our knowledge at a level that is most useful for managers. Given our goal to propose an integrative model, we argue that an exchange-level model is theoretically more appropriate and adopt this level of analysis in our model. QUALITATIVE STUDY To establish the integrative model, we followed the literature review with a qualitative study. The qualitative study was conducted to explore current theories in use with KAMs and with the senior management of KA organizations. We followed the methods used by Kohli and Jaworski (1990) and Workman, Homburg, and Gruner (1998). Given the goal of identifying the main inuences in KA management at the account level, eld interviews were used that systematically explored these inuences across different dimensions of KA relationship effectiveness. Previous studies have used similar qualitative methods to produce knowledge in cases where the subject area is vast and complicated (Bonoma 1985; Eisenhardt 1989; Homburg, Workman, and Jensen 2000; Zaltman, LeMasters, and Heffring 1982). Homburg, Workman, and Jensen veried the appropriateness of this qualitative methodology through a thorough review of qualitative work in the Journal of Marketing and the Journal of Marketing Research (2000, p. 462). Our qualitative work was developed to uncover themes concerning the management of KAs. To this end, semistructured, in-depth interviews were conducted with approximately 25

Fall 2009 307 Table 1 Literature Review

Authors Pegram Stevenson Platzer Year 1972 1981 1984 Empirical Basis 250 interviews with executives in manufacturing and service companies 34 executives in 33 manufacturing companies 130 interviews with national account executives 100+ interviews in 19 manufacturing and service companies Main Focus/Key Statements Describes alternatives for assigning KA management responsibility on a part-time or a full-time basis Explores selling rms nancial and relational benets from national account management Describes activities for KAs Describes types of national account units Describes success factors of national account programs Describes alternatives for integrating a KA management program into the structural organization Discusses issues pertaining to the internal structure of KA management units Describes customer need for activities in areas as such pricing, products, service, and information Describes roles of various functional groups in the performance of activities for KAs Explores reporting level, time utilization, compensation, and required skills of account managers Explores stafng procedures for KA management positions Explains performance of KAMs is affected by length of tenure, age of program, and time devoted to KAs Provides a case study of one KA program over 20 years Identies salesperson activities, skills, and attitudes that KA decision makers value Develops framework for global account management Describes internal cooperation for KAs in global management Explores differences between national account relationships and other strategic alliances Describes development of KA relationships from pre-KA management, to transactional phase, to collaborative relationship with increasing complexity of involvement Reports the number of national account managers has tripled between 1992 and 1998 Finds 53 percent of selling companies report poor effectiveness of partnering with customers Suggests ways KAMs perceive KA management; interest, disenchantment, enthusiasm Finds moderation of customers KA management program perceptions include perceived product importance and centralization of purchase decisions Finds customers preference for KA management programs depends on level of buyers involved, functions involved, and time taken for purchasing Reports KAMs are dissatised with sales training programs Describes KAMs experience and skills (continues)

Shapiro and Moriarty

1984a

Shapiro and Moriarty

1984b

100+ interviews in 19 manufacturing and service companies

Colletti and Tubridy Wotruba and Castleberry

1987 1993

105 National Account Management Association (NAMA) members 107 NAMA members

Pardo, Salle, and Spencer Boles, Barksdale, and Johnson Yip and Madsen Lambe and Spekman McDonald, Millman, and Rogers Napolitano

1995 1996

10 interviews within one telecom company 73 national account decision makers from NAMA list Case studies of IBM, AT&T, and Hewlett-Packard 118 managers, mostly U.S. based Interviews with 11 KA manager purchasing manager dyads

1996

1997 1997

1997

NAMA study among Fortune 1000 companies, no sample size provided

Pardo

1997

20 interviews with KA of electricity and telephone companies

Sharma

1997

109 interviews with buyers of telephone equipment 133 NAMA members

Weeks and Stevens

1997

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Authors Weilbaker and Weeks Sengupta, Krapfel, and Pusateri Sengupta, Krapfel, and Pusateri Dishman and Nitse

Year 1997

Empirical Basis Theoretical

Main Focus/Key Statements Explores early KA research Provides a life cycle view of KA management development Describes growth of KA management approaches and KAM workload Identies customer-based compensation as success factor Discusses switching costs in KA relationships

1997a

176 NAMA members in manufacturing and service companies

1997b

176 NAMA members in manufacturing and service companies 27 interviews with NAMA members whose KA program is older than ve years

1998

Discusses three implementation options of account management: cooperation with existing sales force, company executives, or a separate sales force Describes KAM programs in terms of number and size of customers in program Examines overall changes in marketing organizations Suggests KA management will become more important Finds increased use of teams and increased selling complexity with multiple products/services Reports increase in use of global account management structures Finds use of global account management structure is driven by customer demand Finds three KA customer demands: coordination of resources, uniform terms of trade, and consistency in service quality and performance Investigates individual-level abilities of KAMs, similar to salespeoples abilities, that lead to KAM effectiveness Finds mediators between KAM abilities and perceived KAM effectiveness include communication quality and trust Identies seven KA management approaches Investigates organizational support of KAs (activity support, top-management involvement, use of teams, and access to resources, etc.) Examines effectiveness of each type of KA approach Investigates communication quality as an antecedent to KA trust, solution development, and performance Measures KA communication in terms of informality, bidirectionality, frequency, and strategic content Explores organizational factors leading to effective KA management organizations Examines activities, actors, resources, and formalization and determined that activities and resources had the most impact on effectiveness Finds effective KA management yields nancial performance Suggests use of teams in KA management is growing Examines ve types of team relationships both within selling rm and with buying rm Evaluates relationship marketing theory and strategic marketing theory as a means to determine a value network for KAs (continues)

Homburg, Workman, and Jensen Montgomery and Yip

2000

Theoretical

2000

191 managers in 185 manufacturing and service companies

Sengupta, Krapfel, and Pusateri

2000

176 Strategic Account Management Association (SAMA) members in manufacturing and service companies

Homburg, Workman, and Jensen

2002

264 German and 121 U.S. companies, both large and small rms

Schultz and Evans

2002

121 KAMs in a Fortune 500 consumer packaged goods company

Workman, Homburg, and Jensen

2003

264 German and 121 U.S. companies, both large and small rms

Jones et al.

2005

Theoretical

Gosselin and Bauwen

2006

Theoretical

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Authors Hutt and Walker Pardo et al. Ryals Year 2006 2006 2006 Empirical Basis Theoretical Theoretical Qualitative interviews with 10 companies Main Focus/Key Statements Examines the social networks of KAMs and its relationship to their success Explores the meaning of value in KA context Provides insights into building value in KA organizations Investigates best practices on how companies manage pricing, costs to serve, and customer risk in KA context Examines factors leading to account success and failure Describes current state of KA management practice in Europe Investigates factors related to the decision to implement KA management Explores implementation process of KA management Uncovers hidden KAs in rms with no formal KA programs Finds relational selling strategies were to be antecedent to customer-oriented selling, adaptive selling, and team selling in a KA context Finds no evidence of taking a relational selling strategy leading to organizational citizenship behaviors Investigates differences in satisfaction, trust, and commitment between regular accounts and KAs Finds that KAs have same levels of trust and no greater commitment levels as regular accounts Explored overlap between supply chain management and KAM models Resulted in a series of research propositions Examines t between KAM approach and vendor needs

Sharma Wengler, Ehret, and Saab

2006 2006

57 KAs from single rm 91 single informants from different German companies

Guenzi, Pardo, and Laurent

2007

130 European account managers

Ivens and Pardo

2007

91 KA relationships and 206 ordinary supplierbuyer dyads

Ryals and Humphries Toulan, Birkinshaw, and Arnold Ivens and Pardo Zupancic

2007

30 qualitative interviews were used to explore single buyerseller relationship 106 global accounts from 16 companies

2007

2008 2008

297 purchasing managers in two industries Qualitative interviews and case studies

Offers counterintuitive results Compares KA and regular account relationships Identied ve dimensions of KA management that KAM and directors of KA programs have to monitor

Note: Adapted from Homburg, Workman, and Jensen (2002).

KAMs across 18 different organizations. The sample was a convenience sample based on companies that were involved with the Sales Excellence Institute at the University of Houston and attendees of a Strategic Account Management Association annual conference in North America. The organizations represented were located in both the United States and in Europe and represent multiple industries: telecommunications, insurance, construction and engineering, management consulting, home appliances, personal care products, and so forth. These interviews lasted from 30 minutes to three hours, and interviewer notes were taken in each interview. Subjects ranged in experience from 5 to over 25 years with the mean level of experience at approximately 17 years. Findings from these interviews are used throughout this study in the development of constructs and propositions related to the theoretical model.

KAMs were not shown the proposed model in advance, but were asked to discuss factors that lead to the development of effective KA relationships. Then they were introduced to an initial model and their input helped rene the outcome of the model. Results from the qualitative study suggest that KAMs are heavily involved in the assessment of their accounts and are therefore appropriate as informants on their accounts. A former division president in the consumer package goods industry offered the following comment regarding the relationship between a KAM and their account: My national [key] account managers have more knowledge about their accounts than anyone else in our organization. In fact, I depend on their intimate knowledge of these accounts for all sorts of account planning and investment decisions. They are the authority on their accounts within our company. These strategic/planning decisions were mentioned by several subjects in the study as

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key elements of a good relationship. One vice president of sales in a business-to-business services company echoed these sentiments: Beyond size, there may be factors related to our strategy or operations that signal a particular account needs special attention as a national [key] account. She went on to say that her companys ability to serve accounts across the United States was dependent on her ability to overlay service offerings with the requests from her best clients. An analysis of these, and similar, comments from the interviews supported the development of the integrative model and directed the research toward the concept of t between the buying and selling company. KAMs were particularly concerned with t as it relates to the strategy, operations, and personnel associated with a particular account. Executives comments across industries reect the sentiment that the better two companies t together, the more successful is the KA relationship. Combining the results of the qualitative research with the existing literature, we developed an integrative theoretical framework. The resulting integrative model, shown in Figure 1, is proposed below, and additional evidence from the qualitative study is offered as support for the propositions. Briey, our model proposes that intrapreneurial ability, communication quality, activity intensity, activity proactiveness, esprit de corps, and organizational support drive relationship effectiveness. Relationship effectiveness, the mediating variable, is composed of trust, relationship commitment, cooperation, conict resolution, and information sharing. Further, strategic, operational, and personal t serve as both an antecedent to relationship effectiveness and as moderators of the relationships between the aforementioned antecedents and relationship effectiveness. Ultimately, relationship effectiveness is antecedent to KA performance. THEORIZING KEY ACCOUNT MANAGEMENT: AN INTEGRATIVE MODEL Key Mediating Variable: Relationship Effectiveness Two KA modelsSengupta, Krapfel, and Pusateri (2000) and Workman, Homburg, and Jensen (2003)provided a starting point for the integrative model. These two models offer insights into the development of effective KA relationships at the organizational and individual levels, respectively, both provide a reasonably comprehensive set of variables, and both provide empirical results. As noted, the former examines the issue from an organizational point of view and the latter from an individual KAM point of view. Both points of view provide useful insights for KA studies. Organizational studies help determine the activities, actors, resources, and structures that best facilitate KA management. In contrast, individual-level studies point to characteristics of KAMs that lead to effective KA relationships. Further, it is important to note that both of

these studies represent models with a similar dependent variable and both attempt to explain successful KA management via the creation of effective account relationships. Recently, Palmatier, Dant, and Grewal (2007) conducted a longitudinal study that suggests that commitmenttrust theory essentially remains intact as the better alternative among the four most cited theoretical frameworks used in explaining marketing relationships. In their post hoc model, labeled the resource-based view model, they maintain the important mediating role of commitment and trust and extend the model to suggest that exchange-level performance is best described by this model. In our integrative model, we adopt a similar structure with antecedents and consequences of relationship marketing and a key mediating variable. Further, we use the concept of a key mediating variable that will convey the effects of relationship antecedents on to the performance of the KA. In this study, we dene relationship effectiveness as the extent to which an organization achieves good relational outcomes for the KA of interest. Desired relational outcomes from the relationship marketing literature were specied in further detail in a denition of perceived effectiveness of KA sellers offered by Sengupta, Krapfel, and Pusateri:
key account salesperson effectiveness is dened as the degree to which the key account salesperson has promoted cooperation and built a productive, worthwhile, and enduring customer relationship with the customer. (2000, p. 254)

Similarly, Workman, Homburg, and Jensen (2003) dene KAM effectiveness as the extent to which an organization achieves better relationship outcomes for KAs in comparison with regular or average accounts. Further, we suggest that the models mediatorrelationship effectivenessshould be modeled formatively for the following reasons. First, relationship effectiveness is multidimensional. Based on the commitmenttrust theory of relationship marketing (Morgan and Hunt 1994) and more recent KA research, ve components of relationship effectiveness are posited as rst-order factors in the formative second-order construct. These rst-order factors include trust, relationship commitment, cooperation, conict resolution, and information sharing. This denition of the key mediating variable as a formative construct reects careful consideration of the meaning of relationship effectiveness as a composite of these ve rst-order factors. Second, we recognize the ability for these rst-order factors to move independently of each other. In a formative second-order construct, these ve rst-order factors would be required to demonstrate reasonably high correlations. We suggest that these ve rst-order factors may covary, but they need not covary in the integrative model. The structure of our mediating variable is similar to that of Seiders et al.s (2007) SERVCON construct. In defending the nature of their construct, Seiders et al. argue that changes

Fall 2009 311

Figure 1 Integrative Theoretical Model of Key Account Performance

* Second-order formative construct.

in any of the rst-order factors should alter the second-order construct, regardless of whether other [rst-order] dimensions also change (2007, p. 145). We hold a similar argument for the nature of the integrative models mediatorrelationship effectiveness. Previous KA studies (e.g., Narus and Anderson 1995; Workman, Homburg, and Jensen 2003) have adopted this similar mediational framework. However, we seek to further clarify the meaning of relationship effectiveness by establishing account performance as a consequence of good relational outcomes rather than a component of relationship effectiveness as suggested by Workman, Homburg, and Jensen (2003). Recall that Workman, Homburg, and Jensen were operationalizing their study at the organizational level and were interested in organizational outcomes. Because we have chosen the account level for our study, we need to separate account performance from the denition of relationship effectiveness and establish account performance as an outcome of a good relationship. We contend that KA performance is based on an effective relationship and therefore must follow the existence of the relationship similar to Palmatier, Dant, and Grewal (2007).

Therefore, we reexamined the nature of the mediator. Similar to McNally and Grifn (2007), we argue that relationship marketing efforts are best measured with a group of variables used to explain the outcomes of marketing efforts. For our integrative model of relationship effectiveness (see Figure 2), a second-order, formative construct is proposed to serve in the mediating role between the antecedents of relationship effectiveness and measures of account-level performance. The importance of this formative construct is seen in the theoretical underpinnings of the constructs meaning. A reective measure suggests that the rst-order factors that comprise the construct are interchangeable (Podsakoff et al. 2003), but we contend that these rst-order factors are not interchangeable and indeed are all required to fully dene an effective relationship. We maintain the central role of the mediating variables in commitmenttrust theory (Morgan and Hunt 1994). In the original context, commitmenttrust theory was used to explain multiple types of marketing relationships (e.g., relationships with suppliers, alliance partners, and buyers). Because we only seek to explain KA relationships, we included additional rstorder factors beyond trust and commitment to ensure that the

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Figure 2 Formative, Second-Order Construct: Relationship Effectiveness

model is specically targeted toward explaining effective KA relationships. According to Morgan and Hunt, trust is dened as a state that exists when one party has condence in an exchange partners reliability and integrity and relationship commitment is dened as an exchange partner believing that an ongoing relationship with another is so important as to warrant maximum efforts at maintaining it (1994, p. 23). Similar to their initial roles in the commitmenttrust theory of relationship marketing, trust and relationship commitment have a positive effect on relationship effectivenessas trust and commitment increase, so does relationship effectiveness. Including these two variables as rst-order factors in a secondorder formative construct indicates that these variables need not covary (Chin 1998). Indeed, the original theory posits trust as an antecedent to commitment. However, we assert that commitment in a buyerseller relationship may be based on necessity rather than trust. Moreover, trust may be present, but no business need for commitment may exist, and therefore trust may not lead to more relationship commitment. We posit that both of these rst-order factors form relationship effectiveness, rather than one leading to the other. Workman, Homburg, and Jensen (2003) suggest that the types of desired intermediate outcomes that organizations seek with their KAs include the development of trust, increased information sharing, reduction of conicts, and increased relationship commitment. These additional variables are also found in the list of relationship marketing measures cited by McNally and Grifn (2007). In addition to sharing information and resolving conicts, we include cooperation in our model based on the denition of an effective KA salesperson from the work of Sengupta, Krapfel, and Pusateri (2000). Therefore, we examine the roles of information sharing,

conict resolution, and cooperation in the conceptualization of relationship effectiveness. Information sharing is dened as the extent to which the buying and selling organizations communicate important information about the future that may be useful to the relationship (Cannon and Homburg 2001). Similar to information communication, information sharing is viewed as a key component in an effective relationship by both buyers and sellers (Ahearne, Jelinek, and Jones 2007). Several authors have indicated that information sharing is critical to relationship development and effectiveness (Crosby, Evans, and Cowles 1990; Lages, Lages, and Lages 2005). In our qualitative study, KAMs suggested that establishing shared data sets and offering dedicated customer portals are examples of how critical information is shared between KA partners. Conict resolution is dened as the extent to which . . . disagreements are replaced by agreements and consensus (Robey, Farrow, and Franz 1989, p. 1174). Conicts are a normal part of any relationship and how they are resolved has a large impact on the health of a relationship (Goles and Chin 2005). Several account managers indicated that conicts often allowed for more topics of concern to be addressed quickly, especially when these conicts were handled properly. Cooperation refers to situations wherein both parties work together to achieve mutual goals (Anderson and Narus 1990). Anderson and Narus add that, joint efforts will lead to outcomes that exceed what the rm would achieve if it acted solely in its own best interests (1990, p. 45). KAMs in the qualitative study reinforced the need for cooperation, We cannot effectively serve our KAs if cooperation is not there. Both parties have to want it. Therefore, we combine information sharing, conict resolution, and cooperation with trust and relationship commitment to provide a mediating variable that captures the complex nature of KA relationships. It is our contention that all ve of these rst-order factors are positively related to relationship effectiveness. PROPOSITIONS Relationship Effectiveness to Performance The link between relationship effectiveness and KA performance is critical in the model as it demonstrates the importance of relational outcomes (e.g., trust, cooperation) on the formation of nancial outcomes. We dene KA performance as the extent to which the focal KA is meeting the nancial objectives of the selling rm. While relationship effectiveness measures the relational aspects of a buyerseller union, KA performance is designed to capture the nancial outcomes related to the union. KA performance is dependent on the quality of the relationship between the selling and buying companies according to Workman, Homburg, and Jensen

Fall 2009 313

(2003) and may be measured as either sales as a percentage of planned sales or as a contribution margin. Based on prior research, we propose that relationship effectiveness will have a positive effect on KA performance. From the selling rms point of view, a successful relationship will lead to improved nancial performance. Results from the qualitative interviews suggest that KAMs recognize the effect of relational elements such as trust, cooperation, and conict resolution on the nancial performance of their accounts. Therefore, Proposition 1: As relationship effectiveness increases, KA performance will increase. Antecedents of Relationship Effectiveness Previous KA research has identied a number of antecedents to relationship effectiveness. We focus on six of these antecedents for use in the integrative baseline model. Both parsimony and model completeness were considered when assembling this list of antecedents. We also gave greater importance to antecedents that received empirical support in previous studies and to those that were highlighted by KAMs in the qualitative study. Propositions for these six antecedents (intrapreneurial ability, communication quality, activity intensity, activity proactiveness, esprit de corps, and organizational support) remain consistent with previous studies. In addition, we recognize the importance of the customer in this relationship and suggest that each of these antecedents must impact the customer such that their perception of the relationship is enhanced and can be measured. First, work done on KA salesperson effectiveness by Sengupta, Krapfel, and Pusateri (2000) found that a KAMs ability to work entrepreneurially is mediated by trust and is ultimately a determinant of effectiveness. Intrapreneurial ability is dened as entrepreneurship inside the corporation and being a doer as opposed to a cognitive thinker (Sengupta, Krapfel, and Pusateri 2000, p. 254). Wotruba and Castleberry (1993) suggested that KAMs have to be innovative and able to locate resources within the sellers rm to assist customers. KAMs take risks and may go against conventional wisdom to serve their KAs (Kuratko, Montagno, and Hornsby 1990). Identifying intrapreneurial ability within the KAM is about identifying risk taking and being recognized as thinking like a businessperson. This risk-taking behavior was conrmed in the qualitative study as well. In the qualitative study, several KAMs indicated that they needed to take some chances to serve their accounts well and they needed to think like a businessperson, not a salesperson. Based on these earlier results, a KAMs intrapreneurial ability is expected to be positively related to relationship effectiveness. Therefore, Proposition 2a: As the KAMs intrapreneurial ability increases, relationship effectiveness will increase.

Second, the qualitative study conrms that the lifeblood of a good relationship is communication between the KAM and the account. We have to communicate well and often with our best accounts to ensure that there are no surprises in either direction, offers a KAM of a global construction company. He went on to suggest that communication helped cement the bond between his company and the buyer. Communication quality is the degree to which the appropriate content of the communication is received and understood by the other party in the relationship. This denition is based on work by Johlke and Duhan (2001), Schultz and Evans (2002), and Sengupta, Krapfel, and Pusateri (2000). Therefore, Proposition 2b: As communication quality increases between the buying and selling companies, relationship effectiveness will increase. Third, consistent with Workman, Homburg, and Jensens (2003) earlier work, activity intensity is hypothesized to be an antecedent of relationship effectiveness. Activity intensity is dened as the extent to which activities are performed for the focal KA as compared to other KAs within the same company. Account-level activities are associated with adjustments to the marketing mixproduct, price, place, and promotion (Mohr and Nevin 1990). Greater activity intensity at the account level is designed to bring the following benets to a KA: it builds commitment and trust, reduces cost structures for the customer, improves competitive position, and helps KAs compete via improved logistical arrangements (Workman, Homburg, and Jensen 2003). Therefore, Proposition 2c: As activity intensity increases, relationship effectiveness will increase. Fourth, in addition to the intensity of account-level activities, activity proactiveness is a determinant of KA relationship effectiveness. Activity proactiveness is dened as the extent to which the supplier initiates activities (Workman, Homburg, and Jensen 2003, p. 9). Support for this hypothesis mirrors the support given by Workman, Homburg, and Jensen (2003). Proactiveness is benecial because it allows the supplier to create rst-mover advantage by being the rst supplier to establish a long-term relationship with the buyer. This may lock out competitive suppliers and preclude others from entering into similar agreements (Kerin, Varadarajan, and Peterson 1992; Lieberman and Montgomery 1988). KAMs in the qualitative interviews echo the importance of moving quickly to serve their accounts, There is power in moving rst. It helps to push the relationship forward and maintains focus. Therefore, Proposition 2d: As activity proactiveness increases, relationship effectiveness will increase. Fifth, supplier organizations expect individuals within their company to form strong personal relationships with other

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individuals in the selling organization (Day 2000; Menon, Jaworski, and Kohli 1997). Esprit de corps is dened as the extent to which people feel obligated to common goals and to each other (Workman, Homburg, and Jensen 2003, p. 10). Menon, Jaworski, and Kohli argued that greater esprit de corps allows for early and quick exchange of customer and market information (1997, p. 188). Day suggested that a relationship orientation must pervade the mindset, values and norms of the organization (2000, p. 24). A strong desire to work together to serve KAs can create a company culture that is an intangible assetone that can be employed to create comparative advantage for the supplier company (Barney 1986). This evidence points to an understanding that better relational outcomes result from individuals inside the supplier rm working together to serve KAs. Therefore, Proposition 2e: As esprit de corps increases, relationship effectiveness will increase. Sixth, in addition to the intangible team resources provided by esprit de corps, there are tangible resources that must be employed to serve KAs. Previous literature looked at two particularly relevant sources of these resourcesthe marketing and the sales functions within the supplier company. Workman, Homburg, and Jensens denition of access to marketing and sales resources is the extent to which KAMs can obtain needed contributions to KA management from marketing and sales groups (2003, p. 10). In the proposed model, we broaden and recast the denition as follows. Organizational support is dened as the extent to which a KAM can obtain needed resources from his or her organization to support the focal account. This company-wide level of support reects comments from the qualitative study where KAMs indicated that the company as a whole needs to support these important accounts. Moon and Armstrong (1994) indicate that each team selling effort requires a coordinator who is able to identify and obtain the resources needed to support the customer. KAMs have to look across their organization to nd resources to support their accounts. Therefore, Proposition 2f: As organizational support increases, relationship effectiveness will increase. In summary, the above-mentioned antecedents are intended to capture the drivers of relationship effectiveness based on published work and our qualitative study. We now introduce account t, which executives highlighted as critical during the qualitative study. Strategic, Operational, and Personal Fit Conceptualization of Fit Based on the qualitative study, three types of account t between the buying and selling rms are considered important

antecedents to building effective relationships. By combining these managerial insights with the academic literature, we introduce the three t variables to the modelstrategic, operational, and personal. The rst two t dimensions were grounded on frameworks from the strategic alliance literature. Sheth and Parvatiyar (1992) offered a typology to classify interrm alliances along two dimensions. In this categorization, alliances are a function of the parties to the alliance and the function of the alliance. Parties to the alliance are dened as either competitors or noncompetitors with KAs more closely resembling noncompetitors. Further, Sheth and Parvatiyar dene alliance function as being either strategic or operational. In their conceptualization of these alliance purposes, they dichotomized these two variables along a single continuum. However, they pointed out that this dichotomization is not necessary, and for many rms, the strategic and operations purposes of an alliance may overlap (Sheth and Parvatiyar 1992, p. 76). It is expected that these two dimensions overlap more when noncompetitive alliances are formed, such as those created when buyers and sellers enter into KA partnerships. There are two aspects that make this alliance framework attractive for use in the KA context. First, KA partnerships are a form of interrm alliance (e.g., either strategic or operational, and noncompetitive). Second, the motive for entering into a KA partnership is similar to that of an interrm alliance and spans the range from strategy to operations. These two alliance purposesstrategic t and operational tare the rst two account t factors. Strategic t is dened as the degree to which the buying and selling rms strategies are aligned. Alignment suggests that both the buying and selling companies are pursuing similar strategies (i.e., growth strategies or market share strategies). KAMs suggest that strategic t between the buying and selling company helps each company as they negotiate terms on channel pricing, markets, and a host of other marketing issues. For example, one KAM stated that partners with similar growth plans were more eager to keep prots lower in the channel in return for gaining more market share. Operational t is dened as the degree to which the service requirements of the KA are aligned with the capabilities of the selling company. When operational t is recognized between buyers and sellers, then KAMs should expect that their service offerings will more effectively and completely meet the needs of the buyer. KAMs told us that when buyers make demands on a KAM, the ability to meet those demands is aided by similar operational platforms. For example, one KAM in physical distribution stated, When a customer wants delivery in areas where our service already exists, we are in much better shape than when we have to outsource to serve their needs. In addition to the alliance framework, KA management also has a close connection with personal selling (Weilbaker and Weeks 1997). Personal selling is based on person-to-person interactions, and this type of relationship is also important at

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the KA level. Wengler, Ehret, and Saab (2006) indicate that KA management is one type of relationship marketing approach that is still closely linked to the classic sales task. This relationship between KA management and sales makes it particularly prone to the personal inuences of the individuals responsible for managing and servicing these KAs. Personal t is the degree to which the individuals in the buying and selling companies are similar to each other, and they get along well with each other. Personal t suggests that people in the buying and selling companies have common ground upon which to build their relationships. The KAM sets the tone for the development of these relationships as the central gure representing his or her company. Next we examine the effects of each type of t individually within the integrative framework. Direct Effects of Fit on Relationship Effectiveness We begin by examining the role of strategic t in the integrative model. Sheth and Parvatiyar (1992) provide four strategic motives that drive rms into alliancesgrowth opportunities, strategic intent, protection against external threats, and diversication. Each of these motives exists in the KA context and was conrmed in the qualitative interviews. As previously discussed, account volume or growth is a central goal of KA strategies. In addition, strategic intent may be sought for other types of supplier rm strategies where partnering is a natural means to the strategic end (e.g., seeking to open new markets). Protection against external threats may be likened to protecting market share or share of wallet in a KA setting. Finally, diversication is reected in a supplier rms desire to lower risk by maintaining several KAs and not relying too heavily on any one account. Strategic t is particularly important at the KA level where relationships often involve executive support and the cocreation of products and services. Based on qualitative interviews, KAMs believe that the greater the t between their companys strategy and the buyers strategy, the higher the likelihood of establishing an effective relationship. In addition, KAMs believe that when their companys strategy is closely aligned with the buying companys strategy, synergies may be created between other marketing and distribution efforts that are designed to serve both companies effectively and efciently. For example, in our qualitative interviews, one executive in a professional services company noted that his organization had built a technological platform to provide service to its smallest accounts. The rms strategy with this technology was designed to improve the cost structure of servicing its small accounts. However, he was quick to point out that even their largest accounts were beneting from the technology, particularly when the larger accounts had multiple locations with small numbers of employees in each location. These types of synergistic investments in technology, advertising,

and logistics are more likely to occur when the strategies of the two exchange partners are more closely aligned. This leads to a positive relationship between strategic t and relationship effectiveness. Therefore, Proposition 3a: As strategic t between the selling company and the KA increases, relationship effectiveness will increase. Beyond strategic t, KAMs are also concerned with operational t. Again, Sheth and Parvatiyar (1992) offer four operational motives for entering into an allianceresource efciency, increasing asset utilization, enhancing core competence, and closing the performance gap. In the KA context, resource efciency is equated to entering into a KA relationship to centralize operations and address the complexity of an accounts service requirements. A national director of a large industrial service company indicated that several accounts were considered KAs due to the complexity of handling their service requirements. In order for her company to serve these accounts effectively, they needed central coordination that was not available in the eld sales organization. In addition to addressing issues of resource efciency, KAMs work to increase asset utilization. This effort may take the form of seeking incremental volume from an account that provides only enough gross margin to cover the variable costs of the service. This action is particularly relevant when KAMs realize that the added volume will enable the selling organization to keep its plants running efciently and to retain skilled employees. Enhancing core competencies is another operational motive for entering into a KA relationship for some KAMs. For example, a KAM may enter into an account relationship and either take over some of the buyers function or outsource some functions to the buyer. This sharing of responsibilities is typically based on the understanding that core competencies will be enhanced by focusing only on important functions and outsourcing others. Finally, KAMs may enter into a KA relationship in order to close a performance gap. For example, this type of performance-seeking happens when an arrangement is made for the buyer to provide distribution of the products based on their strong distribution system. Beyond the strategic alliance literature, the qualitative study revealed that operational t is also sought by nding partners who can benet from the automated ordering, delivery, and payment processes in which the supplier has already invested. When operational t is high, goods and services are efciently exchanged for payments, and both the buyers and sellers stand to benet from the improved relationship. Therefore, Proposition 3b: As operational t between the selling company and the KA increases, relationship effectiveness will increase.

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Finally, we turn our attention to the effect of strong personal relationships between the KAM and the buying organization on relationship effectiveness. We propose that the similarities between KAMs and the people in the buying organization have an effect on building effective relationships. Individuallevel, personal friendships established between the KAM and members of the buying center are examples of the types of relationships that are developed when personal t is high. The nature of these relationships is based on these individuals sharing similar values. These relationships result in positive emotional ties (Price and Arnould 1999) and a greater likelihood of the customer continuing to do business with the rm (Seabright, Levinthal, and Fichman 1992). Based on ndings in the qualitative interviews, individuals in both the buying and selling companies develop strong, lasting relationships during the time they work together. As an illustration of the importance of this personal match, one vice president in a professional services rm stated that he considered personal t more important than account size in choosing which accounts to prioritize. In his words, he would rather pass on a large account with poor personal t, than risk destroying his companys culture to gain the large account. Therefore, Proposition 3c: As personal t between the people in the selling company and the KA increases, relationship effectiveness will increase. Moderating Effects of Fit One of the important contributions of this research is the addition of account t factors to the model explaining relationship effectiveness. To further understand the effect of t on relationship effectiveness, three interactions are also proposed between account t and previously established antecedents. Throughout the qualitative interviews, executives indicated that certain accounts seem to respond better to the selling companys attempts to establish deeper relationships. One account executive described a multiplier effect that he believed good t had on his business relationships. Specied below are three such multiplier effects, wherein account t interacts with known antecedents to affect relationship effectiveness. First, consider the combined effect of strategic t and intrapreneurial ability. Based on the qualitative interviews, we propose that when strategic t is high, intrapreneurial abilitys effect on relationship effectiveness is more positive than when strategic t is low. In other words, when strategic t is high and a KAM shows strong intrapreneurial ability, it will be easier for the KAM to work internally to coordinate resources and support for an account. Therefore, Proposition 4a: When strategic t is high, intrapreneurial ability will have a more positive effect on relationship effectiveness than when strategic t is low.

Second, we examine the interaction between operational t and activity intensity. When operational t is high, activities directed toward the focal account are expected to be more effective in establishing good relationships. These activities are closely aligned with the buying and selling companies operations (e.g., product adaptation, training, logistics, joint advertising, and promotion). The higher the operational t, the better the match between the types of account-level activities offered by the selling company and those required by the buying company. This fulllment of the buyers needs will result in stronger relationships between the buying and selling companies than would result if operational t were low. Therefore, Proposition 4b: When operational t is high, activity intensity will have a more positive effect on relationship effectiveness than when operational t is low. Third, KA management remains a personal event, and inherent in these business-to-business relationships are people on both sides that have to work together (Boles, Johnston, and Gardner 1999). Working together requires the ability to communicate with each other. The expected effect of different levels of personal t on the relationship between communication quality and relationship effectiveness is as follows. When personal t is perceived at high levels by the KAM, the relationship between communication quality and relationship effectiveness is greatly enhanced as compared to when low levels of personal t are perceived. It is expected that high levels of personal t will serve as a platform for enhancing the positive effect of communication quality on relationship effectiveness. Therefore, Proposition 4c: When personal t is high, communication quality will have a more positive effect on relationship effectiveness than when personal t is low. CONTRIBUTIONS This study makes several contributions to the academic literature and to managers responsible for KA management and relationship marketing. First, we introduce three types of account t as antecedents to relationship effectiveness. Qualitative evidence suggests that increases in strategic, operational, and personal t are positively related to relationship effectiveness. Theoretical support for each of these three types of t was found in personal selling literature and strategic alliance literature, which helps ground these new constructs in the nomological network. Second, we explore the boundaries of this theoretical model by proposing interactions between the three t variables and existing antecedents to relationship effectiveness. In their roles as both direct antecedents and moderators, we propose that account t will explain addi-

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tional variance in the models central construct, relationship effectiveness. Improving our understanding of the drivers of effective KA relationships is a central concern for scholars and managers alike. Third, this research proposes an integrative model of KA relationship effectiveness that explains both the antecedents to building effective relationships and the performance consequences of such relationships for KAs. This model is built at the exchange level, or account level, which supports the integration of two previous organizational- and individual-level models. The integrative model builds upon Morgan and Hunts (1994) commitmenttrust theory and provides a unifying platform for future KA studies interested in predicting KA performance. Fourth, a new second-order constructrelationship effectivenesswas developed to improve scholars abilities to measure the relational aspects of KA management. By using the qualitative interviews as a guide, Morgan and Hunts (1994) commitmenttrust theory was enhanced to better serve the needs of measuring relationship effectiveness for KAs. This formative construct better captures the theoretical nature of the variable and allows for further clarity in understanding specic factors that compose successful relationships among KAs. The inclusion of cooperation, conict resolution, and information sharing along with trust and relationship commitment provides additional insights into the scope of these important KA relationships. It also separates nancial outcomes from relational outcomes so that both can be measured and evaluated. Beyond academic contributions, account managers and KA organizations benet in the following ways from this research. First, this study introduces three types of account t as antecedents to relationship effectiveness. Understanding the impact of these important antecedents improves a KAMs ability to identify and support KAs with the greatest potential for success. The critical role these KAMs play in managing their accounts provides them an intimate understanding of the accounts. Their perceptions of t between the buying and selling company have a signicant effect on the relationship effectiveness (trust, cooperation, information sharing, etc.) between the two companies. Second, managers gain theoretical support for their theories in use related to the multiplier effects of t on their investments in each KA. Account managers must make trade-offs with respect to the investment of their time and resources. This research speaks directly to the antecedents of effective relationships and helps KAMs better understand the moderation effects that impact their causal inferences. This should help in determining the success of these investments in creating more effective relationships and improving account performance. Third, the expansion of the scope of rst-order factors in the mediating variable from commitmenttrust theory enhances managers abilities to monitor future performance. These intermediate marketing

outcomes (e.g., trust, information sharing, cooperation, conict resolution, and relationship commitment) serve as an early warning system to prevent losses and enhance nancial gains. The theory in this study suggests that when these relationship components begin to decline, for example, a weakening of relationship commitment, then account performance will also decline. Account managers can use this information to better prepare for changes in account relationships. FUTURE RESEARCH This study attempts to lay the framework for future KA research at the account level and it is our desire that it shapes a stream of new research on relationship effectiveness and performance. It is important to note that empirical research at the account level is dependent on account-level data that are becoming more readily available as customer relationship management matures and companies see the need to capture data, including cost data, at this level. This improving data situation is a long way from ideal, but it is improving. One interview with a vice president in a KA organization conrmed this move toward more account-level data: We are following an industry trend in trying to capture data at the level of our customer accountsits imperative for us to make good account decisions. Several possible follow-up studies are obvious at this point. First, empirical work should follow to test the theoretical framework proposed in this study. Collecting account-level data and validating the integrative model is important to ensure that these theoretical relationships function as expected at the account level. Empirical work will allow scholars to examine the nature of the mediating variable and provide support for the second-order formative construct, and evaluate the effect of relationship effectiveness on account performance. These empirical studies should test the theory and provide additional insights into the appropriateness of the integrative model. Second, additional moderators should also be explored in this model. Do the different types of t interact with each other? What are the roles of channel power, number of alternative suppliers, and relationship tenure on performance and relationship effectiveness? KAMs need to consider the nature of the channel and its effects on the relationships and account performance among channel partners. Recent research by McFarland, Bloodgood, and Payan (2008) suggests that the nature of the relationships among channel partners heavily inuences downstream inuence strategies among supply chain partners. We expect that such inuence would be more pronounced given the importance of the relationships between KAMs and their customers. The search for boundary conditions on this model should provide interesting results and should further clarify the extent to which this model can be generalized.

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