MEDDELANDEN FRÅN SVENSKA HANDELSHÖGSKOLAN SWEDISH SCHOOL OF ECONOMICS AND BUSINESS ADMINISTRATION WORKING PAPERS. Jukka Ojasalo

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1 MEDDELANDEN FRÅN SVENSKA HANDELSHÖGSKOLAN SWEDISH SCHOOL OF ECONOMICS AND BUSINESS ADMINISTRATION WORKING PAPERS 421 Jukka Ojasalo CUSTOMER COMMITMENT AND KEY ACCOUNT MANAGEMENT APRIL 2000

2 Key words: Commitment, Business-to-business relationships, Key account management (KAM), National account management (NAM), Customer relationship management (CRM), Relationship marketing Swedish School of Economics and Business Administration & Jukka Ojasalo Jukka Ojasalo CERS Center for Relationship Marketing and Service Management Swedish School of Economics and Business Administration P.O.Box Helsinki, Finland Distributor: Library Swedish School of Economics and Business Administration P.O.Box Helsinki Finland Phone: , Fax: SHS intressebyrå IB (Oy Casa Security Ab), Helsingfors 2000 ISBN X ISSN

3 - 1 - Customer Commitment and Key Account Management Jukka Ojasalo, Ph.D. Swedish School of Economics and Business Administration Finland, CERS Center for Relationship Marketing and Service Management P.O.Box 479, Arkadiagatan 22, Helsinki, Finland Tel , Mob , Fax , jukka.ojasalo@shh.fi Abstract What is the nature of customer commitment in business-to-business relationships and what are its antecedents? What Key Account Management practices help to build customer commitment? Commitment is an important element of Key Account Management since customer relationships are built upon a the foundation of commitment. Building long-term key account relationships occurs by enhancing and maintaining their commitment. Customer commitment has various antecedents, and managing commitment involves focusing on these antecedents. This paper explains the nature of commitment and describes its antecedents. It also suggests how to manage each of these antecedents to strengthen customer commitment. Keywords: Commitment, Business-to-business relationships, Key account management (KAM), National account management (NAM), Customer relationship management (CRM), Relationship marketing Introduction The importance of relationship marketing has been widely recognized both among academics and practitioners, and there is an increasing need for applied science in this area. This partly explains the growing interest in Key Account Management (KAM). KAM can be characterized as a relationship oriented marketing management approach focusing on dealing with major customers in the business-to-business market (Ehrlinger, 1979; Diller, 1989; Millman, 1994; Millman and Wilson, 1994; Pardo, Salle and Spencer, 1995; Millman, 1996; McDonald, Millman and Rogers, 1996 and 1997; McDonald and Rogers, 1998). The terms National Account Management or National Account Marketing (NAM) (Stevenson and Page, 1979; Stevenson, 1980 and 1981) have also been used in the literature and there is no real difference between KAM and

4 - 2 - NAM. KAM is typically associated with the business-to-business context, and most of the KAM or NAM literature deals with industrial relationships. However, services also include business-to-business relationships, and most industrial relationships include both tangible and service elements (c.f. Grönroos, 1990). KAM clearly has potential in any kind of business-to-business relationships. Commitment is an important element of KAM since customer relationships are based on mutual commitment (Berry and Parasuraman, 1991; Morgan and Hunt 1994). The importance of commitment has been recognized in both industrial (e.g. Ford and Rosson, 1982) and service relationships (e.g. Liljander and Strandvik, 1995). However, most of the literature on customer commitment is descriptive and provides no clear guidelines to marketing practitioners and key account managers on how to deal with this important aspect of relationships. This paper broadens the perspective by suggesting various KAM-practices for building customer commitment. This paper is based on a detailed literature analysis and has the following structure. First, it explains the nature of commitment. Then, it identifies the factors affecting commitment. This is necessary since customer commitment can be managed by managing the antecedents of commitment. Next, the nature of these antecedents is described and various KAM-practices are suggested for managing them in order to build customer commitment. Then, research implications are discussed. After that, suggested practices for managing antecedents of commitment are summarized and presented in the form of framework, and final conclusions are drawn. The Nature of Commitment Commitment implies an unwillingness to consider partners other than those in the current relationship (Leik and Leik, 1977; Moorman, Zaltman and Deshpande, 1992) as well as the enduring desire to maintain a valued relationship (Moorman, Zaltman and Deshpande, 1992, p. 316). It entails a desire to develop a stable relationship, willingness to make short-term sacrifices to maintain the relationship, and a confidence in the stability of the relationship (Anderson and Weitz, 1992). Commitment has also been defined as the parties intentions to act and their attitude towards interacting

5 - 3 - with each other (Storbacka, Strandvik and Grönroos, 1994, p. 25; Liljander and Strandvik, 1995, p. 151), and as an implicit or explicit pledge of relational continuity between exchange partners (Dwyer, Schurr and Oh, 1987). Morgan and Hunt (1994, p. 23) characterize commitment as follows: an exchange partner believing that an ongoing relationship with another is so important as to warrant maximum efforts at maintaining it; that is, the committed party believes the relationship is worth working that it endures infinitely. Commitment does not change often (Moorman, Zaltman and Deshpande, 1992), and once it changes, its escalation over time is slow (Wilson and Mummalaneni, 1990), so that commitment means something only over long term (Gundlach, Achrol and Mentzer, 1995, p. 79). A future orientation is an essential aspect of commitment (Johnson, 1982; Wilson and Mummalaneni, 1990; Halinen, 1996). Moreover, commitment entails vulnerability, reflecting the close relation between commitment and trust (Morgan and Hunt, 1994, p. 23). Commitment includes a behavioral element acts and attitudinal element willingness (Miettilä and Möller, 1990; Liljander and Strandvik, 1995). Dwyer, Schurr and Oh (1987, p. 19) argue that committed parties have not ceased attending to alternatives, but maintain their awareness of alternatives without constant and frenetic testing, which corresponds well to the findings of Strandvik and Liljander (1995) which indicate that a customer might not even consider other alternatives as long as the current relationship is satisfying. Furthermore, it is possible to make a distinction between commitment to an individual and to an organization. It is possible for a customer to be committed to a specific person in a company, without being committed to the company per se (Strandvik and Liljander, 1994). Customer Commitment: Antecedents and Facilitating KAM Practices Commitment is affected by various factors. These factors are listed below together with sources (Table 1). Based on these antecedents, various KAM-practices are later proposed for building customer commitment.

6 - 4 - Table 1 Antecedents of commitment Antecedent of commitment Author Trust Dwyer, Schurr and Oh, 1987; Achrol, 1991; Moorman, Zaltman and Deshpande, 1992; Morgan and Hunt, 1994 Satisfaction and relationship Wilson and Mummalaneni, 1990; Bitner, 1995; Liljander and benefits Strandvik, 1995 Investments/adaptations Williamson, 1979; Ford and Rosson, 1982; Grönroos, 1982; Wilson made in the relationship and Mummalaneni, 1990; Hallen, Johanson and Seyed-Mohamed, 1991; Halinen, 1995 Sharing of information Anderson and Weitz, 1992; Booth and Deli, 1996; Gundlach, Achrol and Mentzer, 1995 Personal relations between Emerson, 1962; Cunningham and Turnbull, 1982; Grönroos, 1990 individuals Consistency of interaction Gundlach, Achrol and Mentzer, 1995 Contractual terms Williamson, 1983; Anderson and Weitz, 1992 Conflicts Anderson and Weitz, 1992 Willingness to make Anderson and Weitz,1992 uncompensated short-term sacrifices Shared values Dwyer, Schurr and Oh, 1987; Morgan and Hunt 1994 Trust Trust is one of the most important antecedents of customer commitment (Dwyer, Schurr and Oh, 1987; Achrol, 1991; Moorman, Zaltman and Deshpande, 1992; Morgan and Hunt, 1994). Once customers trust the selling company, they do not have to invest time, money and effort in control activities which in turn makes the relationship more efficient. A feeling of trust creates a favorable atmosphere in a relationship and contributes to relationship longevity. In contrast, without the customer s trust, successful relationship management becomes extremely difficult and is likely to lack long-term orientation. Trust can be increased by reducing customer uncertainty. Spekman (1988, p. 78) discusses trust, commitment, and uncertainty in the context of long-term buyer relationships and concludes that Collaboration grows from the need for both parties to reduce the uncertainties inherent in any trading relationships. Customer uncertainty has been discussed in the context of professional relationships in particular (Wittreich, 1966; Gummesson, 1978; Bloom, 1984; Wheiler, 1987; Swartz and Brown, 1991; Nooteboom, Zwart, and Bijmolt, 1992). Thus, KAM practices that relate to identifying and removing sources of uncertainty are relevant in this context. Customer uncertainty may be related to selection of supplier, consumption, and post purchase

7 - 5 - evaluation (c.f. Strandvik 1994), and the reasons causing it may be real or imagined. Supplier selection, consumption, and post purchase evaluation are all areas in which uncertainty can be reduced. This can be done in terms of product/service improvements and better communication. Communicating practical examples and previous success stories are examples of how communication can reduce customer uncertainty. Satisfaction and relationship benefits When customers have a choice they will remain loyal to a firm when they receive greater value relative to what they could get from competing firms (Bitner, 1995). Not only the fact that certain relationship will provide benefits to the customer is important, but also how fast they materialize in the relationships. According to Ojasalo (1999a), faster positive development of satisfaction naturally supports relationship longevity and decreases the propensity to switch. A partner that delivers superior benefits will be highly valued, and firms will commit themselves to establishing, developing, and maintaining relationships with such partners. Formation and occurrence of different benefits becomes possible in long-lasting relationships, because providers become knowledgeable about the customers special requirements and needs (Berry, 1995). Thus, product/service customization is an essential aspect of successful KAM (c.f. Berry, 1983). Beyond economical benefits and value there are other relationship benefits that strengthen commitment. These benefits are of a more social or psychological nature. Customers benefit from long-term relationships because such associations can contribute to a sense of well-being and overall quality of life (Bitner, 1995). This corresponds to the suggestion that relationship marketing can benefit by adopting a quality-of-life (QOL) approach (Sirgy and Lee, 1994). Furthermore, long-term relationships become predictable (Bitner, 1995), resulting in risk-reducing benefits (Berry, 1995). The relationship between satisfaction and commitment is not straightforward, however. Satisfaction does not always guarantee commitment, and sometimes commitment may exist despite dissatisfaction. According to Wilson and Mummalaneni (1990),

8 - 6 - satisfaction with a relationship, based on successful past experiences, does not necessarily guarantee commitment, although investments are generally made in relationships considered to be satisfactory. Sometimes customers who are grateful for the benefits they receive today, still choose another partner tomorrow (Jackson 1985), perhaps simply because they are not interested in a long-term relationship (Webster, 1994). Alternatively, a customer may be dissatisfied, but still be committed to a relationship (Wilson and Mummalaneni, 1990; Liljander and Strandvik, 1995). Nevertheless, it is clear that customer satisfaction and benefits generally increase commitment. Consequently, KAM practices which increase customer satisfaction in terms of product/service customization and meet special needs are important. Although paying customers in business-to-business relationships are organizations, they are nevertheless always represented by individuals. Thus, successful KAM requires handling both organizational and individual levels. Research has shown that benefits contributing to organizational goals ( quality for the company ) tend to be rational and benefits contributing to the wellbeing of key individuals ( quality for the individual ) are both rational and emotional (Ojasalo, 1999b, pp ). Moreover, providing extra benefits (ibid., p. 146) may be an efficient method of customizing the relationship. Extra benefits do not contribute to the official goals of the cooperation, but do contribute to the customer s well-being in general. Small free favors and advice are examples of extra benefits. Investments and adaptations made in the relationship Commitment is enforced by the investments made in the relationship (Ford and Rosson, 1982; Wilson and Mummalaneni, 1990; Halinen, 1995; see also Williamson, 1979). Investments may be economic, communicative, and emotional (Scanzoni, 1979; Dwyer, Schurr and Oh, 1987). Investments are also perceived in terms of two broader classes, economic and social, which both can be operationalized by using product-, organization- and person-related factors (Wilson and Mummalaneni, 1990). This covers human capital investments, including alternations in procedures, special training, and allocation of managerial resources to the relationship (Ford and Rosson,

9 ; Ford, 1990). Investments of a personal nature may, for example comprise time, energy, and friendship (Wilson and Mummalaneni, 1990). Adaptations resemble investments to a high degree. Adaptations have been broadly discussed, especially in the context of industrial relationships. The importance of continuous need adaptation has, however, been recognized in service relationship as well (Grönroos, 1982, p. 155). An integral characteristic of a relationship or a partnership is that at least one of the partners adapts to the needs of the other (Brennan and Turnbull, 1995). Adaptations take place when the selling company adapts to the needs of the customer and when the customer adapts to the capabilities of the seller. As noted, the concept of adaptation is closely connected to the above discussed concept of relationship investment. Adaptations imply that an investment has been made by one or both companies (Ford and Rosson, 1982; Ford, 1990; Hallen, Johanson and Seyed-Mohamed, 1991; see also Williamson, 1979). Adaptations may occur either in relation to the elements exchanged or the process of exchange (Håkansson, 1982). Adaptations may also be necessary in an ongoing relationship as the exchange parties are exposed to changing business conditions. In addition, adaptations which have already been made in an ongoing relationship, provide part of the framework for further business expansion. Thus, adaptations are a significant feature of the dynamics of business relationships (Hallen, Johanson and Seyed- Mohamed, 1991). Adaptations can be both formal and informal (Ford and Rosson, 1982). Formal adaptations are contractually agreed on. Informal adaptations may be arranged subsequently to cope with particular issues which arise as the relationship develops. Informal adaptations beyond the terms of contract are often an important indicator of commitment (Ford, 1990). Hence, KAM practices which aim at revealing new possibilities to provide added value to the customer are relevant (c.f. Hallen, Johanson and Seyed-Mohamed, 1991) since they tend to lead to increased investments and adaptations. These practices may comprise analyzing customer processes and spotting areas which could be improved in terms of increased cooperation. This could, for example, involve outsourcing some existing customer processes and inventing new needs.

10 - 8 - Information sharing Open information sharing increases the motivation to commit to a relationship (Anderson and Weitz, 1992; Booth and Deli, 1996). Time, effort, and occasional frustration involved in exchanging information may even move the business arrangement to the level of a strategic business alliance (Anderson and Weitz, 1992). Disclosure of confidential information (Gundlach, Achrol and Mentzer, 1995) especially increases commitment. This information may, for example, relate to industry and market conditions and competitive information. Proprietary information about the firm s decisions and strategies, such as brand design intentions, R&D projects, target market selection, store openings, sales force allocation, advertising, and media strategies, is also sometimes shared. Information may also relate exclusive representations or dedicated operational decisions, for example market research, inventory allocations, and financial and managerial assistance (Gundlach, Achrol and Mentzer, 1995). Thus, one purpose of KAM practices is to facilitate information sharing. This can be done by identifying which persons/functions in both organizations need information and what kind of information is needed. It is also necessary to consider changing information needs (c.f. McAuley, 1993). The customer may be particularly reluctant to share confidential information if the selling company is working with companies that are the customer s competitors (Ojasalo, 1999b). Thus, emphasizing confidentiality of information is important. Information sharing can also be facilitated by creating more interfaces between the organizations (c.f. Araujo, Dubois and Gadde, 1999) and exploiting IT. Personal relations between individuals According to Grönroos (1990), personal relationships and other human factors contribute to relationship commitment. The relations between the employees of the seller and the buyer are a source of perceived quality in service firms as well as in firms manufacturing goods. Contact persons constitute the ground of personal relations, so that social relations entailing ties of mutual dependence between parties may develop (Emerson, 1962). Inter-company relationships are established and maintained through contacts with key individuals (Cunningham and Turnbull, 1982). Significant

11 - 9 - communication and emotional resources are often exchanged in relationships (Dwyer, Schurr and Oh, 1987). Furthermore, Halinen (1994) points out that good communication and interaction skills, as well as knowing the right people, their intentions and preferences in the partner organization, facilitate building interpersonal relations. The behavior of the individuals acting either in their own right, or as representatives of their companies creates the atmosphere in the relationship (Cunningham and Turnbull, 1982). Determinants of interpersonal interaction have also been understood in terms of social distance. Thus, efforts to reduce social distance are one way of demonstrating commitment (Ford, 1990). Personality, educational background, performed tasks, and job descriptions all influence the nature of interaction (Grönroos, 1982). Furthermore, intensity and style of interaction are also determinants of interpersonal relations (Cunningham and Turnbull, 1982). In conclusion, KAM-practices which help to develop personal relations with the key individuals in the customer organization are important (c.f. Barret, 1986). For this reason, it is vital to identify the key person(s) in the customer organization who hold the power to continue or terminate the relationship (Ojasalo, 1999b). It is also relevant to identify the persons who influence key decision maker(s). Interpersonal relations with key decision makers can be developed, for example, by adapting to the social interaction style appreciated by these persons and by socializing with them outside the official context. Consistency of interaction To establish commitment, the inputs and attitudes brought to the relationship must be consistent over time (Gundlach, Achrol and Mentzer, 1995). Thus, commitment is influenced by the consistency with which inputs are made in the association. If one party s input levels fluctuate, the other party will have difficulties in predicting the exchange outcomes (Dwyer, Shurr and Oh, 1987). Consistency includes the following dimensions of interaction: (a) frequency of contact, (b) regularity of contact, (c) interaction time, (d) control, (e) diversity of demand, (f) participation, (g) level of contact, (h) initiative, and (i) business logic (Storbacka 1993, p. 43). Inconsistent inputs from one party reflects low commitment and leads to a reduced reliance of the other party on the outcomes of the exchange (Dwyer, Schurr and Oh, 1987).

12 Thus, KAM should include practices contributing to the consistency of interaction. For this purpose, it is important to determine what interaction procedures are appreciated by the customer and standardize them to a reasonable extent. Ford and Rosson (1982) suggest that companies sometimes allow their dealings with each other to become overly standardized and routine, and the relationship becomes institutionalized (Rosson, 1986). This may make the company appear to be unresponsive or uncommitted in the eyes of the partner (Ford and Rosson, 1982). Since numerous people usually interact with the key customer, it is important that they all know the guidelines for interaction. Contractual terms Voluntary constraining of relationship activities through contract terms is a form of commitment or a pledge (Williamson, 1983; Anderson and Weitz, 1992). Contracts can establish territorial exclusivity, concerning for example manufacturing and distribution, limit termination to situations in which minimum performance goals are not achieved, and provide for advance notice of termination of a relationship (Anderson and Weitz, 1992). According to Gummesson (1995), the juridical aspect of relationships has three objectives: (1) to minimize misunderstandings and protect from misuses, (2) to function as quality control and to resolve disagreements, and (3) to manipulate the other party. It is very difficult to draw any general conclusions on how to deal with the contractual KAM issues. It might, however, be worthwhile to remember that written contracts are not ends, they are means. Sometimes it is wise to show flexibility with respect to fulfilling each detail of the contractual terms, particularly if the continuation of the relationship is at stake. This can in turn lead to reciprocal flexibility. Conflicts Conflicts in a relationship may have both a positive and a negative impact on commitment. Conflicts may signal low commitment to the relationship, and a persistent history of conflict is likely to reduce commitment. Conflicts often make it difficult to place confidence in the other party s long-term orientation (Anderson and Weitz, 1992). On the other hand, a conflict can also be constructive when it leads to an

13 exploration of new options (ibid.) resulting, for example, in increased productivity in the relationship (Morgan and Hunt, 1994). The effects of conflicts on commitment finally depend on how they are handled. Since conflicts tend to occur in relationships with major customers (Barret, 1986; Alajoutsijärvi, 1996), solving them is an integral part of successful KAM. The following practices have been suggested for handling conflicts (Lippitt, 1982; ILO publication, ed. Kubr, 1996 p. 89). It is important to increase communication and identify the reason(s) for the conflict. Persons are likely to involve poor communication, poor performance and inefficiency, disagreement on objectives and results, disagreement on methods used, refusal to cooperate, personality and cultural clashes, competition for resources, fear of losing influence and power, disrespect of commitments, and resistance to change. The conflict should be depersonalized by shifting the focus from the disputing persons to the conflicting issues. Furthermore, it is wise to emphasize common needs and goals, and aim for a win-win rather than winlose solution. In addition, rather than accusing each other, it may be reasonable to try to find a common enemy. Willingness to make uncompensated short-term sacrifices Willingness and ability to make uncompensated or unbalanced short-term sacrifices facilitates commitment. According to Anderson and Weitz (1992, p. 19), commitment to a relationship goes beyond a simple, positive evaluation of the party based on a consideration of the current benefits and costs associated with the relationship. Commitment implies a long-term orientation in the relationship, including willingness to make short term sacrifices to realize long-term benefits from the relationship. This corresponds well to Bell s (1996, p. 5) argument for having customers as partners. He emphasizes the spirit of generosity in doing business and the importance of shifting from a taker or greed orientation to a giver orientation. Consequently, a reasonable KAM measure is to compare the degree of the short-term sacrifice to future benefits for the customer. According to Blois (1999), the revenues from each customer should exceed the costs of establishing and maintaining a relationship within a certain time span. To make this comparison, it is necessary to

14 assess 1) the total positive cash flow coming from the customer in the future, 2) and also the value of other benefits received from the relationship: reference value, security and stability of business, increase of competencies, new business opportunities, etc. Shared values and organizational culture According to Morgan and Hunt (1994, p. 25; see also Dwyer, Schurr and Oh 1987), shared values contribute to the development of commitment. Shared values refer to the extent to which the parties have common beliefs about what behaviors, goals, and policies are important or unimportant, appropriate or inappropriate, and right or wrong (Morgan and Hunt, 1994). Differences between organizational values and culture may cause irritation and various problems of cooperation, they may even represent a pitfall for relationship longevity. Thus, from the KAM perspective, it is important to identify differences between one s own and the customer s organizational values and culture. This can be done, for example, by analyzing the following aspects of organizational values and cultures (ILO publication, ed. Kubr, 1996 p. 109): company mission and image, decision making process, authority and seniority of the persons, the relative importance of different management positions and functions, the treatment of employees, the role of women in management, work organization and discipline, management and leadership style, circulation and sharing of information, communication patterns, socializing patterns, and performance evaluation. Gaps in values and culture indicate the areas in which problems will most likely occur. Proactive KAM includes preparing for potential problems in these areas by developing plans for prevention and recovery. Research Implications The earlier analysis revealed a number of antecedents of customer commitment: trust, satisfaction and relationship benefits, investments/adaptations in the relationship, information sharing, personal relations between individuals, consistency of interaction, contractual terms, conflicts, willingness to make uncompensated short-term sacrifices, and shared values of parties. Figure 1 suggests a model which integrates these antecedents. It is important to remember that many of the antecedents of commitment suggested in the model may be more or less interrelated.

15 In this model all the antecedents, with the exception of conflicts, are suggested to correlate positively with customer commitment. As discussed earlier, the role of conflicts may be twofold. Conflicts in a relationship may have both a positive and a negative impact on commitment. Nevertheless, it is assumed here that there is a higher probability for conflicts to have a negative rather than a positive impact on customer commitment. Trust Satisfaction and relationship benefits + + Investments/adaptations made in the relationship + Information sharing + Good personal relations between individuals + Commitment Consistency of interaction + to a relationship Coercive contractual + terms Conflicts _ + Willingness to make uncompensated + short-term sacrifices Shared values Figure 1 Commitment to a relationship

16 Managerial Implications: A Framework for Managing Customer Commitment in Key Account Management Managing customer commitment is an important aspects of KAM, since customer retention and long-term relationships are the result. Commitment has several antecedents. Managing customer commitment involves managing these antecedents. This paper identified and described the nature of ten antecedents of commitment and suggested KAM practices for managing each of these antecedents. Table 2 shows the antecedents of customer commitment. It also summarizes, in normative form, the related KAM practices suggested based on the analysis.

17 Table 2 Antecedent of customer commitment Trust Satisfaction and relationship benefits Investments/ adaptations in relationship Information sharing Personal relations between individuals Consistency of interaction Contractual terms Conflicts Uncompensated short-term sacrifices Shared values and organizational culture Key Account Management practices contributing to customer commitment KAM practices contributing to customer commitment Analyze the sources of account s uncertainty a) in selecting the supplier, b) during the consumption of the product/service, and c) after the consumption. Identify real and imagined sources of uncertainty. In the case of real sources of uncertainty, focus on improving product/service performance. In the case of imagined sources of uncertainty, invest in communication. Do not belittle the reasons for the account s uncertainty, but instead listen with empathy and convince the account by using practical examples and previous success stories. Identify the account s special needs. Consider the special needs both at the organizational and individual level. Customize product/service to meet these special needs. Offer extra benefits to the account if possible. Analyze the account s basic characteristics: products/services, inputs, internal value chain, markets, suppliers, and economic situation. Determine whether the account s existing processes could be improved by investing/adapting more in the relationship. Be proactive and analyze the account s potential undiscovered and unfulfilled needs which might make it worthwhile to invest/adapt more in the relationship. Be prepared to make reciprocal investments/adaptations in our own organization and processes. Offer assistance, information and cooperation to the account as they make investments/adaptations. Analyze which persons/functions in both organizations need information and what kind of information. Increase interfaces between the selling and buying organizations and encourage people in different positions to directly communicate with each other, not just via the key account manager. Consider the changing needs of information over time. Let the account know that all the information shared in the relationship is handled in strict confidence. The account may be particularly reluctant to share confidential information if the selling company is cooperating with companies that are the account s competitors. In such a case, let them know that information shared by the account will never be used against them in any way. Find out about possibilities to use IT for information sharing (e.g. in terms of an extranet). Identify the key person(s) in the account organization who hold the power to continue or terminate the relationship. Adapt to the social interaction style appreciated by these persons. Outside the official context, also create informal social contacts and arrange events with key persons in order to build and enhance friendship. Find out what kind of interaction procedures are appreciated by the account and standardize the relevant elements to a meaningful extent. Make sure that all individuals dealing with the account know the guidelines for interaction. Remember that written contracts are not ends, they are means. If possible, show flexibility with respect to fulfilling each detail of the contractual terms, particularly if the continuation of the relationship is at stake. This may lead to reciprocal flexibility. Increase communication and identify the reason(s) for the conflict. Depersonalize the conflict by shifting the focus from the disputing persons to the conflicting issues. Emphasize common needs and goals, and aim for a win-win rather than a win-lose solution. Instead of accusing each other it may be reasonable to find a common enemy. Assess the total positive cash flow coming from the account in the future. Also assess the value of other benefits received from the relationship: reference value, security and stability of business, increase of competencies, and new business opportunities. Compare the short-term sacrifice with the two factors above and decide if the sacrifice pays off. Identify differences between your own and the account s organizational values and culture. Gaps in values and culture indicate areas in which problems will most likely occur. Prepare for potential problems beforehand by developing plans for prevention and recovery.

18 Conclusions This paper explained the nature of customer commitment to a relationship by identifying its antecedents and providing a broad description of their nature. Altogether, ten important antecedents of commitment were identified and described. Moreover, this paper combined customer commitment with KAM and aimed to bridge theory and practice. It did this by suggesting various KAM practices for managing antecedents of customer commitment in order to build long-term customer relationships. Finally, the focus of commitment has mostly been in dyads. A relevant extension and possibility for further research would be to broaden the perspective to business networks. The ten identified antecedents could obviously offer a fruitful starting point for examining commitment in business networks.

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