A framework for key account management and revenue management integration Xuan Lorna Wang a , Ross Brennan b, ⁎ a London School of Hospitality and Tourism, University of West London, London W5 5RF, UK b Hertfordshire Business School, University of Hertfordshire, Hertfordshire AL10 9AB, UK abstract article info Article history: Received 28 March 2013 Received in revised form 1 October 2013 Accepted 4 March 2014 Available online 4 July 2014 Keywords: Key account management Revenue management Customer relationship management Customer value Service industries Key Account Management (KAM) and Revenue Management (RevM) have been widely practiced in the service industries for more than three decades, but the effects of RevM on KAM remain largely unknown. This paper addresses this neglected area of study in the marketing field by presenting a framework for KAM and RevM in- tegration that aligns the potentially conflicting management priorities of the two. The study uses an international hotel company as a research context to investigate, first, how a long-term relational approach to KAM may have been affected by RevM short-term revenue maximization goals, and, second, how KAM could be facilitated by RevM through an integrated approach to yield optimization from perishable products and from key accounts. The proposed framework is the first attempt of its kind to amalgamate KAM and RevM, involving critical analysis to assess comprehensively the revenue and the relationship value of a key account. © 2014 The Authors. Published by Elsevier Inc. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/3.0/). 1. Introduction The principal contention of this paper is that there are important in- teractions between revenue management (RevM), a widespread prac- tice in business-to-business service industries, and key account management (KAM). These interactions have been neglected in prior re- search, and yet the practice of RevM is clearly likely to affect the practice of KAM, possibly with damaging results for key account relationships. In extreme cases RevM policies, which seek to maximize short-term reve- nue using a market segmentation approach, could adversely affect the development of effective KAM relationships, contradict a carefully de- signed relationship portfolio strategy, and prevent the alignment of a supplier's strategic objectives with those of a key account. For re- searchers, the interaction between RevM and KAM is an interesting the- oretical question, and the neglect of RevM by KAM researchers is an important lacuna in prior work. For practitioners it is imperative to avoid a situation in which KAM strategies are unintentionally frustrated by RevM policies; guidance is needed on the integration of KAM with RevM. This paper examines the theoretical questions about interactions between KAM and RevM in the research context of the hotel industry, presenting a case study of an international hotel group based in the UK. KAM and RevM are two popular research areas in marketing and op- erations management. KAM primarily focuses on the management and development of profitable relationships with strategically important business-to-business (B2B) clients (Anton, 1996; Buttle, 2004; Ryals, Knox, & Maklan, 2000). RevM originated from the airline industry and is one of the most implemented operations management concepts in the service sector (Cross, 1997; Kimes & Wirtz, 2003), aiming to maxi- mize revenue by increasing operating efficiency through effective man- agement of pricing, perishable capacity and customer mix (Anderson & Xie, 2010; Siguaw, Kimes, & Gassenheimer, 2003). Recently it has been recognized that RevM could have adverse effects on customer relation- ships (Hendler & Hendler, 2004; Kimes, 1994; Mathies & Gudergan, 2007; McCaskey, 1998; Milla & Shoemaker, 2008; Noone, Kimes, & Renaghan, 2003; Wirtz, Kimes, Ho, & Patterson, 2003), but few studies have investigated the interaction between RevM and KAM specifically (Wang, 2012a, 2012b; Wang & Bowie, 2009). This paper has three objectives. First, to bridge the gap between mar- keting and operations management literature by presenting a frame- work for KAM and RevM integration that harmonizes the latently conflicting areas between the two concepts. Second, to understand bet- ter how RevM can contribute to KAM decisions that have a long-term perspective. Third, to argue for a change of focus of RevM away from maximizing daily revenue to optimizing profit yield from a company's relatively fixed capacity, while sustaining valuable long-term client relationships. This article is organized as follows. A review of relevant literature in KAM and RevM is presented to support the argument that this is an important and neglected research topic. The case study research design used to investigate KAM and RevM at an international hotel company is described, and the results are presented and discussed. Following this, the framework for KAM and RevM integration is pro- posed, and the theoretical and practical conclusions from the work are explained. Industrial Marketing Management 43 (2014) 1172–1181 ⁎ Corresponding author. E-mail addresses: Lorna.Wang@uwl.ac.uk (X.L. Wang), d.r.brennan@herts.ac.uk (R. Brennan). http://dx.doi.org/10.1016/j.indmarman.2014.06.006 0019-8501/© 2014 The Authors. Published by Elsevier Inc. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/3.0/). Contents lists available at ScienceDirect Industrial Marketing Management