Switching Costs in Key Account Relationships

Abstract

Companies are increasingly implementing key account management for their most important business customers. Relationships between key account managers and their customers are intended to be long-term strategic partnerships resulting in competitive advantage for both. Switching costs include the psychological, physical, and economic costs a customer faces in changing a supplier. The main question we seek to investigate in this study is whether customer switching costs are good or bad for both the customer account and the selling firm. Further, we examine the factors leading to switching costs so that key account managers may influence the outcomes in these relationships.