Revenue management: the impact on business‐to‐business relationships

Abstract

PurposeThis paper aims to explore the links between revenue management and business‐to‐business (B2B) relationships and explains how revenue management can both support and damage B2B relationships.Design/methodology/approachA single case study method was employed to conduct qualitative research into a company and its key accounts. In‐depth data were collected from three divergent sources (company revenue managers, company account managers and nine of the company's key accounts) through semi‐structured interviews, observations and document studies.FindingsThe research findings reveal that from the company's perspective, managers acknowledge that revenue management has positively influenced the process of identifying and analysing key account activities and conducting contractual decision making with key accounts. However, from the key accounts' perspective, revenue management practices were found to have significant negative consequences which damage trust and undermine long‐term relationships and commitment.Research limitations/implicationsAlthough the research findings cannot be generalised to other service sectors because of the single‐case study research method, the implications of this study suggest that the impact of revenue management practice on B2B relationships should be further investigated in a wide range of organisational and industry settings.Practical implicationsThe research findings confirm the long‐held assumption that revenue management can negatively affect B2B relationships. The benefits of revenue management primarily reward the company, whilst long‐term B2B relationship development suffers from the short‐term consequences of the company's opportunistic behaviour.Originality/valueThis paper bridges the gap in the literature between revenue management and key account management. It also explores the conceptual incompatibility between revenue management and a long‐term relational approach to B2B relationships and provides evidence to support this proposition.