Do cozy personal relationships really matter in business? The assumption has long been that relationship building erects psychological barriers that keep clients from switching to other suppliers. But new research suggests it may be time to cut back the expense accounts of the people who have been managing key relationships.Using a survey of 39 key-account managers at a commercial bank and 114 managers at the bank's corporate customers, the researchers examined corporate buyers' decisions to switch suppliers. In particular, they compared how three factors influence that decision:interpersonal relationships between account managers and buyers;the existence of processes, custom software or other buyer-level switching costs; andthe product/price marketing mix.They found that although interpersonal relationships do matter, price and switching costs are more important than socializing with clients.It should be no surprise that buyers are price-sensitive. More interesting is the study's suggestion that a supplier's best option for customer retention may be to create switching costs for the corporate buyer, rather than to nurture close personal relationships. “Marketers have spent a lot of money on key-account managers,” says researcher Kenneth Wathne. “We say you should be pretty careful how you spend that money.&
