Impact of online channel use on customer revenues and costs to serve: Considering product portfolios and self-selection

Sonja Gensler*, Peter Leeflang*, Bernd Skiera*

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

49 Citations (Scopus)

Abstract

Developing a strategy for online channels requires knowledge of the effects of customers' online use on their revenue and cost to serve, which ultimately influence customer profitability. The authors theoretically discuss and empirically examine these effects. An empirical study of retail banking customers reveals that online use improves customer profitability by increasing customer revenue and decreasing cost to serve. Moreover, the revenue effects of online use are substantially larger than the cost-to-serve effects, although the effects of online use on customer revenue and cost to serve vary by product portfolio. Self-selection effects also emerge and can be even greater than online use effects. Ignoring self-selection effects thus can lead to poor managerial decision-making. (C) 2012 Elsevier B.V. All rights reserved.

Original languageEnglish
Pages (from-to)192-201
Number of pages10
JournalInternational Journal of Research in Marketing
Volume29
Issue number2
DOIs
Publication statusPublished - Jun-2012

Keywords

  • Channel management
  • Self-selection effect
  • Product portfolio
  • Matching method
  • Online marketing
  • Distribution
  • PROPENSITY SCORE
  • SHOPPING BEHAVIOR
  • RISK PERCEPTIONS
  • EXPERIENCE GOODS
  • BANKING
  • SEARCH
  • SATISFACTION
  • CONSEQUENCES
  • DETERMINANTS
  • PERFORMANCE

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