Faculty of Economics and Business Administration Publications Database

Influence of Online Use on Product Usage Behavior and Consequences for Customer Channel Migration Strategies

Gensler, Sonja
Leeflang, Peter
Volume: 29
Number: 2
Pages: 192 - 201
Month: June
ISSN-Print: 0167-8116
Link External Source: Online Version
Year: 2012
Keywords: Channel management; Self-selection effect; Product portfolio; Matching method; Online marketing; Distribution
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.