Impact of Online Channel Use on Customer Revenues and Costs to Serve: Considering Product Portfolios and Self-Selection

International Journal of Research in Marketing, Forthcoming

44 Pages Posted: 12 Oct 2011 Last revised: 17 Nov 2011

See all articles by Sonja Gensler

Sonja Gensler

University of Muenster - Institute for Value-Based Marketing

Peter S.H. Leeflang

University of Groningen - Faculty of Economics and Business

Bernd Skiera

University of Frankfurt - Department of Marketing

Date Written: October 3, 2011

Abstract

Developing a strategy for online channels requires knowledge about the effects of online use on customer revenues and costs to serve, which ultimately influence customer profitability. The authors theoretically discuss and empirically examine these effects. The results of an empirical study, with information about retail banking customers, reveal that online use affects customer profitability positively by increasing customer revenues and decreasing costs to serve. Moreover, the revenue effects of online use are substantially larger than the cost-to-serve effects, though the effects of online use on customer revenues and costs to serve differ across product portfolios. Self-selection effects also emerge and can be even greater than the online use effects. Ignoring self-selection effects thus could lead to inaccurate managerial decisions.

Keywords: channel management, self-selection effect, product portfolio, matching method, online marketing, distribution

Suggested Citation

Gensler, Sonja and Leeflang, Peter S.H. and Skiera, Bernd, Impact of Online Channel Use on Customer Revenues and Costs to Serve: Considering Product Portfolios and Self-Selection (October 3, 2011). International Journal of Research in Marketing, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1942170

Sonja Gensler (Contact Author)

University of Muenster - Institute for Value-Based Marketing ( email )

Am Stadtgraben 13-15
Muenster, 48143
Germany

Peter S.H. Leeflang

University of Groningen - Faculty of Economics and Business ( email )

Postbus 72
9700 AB Groningen
Netherlands

Bernd Skiera

University of Frankfurt - Department of Marketing ( email )

Theodor-Adorno-Platz 4
Frankfurt am Main, 60323
Germany
+49 69 798 34640 (Phone)
+49 69 798 35001 (Fax)

HOME PAGE: http://www.skiera.de

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