Behavioral Consequences of Customer-Initiated Channel Migration

Journal of Service Research (Forthcoming)

52 Pages Posted: 19 Dec 2013 Last revised: 22 Dec 2013

See all articles by Sebastian Ackermann

Sebastian Ackermann

Independent

Florian V. Wangenheim

ETH Zurich; ETH Zürich - Department of Management, Technology, and Economics (D-MTEC)

Date Written: December 18, 2013

Abstract

When customers deliberately change the channel through which they do business with a firm, is that an indication of behavior change, and thus, future revenue? This research investigates the causal effects of customer channel migration to direct, company-managed or indirect, independent agent-managed online and offline channels using data from a leading international airline. In a quasi-experimental design via Mahalanobis-metric matching and conditional difference-in-differences estimation, the authors show that channel migration affects customer relationship breadth and depth: (1) Customers migrating from indirect to direct channels exhibit lower levels of relationship depth (revenue); (2) customers migrating from offline to online channels exhibit higher levels of relationship breadth (cross-buying); and (3) customers migrating from indirect offline to direct online channels exhibit higher levels of relationship depth (sales) and breadth (cross-buying). These findings expand our understanding of customer channel migration in service industries and suggest reconsidering and evaluating service firms’ strategies for direct channels as a lever for short-term revenue increase. Improving service firm’s direct channel relationship depth and breadth, pricing structure in direct channels must be adapted to compensate for lower sales figures per customer. In addition, direct channels services should be optimized to achieve higher conversion rates.

Keywords: Customer Channel Migration; Online and Offline Channels; Direct and Indirect Channels; Conditional Difference-in-Differences Estimation

JEL Classification: M31

Suggested Citation

Ackermann, Sebastian and Wangenheim, Florian V., Behavioral Consequences of Customer-Initiated Channel Migration (December 18, 2013). Journal of Service Research (Forthcoming), Available at SSRN: https://ssrn.com/abstract=2369200 or http://dx.doi.org/10.2139/ssrn.2369200

Sebastian Ackermann

Independent ( email )

Florian V. Wangenheim (Contact Author)

ETH Zurich ( email )

Weinbergstrasse 56
Zurich, 8092
Switzerland
41-44-632 6924 (Fax)

HOME PAGE: http://www.techmarketing.ethz.ch/

ETH Zürich - Department of Management, Technology, and Economics (D-MTEC) ( email )

Zurich
Switzerland

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