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

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  • Gensler, Sonja
  • Leeflang, Peter
  • Skiera, Bernd

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.

Suggested Citation

  • Gensler, Sonja & Leeflang, Peter & Skiera, Bernd, 2012. "Impact of online channel use on customer revenues and costs to serve: Considering product portfolios and self-selection," International Journal of Research in Marketing, Elsevier, vol. 29(2), pages 192-201.
    • Handle: RePEc:eee:ijrema:v:29:y:2012:i:2:p:192-201
    DOI: 10.1016/j.ijresmar.2011.09.004
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