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

journal contribution
posted on 2012-06-01, 00:00 authored by S Gensler, P Leeflang, Bernd SkieraBernd Skiera
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. © 2012 Elsevier B.V.

History

Journal

International Journal of Research in Marketing

Volume

29

Issue

2

Pagination

192 - 201

ISSN

0167-8116

Publication classification

C1.1 Refereed article in a scholarly journal; C Journal article

Copyright notice

2012, Elsevier B.V.