Modeling Optimal Multichannel Strategies in Service Industries

Paul, Michael/ Hennig-Thurau, Thorsten/ Rudolph, Thomas

Abstract

We demonstrate how service companies can optimize their multichannel strategy by using acustomer equity approach. We simulate the effect of channel choices on customer retentionwith a 2x3 between-subjects experimental design that varies the channel (internet vs. store)and customer decision stages (search, purchase, and after sales). We combine theexperimental results with data about channel revenues and costs from a major European travelcompany and calculate the channel strategy for this firm which maximizes the firm'scustomer equity. We differentiate between three different shopper segments (online,multichannel, and store) and vary their size. Results show that the travel company can, undercertain conditions, increase customer equity by up to 34 % when restricting after salesservices to the Internet and motivating multichannel shoppers to enhance their onlinepurchasing.