“Are multichannel customers really more valuable? An analysis of banking services”

• Kushwaha and Shankar (2013) find that the profitability of multichannel customers depends on the type of product purchased.
• Our study replicates K&S by analyzing the profitability implications of multichannel customers in services (banking).
• Fully multichannel customers are not the most profitable for service firms because using all channels decreases profits.
• Concentrating the interactions through high-margin channels or using dual-channel combinations increase profitability.

Conventional wisdom suggests that multichannel customers are more profitable. With a focus on goods, Kushwaha and Shankar (2013) demonstrate that it depends on the type of product purchased. Our study looks at the profit implications of multichannel customers in services (banking). Our research shows that fully multichannel customers (using all channels available) are not the most profitable for service firms. We find that concentrating the interactions through high-margin channels as well as using specific dual-channel combinations produce improvements in profitability.