Does Multichannel Usage Produce More Profitable Customers?

One of the most intriguing and managerially relevant findings in the multichannel customer management literature is the positive association between the multichannel customer and profits. The question is whether this is an actionable, causal relationship, specifically, whether marketing campaigns can be designed to turn single-channel customers into multichannel customers, and in turn whether these multichannel customers will become more profitable to the firm. The purpose of this research is to conduct a field experiment to investigate this question. We design a field test where we vary the incentive (financial vs. non-financial) for inducing the customer to become multichannel, and the targeting of the incentive (random assignment vs. assignment based on a model developed to identify the customers who are expected to generate the most revenues if they become multichannel). The field test started at the beginning of January 2011. We discuss the design of the experiment, the model-based treatment, and the preliminary results.