The Impact of Channel Mix and Channel Acquisition on Revenues, Retention and CLV

The availability of multiple points of contacts offers consumers the opportunity to choose the channel or the portfolio of channels that best match their needs. This often leads consumers to adopt very different channel mix. The composition of the channel mix, however, can have important consequences on the gain a firm’s derives from each customer. Omnichannel shopping behavior can result in customers using costly channels and/or channels inapt to build a customer-firm relationship. This paper examines how the different combinations of channel consumers use to shop influence retention, revenues and, ultimately CLV. We find that different channel mix vary in their impact on both retention and revenues because affect revenues but have a negligible impact on retention. Our findings are particularly important for managers who need to be aware of the profit consequences of their omnichannel strategies, and determine the most effective acquisition and retention multichannel strategies. By knowing which channel mix are more likely to improve both retention and profitability, managers might design their multichannel campaigns to foster specific channels’ adoption.