Customer Responses to Channel Migration Strategies Toward the E-Channel

Abstract

Many firms stimulate customers to use the E-channel for services, which provokes various consumer responses to such limits on their freedom of choice. In a study on bank customers, we examine the extent of customer reactance in response to various E-channel migration strategies, the potential of incentive programs in mitigating customer reactance, as well as the moderating role of perceived customer value. Finally, we address the mediating role of customer forgiveness. Our study documents that rewarding the use of the firm-preferred E-channel is more effective than punishing the retention of the incumbent channel, and that a punishment-based E-channel migration strategy causes similar reactance levels as forced migration does. Importantly, the mere act of forcing also creates reactance among those customers who have already been using the firm-preferred E-channel. In addition, our results reveal that high-value customers exhibit lower reactance than low-value customers. By including customer forgiveness as a process measure we show that this occurs because high-value customers tend to be more forgiving towards the firm than low-value customers.