Evaluating channel performance in multi-channel environments

Abstract

Evaluating channel performance is crucial for actively managing multiple sales channels, and requires understanding the customers’ channel preferences. Two key components of channel performance are (i) the existing customers’ intrinsic loyalty to a particular channel and (ii) the channel's ability to attract switching customers. We apply the Colombo and Morrison (Colombo, R., Morrison, D., 1989. A brand switching model with implications for marketing strategies. Marketing Science 8, 89–99) model to assess channel performance along these dimensions. Using data from a large home-shopping company, we analyze the evolution in the performance of its main channels over time, and test for differences in channel performance among different product categories offered by the company, as well as between different customer segments. Based on the results, we derive implications for managers to operate a company's multiple sales channels more effectively.