AI and Analytics for Business

Research Paper Series

Do Marketing Campaigns Produce Multichannel Buying and More Profitable Customers? A Field Experiment

One of the most intriguing and managerially relevant findings in the multichannel customer management literature is the positive association between multichannel purchasing and customer profitability. The question is whether this is an actionable, causal relationship. We design and implement a randomized field experiment to investigate this issue. The field experiment tests four marketing campaigns that vary in the communications message and the provision of financial incentives. We find that the multichannel/profitability relationship indeed is actionable. A properly designed marketing campaign increases the number of multichannel customers and increases average customer profitability. That campaign’s message emphasizes the benefits of multichannel shopping but does not rely on financial incentives. Moreover, we estimate a switching regression to show that, after accounting for self-selection bias, multichannel customers are more profitable than they would be if they were single channel. These results are important because they provide insights on how multichannel shopping leads to higher profit.

Keywords: Multichannel marketing, field experiment, CRM