1

Exploring the role of the online customer experience in the firms multi-channel
strategy An empirical analysis of the retail banking services sector
Prof. Dr. Phil Klaus
Professor of Customer Experience and Marketing Strategy
ESCE International Business School, Paris, France
Dr. Klaus & Associates Consultancy, London, UK
Phone: +39 349 88761961
Dr. Bang Nguyen
Oxford Brookes University, Wheatley Campus, Oxford, OX33 1HX, United Kingdom
Citation:
Klaus, Ph. and Ngyuen, B. (2013), Exploring the role of the online customer
experience in the firms multi-channel strategy An empirical analysis of the retail
banking services sector, Journal of Strategic Marketing.
Biographies:
Dr Philipp Phil Klaus is Professor of Customer Experience and Marketing Strategy
at ESCE International Business School, Paris, France, Visiting Fellow at Cranfield
University School of Management and holds visiting professorships at LUMSA
University in Rome, Italy and the University of Valencia in Spain. His areas of
expertise include customer experience strategy and management, customer experience
quality, marketing strategy, the influence of marketing activities and customer
experience on consumer behavior and the financial performance of organizations. Phil
is a frequent keynote speaker at public and in-company seminars and conferences
around the world. He is an experienced senior marketing manager and management
consultant with an active, international portfolio of Blue-Chip clients from the
financial services, retail, luxury goods and the energy sectors, for whom he advises on
customer experience strategy, profit enhancement, customer behavior, best practice
and business development.
Bang Nguyen s a Senior Lecturer at Oxford Brookes University in Oxford. His
research interests include customer relationship management, customisation,
targeting, consumer behavior, and issues of fairness and trust. He has extensive
knowledge in retailing and has presented at various national and international
conferences. Before joining Brookes, he worked as a Lecturer at RMIT International
University.

Email: dr.philipp.klaus@gmail.com

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Exploring the role of the online customer experience in the firms multi-channel
strategy An empirical analysis of the retail banking services sector

Abstract

The concept of online customer service experience (OCSE) has recently received great
interest from academia and businesses alike. Despite the belief that providing superb online
experiences will influence customers online buying behavior, most of the research focuses
solely on the customer perspective rather than the firms strategic viewpoint. This study
investigates current strategies of retail banking service, developing a much-needed typology
of such practices. Based on in-depth interviews with 32 top executives, using the ECT
method, extracting elicit behavioral aggregation, we explore firms offering more and more
sophisticated online tools to compete for contemporary, digitalized customers. In particular,
we explore the implications of these tools on segmentation practices. The study exposes a
convoluted, fast-moving retail banking services sector in the midst of fundamental changes.
We propose a typology of retail banking service online channel strategy and management
based on 5 dimensions: (1) key objectives, (2) business processes, (3) benefits, (4)
integration, and (5) outlook. While some firms are already developing and executing
strategies that integrate online retail channels, others are only in a preliminary stage. Three
emerging categories differentiate strategies and practice into introducers, converters, and
integrators. We discuss differences among these categories with implications for theory and
practice. Based on data analysis, we highlight current and future roles of online channels,
social media and their strategic implications for the retail banking services sector, and
subsequent segmentation practices.

Keywords: customer experience; marketing strategy; multi-channel management; social

media; segmentation; marketing practice;

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Exploring the role of the online customer experience in the firms multi-channel
strategy An empirical analysis of the retail banking services sector

In only a few years the Internet has established itself as a tool that not only
changed the way we communicate but also the way we do business. The Internet, a
true global communication medium, has evolved as the primary source of information
for billions of people. In the last 5 years the user numbers doubled worldwide, and for
over 2 billion people the Internet is now a part of their lifestyle (Nielsen Online,
2010). Online channels changed the face of the retail environment, influencing
industries and markets variously. The digital age has arrived, and it is not only
changing the way customers make purchasing decisions, but also how firms do
business. In the United States alone, nearly 50 percent of online customers are
advanced users of smartphones, social networks, and other emerging tools (Kim &
Ko, 2012). This shift highlights changes in how customers use core technologies. The
retail banking services sector reacts to these customer behavior changes by
progressively offering more and more sophisticated online tools to compete for
contemporary and digitalized customers (Konus et al., 2008).
Exploring the customer experience, in particular using online channels, is of
increasing importance to businesses and academia (Verhoef et al., 2009). Research
exploring what constitutes the online customer experience considered one of the hot
topics for Internet marketing research (Schibrowsky et al., 2007) is, despite
evolving from its stages of infancy (Boyer & Hult, 2006), still in need of further
exploration (Trueman et al., 2012). Previous studies indicate that the creation of
compelling online experiences for web users will have numerous positive impacts for
retailers (Dholakia et al., 2004). Researchers consequently call for the development of

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customer experience frameworks to understand the customer service experience in a
single context (Lemke et al., 2010), and in particular in online environments (Bolton
& Saxena-Iyer, 2009). Recent research highlights the importance of the online
customer experience on the overall customer experience and customer behavior
(Klaus, 2013), but studies still need to be conducted to explore how retail banking
service addresses the challenges of the new multi-channel environment (Neslin et al.,
2006). The majority of the marketing literature focuses on the influence these new
technologies and subsequent channel choices have on customer behavior (e.g. Beldad
et al., 2010).
To understand online retail banking services, we must first comprehend the
practices of managing online retail channels through the eyes of the firm. Research
should examine what marketing and management strategies optimize the service
firms customer interaction, and what strategies have the most positive influence in
terms of financial returns on customer online channel experiences over time
(Hanssens et al., 2009). An appropriate starting point for such investigations is to
conduct descriptive research to understand and categorize current online retail
strategies (Verhoef et al., 2010). This study addresses this gap grounded in both
relevant literature and empirical research. Conducting interviews with 32 retail
banking service firms top-executives. Results suggest a complex and fast-moving
retail banking services sector in the middle of deep-seated changes. We propose a
typology of retail banking service online channel strategy and management based on
5 dimensions: (1) key objectives, (2) business processes, (3) benefits, (4) integration,
and (5) outlook. Three emerging categories differentiate strategies and practice into
introducers, converters, and integrators. We discuss differences among these
categories with implications for theory and practice. Based on data analysis, we

5
highlight current and future roles of online retail channels and their strategic
implications for the retail banking services sector. The purpose of this paper is
fourfold: (1) we synthesize extant retail banking service literature, (2) explore current
online channel retail banking service strategies and practices, to (3) determine and
categorize existing practices, (4) explore the role of the online customer experience,
and in particular the role of social media in a multi-channel environment, and (5)
discuss the impact these findings have on the firms segmentation practices.

Theoretical framing
Originally, the comparable low-cost characteristics of the Internet, being a
direct channel between a firm and customers with relatively low investment and
maintenance costs, were considered the key drivers of online-based businesses
success (Chang & Chen, 2008). Soon, however, because users (a) encountered
technical problems, (b) found their transactions put on hold, the delivery of their
desired products delayed, and their messages not responded to, and (c) that accessing
information proved to be a daunting task, the perception of the Internet as a reliable
distribution channel was put at risk (Beldad et al., 2010). Subsequently, online-based
businesses shifted their efforts towards improving the quality of the online services. In
order to succeed in this endeavor businesses with an e-commerce presence have to
understand what attributes contribute to the service quality online customers desire.
The Internet triggered a management paradigm shift by advancing service-based
relationship marketing from its initial database orientation into mutual and interactive
experience-driven relationships with customers (e.g. Payne & Frow, 2005).
Subsequently, an emerging paradigm reflecting this focus is proposed by marketing

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researchers the multichannel customer service experience (e.g. Klaus & Maklan,
2011; 2012; Lemke et al., 2010).
Multichannel environments provide tremendous opportunities for financial
service firms. Firms believe they enhance customer satisfaction using multiple
channels (Rangaswamy & van Bruggen, 2005), leading to increases in customer
loyalty (Shankar & Winer, 2005). Only a few studies investigate how online channels
can enhance the segmentation practices of the firm (Chaffey et al., 2003). Scholars
attention on online channel marketing practices shifted away from evaluating whether
it is valuable; the new focus is on providing guidance developing and executing an
online channel program for customer maintenance (Weinberg et al., 2007).
Traditionally, marketing research focuses on determinants of customer loyalty
in online contexts (Burnham et al., 2003). However, there is limited research into a
multiple-channels context, especially in the service industry. In multichannel
environments such as finance, managers face several challenges maintaining customer
loyalty and using online channels to more effectively segment their target customers.
For example, offline channel fulfilment emerges as at least equally important to
online channel performance (Semeijin et al., 2005). Investigating online channel
strategies and their applicability for enhancing customer loyalty and segmentation
practices in a multichannel environment is an important issue for scholars, managers,
and firms. Though recognizing the importance of understanding, designing, and
managing online and multichannel strategies when creating segmentation-led
customer satisfaction and loyalty (Neslin & Shankar, 2009), no typology exists in
marketing or management. In spite of many publications proposing a variety of
definitions and frameworks, there is a need for both theoretical and conceptual
development and empirical research to determine which strategies and practices have

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the most positive influence on firm performance (Mittal et al., 2005). To investigate
this link, marketing scholars must first conduct descriptive research to reveal current
online channel management practices (Klaus, 2013). A typology of online channel
practice is needed to act as a foundation for further research exploring the link
between practice and performance (Samuel & Mannheim, 1970).

Creating a typology for online channel management and strategies

It is imperative that managers initiate a clear strategy for online channel
development if they are to profit from such programs. Marketing managers should
learn from earlier investments initiatives, where a lack of articulated strategy, wellgrounded ambitions, and development of dynamic capabilities creates early
disappointment (Maklan et al., 2011). Implementing an online channel strategy is
challenging because of its implications; managers must consider covering an extended
period, influencing multiple customer touchpoints, implications for face-to-face
channels, and functional results. Unless firms have a clear scope and express an
achievable development plan for building dynamic capabilities, managers repeat
mistakes of previous process-led change marketing management (Boulding et al.,
2005). A typology of online channel management is proposed as a starting point for
firms seeking to both understand the quality of practice and plan for online channel
development systemically.

Method
To develop a typology of existing retail banking service online-channel
strategies and management practices, we created an interview protocol to articulate
the meaning and domain of these strategies and practices. The protocol is based on a

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literature review and well-cited studies exploring marketing strategies (e.g. Coviello
et al., 2002). We examined these topics using in-depth interviews with a sample of
retail banking managers responsible for online channel strategy or management
programs. First, we identified potential experts candidates for our study by following
the procedure advocated by the literature based on the following criteria (e.g. Hora &
von Winterfeldt, 1997): (a) tangible evidence of expertise, (b) reputation, (c)
availability and willingness to participate, (d) understanding of the general problem
area, (e) impartiality, and (f) lack of an economic or personal stake in the potential
findings. Managers were then further selected based on meeting the following three
criteria: (a) employed with a company at least since the introduction of an online
channel strategy and program, (b) involved with the programs creation and
introduction, and (c) responsible for current online channel management and program
development. This selection procedure ensures the reduction and occurrence of bias
(e.g. Adelman & Bresnick, 1992), and, according to cognitive science (e.g. Dreyfus &
Dreyfus, 1986) attains the use of true expertise and knowledge to explore the
phenomenon in question (Ericcson & Crutcher, 1990). The interviewees companies
headquarters were located in countries demonstrating service-economy orientations
such as the Unites States, Canada, England, Finland, Sweden, Italy, Germany,
Luxembourg, and Spain (World Bank, 2009). The majority of the companies are both
listed publicly and considered market leaders worldwide or in their home countries.
Generating an initial item pool through qualitative research is possible with an
experience survey conducted with a judgment sample of persons who can offer some
ideas and insights into the phenomenon (Churchill, 1979, p.67). The objective is to
create an initial pool of items that are scrutinized thoroughly with tests. We achieved
data saturation (Glaser & Strauss, 1967) after conducting in-depth interviews with

9
managers from 32 retail banks; each interview lasted 30 to 90 minutes. Interviews
were conducted during the first half of 2011, and interviewees were recruited from the
research teams network and were not offered participatory compensation.

Interviews were transcribed and coded with support of NVivo 8.0, software
that allows a researcher to reflect on key themes, and code and compare data (Di
Gregorio, 2000). Coding followed the grounded approach described by Ryan and
Bernard (2003), which draws heavily from Strauss and Corbin (1990). We started
with open interview coding and extended analysis to axial coding to compare
interviews. We incorporated a systematic, constant line-by-line comparison approach
and hierarchical coding, exploring repetitions, similarities, and differences. This
ensured we observed all data thoroughly and explored all their dimensions. This
coding approach keeps a researcher focused on data rather than theoretical flights of
fancy (Ryan & Bernard, 2003, p. 91). The approach suggests categories are
classifications of discrete concepts. According to Strauss and Corbin (1990),
classification is discovered when concepts are compared one against another and
appear to pertain to a similar phenomenon. Thus, the concepts are grouped together
under a higher order, more abstract concept called a category (p. 61). Initial
categorization of all attributes was the outcome of an extended workshop involving
the primary researchers. Each attribute was named and defined. In a subsequent stage,
we discussed differences in attribute categorization, and agreed on revised attributes
and category definitions. Some constructs appeared in more than one interview. The
researchers examined transcriptions and individual codes to identify repetitions, and
defined standard construct names, resulting in a coherent coding structure. Based on
the interviews, five dimensions were generated. To maximize the content and face

10
validity of the dimensions generated from the exploratory research, we adopted the
Emerging Consensus Technique (ECT) (Klaus, 2013). ECT draws on the grounded
exploratory approach (e.g. Strauss & Corbin, 1990) and the Q-sorting technique
(Funder et al., 2000), and is based on utilizing a panel of expert judges. ECT allows
the researcher to develop a validated, clear, and concise labeling of attributes,
dimensions, and their individual allocation in the conceptual framework of the
phenomenon of interest, employing multiple experts and a combination of behavioral
(emerging consensus) and mathematical methods, as recommended in the literature
(OHagan et al., 2006). The panel was comprised of five marketing academicians
familiar with retail online channel strategy and management practices.
Employment of the ECT follows six steps: (1) attribute labeling and describing;
(2) attribute label and description selection; (3) advanced attribute label and
description selection; (4) dimensions and sub-dimensions reliability testing; (5)
attribute validity testing; and (6) model readability and applicability testing (Klaus,
2013), described in more detail as follows:

1. First, the panel judges were individually presented with the quotes corresponding
to the attribute originating from the categorization procedure outlined above. The
judges received the quotes in sequential order on one card for each attribute and
were asked to name and define each attribute based on the information provided,
i.e. the original quotes from the coding references.
2. Next, the judges were shown the original quotes for each attribute, the names and
descriptions for the attribute given by them, and the names and descriptions for
the attribute given by the research team. Each of the judges was then asked which

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of the two names and which of the two descriptions fitted the data better. Based
on their judgment, a name and description for the attribute was noted.
3. In subsequent sessions, the judges were given all possible names and descriptions
for the individual attribute, together with the original quotes used to label the
attributes. The judges were then asked to choose the one most applicable to the
name and description of the attribute. The research team then compared the
findings and selected the names and descriptions emerging from the judges
feedback. In order to qualify, a name or description for an attribute had to be
selected by at least four of the five judges.
4. Using the Q-sort technique (Funder et al., 2000), each attribute in the initial pool
was printed on an index card and each panel member was asked to create
dimensions and, if applicable, sub-dimensions based on the similarity representing
aspect of the retail banking service online-channel strategies and management
practices. It was up to the members to decide on the number of dimensions they
used and to find appropriate labels and descriptions of the dimensions. The
proportion of agreement among the judges was high, demonstrating high
reliability. Interrater reliability was calculated with Spearman correlation
coefficient between the judges assessment and was r = 0.87, p < 0.05. The sorting
procedure (Moore & Benbasat, 1999) generated five dimensions. Four attributes
were dropped because a number of judges identified them as being too ambiguous
to fit into the emerging dimensions.
5. Next, three marketing academics familiar with the research were given the
conceptual description of the five dimensions and asked to rate them as either
very applicable, somewhat applicable, or not applicable relative to the
respective dimension. Dimensions needed to be rated at least as somewhat

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applicable to be retained. This procedure resulted in retaining all five
dimensions.
6. Finally, three CE managers and two marketing researchers reviewed the
readability and applicability of the dimensions and their descriptions. Brief
descriptions of each dimension are given below. The resulting five dimensions
and descriptions of CE management practice are shown in the Table 1.

Table 1 Online Channel Strategy Practice Dimensions

Dimensions

Definitions

Key objectives

Objectives, roles, and use of integrating

online channels strategically
How online retail channels influence the
range and execution of the firms internal and
external processes
Statements explicitly and implicitly
connecting use of online channels to
corporate performance
How online channels are integrated and
managed in the organizational environment,
internally and externally
Strategic outlook and influence on practices
and strategies based on use of online
channels

Business processes
Benefits
Integration
Outlook

Findings and typology

Based on findings from the qualitative research stage, we develop a typology
of retail banking online channel strategies and management practices using the peerreviewed conceptualizations of online channel management practices emerging from
the data analysis (Table 2).

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Table 2 Online Channel Strategy Typology

Introducers
Acknowledge and try to
develop online channel
because competitors are
dictating it; cost-cutting
opportunities are a primary
objective

Converters
In the process of
implementing an online
channel strategy; externally
focused toward customers,
internally toward
communication and data
access efficiency

Business processes

Support customers and

internal transactions and
communications; spare use of
social media to track
competitive environment

More than transactions and

communications; use of
social media to track
competitive environment and
customer perceptions

Benefits

Solely functional; focus

within the firm on cost
reduction

Linking online channel

strategy to loyalty, brand
perceptions, and (intuitively)
sales and profits

Integration

Inwardly focused on lack of

overarching vision; avoid
tension between channels

Strategic intent; internal and

external focus; managing
tension between channels

Outlook

Keeping up with competition

and technology; focus on
evolving data-driven
decisions

Acknowledging and trying to

develop a multichannel
strategy; focus on
technologies and data to
improve performance
internally and externally

Key objectives

Integrators
Constantly develop online
channel as part of a
multichannel strategy;
sophisticated focus externally
toward all stakeholders,
internally as key
communication tool and
enabler to develop and
allocate resources.
Integral part of external and
integral communication and
transactions; social media
used internally and externally
for resource allocation,
gaining customer insight,
new product and service
development, and project
management
Policies and operational
levels are aligned strictly;
continual internal and
external assessment and
development of strategy and
practices
Cross-functional ownership;
buy-in from entire firm;
tracking influence of strategy
internally and externally, and
evolving practices
Multichannel rather than
online channel strategy;
constant reinvention and
maintaining competitive
edge; managing challenges
and benefits of data-driven
decisions; technology only an
enabler, not the focus

The research team then scrutinized each interview according to the previously
uncovered dimensions to develop the typology. Four researchers familiar with the
study investigated each interview on the five dimensions and summarized each
dimension for each case in their own words. In addition the researchers ranked each
item of the dimensions from no evidence to support explicit practices and strategies
to explicit evidence to support associated statement. Based on a review of the
literature and extensive exchanges among the researchers, the primary research team
agreed on (a) a description for each practice and strategy dimension for each of the 32
interviews and (b) a description of the online channel strategies and practices from
each interview. The purification and validation process resulted in a three-cluster

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typology of retail banking online channel management practice. The typology
suggests three practices: introducers, converters, and integrators. This typology is a
foundation for further research examining links between practice and performance.
The three types display differences across all 5 dimensions of retail banking online
channel practice. Despite a verbal pledge, introducers project little evidence that
online channels are a strategic focus or more than an extension of existing processes.
Converters raise online channels to a strategic level, moving toward online channel
practices evident by defining online channel programs and prioritizing investments
accordingly. The primary driver of their online channel practice is the market.
Integrators have faith in leading their respective market through sophisticated online
channel practice. For integrators, online channels are a source to compete and gain
sustainable competitive advantages. Well-developed and executed online channel
practice is designed around creating value for customers and proven market gains.
The following descriptions elaborate on the characteristics of all three clusters,
introducers, converters, and integrators, in detail.

Introducers
Introducers define online channel management as an extension or
development of existing sales and communications practices, and assess effectiveness
using traditional cost-reducing calculations. While acknowledging its importance,
introducers are having difficulties in making a strong business case for online channel
management. Introducers execute online channel strategies tactically rather than
strategically, lacking corresponding processes and an overarching vision. Inabilities to
connect online channel practice to identifiable goals inhibit development of a
compelling business case and elevation of an online channel program to a strategic

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level. Introducers focus on keeping pace with technology and competitors. Though
they acknowledge verbally the importance of online channel management, they do not
develop matching practices.

Converters
Converters differ from introducers in all five dimensions of online channel
practice. Converters believe online channel practice links positively to financial
performance, but acknowledge an online channels internal and external foci and
resulting challenges in developing a multichannel strategy. This indicates a clear
internal discourse concerning the online channel strategy and its management
practices. Unlike introducers, they view both face-to-face and online channels as
essential components for shaping an overall multichannel strategy, and they are
willing to manage tensions between both channels. Converters are convinced online
channel programs influence not only customer satisfaction, loyalties,
recommendations, and brand perceptions, but also internal workflows. In contrast to
introducers who manage online channels as an extension of existing practices,
converters believe online channel management is strategically important, and
highlight the need to design and execute a strategy based on the perceptions of all
internal and external stakeholders. Converters connect online practices to
organizational goals, and use social media to gain customer insight. Converters voice
struggles with developing a multichannel business model and corresponding business
processes. While they often concentrate on improving existing processes, they labor
to grasp the overall picture of the multichannel strategy. In comparison to an
introducers focus on incremental improvements, converters strive to create a
multichannel organization, acknowledging implications for managing online channels

16
throughout the firm. Firms accept long-term commitments to transformations. While
converters struggle to link online channel management to financial outcomes, they are
convinced of the positive influence of online channel management on customer
behaviors and organization goals.

Integrators
Integrators elevate online channel to a multichannel strategy. Integrators
possess a clear strategic model of multichannel management visible throughout the
firm, and in matching business processes and practices. While converters only
recognize the broad-based challenges of multichannel management, integrators
achieve amalgamation of functions and channels to implement best practices
throughout the firm and partner businesses. Integrators use existing measurements to
track the impact of a program based on customer-centric outcomes and internal
evaluations, while constantly developing new tools and practices to support the
overall strategy. The sophistication of multichannel management and practices appear
far superior to all types of firms. Vanguards noticeably connect multichannel practice,
outcomes, and goals as defined and controlled by a central function or division,
encompassing multiple organizational functions. Integrators acknowledge the
imperative role of accountability, and continuously advance their multichannel
practices. Online channelssocial media particularlyare used in customer insight,
training, project management, resource allocation, and human resources development.
Integrators practices center on constant refinement of a multichannel business model,
based on and implemented by internal research and functions throughout the firm.
Integrators are the vanguards of online channel practice, and their constant goal of

17
improvement keeps them in a leading position involving what marketing scholars call
delivering perfect online and multichannel strategies.

Discussion
We explored a dynamic, competitive environment in which some companies
harvest fewer benefits and, thus, became less digitalized, while a smaller portion
deployed these tools to become even more networked. To determine which of these
strategies and practices have the most positive influence on organizational
performance, we first need a typology. This paper presents a typology of current
online channel practices, classifying online channel management into five
dimensions: business processes, key objectives, benefits, integration, and outlook.
Three categories differentiate these strategies and management into introducers,
converters, and integrators. The three types display differences across all 5
dimensions of retail banking online channel practice. We developed a platform that
may lead to understanding of multichannel practices and management methods
appropriate to each practice type. The typology can be used to benchmark existing
practices to the descried state of management including how different multichannel
practices are linked to performance. We state that social media, in particular, has an
important role in successfully managing the multichannel customer experience. The
use and impact of social media is highlighted throughout the dimensions of our
typology. Managers use social media not only to communicate externally with other
stakeholders, such as customers and suppliers, but also internally as a key
communication tool as an enabler to develop and allocate resources. This use of social
media in day-to-day business and business processes extends to tracking not only
customers, but also the firms competitive environment. In terms of segmentation

18
practices the findings support the view that social media can be an integral part to
collect and deliver customer experience data enabling a more sophisticated
segmentation based upon desired experiences and corresponding customer behavior,
overcoming what Dibb and Simkin (2009) describe as barriers. Thus, social media
delivers key insight for the internal and external perceptions of the entire
multichannel strategy, elevating it from solely being a channel of, to a key component
of the overall strategy.

Managerial implications
Based on our results we suggest that to develop and take advantage of
opportunities, firms must (a) develop an online channel strategy focused on multiple
channels, (b) manage transformations of this strategy internally, (c) upgrade their skill
sets, (d) integrate new technologies such as mobile devices, in order to (e) improve
the customer experience. The development of a new multi-channel transformation
plan requires a coherent buy-in from all functions inside the firm. Our findings submit
that many firms are struggling to come to a consensus on how these changes will be
formulated and implemented. The documented tensions between the different
channels have to be overcome in order to succeed with a company-wide accepted
vision, including the new marketing approach reflecting the new channel mix. Once
this is achieved, firms facing the task of managing the transformation internally. We
found support to the proposition that that introduction of an online channel program
influences the constellation of the entire financial service firm. With online channels
used for all customer transactions, basic advice, and sales, face-to-face business
changes dramatically. Branch density will decrease in developed countries, and
branches will become more customer-experience and advice oriented. Branch

19
personnel skills need to acclimate to these environments and new challenges. We
posit that these challenges can, for example, be addressed by enhancing the frontline
service employees commitment to deliver superior customer experiences (e.g.
Verhoef et al., 2009). Elmadag et al. (2008) advocate that this can be achieved though
managerial coaching and by managers demonstrating commitment to the principles of
delivering superior service quality. Moreover, in order to avoid frustration for their
existing branch personnel organizations need to carefully communicate and endorse
the new consultancy service role of the branch in the new multi-channel strategy.
For example, we would recommend allocating a part of the incentives coming from
online sales to the branch. These and other processes shall be aligned with carefully
monitoring footfall, number of transactions and sales in order to ensure that the
changes will not influence the customer experience and subsequent market position
negatively. Branches must rely on and invest in multichannel integration to take
advantage of the opportunities offered by market changes. Most firms are aware that
their skill sets must be improved in terms of marketing, advice capabilities, and backoffice integration. We advocate that firms overcome their silo challenges and adapt
a holistic view on how all channels can contribute to the customer experience and the
organizational success. In particular clients need to be market to and approached on
their preferences in the new multi-channel firm, leading to new segmentation
practices. Even existing pricing models should be scrutinized and reconsidered to
adapt to the new multichannel environment. Firms could profit from the new
holistic model of multi-channel strategy by, for example, stimulating offline sales
through digital leads, or use online technology to improve the availability of service
personnel (Wright, 2002), such as using online chats and Skype conversations
services. Based on our findings we believe that online, and in particular self-service

20
options will be used to actively enhance customer productivity (Anitsal & Schumann,
2007). Mobile devices, as indicated by our study, will be a key component of multichannel strategies in the future. For the majority, respondents created awareness of
the role of mobile devices as a primary online channel. However, there was little
consensus about the future role of mobile devices, ranging from use as a payment
device to a tool on which sales are conducted. Our study explores how new
multichannel strategies can benefit from online channels, such as social media, to
enhance and improve their segmentation practices (Dibb et al., 2008). Respondents
stated certain technologies are better suited to particular types of business tasks. For
example, social networking and blogs are employed to congregate competitive
intelligences and sustain marketing efforts.
The main benefit and main challenge of the new multichannel environment is
to create immediate access throughout all channels to not only gain insight in the new
customer-experience-driven behavior pattern, but to deliver the corresponding
experiences. Managers are clearly voicing the opportunities of new technologies, but
the challenges of coordinating all data in a way to allow customer insight driven by
data, and imbedded in their strategy. A main challenge is to design segmentation
practices driven by the customer rather than the firm, emphasizing internal rather than
external barriers (Dibb & Simkin, 2009). Many respondents submitted once
organizational barriers to use of digital tools fade, they could shape the foundation of
entirely new business processes that significantly improve performance. Firms able to
address and master the challenges our study highlighted have a great opportunity to
deliver the corresponding customer experiences (e.g. Maklan & Klaus, 2011), leading
to superior financial performances (Badgett et al., 2007). In summary, we posit the
use of online channels isor in the case of introducers, will inevitably becomea

21
key ingredient of financial service firm strategies worldwide. Firms will use them to
support a range of businesses processes to create stronger links to employees,
suppliers, customers, and vendors. A key challenge that remains is managing
unavoidable multichannel strategies in which all channelsface-to-face and online
must coexist and deliver the best customer experience possible (Klaus & Maklan,
2007; 2013).
Limitations and future research directions
Although expert respondents are reasonable representatives of the
phenomenon, they represent a convenience sample. Despite the purposeful
exploratory design of our study we could not detect differences in management
practices based upon region, location and size of the firm. Future research, however,
should explore multichannel strategies and management practices in more detail
based on industry contexts and country of origin. Extending this study to other areas
allows comparative studies of multichannel practice according to cultural differences
and across industries.
One subsequent question worthy of exploration, based on our findings, is
whether, and if yes, how firms choose to be reactive (introducers and converters) or
proactive (integrators)? Research should examine when and why firms choose to
adopt an introducer, converter, or integrator practice. It would also be useful to
understand if firms move between management practices and what prompts such
changes. Moreover, we encourage researchers to explore which of the three types of
online channel strategies and practices is most profitable. This study offers a crucial
foundation to determine which of these strategies and practices have the most positive
influence on organizational performance (Verhoef et al., 2009). We encourage future
studies to examine how these practices influence performance by using validated

22
outcome measures such as sales growth (Coviello et al., 2002) across the three
management types.

Acknowledgments
The authors thank Lyndon Simkin for his helpful comments on a previous version of
this article. The authors are also grateful for the constructive feedback received during
the presentation at the AM CRM/Segmentation SIGs event in Oxford.

23
Table 1
Online Channel Strategy Practice Dimensions

Dimensions

Definitions

Key objectives

Objectives, roles, and use of integrating

online channels strategically
How online retail channels influence the
range and execution of the firms internal and
external processes
Statements explicitly and implicitly
connecting use of online channels to
corporate performance
How online channels are integrated and
managed in the organizational environment,
internally and externally
Strategic outlook and influence on practices
and strategies based on use of online
channels

Business processes
Benefits
Integration
Outlook

24
Table 2
Online Channel Strategy Typology

Introducers
Acknowledge and try to
develop online channel
because competitors are
dictating it; cost-cutting
opportunities are a primary
objective

Converters
In the process of
implementing an online
channel strategy; externally
focused toward customers,
internally toward
communication and data
access efficiency

Business processes

Support customers and

internal transactions and
communications; spare use of
social media to track
competitive environment

More than transactions and

communications; use of
social media to track
competitive environment and
customer perceptions

Benefits

Solely functional; focus

within the firm on cost
reduction

Linking online channel

strategy to loyalty, brand
perceptions, and (intuitively)
sales and profits

Integration

Inwardly focused on lack of

overarching vision; avoid
tension between channels

Strategic intent; internal and

external focus; managing
tension between channels

Outlook

Keeping up with competition

and technology; focus on
evolving data-driven
decisions

Acknowledging and trying to

develop a multichannel
strategy; focus on
technologies and data to
improve performance
internally and externally

Key objectives

Integrators
Constantly develop online
channel as part of a
multichannel strategy;
sophisticated focus externally
toward all stakeholders,
internally as key
communication tool and
enabler to develop and
allocate resources.
Integral part of external and
integral communication and
transactions; social media
used internally and externally
for resource allocation,
gaining customer insight,
new product and service
development, and project
management
Policies and operational
levels are aligned strictly;
continual internal and
external assessment and
development of strategy and
practices
Cross-functional ownership;
buy-in from entire firm;
tracking influence of strategy
internally and externally, and
evolving practices
Multichannel rather than
online channel strategy;
constant reinvention and
maintaining competitive
edge; managing challenges
and benefits of data-driven
decisions; technology only an
enabler, not the focus

25
Appendix A
Sample Profile

Title
Head of Customer Experience
Global Loyalty Manager Retail
Head of Marketing
COO Marketing
VP Operations
Chief Intelligence Officer
Head of Operations
Chief Marketing Officer
VP Marketing
Head of Marketing
VP IT
Head of Marketing
CEO
Chief Marketing Offices
Head of Customer Experiences
Chief Customer Officer
Customer Experience Director
Senior Director Customer Care
Head of Operations
Management
VP Strategic Marketing
CEO
Customer Strategy Director
COO
CIO
CEO
Chief Strategy Officer
Chief Marketing Officer
COO
CEO
VP Strategy
Chief Customer Officer
CIO

Company headquarters
Germany
England
Spain
England
Sweden
The Netherlands
United States
England
Spain
Sweden
Italy
Luxembourg
England
United States
Finland
United States
Spain
United States
Sweden
Canada
United States
Germany
Switzerland
Italy
Portugal
England
Germany
Austria
Finland
United States
United States
Canada

26
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